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    The 4% Rule Can Help You Plan for Retirement

    retirementRetirement planning. It seems like a huge task. An undertaking only to be taken on by those who have hours upon hours of time that they can dedicate to the process. Fortunately, those are common misconceptions.

    Retirement planning actually only takes about an hour per year. And that hour doesn’t have to be done all at once. You can spend 15 minutes here, and 15 minutes there, and develop your plan. Considering that most of the planning has to do with determining how much you spend now, how much you earn now, how much you would like in retirement, and so forth; you don’t even have to sit down with a financial advisor until it is time to implement that plan. Here’s how you can get started.

    Determine Your Income Needs

    There is a big myth out there that says during retirement you will need approximately 60% of your pre-retirement income. Nobody is sure where that myth got started, but it proves to be false for the vast majority of people.

    Instead, when you sit down to plan for retirement, you should plan on spending exactly the same as you spend now. Your mortgage may go away, and you won’t have to contribute to savings any longer, but most people find ways to spend the same amount. Lifestyles don’t decrease because you are no longer working. If anything, they increase due to more free time to pursue hobbies.

    Let’s suppose that you are living on $4,000 per month now. That means during retirement, you will still need $4,000 per month.

    Accumulating Wealth to Generate $4,000 Per Month

    There are a number of ways to accumulate wealth. Most people do so by working. They set aside a portion of their income in a 401k, and when they retire they draw on that income. Others will invest in things like real estate. The properties that they own will generate income for them.

    Regardless, you need to know a few things. First, when do you want to retire? Second, how much do you need to save to get there? These are the biggest determining factors to meet your retirement goals.

    But that is for another discussion at another time. For now you need to know that you should be earning more on the side, slashing expenses, and investing your money properly. This is going to bring you to your “magical” retirement number.

    Your Magical Retirement Number

    As indicated, you need $4,000 per month to survive. We can now reverse engineer the number that you need to be able to comfortably retire.

    $4,000 per month is $48,000 per year. Let’s just call it $50,000 to accommodate unexpected expenses. Using the 4% rule we can determine that you need $1,250,000 to retire. Let’s see how that is done.

    We can safely assume that your investments will generate 4% per year in perpetuity. That’s a fancy way of saying you can withdraw 4% of the account value from your investments forever. If $50,000 is 4% of the overall account, we simply divide $50,000 by .04 to reach a number of $1.25 million.

    Now we can’t exactly stop there though. We have to account for 2 other variables that could make this whole analysis worthless.

    Inflation and Market Declines

    Inflation and market declines can destroy a portfolio in a matter of weeks. But there are ways to combat these inevitabilities.

    To combat the risk of inflation, you simply have to realize that you will need to save more than you thought. So instead of $1.25 million as our analysis previously determined, you will need to save closer to $1.5 million.

    That $1.5 million, however, can quickly be cut in half during a severe recession. If you are drawing from your account during that time, you will deplete your nest egg much faster than you anticipated. But there is a way around market risk as well.

    You will want to keep an additional 1/5 of your portfolio (our magical number is now up to about $1.8million) in an account that is not subject to market risk. So cash savings, permanent life insurance, government bonds, or the like. During times when the market has dropped severely, you live off of these savings and allow your investment portfolio to recover. When it has recovered, you slowly replenish your savings.

    Investing, Saving, and Planning for Retirement

    The biggest hurdle for planning for retirement is determining how much you will need to live on. Financial advisors have some fancy software that can help you determine that number, but you can do it yourself pretty easily.

    Now that you know how much you need to retire comfortably, the last step is determining when you want to retire. Knowing how many years you have is all that is needed to determine how much you have to set aside each year.

    Don’t be surprised when you realize that you can’t save enough; you will likely have to adjust one, or more, of your numbers.

    Practical Taxes Can Help

    As mentioned, these calculations don’t take into account taxes. That can throw a big wrench in your retirement planning. Fortunately, we can help when it comes time for taxes. We know how to minimize taxes, which accounts would be best for tax advantages, and can even prepare your tax return so you get the biggest refund possible.

    Give us a call today at 406-894-2050 to learn more about tax preparation, payroll services, business consultation, or more in Billings, Montana.

