Cash Flow - The Pulse of Your Business

Many small business owners do not fully understand their cash flow statement. This is surprising, given that all businesses essentially run on cash, and cash flow is the lifeblood of your business.

Some business experts even say that a healthy cash flow is more important than your business's ability to deliver its goods and services! That's hard to swallow, but consider this: if you fail to satisfy a customer and lose that customer's business, you can always work harder to please the next customer. But if you fail to have enough cash to pay your suppliers, creditors, or employees, you're out of business!

What Is Cash Flow?

Cash flow, simply defined, is the movement of money in and out of your business; these movements are called inflow and outflow. Inflows for your business primarily come from the sale of goods or services to your customers. The inflow only occurs when you make a cash sale or collect on receivables, however. Remember, it is the cash that counts! Other examples of cash inflows are borrowed funds, income derived from sales of assets, and investment income from interest.

Outflows for your business are generally the result of paying expenses. Examples of cash outflows include paying employee wages, purchasing inventory or raw materials, purchasing fixed assets, operating costs, paying back loans, and paying taxes.

Note: A professional is the best person to help you learn how your cash flow statement works. Please contact us and we can prepare your cash flow statement and explain where the numbers come from.

Cash Flow Versus Profit

Profit and cash flow are two entirely different concepts, each with entirely different results. The concept of profit is somewhat broad and only looks at income and expenses over a certain period, say a fiscal quarter. Profit is a useful figure for calculating your taxes and reporting to the IRS.

Cash flow, on the other hand, is a more dynamic tool focusing on the day-to-day operations of a business owner. It is concerned with the movement of money in and out of a business. But more important, it is concerned with the times at which the movement of the money takes place.

Theoretically, even profitable companies can go bankrupt. It would take a lot of negligence and total disregard for cash flow, but it is possible. Consider how the difference between profit and cash flow relate to your business.

Example: If your retail business bought a $1,000 item and turned around to sell it for $2,000, then you have made a $1,000 profit. But what if the buyer of the item is slow to pay his or her bill, and six months pass before you collect on the account? Your retail business may still show a profit, but what about the bills it has to pay during that six-month period? You may not have the cash to pay the bills despite the profits you earned on the sale. Furthermore, this cash flow gap may cause you to miss other profit opportunities, damage your credit rating, and force you to take out loans and create debt. If this mistake is repeated enough times, you may go bankrupt.

Analyzing Your Cash Flow

The sooner you learn how to manage your cash flow, the better your chances for survival. Furthermore, you will be able to protect your company's short-term reputation as well as position it for long-term success.

The first step toward taking control of your company's cash flow is to analyze the components that affect the timing of your cash inflows and outflows. A thorough analysis of these components will reveal problem areas that lead to cash flow gaps in your business. Narrowing, or even closing, these gaps is the key to cash flow management.

Some of the more important components to examine are:

• Accounts receivable. Accounts receivable represent sales that have not yet been collected in the form of cash. An accounts receivable is created when you sell something to a customer in return for his or her promise to pay at a later date. The longer it takes for your customers to pay on their accounts, the more negative the effect on your cash flow.
  
• Credit terms. Credit terms are the time limits you set for your customers' promise to pay for their purchases. Credit terms affect the timing of your cash inflows. A simple way to improve cash flow is to get customers to pay their bills more quickly.
  
• Credit policy. A credit policy is the blueprint you use when deciding to extend credit to a customer. The correct credit policy - neither too strict nor too generous - is crucial for a healthy cash flow.
  
• Inventory. Inventory describes the extra merchandise or supplies your business keeps on hand to meet the demands of customers. An excessive amount of inventory hurts your cash flow by using up money that could be used for other cash outflows. Too many business owners buy inventory based on hopes and dreams instead of what they can realistically sell. Keep your inventory as low as possible.
  
• Accounts payable and cash flow. Accounts payable are amounts you owe to your suppliers that are payable some time in the near future - "near" meaning 30 to 90 days. Without payables and trade credit, you'd have to pay for all goods and services at the time you purchase them. For optimum cash flow management, examine your payables schedule.

Some cash flow gaps are created intentionally. For example, a business may purchase extra inventory to take advantage of quantity discounts, accelerate cash outflows to take advantage of significant trade discounts, or spend extra cash to expand its line of business.

