Hope for your financial life and beyond

How to Pass the CPA Exam On the First Try

Earlier this year, I wrote a post about how to tackle a huge looming project. Back in the summer of 2012 I was dealing with the biggest professional project of my life – studying for the CPA Exam. I’m happy to say that I now have my CPA license because I learned how to pass the CPA exam on the first try. Today I’m going to show you what I did.

Learning How to Pass the CPA Exam

how to pass the cpa examI read a ton about the CPA Exam itself before I started and while I was in the middle of it (and not at all after I was done). You have got to learn everything you can about it in order to pass. It’s important to learn from both the official source, but also from blogs and forums where people who are also taking the exam are chatting.

You’ll find out great little tips but also you’ll get the motivation to carry on when you get tired. Some places I looked at included:

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Our Local Target Is Showing How to Rock Customer Service

customer serviceEnjoy this guest post by Kim Fourman, aka Mrs. Luke1428.

I recently had a great experience with Target’s customer service – and it wasn’t the first time.

Where’s My Kid?

About three years ago, I was shopping at our local Target (or Tar-jay if you’re cool like that) with my then 3 year old son. I was up at the kids’ clothing section near the front of the store when all of a sudden – I can’t find the 3 year old. Gone. I look around calmly at first, and then with a little more panic.

If you’re a parent, you know the feeling of dread that grows and grows when you can’t find your child.

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Wrestling Against Something Twice Your Size

Today my wife Kim contributes to the Hidden Nuggets Series by discussing what we are learning about life from our boys’ wrestling.

Hidden Nuggets Series #39 – “As iron sharpens iron…” – Proverbs 27:17

We have four great kids, two girls and two boys. Our two boys are aged 11 and 6, and they wrestle – boy do they wrestle. All. The. Time. In their room, in my room, outside, at their sister’s soccer game 2 inches from the sidelines — doesn’t matter, they are wrestling.Boys Wrestling

I don’t know how it usually starts, but I have a feeling that one of them pokes the other and then off they go.  Now, our 11 year old – (I’ll call him Bubbers – long story) – is about twice the size of the 6 year old — (I’ll call him Doot – longer story). When I watch Bubbers and Doot wrestle, it is really no contest. They are having a ton of fun, but Bubbers wins every single time.

It usually takes about 20 seconds or so. Doot will be almost pinned to the ground, usually with an arm raised up in protest, and then boom – Bubbers grabs his wrist and Doot is pinned down flat. Bubbers lets him up, and they’ll start circling around each other to go at it again.

Brian and I have started noticing something though about the outcomes. Bubbers still always wins, but it is starting to take a little longer. Doot has figured out that if he gets down a little and lowers his center of gravity, then he can last just a smidgen longer.

What do you think will happen when Doot gets to be closer to Bubbers’ size?

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How to Tackle a Huge Looming Project

Hard motivational quote

Step up to the challenge!

Probably the biggest hurdle to getting your CPA license is the CPA Exam. It’s pretty tough — there are four sections that must all be passed in 18 months and the current pass rate hovers around 50%. Each section is either 3 or 4 hours long.

I’m happy to say that two years ago I passed all four sections in about 5 months. I’ll talk about some of the specific things I did to pass in a later post. The general steps that I used can apply to any huge task that you may be facing.

Take a look at some of the suggestions below to see if they can help you tackle your next huge project.

Learn as much as you can about it

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3 Tips for Taking a Charitable Deduction on Your Taxes

The following is a guest post by Kim, otherwise known as Mrs. Luke1428. She is a CPA at Loggins, Kern & McCombs in Jonesboro, Georgia. The following is intended to be a general tax discussion and not tax advice. If you have questions about your specific situation, please consult a professional.

ID-10096025Feeling a little charity-minded? Here are some tips that may help you come tax time.

Do Not Give Simply For The Tax Benefit

I am making this the #1 tip because that is how strongly I feel about it. Giving should come from my heart and not because of any perceived benefit come tax time. It’s a spiritual issue for me based on teachings like this one from the Bible:

“So let each one give as he purposes in his heart, not grudgingly or of necessity; for God loves a cheerful giver” – II Corinthians 9:7

Knowing how to deduct the charitable gift on your taxes is important to make sure it is done right, but the tax benefit should not be the motivation for the gift. Suppose you can’t decide whether to give to a charity or to a person in need, and maybe you feel led to give to the individual person. Even though you can’t deduct gifts to individuals, the right thing to do is to give how your heart is leading you despite losing the deduction.

Keep Good Records For Cash Gifts

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How to Save Money and Cut Taxes by Hiring Your Kids

The following post is by Kim Fourman. Please note that this article is intended to discuss general tax topics. Consult your own tax advisor regarding your specific circumstances.

hiring your kids

Boy at a weaving station – circa 1908

One of the most overlooked ways for small business owners to save on taxes is by hiring your kids in the business.  Here’s how it works:

Consider What Work Can be Done

The first thing to consider when hiring your kids is the work that your child can do. Their work must be age appropriate and must be legitimate work for your business.