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    5 Ways to Illicit Feedback from Customers

    Feedback-265x300Knowing what your customers or clients think of your business is the only way that you can hone your skills and perfect your business. But most people are very slow to give feedback. For some reason most people don’t take the time to review a business online, and when they do it is usually because they had such a negative experience that they want to warn others away. The saying goes: do a great job and a happy customer will tell 3 people; do a terrible job and an unhappy customer will tell 20.

    So how do you get customers to actually give you feedback? There are a few ways to do so.

     

    Have Them Complete a Survey

    There are so many different ways to survey people. You can go old school and have them fill out a card before they leave your store or office. They simply write down their thoughts, or select from your multiple choice responses.

    The problem you run into, however, is that most people don’t want to give negative feedback right in front of you. Even if there is a secure deposit box, they feel that you might open it as soon as they are out the door. To combat this, you can have the cards come with pre-paid postage. They can drop the card in the mail when they get home.

    Instead of worrying about all of that, however, you can direct them to fill out a survey online. There are numerous free survey resources like SurveyMonkey and Freeonlinesurveys.com. You may end up with a lower response rate since people will forget to take the survey as soon as they are out the door.

    Let Them Review You on Social Media

    Creating a Facebook page is completely free. All it takes is a little bit of time to set it all up. It is a fantastic way to keep your clients and customers engaged, keep them coming back for more, and illicit a response.

    Facebook has a way for everyone to rate your business. They can give you 1 to 5 stars, and leave comments. Even if they don’t want to rate the business, they can always leave comments and questions on the page. It’s an easy way to interact with customers, and they can give feedback from the comfort of their own home.

    Sign Up for a Yelp Account

    Your business should be on Yelp. Around the country this site is where people go when they want to know if they should utilize a business. Here’s the thing: even if you don’t create a business page, someone can do it for you.

    Your business can be reviewed on Yelp without you even signing up for Yelp. If this has happened, you can claim the Yelp listing and take over management. But those reviews are going to stick around. If they’re negative, you should work on making things right. A bad review that has been remedied is worth much more than a good review.

    Comment Cards

    Similar to the survey idea, you should have a place where your customers and clients can fill out comments. Most people would like to give feedback if given the opportunity. This one is simple and straightforward. Leave comment cards near the door, so as people are leaving they can fill on out and drop it in the box.

    Ask For Feedback

    There’s no reason that you can’t just straight up ask your clients and customers for feedback. Before they leave ask if they are happy with the service. Ask if there is anything that you can do to make things better. Ask them if they would be likely to refer a friend, and if not, what you can do differently to encourage them to refer a friend.

    When asked in person, people will sugar coat things. They don’t want to hurt your feelings, and would rather tell you a half truth than something they think you don’t want to hear. For instance, when asked, “What did you think?” a client may respond, “Your office is very nice.” Instead of saying that they thought your service was lousy.

    Practical Taxes is Here to Help

    As a full service accounting firm in Billings, Montana, we aren’t really in the business of supplying surveys. But we can help you make sure that your business is running smoothly. We offer everything from tax preparation, to payroll services, to business consultation. By taking those worries off your plate, you can focus on the driving force behind your business: the customer. 406-894-2050.

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    The Right Way to Ask for a Promotion

    Large bills fanned out and held in hand

    Large bills fanned out and held in hand

    There are many people that are fantastic at their jobs. They do so well that they deserve to be promoted. After their promotion they would have more responsibilities, a higher pay, and be in an overall better situation. Many of those people are passed over for promotion for two reasons: they don’t ask for one, or they don’t ask properly. Just popping into your boss’s office and asking for the promotion likely won’t yield the results that you desire. However, if you take the approach that your payroll services expert in Billings, Montana recommends, you can be sure to land that promotion (and all it entails).

     

    Do Your Homework

    The worst thing that can happen when you want to be promoted, is to simply walk into your boss’s office and ask for the promotion. Most of those conversations go something like this:

    Employee: I have been here one year now. I think I deserve a raise/promotion.

    Boss: What have you done to deserve it?

    Employee: I have arrived on time every day, worked hard, I understand the business and the job, I have more responsibilities now than when I started.

    Boss: So… what have you done to deserve a raise?

    Employee: I’ve been here a year, and all the stuff I just said.

    Boss: Now isn’t the right time.