For other businesses, cash flow gaps are unavoidable. Take, for example, a company that experiences seasonal fluctuations in its line of business. This business may normally have cash flow gaps during its slow season and then later fill the gaps with cash surpluses from the peak part of its season. Cash flow gaps are often filled by external financing sources. Revolving lines of credit, bank loans, and trade credit are just a few of the external financing options available that you may want to discuss with us.

Monitoring and managing your cash flow is important for the vitality of your business. The first signs of financial woe appear in your cash flow statement, giving you time to recognize a forthcoming problem and plan a strategy to deal with it. Furthermore, with periodic cash flow analysis, you can head off those unpleasant financial glitches by recognizing which aspects of your business have the potential to cause cash flow gaps.

Need Assistance?

We can help you analyze and manage your cash flow more effectively and make sure your business has adequate funds to cover day-to-day expenses. Give us a call today!

Security Tax Services LLC

North Sound                                       South Sound

2802 Wetmore Ave, Suite 212           33530 1st Way S, Suite 102

Everett, WA 98201                             Federal Way, WA 98003

425.339.2400                                     253.237.0751

fax 425.259.1099                               fax 253.237.0701

www.securitytaxservices.com

Ensuring Financial Success for Your Business

Can you point your company in the direction of financial success, step on the gas, and then sit back and wait to arrive at your destination?

Unfortunately, the answer to this question is no. You simply can't let your business run on autopilot and expect good results. Any successful business owner knows that numerous adjustments--from decisions about pricing to hiring and investing--must be made along the way in order to achieve success.

So, how do you handle the array of questions facing you?
One way is through cost accounting.

Cost Accounting Helps You Make Informed Decisions

Cost accounting reports and determines the various costs associated with running your business. With cost accounting, you track the cost of all your business functions including raw materials, labor, inventory, and overhead, among others.

Note: Cost accounting differs from financial accounting in that it's only used internally, for decision making. Because financial accounting is used to produce financial statements for external stakeholders, such as stockholders and the media, it must comply with generally accepted accounting principles (GAAP). Cost accounting does not.

Cost accounting allows you to understand the following:

1. Cost behavior. For example, will costs increase or stay the same if production of your product increases?
   
2. Appropriate prices for your goods or services. Once you understand cost behavior, you can tweak your pricing based on the current market.
   
3. Budgeting. You can't create an effective budget if you don't know the real costs of the line items.

To monitor your company's costs with this method, you need to pay attention to the two types of costs in any business: fixed and variable.
Fixed costs don't fluctuate with changes in production or sales. They include:

• rent
• insurance
• dues and subscriptions
• equipment leases
• payments on loans
• management salaries
• advertising

Variable costs DO change with variations in production and sales. Variable costs include:

• raw materials
• hourly wages and commissions
• utilities
• inventory
• office supplies
• packaging, mailing, and shipping costs

Tip: Cost accounting is easier for smaller, less complicated businesses. The more complex your business model, the harder it becomes to assign proper values to all the facets of your company's functioning.

How to Get Paid on Time

With the current economic conditions, the collection of accounts receivables is becoming more and more of a challenge. Strengthening your collection procedures may allow you to improve collection rates and shorten the aging days of your accounts receivables.

The following suggestions will help your business improve its cash flow and tighten up its credit and collections policies. Some of the tips discussed here may not be suitable for every business, but can serve as general guidelines to give your company more financial stability.

Define Your Policy. Define and stick to concrete credit guidelines. Your sales force should not sell to customers who are not credit-worthy, or who have become delinquent. You should also clearly delineate what leeway sales people have to vary from these guidelines in attempting to attract customers.

Tip: You should have a system of controls for checking out a potential customer's credit, and it should be used before an order is shipped. Further, there should be clear communication between the accounting department and the sales department as to current customers who become delinquent.

Clearly Explain Your Payment Policy. Invoices should contain clear written information about how much time customers have to pay, and what will happen if they exceed those limits.

Tip: Make sure invoices include a telephone number and website address so customers can contact you with billing questions. Also include a pre-addressed envelope.

Tip: The faster invoices are sent, the faster you receive payment. For most businesses, it's best to send an invoice with a shipment, rather than afterward in a separate mailing.