For example, having your child do household chores would not count as working for your business, but picking up trash and cleaning up the yard at your rental property would. The IRS has accepted employment by a child as young as seven. You do not run afoul of any federal child labor laws when you employ your own children, but make sure to check with your state department of labor.

You Must Do the Paperwork

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Why Does Toys R Us Want My Phone Number?

No“Your phone number?”
“No, thank you.”

“And your zip code please?”
“No, thanks.”

“Can I get your email to complete the transaction?”
“No.”

“And would you like to save an extra 5% today by signing up…”
“No…GAAAAWWWW, can I just give you my money and go home!?”

I don’t ever say the last one…out loud. But at the checkout line, I’m usually thinking it and feeling just like this screen shot of David Tennant from Doctor Who.

Is it just me, or is it getting harder and harder to complete a simple transaction anymore? Why can’t I just pay and leave with my stuff? Why does Party City want my zip code? My email I get…they just want me for their mailing list…but my zip code? And what’s up with asking for my phone number? Toys R Us does that ALL…THE…TIME.

Am I just being too sensitive? Maybe I’m turning into a cranky old curmudgeon.  “Hey kids, get off my lawn.”

Turns out, stores can learn quite a bit by the extra piece of information that you volunteer at the checkout line.  I’ll admit — my initial motivation for not giving this information was just to get out the door faster, but now that I’ve read about it, I’m not going to be giving personal information at all anymore.

Why Stores Want Your Personal Information

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My January Fuss-a-Thon at Business Owners Has Begun

Form_1099-Misc_2013

Download this form at IRS.gov

2014 has begun, and for me, and most other accountants, that means the start of busy season. This is because we are assisting our business clients with year-end issues – and sometimes “assisting” turns to “fussing at”.  With a smile, of course.

So, what do I need to fuss about the most? Here are two things (out of many) that an accountant wants you to know and do regarding year-end business issues.

1099s

What I am referring to here is Form 1099-MISC. This form is an information return that you as the business owner are required to give to certain vendors. The rules change from year to year, but for now, here’s who gets one:

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Year End Tax Planning For Small Businesses

Plan MazeThe following is a guest post by Kim Fourman.

Taxes may not be foremost on your mind right now, but they are important to think about before the year is over. It would be wise to know what kind of changes are coming and how that can affect you. For those in business, including the self-employed, here are two big changes coming for this year’s tax return.

Section 179

So what is Section 179 anyway? Well, first you need to understand depreciation. If you buy an asset (say, a computer), you are generally not allowed to expense (“expensing” means writing off or deducting) the entire amount in the year that you purchased it. Instead you are supposed to spread out the expense over several years.

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Getting An Electric Car For Free Through Tax Credits

Welcome to a Q & A tax session at Luke1428. Today we are discussing how to fund the purchase of an electric car with tax credits. Some states offer tax credits as incentives for many transactions, including purchasing or leasing an electric car.

To answer your tax credit questions I’ve pulled in none other than Mrs. Luke 1428, who just happens to be a CPA. So here we go.

Electric Car

The Nissan Leaf – source of a nice little state tax credit

Q: What are tax credits and how can I use them?

A: Great question. First, I’d like to make sure that we’re clear on the difference between a tax credit and a tax deduction. As an example, let’s assume you have $50,000 of taxable income, and your tax rate is 10%. Let’s compare the difference between a $1,000 tax credit and a $1,000 tax deduction.

A tax deduction lowers your taxable income. Without any deductions, your tax would be 10% of $50,000, which is $5,000. So, a $1,000 tax deduction lowers your taxable income to $49,000. Then we apply the 10% tax rate and come up with a tax of $4,900.

Tax Deduction Savings: $100.

Now, instead of the tax deduction, let’s try a tax credit.

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Ranking the Tax Prep Options

This following is a guest post by Kim, otherwise known as Mrs. Luke1428. She is a CPA at an accounting firm in Georgia.

Liberty TaxStill haven’t done your taxes? No worries, I haven’t either! Maybe the better question is do you even know HOW you are going to get your taxes done?

As I see it, there are five different methods of preparing your taxes. (Well…six, if you include just blowing it off and not doing it at all. Guess you can imagine I do NOT recommend that!) Here is my assessment of them:

1. Do It All Yourself

a. Paper and pencil: OK, this is still possible. You can just go to irs.gov and download the forms right there and go to it. Geek factor and bragging rights are high, but accuracy level is generally low. It is free, but the pain in the tail factor is off the charts.

Grade: C-

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