    While it seems silly, that is how the vast majority of people ask for a raise or a promotion. They simply walk in and ask (or usually demand) it. The gut reaction is to throw up defensive arguments and turn down the employee.

    Before you ask your boss for that raise or promotion, you need to do your homework. This can be extensive, and it should start when you begin working.

    Track Your Progress – As soon as you begin your job, you need to track your progress. How many accounts are you bringing in? What value are you adding? How are you easing your boss’s burden? Over time all of these quantifiable aspects will grow and give you solid evidence that you deserve more.

    Go Above and Beyond – As you work, you have to do more than the minimum. The minimum will help you to keep your job, going above will help you grow your career. If you are comfortable doing just the minimum, then you must be comfortable earning just the minimum.

    Know the Competition – Your job isn’t the only one in the industry. This can go both ways. If you’re a terrible employee, you are replaceable. If you’re a great employee, you have options. Pulling out the “I can work for XYZ” should be a last resort option. And be prepared to follow through on your threats.

    Asking for the Promotion

    Now for the daunting part: asking for the promotion. First, here are your don’ts.

    1. Don’t ask at your performance evaluation
    2. Don’t blindside your boss
    3. Don’t be demanding
    4. Don’t ask without evidence

    Your boss needs to know, ahead of time, what you are meeting about. He needs to know what he can offer, even if he is “certain” the answer will be no, before you step foot in the room. When you do go in, follow these tips.

    1. Do be polite
    2. Do show evidence of increased productivity
    3. Do expect the answer to be no, and have a compromise ready
    4. Do be prepared to move to another company

    If you have done your homework, and you have evidence to show that you are providing much more value to the company than you did when you received your last raise or promotion, then your boss shouldn’t have any problem giving you the promotion.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. If you are passed over for promotions or raises repeatedly, it may be time to start your own company. When that time comes, we can help with business consultation, payroll services, tax preparation, and much more. Let us ease the burden so you can focus on growing your business.

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    Overtime Laws Will be Changing Soon

    Time-Clock-300x225Business owners that have employees understand that those employees represent their biggest expenses. When the right employee is on board, that employee earns the company much more money than trying to go without them, but they still end up costing a lot of money. It turns out that they may end up costing the company even more money if they are required to work overtime. Your payroll services specialist in Billings, Montana explains how.

     

     

     

    Overtime Laws and Pay Back Then

    It has been a little over a decade since the laws have been restructured, and many advocates think it is time to have them redone. This means there will be a big change.

    The Fair Labor Standards Act has a certain set of rules when it comes to paying your employees. The laws, as determined in 2004, state that if you have an employee that earns less than $23,660 per year (based on 40 hours per week), they are non-exempt. You must pay time-and-a-half for any hours worked over and above 40.

    Naturally there are some exemptions to that rule. Commissioned employees, salaried employees, drivers, babysitters, farm and seasonal workers, and a few others are not subject to those rules.

    Overtime Laws and Pay Now

    Sometime this month there will be some major overhaul of those laws. Instead of that $23,660 cap, many are pushing to move that to $42,000. But the idea is to make it a little more complicated than that. Instead of a single cap, it will be tiered and have 2 higher tiers.

    What this means for business owners is that they have a couple choices. They could pay the overtime as necessary; they could salary their employees; or they could bump their employees up and over that $42,000 cap. It’s a decision that each business owner must make for themselves.

    Nothing is completely set in stone, and even if the laws do pass sometime this month, we will have a little time before they fully go into effect. But it does mean that some businesses will need to make big decisions; those decisions could have a drastic impact on their employees. For instance, limiting the number of hours so there is no chance of overtime.

    What You Can Do as a Business Owner

    In order to prepare for these changes, and the likelihood of things changing is great (we just don’t know exactly what the changes will end up being), you need to do an audit of your employees and their hours. If your employees are regularly working over 40 hours per week, it may be advantageous to hire more employees to spread out the workload. If your employees are very close to that $42,000 cap, then perhaps it will be best to just give them a raise and push them over that line.

    Practical Taxes can Help

    Here at Practical Taxes we know the payroll structures, and we know the laws surrounding them. We are a full service accounting firm, and we are able to make sure that your business is functioning following all of the laws. If you don’t want to deal with any of these new laws, just let us do your payroll for you. You will be pleasantly surprised at how affordable it is. Give us a call today at 406-894-2050 to learn more.