Follow Through on Your Stated Terms. If your policy stipulates that late payers will go into collection after 60 days, then you must stick to that policy. A member of your staff (but not a salesperson) should call all late payers and politely request payment. Accounts of those who exceed your payment deadlines should be penalized and/or sent into collection, if that is your stated policy.

Train Staff Appropriately. The person you designate to make calls to delinquent customers must be apprised of the seriousness and professionalism required for the task. Here is a suggested routine for calls to delinquent payers:

• Become familiar with the account's history and any past and present invoices.
  
• Call the customer and ask to speak with whoever has the authority to make the payment.
  
• Demand payment in plain, non-apologetic terms.
  
• If the customer offers payment, ask for specific dates and terms. If no payment is offered, tell the customer what the consequences will be.
  
• Take notes on the conversation.
  
• Make a follow-up call if no payment is received and refer to the notes taken as to any promised payments.

We Can Help

If you'd like to understand the ins and outs of your business better as well as create sound guidance for internal decision making, consider cost accounting.

If you need assistance we can help. We'll evaluate your business from top to bottom and determine the real cost of each component. With that as a foundation, we will help you draft budgets, adjust pricing, keep an appropriate level of inventory, and much more. Give us a call today!

Security Tax Services LLC

North Sound                                       South Sound

2802 Wetmore Ave, Suite 212           33530 1st Way S, Suite 102

Everett, WA 98201                             Federal Way, WA 98003

425.339.2400                                     253.237.0751

fax 425.259.1099                               fax 253.237.0701

www.securitytaxservices.com

STS QuickBooks Tips - Tracking Bills in QuickBooks, Worth the Effort

Next to payroll, paying bills is probably your least favorite task in QuickBooks. You don't have to use this feature -- you can keep stacking bills on your desk, scrawling the due dates on a paper calendar, and writing checks.

If you're still operating this way, though, you're missing out on the numerous tools that QuickBooks offers to track your accounts payable, including the ability to:

• Enter bills as they come in
• Set reminders for bills due
• Pay bills easily
• Locate a bill or payment quickly
• Enter bills as (or after) you receive items
• Link bills to purchase orders
• Have instant access to a bill's status

Receiving the goods
 
When an expense bill comes in (from a utility company, for example), click the Enter Bills icon on the home page, or Vendors | Enter Bills. A window like the one displayed above opens. Select the vendor and fill in the blanks. Make sure that the Expenses tab below is selected and the appropriate account number and amount fields are completed. If it's a bill for an item that already has a related Item Receipt (the shipment preceded the bill), QuickBooks instructs you to use Vendor | Enter Bill for Received Items. Follow the prompts.  

Note: Dealing with incoming inventory is complex. Consult with us if you plan to use this feature.

If the bill came simultaneously with items, click Vendors | Receive Items and Enter Bill. When you select the vendor from the list, this box opens (if you have sent a purchase order):


Figure 2: QuickBooks is telling you that you have open orders with this vendor.

 
Click Yes. The Open Purchase Orders box opens, containing a list of open POs. Select the one(s) you want and click OK. The bill form opens, containing the details of that purchase order. Change quantities if they don't match the shipment, and edit other fields as necessary. Save the bill.


Settling your debts

It's good to set reminders for bills. Go to Edit | Preferences and click Reminders. Make sure that the Show Reminders List...box is checked, then click Company Preferences. Find the Bills to Pay row and enter the advance notice you'd like. Indicate whether you want to see a list or a summary, then click OK. When bills are due, click the Pay Bills icon or select Vendors | Pay Bills. A window opens displaying all outstanding bills.

You can pare this down by selecting a date in the Due on or before field and filtering by vendors. The screen will look something like this:


Figure 3: You can easily select the bills you want to pay.

Enter a check mark next to the bills you're paying, and change the amount in the Amt. To Pay field at the end of the row if necessary. At the bottom of the screen, you can set the payment date and type, use any discounts or credits, and make sure the correct payment account is selected. When you're done, click Pay Selected Bills. 

Tip: You can have credits and discounts automatically applied by going to Edit | Preferences | Bills.


After You've Paid Up

There are a number of places where your bills appear in QuickBooks, including:

• The Unpaid Bills Detail report
• The A/P Aging Detail report
• The Vendor Center
• QuickReports
• In the Recent Transactions pane of some forms
• On the bills themselves

Figure 4: QuickBooks displays the Paid status of bills.




