Happy New Year & Oil Spills

Half Way to New Years!

Goals, goals, goals. I do talk about other things . . . occasionally. Realistically, we all make goals and many of us even write them down. Too many people ignore goals even written ones, and then declare, "well, they just don't work." Goals create the stairway to the life you want. And they do work. It doesn't matter either if you call them goals, objectives, targets, or desired outcomes. If they have a deadline and are measurable, they are goals.


Now, the secret to strong goals is really not that difficult.
1. The goal should stretch your ability (BHAG=Big Hairy Audacious Goals). If you set the goal at 82 and last year you did 70 and you achieve 79, you will be happy. If you had set your goal at 75, would you have reached it? Probably. Would you have reached 79? Maybe/maybe not. Many humans have a natural tendency to coast after the goal is achieved.


2. Break it down. A workable goal is able to be broken into projects and projects can be broken into tasks. And if you are really clever while doing these break-downs, you can assign some to other people in your business. Be clear - a project will, like a goal have a deadline, but it will also be assigned to someone, even if it is just you. Tasks are then broken down to strategic next actions.


Here is an example:
Goal = $1.2 million in sales by year end;
Project = increase sales by 5% to past customers by end of third quarter;
Task = Design and implement a marketing program for customer retention;
Strategic Next Action (SNA) = Assign Marketing design to Sam.


Notice how from the bottom up, these are all aligned to each other. The Goal may have a multitude of projects to achieve the end, but for this particular SNA, if it is not done, then none of the above will likely happen.


3. Measure. Since goals must be measurable, then we need to measure them. Projects are judged my the completion percent to the goal. The tasks are usually a sequential process to complete a project and the SNA is either done or not.


4. Small Steps. If you find yourself stuck with goals not being met, start with a strong SNA. Remember, when you notice a person has lost weight they likely did it one mile and one calorie at a time.


Happy New Year!


Copyright 2010 Linda Fayerweather
Changing Lanes LLC
419-897-0528
http://www.changinglanes.biz/



What is the Implication of Disaster Assistance?
President Obama has declared the BP oil spill, still spewing millions of gallons of oil into formerly pristine waters, to be the worst natural disaster in American history. The spill has already cost BP over $2 billion, and experts assume this to be a small down payment on the final cost. BP will end up spending billions more to reimburse Gulf residents for lost wages and other income, physical injuries, and lost property.


With dozens of federal, state and local agencies giving funds, advice and cautions, it should come as no surprise that our beloved Internal Revenue Service has also weighed in with a special discussion clarifying tax rules for oil spill claims.


Generally speaking, payments for lost wages and other income are taxable. That's because the wages and income they replace would have been taxable. Replacing wages is relatively straightforward. When hotel staff, cooks, and servers at beachside resorts are laid off, it's not hard to calculate the wages (and thus the tax) that they would have made had they been working. However, those payments generally aren't subject to Social Security and Medicare tax (because they aren't actual "payment for employment" under the law) and aren't subject to withholding.


Replacing lost business income can be harder.
First, businesses have to substantiate their losses. Tax returns may be the best vehicle for proving lost income. However, it seems that some businesses affected by the spill haven't reported their full income in the past. (I know, hard to believe.) And some businesses may have a hard time claiming reimbursements in the first place. For example, should BP pay to replace tips lost by exotic dancers playing their trade in affected areas?


Second, payments for property damage aren't taxable so long as the payment doesn't exceed the property's "basis," which is the measure of its value after any depreciation. The same is true for payments on account of personal physical injuries or physical illness. Payments for emotional distress (like insomnia, headaches, or stomach disorders) not attributable to personal physical injuries or physical symptoms are taxable; however, you can exclude your medical expenses attributable to that emotional distress.


Typically this column focuses on how long-term planning can save tax. In the case of payments to Gulf coast residents, there's not much long-term planning to do, at least for the tax consequences. But the IRS guidance is a useful reminder that taxes factor into nearly every financial choice you make. And we're here to help you make those choices as tax-efficient as possible. Don't hesitate to call!


Copyright 2010 Tim Pinkelman, CPA
Accounting Center & Tax Services, Inc.
419-882-9255 or 734-847-0400
www.accounting-centers.com