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    6 Ways to Motivate Your Employees

    Business-Taxes-300x199Having employees can make your life as a business owner so much easier. It takes the burden off of you to do every little thing, letting you focus on the important aspects of running the business, and it provides a job for someone else, helping to stimulate the economy. But anyone who has dealt with employees before knows that it can sometimes be difficult to keep your employees motivated so that they want to work hard and help further the business. Your accountant in Billings, MT outlines six ways to keep your employees happy.

     

     

    Company Paid Lunches

    One of the best things that you can do is to take little stressors away from your employees. Making it so they don’t have to worry about lunch can do just that. If you have just one or two employees, you may want to consider providing lunch every day of the week; if you have more then you may want to do company provided lunches on Friday. No matter how you structure it, your employees are going to be happy because how many companies actually do this?

    Be Real

    This is easier said than done. But think about it who you would appreciate more: a boss that comes by once a week and gives you a cheery smile and tells you how much you’re benefiting the company, or the boss that comes by and says that things are looking grim and everyone needs to work extra hard to make sure we turn a profit this quarter? Now you can’t be negative all the time, but when you’re real your employees appreciate you more.

    Listen and Follow Through

    Too often the boss gets in the habit of saying, “This is how I want it done, so you do it like this.” This makes for disgruntled employees. Perhaps even worse is the boss that seems to care, listens to complaints and suggestions, and never does anything about them. Want to keep your employees happy? Encourage them to give you feedback, actually pay attention when they do (turn off the computer if you need to minimize distractions), and ultimately follow through.

    Empower Them

    Talking about “empowering employees” sounds cliché and overused. But there is a reason that these buzzwords exist. An employee that has a say in the company is going to be a productive employee. They don’t want to feel as though they come to work, do a series of chores, and then go home. If your employees have an idea of how to make operations smoother, test those out. If your employee wants to work from home, try it for a week to see if he or she is as productive (or more productive) than in the office. People want a say in what they do, let them have it.

    Provide Incentives

    Most jobs can be quantified in some form or another. Determine a series of goals and provide incentives for the employees as they meet those goals. Incentives can be as simple as a coffee card for small goals, or bonuses and pay raises for bigger goals. Little rewards keep employees happy; happy employees work harder and stay longer.

    Profit Sharing Plans

    This is separate from “provide incentives” for a couple reasons. First, it is more than just an incentive for working harder; it is a reward for the employee for their expertise. Second, it should be reserved for your top executives. Top talent needs to be rewarded when they help to grow the business. It encourages them to put more time and effort into the job (even if their pay remains the same); because at the end of the quarter they know they will get a fat bonus check. Profit sharing amounts depend greatly on the executive, size of the company, and many other factors.

    Motivating Employees shouldn’t be Hard

    You don’t need gimmicks to motivate your employees. In fact, if your treat them fairly, and you have the right person in the right job, then their biggest motivation will come from job satisfaction. But sometimes people get a little burnt out, and you do need to provide some incentives.

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help you with your tax preparation needs, bookkeeping needs, payroll services needs, and much more. If you are a business owner, and you want to grow your business, we can help you do that. Give us a call at 406-894-2050 to set up an appointment today!

     

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    Time Management: Where Many Entrepreneurs Go Wrong

    time-management-294x300If you are a business owner, you know that there just are not enough hours in the day to get everything accomplished. You go in early, and you stay late, and you even work at night after the family has gone to bed. But you still can’t seem to get everything done that needs to be done. If you are faced with this dilemma, then you need to spend a little bit of time reading about how to appropriately manage your time so that you can get more done in fewer hours. Want to get the basics? Read on as your accountant in Billings, MT explains some of the secrets to time management.
     

     

    Prioritize Your Obligations

    Sometimes there are far too many things that need to get done in the day, and just not enough time. You have to prioritize exactly what needs to be done first, and what can be put off until later. Doing this is actually a whole lot easier than you might think, and it takes on two steps.

    Before you even add something to your to-do list think “eliminate, simplify, delegate”. These three words can make your life a whole lot easier and can boost your productivity. For instance, when you have to get something done, think “does it even need done in the first place?” If not, then just eliminate it from your to-do list. If you can’t eliminate it, can you simplify it? If not, then can someone else do it?