QuickBooks also lets you void and delete bills, and copy and memorize them. Check with us before voiding and deleting, as this can make some complicated changes in your accounts.


You can just pay bills by using Banking | Write Checks or Enter Credit Card Charges. But the payoff for tracking bills is instant access to your accounts payable status, better relations with vendors, and a more insightful accounting of your company's cash flow.

STS QuickBooks Tips - Job-Tracking Adds Precision to Your QuickBooks Company

Does your business have clients whose work sometimes requires multiple steps drawn out over weeks or months, like remodeling projects or court cases? If so, and you're not using QuickBooks' Jobs features, you're missing out on the opportunity to track and evaluate the financial impact of these complex tasks.

You can, of course, just send an invoice out to these customers. But if you do, you're not taking advantage of what QuickBooks' job tools can do. If you create and track these projects faithfully, you'll have valuable insight that you wouldn't otherwise.

Simple definitions

 

Before you create jobs, you'll need to make sure that QuickBooks is set up properly. Click on Edit | Preferences and then on the Jobs & Estimates and Company Preferences tabs. You'll see this window:

Figure 1: It's important to set up Jobs options before you begin.

There are just a few preferences to set here, but you need to make any necessary changes before you launch into job creation. Also, if you track time, scroll down on the list on the left to Time & Expenses. Be sure time-tracking is turned on, as this will likely be an important element of your jobs.

Before you can attach jobs to customers, you'll have to define your Job Types. Go to Lists | Customer & Vendor Profile Lists | Job Type List. A small window opens with command bars at the bottom. Open the Job Type tab and click New. Let's say you're a building contractor. You might type Remodel in the Job Type Name box, then OK.

Repeat until you've entered all of your job types. If you want to build subtypes, click New again and enter the name of the subtype, like Kitchen. Click Subtype of and click the arrow to drop down the list. Select the parent type and click OK.


Figure 2: It's easy to build a list of your job types and subtypes.

Outlining your jobs

 

Of course, you'll be attaching jobs to customers, though each Customer:Job will exist as an individual entity. So start by opening the Customer Center. Right-click on a customer who needs a job tracked and select Add Job. The New Job window opens, which should already contain your customer's profile. Click on the Job Info tab. In the Job Name field, enter Main Home Kitchen Remodel, and skip over the Opening Balance field.

Click the arrow to open the Job Status list and select Awarded from the options offered (None, Pending, Awarded, In Progress, Closed, Not Awarded). Select the Start Date and Projected End Date. Type a brief description in the Description field and select the correct job type. Your window will look something like this:

Figure 3: You can lay out simple details about each job on this screen.

Click OK to save this job. It's now available for use in transactions and reports. When you're creating an invoice or estimate for a specific job, for example, or filtering a report, you'll need to make sure that you select the correct job, and not just the customer. Otherwise, your bookkeeping will not be accurate.

Estimates and progress invoicing

 

If you do many jobs that take weeks or months, you may find yourself in a bit of a cash flow crunch. Rather than billing for everything at the end, companies in this position often deal with that by creating estimates and dispatching progress invoices. You don't even have to send estimates to customers; they're helpful, though, for gauging your projected income and expenses.

To build a progress invoice partway through a job, create the estimate and click Create Invoice. This window will open, offering three billing options:

Figure 4: QuickBooks gives you three options when you're creating a progress invoice.

Select the one you want and click OK. Your invoice will appear, billed according to your instructions.

In-depth reports

 

Insightful, detailed reports are your reward for all of this meticulous bookkeeping. QuickBooks' job definitions may be fairly simple, but the reports they make possible give you tremendous insight into how cost-effective your projects are. You'll learn how each job is doing in terms of things like:

• Profitability
• The accuracy of your estimates
• Time and mileage
• Unbilled costs
• Job status

QuickBooks' job-tracking tools are not overly difficult to use, but you may want our help in getting your jobs set up and preparing progress invoices. Once you get more than a few jobs in the pipeline, you're going to want to be very confident in your ability to keep up with these procedures. But if you do, you'll have a deeper awareness of how all of your inventory and labor and other expenses are working together to complete projects profitably. We'll be glad to help you make sure that this sometimes-complex task is done right from the start. We're your partner and we're here to make your business better.

Security Tax Services LLC

North Sound                                       South Sound

2802 Wetmore Ave, Suite 212           33530 1st Way S, Suite 102

Everett, WA 98201                             Federal Way, WA 98003

425.339.2400                                     253.237.0751

fax 425.259.1099                               fax 253.237.0701

www.securitytaxservices.com

Quelle Horreur! Mitt Romney Pays 'About 15% Tax Rate (Forbes)

Article originally published on Forbes.com by Kelly Phillips Erb - 01/18//2012

Under growing pressure from other GOP candidates, GOP presidential hopeful and frontrunner Mitt Romney has released some limited information about his finances this week. It turns out *gasp* that Romney has done pretty well for himself over the years. But, really, we already knew that . While we don’t know the specifics, Romney’s net worth is estimated to be northwards of $250 million. He is thought to earn close to $10 million in income per year with some speculation that the number is closer to $40 million (it’s hard to tell exactly since Romney has not released income information even while serving as Governor).

As I predicted, Romney benefits from having a number of tax favorable long term investments. I suggested that would put him roughly in the same category as Warren Buffet with respect to tax rates with Romney paying an effective tax rate close to Buffet’s 11%. This week, Romney confirmed that his effective tax rate is “about 15%.”

Let the skewering begin.

Or maybe not.

The fact is that Romney is doing exactly the same thing that you and I do: he’s taking advantage of existing Tax Code. You wouldn’t expect him to volunteer to pay at a higher rate “just because” anymore than you would volunteer to give up your own mortgage interest deduction or offer to drop a personal exemption. There is absolutely nothing in the Tax Code that requires you to legally pay more taxes than you have to.

The thing is, I want my President – no matter who it is – to either know enough about fiscal and tax policy to make smart decisions or to surround himself (or herself) with people who can make those smart decisions. Having someone who consistently makes poor decisions about their own taxes directing tax policy seems like, I don’t know, asking Newt Gingrich for relationship advice.
So if there’s anger to be had, let’s make sure it’s pointed in the right direction. It isn’t that we should be angry at Romney for taking advantage of the Tax Code as written. We should be angry at Congress for letting it to happen. Tax reform should be the clamor, not torching the wealthy.

And let’s face it: historically, we’ve tended to elect wealthy presidents from Jefferson to Kennedy to Bush. And many of those attempting to throw stones right now (yes, I’m talking to you, other GOP candidates who are clearly in the 1%) are doing so in an attempt to paint success as elitist, as if that’s something terrible. It’s very reminiscent of the 2008 presidential nomination race when the Democrats did the same thing, causing Jon Stewart to remark: Not only do I want an elite president, I want someone who’s embarrassingly superior to me.

Agreed. There’s a reason that we tend to vote in the Clintons and the Bushes of the world and not the equivalent of Larry the Cable Guy. Being smart and successful isn’t a bad thing.

All of that said, I’m not going to give Romney a free pass altogether. As a GOP presidential candidate, Romney, like many others favors tax policies that would benefit taxpayers like him. If there’s a criticism to be had here, it shouldn’t be that he’s benefited from the existing system but that he’s not suggesting meaningful reform. And that’s where this discussion should really be focused, isn’t it?

Article originally published on Forbes.com by Kelly Phillips Erb - 01/18//2012

Are You Ready for Government Prepared Tax Returns?

Article originally published on Forbes.com by Kelly Phillips Erb - 01/13//2012

“The income tax has made more liars out of the American people than golf has.” – Will Rogers

But what if it were easier? And what if the IRS made it nearly impossible to lie? What then?

Last year, IRS Commissioner Doug Shulman hinted that one way to reduce the potential for tax fraud was to have IRS prepare returns for taxpayers. That’s right, you wouldn’t have to prepare returns come tax time: the IRS would do it for you.

The idea is commonly referred to as a “simple return” or “ready return” (yes, it sounds like a snack you might buy at a Wawa). Under the plan, the IRS would send out tax returns that had already been completed with taxpayer identification and wage information. Taxpayers would merely review the returns for accuracy and sign at the bottom… kind of a “check the box if you agree” system. Taxpayers would have the opportunity to correct any mistakes prior to submitting the returns to the IRS.