    For instance, let’s think about payroll. You can’t simply stop paying your employees, so elimination is off the board. You may be able to simplify your payroll by only paying employees once per month, but if that is done, then you may not be able to retain those employees that need paid twice per month. You can easily, however, delegate your payroll services. A+ Accounting specializes in payroll, and with a short meeting you can remove this huge burden and free up a lot of your time.

    Once you have your to-do list trimmed down by eliminating, delegating, and simplifying, you are now ready for the second step. Everyone’s list contains some difficult tasks, some that are fairly easy, and a whole lot in between. In order to be as productive as possible, tackle those harder tasks (or the ones you dread doing) first thing. Save the easier stuff for later when you’re tired and you just want to go home. Doing so will help you to accomplish more in the day than you ever thought possible.

    Need to Get a Lot Done? Schedule a Power Hour

    There will be times, even after you trim down your to-do list that you just have a ton of stuff to tackle. Now is the time to kick things into overdrive, and make sure that you knock out as many tasks as possible. You need a power hour.

    A power hour is simple really. You lock yourself in a room where you won’t be distracted. You mute the phone, log off the internet if possible, and just work. You work hard, you work fast, and you work for exactly one hour. At the end of the hour, find a stopping point, and go stretch your legs. You could walk around the block, spend a few minutes watching cat videos, or get a cup of coffee; it doesn’t matter just clear your mind from work. If you are still behind, have another power hour after your break.

    Just Say No

    Many entrepreneurs have the problem that they want to do everything. You might need some money, you might need to expand your resume, or you might just want to make everyone happy. The end result is you end up with too much on your plate and it causes unnecessary stress. When this happens, you need to train yourself to say “no.”

    When you do have to tell someone no, don’t worry about them being offended (unless you’re rude about it). Instead, simply tell them “I’m really booked at the moment, when things calm down I can check back to see if you’re still in need.” Most of the time people understand and if they’re in a bind they can find someone else to help them. If they wait, then it’s a good sign that you have a superior service or product; one worth waiting for.

    Make the Most of Time Management

    Now that you have spent time learning about time management, get back to work. Figure out your priorities, and then get in touch with us here at A+ Accounting & Consulting. We are a full service accounting firm in Billings, Montana, and we can offer you services that will help free up your time so you can run your business more efficiently. Schedule an appointment today by calling 406-894-2050.

     

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    Overcoming the Fear of Failure

    Failure-300x225Failure. Nobody wants to hear that word. We don’t want to fail on our tests in school, we avoid failing in sporting events, we definitely wouldn’t want to be failures at life, and if we fail in our business there could be lasting consequences. Since there is so much pressure on not failing, we often get an overwhelming fear of failure. Spend the next few minutes learning how your accountant in Billings, MT suggests overcoming the fear of failure.

     

     

     

    Fear of Failure

    It is said that the fear of failure is the biggest fear that business owners have. They aren’t afraid of selling, they aren’t afraid of losing a key employee, and they aren’t afraid of the monetary risks they are taking. But the fear of failure is huge.

    So what is the fear of failure? To some people it is the fear of losing all their money. Business owners understand that money comes and goes. To some it is the fear of not seeing their business grow to the size they want. But an entrepreneur knows that if this business doesn’t succeed he can start another that will. The fear of failure that business owners suffer from is the fear of never succeeding. It isn’t a onetime setback, it’s a permanent loss.

    Overcoming the Fear of Failure

    What often happens when we are presented with the possibility of failure is that we simply freeze up. Rather than make a decision, we end up making no decision. That can be as bad, or worse, than making the wrong decision. So here are ways to overcome that fear, and become a better business owner because of it.

    Analyze – Weigh the pros and cons of each decision carefully. Write this all down.

    Seek Advice – You should surround yourself with a team of advisors. An accountant, a financial advisor, a marketing person, a graphic designer, a strategist, a website person, etc.

    Go with your gut – Generally speaking your gut feeling is sound advice. Your subconscious has already made the decision, so follow through.

    Keep Moving – We all make mistakes, learn from the past mistakes and prevent future mistakes.