Why not? The IRS already has a good chunk of taxpayer information on file. Add to that the obligations of employers, financial institutions and other third parties to provide wage and other income information to the IRS and there’s already a nice little database at the IRS’ disposal.

But putting those returns together is not cheap. Right now, the IRS simply doesn’t have the manpower to prepare returns for taxpayers and pursuant enforcement and collections activities and adding to the rosters (and thus, the budget) would be a major endeavor. Shulman, however, seems to believe that it might be worth considering.

A limited version of the plan is already in place in California. The plan, called (of course), ReadyReturn, is free to taxpayers who qualify in the Golden State. The state uses information from the prior year’s return along with information from the form W-2 to pre-fill a California state tax return. The return only needs to be reviewed by the taxpayer and signed. Brilliant, right? Then how come no one is signing on?

For one, the number of taxpayers who qualify is limited. To qualify, taxpayers must have filed a 2010 California resident return as single or head of household and no more than five dependents. Taxpayers must only have income from wages from a single employer and must claim the standard deduction with no credits other than the renter’s credit. Depending on who you are, the program was either wildly successful or a terrible failure. The pilot program, sent out to 50,000 taxpayers, had a 27% participation rate. That works out to about 13,500 taxpayers. The state has about 20 million taxpayers, making the overall participation rate less than 1/2%. In 2009, the number of participants in the program grew to 60,000 taxpayers, or about 3%. Hardly statistically significant. But the folks who are using the system appear to like it.

The program has also seen success outside of the U.S. Programs in Sweden and Denmark claim participation rates of over 75% (downloads as a pdf). Could the IRS duplicate those kinds of results?

I’m not so sure.

Notwithstanding the costs – which would be huge – to convert to such a system in the U.S., I don’t think that U.S. taxpayers would embrace a system where the government prepared their returns. For one, U.S. taxpayers aren’t enthralled with the feds these days. Most are seeking less government interference, not more. I don’t think many taxpayers would trust the government with their own finances; after all, the government can barely manage its own. Further, if you’ve ever seen a substitute return (one prepared by the IRS for a taxpayer), you know that there’s a financial incentive to prepare a return that produces the most revenue for the government, not what’s most advantageous to the taxpayer. And the benefit of that to taxpayers is what, exactly?

The underlying problem isn’t that taxpayers don’t have the wherewithal to fill out a simple tax form (and keep in mind that this option would only be available to taxpayers with simple returns): it’s that the Tax Code is far too complicated as it stands. The simple tax forms aren’t the problem and yet, those are the very returns the IRS seeks to make more, well, simple with this kind of plan. We keep skirting the real problem: a tangled, confusing Tax Code. I would suggest that reform, not pre-filled returns, is a better, more economical answer

Article originally published on Forbes.com by Kelly Phillips Erb - 01/13//2012

Credit Card Reporting for Tax Purposes Debuts This Month

Article originally published on Forbes.com by Kelly Phillips Erb - 01/13//2012

 

Form W-2, check.
Form 1099-Misc, check.
Form 1098, check.
Form 1099-K… wait, what?

Yep, there’s a new form from the IRS out this year and one might be landing in your mailbox soon. The federal form 1099-K, Merchant Card and Third Party Network Payments, will debut early this year:  forms 1099-K are due to merchants by January 31, 2012. Electronically filed 1099-Ks are due to the IRS April 2, 2012 (normally March 31), while paper 1099-Ks are due February 28, 2012.

So what is the new form 1099-K? It looks like this (downloads as a pdf and yep, no longer in draft form!).

And here’s how it will work: certain payments for goods and services paid by credit card or third party merchants will be reported to the IRS via the form 1099-K. A reportable payment transaction is a transaction in which a payment card (such as a credit card or gift card) is accepted as payment or any transaction that is settled through a third party payment network like PayPal. It does not include ATM withdrawals, cash advances against a credit card, a check issued in connection with a payment card, or any transaction in which a payment card is accepted as payment by a merchant or other payee who is related to the issuer of the card.

In plain talk, this means that taxpayers who have a credit card merchant account, Paypal account or similar account and otherwise meet the criteria will receive form 1099-K from their service provider. That would include professionals like lawyers and architects who accept online or credit card payments for services, freelancers compensated via PayPal and etsy sellers, affiliates, eBay merchants and other small businesses who accept credit cards, debit card or PayPal as payment for their wares.

But not every dollar will count. Reporting is only required when gross payments to an individual payee exceed $20,000 for the year and when there are more than 200 transactions with the participating payee. So the occasional sale of a crocheted toilet paper roll cover over the internet? Not likely to merit the issuance of a 1099-K. But a successful online store? That’s another story.

It’s the first year of reporting so there’s bound to be a lot of confusion. As a result, the IRS will delay penalty provisions and withholding requirements until January 1, 2013, for entities required to issue the forms 1099-K. The reporting, however, is moving forward.

The point of the law is to “improve voluntary tax compliance by business taxpayers and help the IRS determine whether their tax returns are correct and complete.” Read: the IRS thinks you’re cheating. And some of you are. That explains the whole tax gap problem. This is yet another effort to step up compliance. Taxpayers who receive those forms 1099-K are going to be expected to report the income. Don’t get caught off guard.

Article originally published on Forbes.com by Kelly Phillips Erb - 01/13//2012

Receive a Faster Refund with Direct Deposit

The New Year has arrived, which means . . . it's tax time!

This year, do you want your refund faster? Have it deposited directly into your bank account. More taxpayers are choosing direct deposit as the way to receive their federal tax refunds. More than 78.4 million people had their tax refunds deposited directly into their bank accounts last year. It's the secure and convenient way to get money in your wallet faster.

• Security. The payment is secure - there is no check to get lost. Each year thousands of refund checks are returned by the US Post Office to the IRS as undeliverable mail. Direct deposit eliminates undeliverable mail and is also the best way to guard against having a tax refund stolen.
  
• Convenience. There's no special trip to the bank to deposit a check!

You can also electronically direct your refund to multiple accounts. With the new "split refund" option, taxpayers can divide their refunds among as many as three checking or savings accounts and three different U.S. financial institutions. The split refund option, using Form 8888, is also available for paper returns.

Caution: Some financial institutions do not allow a joint refund to be deposited into an individual account. Check with your bank or other financial institution to make sure your direct deposit will be accepted. Also, make sure you have the correct nine-digit routing number and your account number when selecting direct deposit.

To request direct deposit, just ask us. We are happy to assist you.

Security Tax Services LLC

North Sound                                       South Sound

2802 Wetmore Ave, Suite 212           33530 1st Way S, Suite 102

Everett, WA 98201                             Federal Way, WA 98003

425.339.2400                                     253.237.0751

fax 425.259.1099                               fax 253.237.0701

www.securitytaxservices.com

Customer Refunds: Are You Doing Them Right?

Refunds. You probably wince at the word. Some -- like customer refunds for returns -- are fairly uncomplicated, thanks to QuickBooks' tools. Others, not so much. You may find yourself unable to balance your accounts receivable.

There are numerous scenarios that necessitate the use of credit memos, including overpayment, order cancellations and bad debt write-off. It's critical that these are entered correctly. If they aren't, you may lose a lot of the time that QuickBooks helped you save as you try to chase down a few dollars.


Figure 1: QuickBooks helps you identify refunds quickly.

Sending money back

Let's say a customer pays for an order but cancels before it ships. You could:

• Apply the balance to an existing invoice
• Keep it as an available credit
• Issue a refund

Click Customers | Create Credit Memos/Refunds. Select the correct customer and job (and A/R account, if you have more than one). Enter the items just as they appear on the invoice.
When you're finished, click Save & New. The Available Credit window opens, displaying your options:


Figure 2: The Available Credit window displays your credit balance options.You would select Give a refund and click OK. The Issue a Refund window opens and should already be filled in. If everything is correct, click OK. The refund check has now been entered in the checking register, ready to be processed.

WARNING: If the invoice was paid with a credit card, it gets complicated. Your instructions will depend on whether you are using Intuit Merchant Service for QuickBooks or another merchant account service. You'll also have to deal with transaction fees. We can help you deal with this.

Other refund options

If the customer has open invoices, you may want to choose Apply to an invoice in the Available Credit window. A list opens; just select the correct invoice. Or if you want to have those extra funds available for other invoices but don't want to apply them immediately, click Retain as an available credit. When you want to use them, click the Apply Credits button in the lower right corner of the invoice.