    Accept the Fear – Fear of failure will never go away. But we can harness that emotion and use it for our good.

    Harnessing the Power of Fear

    There are two ways that fear will motivate people. Some people will be wrought with fear of failure so they become workaholics. They have to do everything and have everything perfect. In the end they are no better off than those who don’t do much at all. The other group will harness the power of the fear, and use it to make themselves better business owners. They will work smarter, not harder; they will learn from mistakes, not repeat them; they will seek advice, not be a one-man show. In the end, you don’t want to get rid of the fear, because that is what drives you and motivates you. But you can’t succumb to the fear either.

    Practical Taxes is a full service accounting firm in Billings, MT. We can handle your accounting, payroll services, bookkeeping, and much more. This leaves you the time to focus on what you do best: running your business. Don’t let fear distract you, instead put some of your burdens on us in order to overcome your fear. Call us today at 406-894-2050 to learn how we can help your business thrive!

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    The Power of Proper Leadership

    Leadership-300x200There are many different aspects to running a business. Each one is incredibly important, and without them your business will struggle to stay afloat. Leadership is one of those key aspects. Without a strong leader, your employees won’t understand which direction the company is heading, and they will feel as though they are simply working to collect a paycheck. So how does leadership grow a business? And how do you know if you are a good leader? Your accountant and payroll expert in Billings, Montana explains the details.

     

     

    Leadership Defines Importance

    Brian Mulroney, the former Prime Minister of Canada, once said, “If everything is important, then nothing is.” Those words ring true in our personal and our professional lives.

    For instance, let’s suppose you have a list of chores that need done. That list is a mile long and everything needs to be done. Many people will just start tackling them. Some will start with the easiest first; some with the hardest first. Some will start at the top of the list; others will start in the middle. Everything needs to get done; it is important that everything gets done, but nothing is more important than another. Now suppose you add to the list that you need to remove a tree that is within minutes of falling onto your house. Suddenly there is one aspect that is much more important than the others.

    A good leader will be able to define importance; even when there is no clear set of what is more important. A good leader will be able to take that list of chores, and give each one a ranking of importance so that they all get done on time.

    Leadership Defines Goals

    Without a goal, how will you know when you have arrived? Before you even begin with your business, you need to be able to define your goal and where you would like to be at various intervals. One year from now, where do you want your business to be? 3 years? 10 years?

    Defining your goals will give you a clear idea of where you and your company are heading. It will help you know what needs to be done, and it will help give importance to some of those other chores.

    The role of a leader is to set those goals, but the leader also needs to be able to help get the company to those goals.

    Leadership Develops Strategy

    You have your goals; you have a daily list of chores; now you need to know your strategy and how to make everything work together in order to meet your goals.

    Strategy is the hardest part of leadership. It involves taking risks, making sure everything is working together, and ensuring that everyone is on the same page.

    The strategist helps to instill a sense of worth into employees. Those employees no longer show up so they can collect a paycheck, but rather so they can help the company hit those goals. An employee that has a good leader understands the importance of the strategy that is needed to hit those goals. It is no longer about the paycheck, but rather about the overall good of the company.

    How Will You Improve as a Leader?

    The hard part is knowing HOW to improve as a leader. We know what a leader is, but how do we get there. There are three steps:

    1. Write it all out. Write your goals and your strategy.
    2. Delegate tasks to your employees. Make certain employees the “go-to” for specific problems.
    3. Lead by example. Show your employees how to do their job instead of telling them.

    Take some time today to grow yourself as a leader, and then you can help grow your company through strong leadership.

    Practical Taxes Can Help

    Here at Practical Taxes, we specialize in business consulting. We know that running a business is hard, and we can help you along the way. Whether you need consulting, payroll services, tax preparation, or more, we can handle your needs. Give us a call at 406-894-2050.

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    Hiring the Right Employee for the Job

    Employee-214x300If you are a business owner, then you know that having the right people in the right position is imperative to keep your business flowing smoothly. However, getting the right person can be tricky if you are not aware of what to look for. Fortunately, there are a few clues that you can look out for in order to prevent mistakes. Read on as your accountant in Billings, Montana helps you learn to make good hiring decisions.

    How to Start Your Search

    There are different approaches to finding the right person for the job. It all depends on who you are, what the position is, and a variety of other factors. Here are the most common methods.

    Advertisement – You can put an ad in the paper, online, post it on a bulletin board, or create a TV or radio spot. Advertising for the job is the fastest way to get people to apply, and you will likely be flooded with applications in no time. The problem is that you will get a lot of applications for people not exactly fit for the job.

    Word of Mouth – As a business owner you likely have a good network to bounce ideas off of. By telling those around you that you need an employee, they can come up with recommendations that might be a good fit. By using a pre-screen like this you weed out those simply looking for a job because they want more spending money, and get some better suited for the position.

    Employment Service – There are a number of employment services that can help you find the right employee (Kelly Services is one of them that does a great job). These services do all the hard work for you; you just pay a small fee to have them pre-screen.

    So now you have the search going for an employee… but how do you know that you’re hiring the right person?

    Being Selective When Hiring Employees

    The first rule of hiring is to never hire the only person you interview. The larger your pool of applicants is the better chances of not making a mistake. So here is what you need to watch out for.

    Personality – Some people are quiet, some our outgoing, some are shy, some are thinkers, some are relational. There will be a wide variety of people that come through the door in order to interview for the job. Make sure the personality matches the job! A thinker or someone quiet won’t do well in a sales position; an outgoing relational person will dread a job where they are stuck behind a computer all day long. Pay attention and match the personality to the position.

    Attitude – Education and experience are one thing, but attitude is often seen as more important. As the employer you can train a hard-worker to do just about any job, but someone who has all the experience in the world that only wants to slack off won’t last long.

    Goals – Nobody wants an employee that only plans to stick around for a few months. But any employee worth hiring won’t tell you that they only plan to stick around for a few months. You will have to do your best to determine through your interview to find out their long term goals.

    Test Them – Anyone can give the answers that you want to hear when you ask interview questions, it only takes a little bit of preparation work to do that. This is why you should never hire based on the interview alone. Create a smaller group of those that you think would be a good fit for the job, and have them return for a second interview. This interview will consist of little tests and problems they will come across on the job. Those that do well are a better fit.

    Hiring Employees

    An employee costs money to find and train, but ultimately they will make you more money.   Unless they are a bad fit for the company. By being extra selective and not hiring the first one that comes along you can make sure to minimize the risk of hiring a bad employee.

    Practical Taxes is a full service accounting firm in Billings, Montana. When you do get the employee or employees on board, you will need to pay them. We specialize in payroll services that reduce the amount of work you have to do every week. Give us a call today at 406-894-2050 to learn more.

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    Determining the Proper Business Structure

    Business-Taxes-300x199Are you an entrepreneur? You probably are even if you don’t think that term applies to you. Most of us have great ideas, and if we really put our minds to it, we could start up some amazing businesses that could radically change the world. Unfortunately, the organization, taxation, and all of the other complications that go along with starting a business are enough to deter most people. If you are interested in becoming a business owner, your first step is to do plenty of research. Your accountant in Billings, Montana explains the nuances of different business structures.

    What is a Business Structure?

    Basically speaking, your business structure will determine how your earnings are taxed. There are pros and cons to each of the different methods, and there will be several determining factors based on how much you plan to earn, what your business plans to do, and who you plan to market to.

    Types of Business Structures

    Sole Proprietorship – A sole proprietorship is the most basic way to set up your business is as a sole proprietorship. This method doesn’t involve any fancy ways to file with the state, it says that you own the company, and you own everything in the company. The issues here arise when trying to determine the business as an entity from you as a person. If something goes wrong, you as a person could be held responsible. This includes business debts; the business cannot file bankruptcy separate from the individual.

    Limited Liability Company – A Limited Liability Company (LLC) is very similar to a sole proprietorship, but with one major distinction. It is organized in such a way as to provide the limited liability of a corporation, but the flexibility of a sole proprietorship. Each owner in an LLC (called a member) is responsible for their own share of the earnings and they are filed on a personal tax return; no business taxes necessary here. An LLC is a great structure for a small business that only plans to earn enough income for a single person.

    Corporation (C) – A business can be incorporated two ways. A C Corp is a business that is owned by shareholders. However, the shareholders are not responsible for the business, but the business itself is responsible. Corporations are bigger and more complex, and often have costly overhead (including a lot of tax advisor and legal advisor fees). Most people just starting out will not want to start a C Corp.

    Corporation (S) – An S Corp is similar to a C Corp in that it is structured as a separate entity apart from the owners (shareholders). But it has some distinctions. All of the profits in an S Corp are passed through to the shareholders, so the business itself is not taxed. This is great to avoid double taxation, but it also incurs lower limits of liability (the shareholders can still be held responsible).

    For those just getting started in their business owning journey, these are the main types of business structures they will need to know about. Naturally there are more, such as cooperations, partnerships, and specialized structures for people like attorneys. But most people won’t have to worry about that. In fact, you don’t even have to worry about these basic types. You can learn more about all the business structures on the Small Business Administration page.

    Your accountant in Billings, Montana can help you figure out which business structure to set up as. He can help you get all of the paperwork in order, and get everything filed with the state and city. This frees you up to pouring more time into your idea and building your new business.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help with simple tax preparation, but we also do a lot with business consulting, payroll services, and much more. If you have any accounting needs, give us a call today at 406-894-2050.

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    Use 2015 to Revamp Your Financial Health

    Finances-300x225The New Year is upon us, and now is the perfect time to get your finances in order. There are some things that just about every single person needs to be financially fit. Without those pieces, your overall finances will never be complete. Here is a list of the most important parts of your financial plan, if you are lacking in an area, use this year to get it fixed up.

     

     

     

     

    Emergency Fund and Other Savings

    Ask any financial expert, and they will tell you that an emergency fund is one of the most fundamental components of a healthy financial plan. This fund can look different depending on the person, but it has a few key features that make them all similar. First, the money has to be easily accessible. This means you should not be using home equity as your emergency fund. Second, it should be safe; that means no risky stock ventures or buying bitcoins. Instead, most people opt for a high-yield savings account to stash their money in case something happens and they need a boost. After have your tax return prepared by an accountant in Billings, Montana (you can do so by utilizing the services of Practical Taxes, you should have a refund that you can use to get a jump-start on your savings.

    Insurances Protect Your Financial Health

    We live in a world where we can protect ourselves from the unknown. While the premiums may not be something you really want to pay, they are always much lower than the out-of-pocket costs if tragedy hits. There are ways to protect your income and finances through insurances such as:

    Life Insurance: Leave your legacy, provide for your family, and cover final expenses all after you are gone. Utilizing permanent life insurance can help you meet savings goals as well as protection goals.

    Disability Insurance: Most disabilities are caused by illness rather than major accidents. And you don’t have to be in a wheel chair to be disabled. If you are young, you have a lot of years left before you will be done working. Protect that income with disability insurance.

    Financial advisors will tell you that insurances make up the foundation of your financial plan. Without protection against the “what ifs” there is no real way to plan for the future. Review your insurances over the next couple of months and make sure they are adequate.

    Investments Build Your Financial Health

    There is essentially no way that you can retire comfortably without investing some of your money. Social Security was never designed to cover all of your retirement goals, so you need to put money away on the side as well. Those investments can be in a tax qualified plan, like a Roth or Traditional IRA. Or they can be invested in non-qualified accounts. If you do choose the non-qualified option, your accountant in Billings, Montana can help you to determine the best way to report the gains on them. There are ways to minimize the taxes that come as a result.

    Get Rid of Your Stuff to Increase Financial Health

    Our culture shows us that people are prone to collecting stuff. We buy a house, and we have to fill it. We buy things we think that we need, and after using them a few times, they sit idle in the closet. You can use 2015 to help get your home organized, and build your net worth at the same time. More expensive items can be sold on Ebay or Craigslist, and smaller items can be filler for a garage sale. If you choose to just donate things that you don’t need any more, that is great too. You will be able to deduct the value off of your taxable income.

    Revamp Your Financial Health, and End the Year in the Green

    Let’s make 2015 the year where we get the most out of our finances. Starting with getting your taxes prepared by a professional accountant in Billings, Montana, and ending the year with money coming in on the side, make this the year that your financial picture looks great.

    Practical Taxes is a full service accounting firm. If you need online payroll services, this is your place to be. If you need business consulting services, then look no further. Of course if you just need a professional to do your tax preparation for a cost that is affordable, we can do that as well.

     

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