Figure 3: When issuing a refund, QuickBooks can hold those funds to be applied to invoices later.

Sometimes, customers overpay an invoice or statement charge, or make a down payment for which there is no invoice. This is easy to fix. Open the Customer Payment screen (Customer Center | Transactions | Received Payments) and double-click the related payment. In the screen's lower left corner, you'll see this:


Figure 4: Click the correct option here.

Click the correct button, then Save & Close. The Issue a Refund window opens; you'd treat it the same way you did when you dispatched a return refund.

Another use

You can also use credit memos to write off bad debt if you are using the accrual method of accounting.
If you don't already have a Bad Debt item in your item list, set up a new item as an Other Charge. Name it "Bad Debt" and match it to the correct account.

Open the Credit Memo window and select the customer, then select Bad Debt as the item. You'll get a message saying that the item is associated with an expense account; click OK. Enter the write-off amount minus sales tax if taxable (be sure the Tax column is correct) and click Save & Close.

WARNING: Enter two lines on the credit memo if it combines both taxable and non-taxable items (both charged to the Bad Debt account), one for each type. Be sure that the Tax Columns are correct.

The Available Credit window opens. Select Apply to an invoice. Put a check mark next to the correct one and click Done.

Make refunds make sense

It seemed easier in the days when you just wrote a check for a refund or made an entry in a paper ledger, didn't it? Using QuickBooks credit memos, though, helps you maintain records that follow standard accounting procedures and simplifies our understanding of your files. We'll be glad to help you make sure that this sometimes-complex task is done right from the start. We're your partner and we're here to make your business better.

Security Tax Services LLC

North Sound                                       South Sound

2802 Wetmore Ave, Suite 212           33530 1st Way S, Suite 102

Everett, WA 98201                             Federal Way, WA 98003

425.339.2400                                     253.237.0751

fax 425.259.1099                               fax 253.237.0701

www.securitytaxservices.com

Do you keep your money in an offshore bank account?

IRS Offshore Programs Produce $4.4 Billion to Date for Nation’s Taxpayers; Offshore Voluntary Disclosure Program Reopens

WASHINGTON — The Internal Revenue Service today reopened the offshore voluntary disclosure program to help people hiding offshore accounts get current with their taxes and announced the collection of more than $4.4 billion so far from the two previous international programs.

The IRS reopened the Offshore Voluntary Disclosure Program (OVDP) following continued strong interest from taxpayers and tax practitioners after the closure of the 2011 and 2009 programs. The third offshore program comes as the IRS continues working on a wide range of international tax issues and follows ongoing efforts with the Justice Department to pursue criminal prosecution of international tax evasion. This program will be open for an indefinite period until otherwise announced.

“Our focus on offshore tax evasion continues to produce strong, substantial results for the nation’s taxpayers,” said IRS Commissioner Doug Shulman. “We have billions of dollars in hand from our previous efforts, and we have more people wanting to come in and get right with the government. This new program makes good sense for taxpayers still hiding assets overseas and for the nation’s tax system.”

The program is similar to the 2011 program in many ways, but with a few key differences. Unlike last year, there is no set deadline for people to apply. However, the terms of the program could change at any time going forward. For example, the IRS may increase penalties in the program for all or some taxpayers or defined classes of taxpayers – or decide to end the program entirely at any point.

“As we’ve said all along, people need to come in and get right with us before we find you,” Shulman said. “We are following more leads and the risk for people who do not come in continues to increase.”

The third offshore effort comes as Shulman also announced today the IRS has collected $3.4 billion so far from people who participated in the 2009 offshore program, reflecting closures of about 95 percent of the cases from the 2009 program. On top of that, the IRS has collected an additional $1 billion from up front payments required under the 2011 program.  That number will grow as the IRS processes the 2011 cases.

In all, the IRS has seen 33,000 voluntary disclosures from the 2009 and 2011 offshore initiatives. Since the 2011 program closed last September, hundreds of taxpayers have come forward to make voluntary disclosures. Those who have come in since the 2011 program closed last year will be able to be treated under the provisions of the new OVDP program.

The overall penalty structure for the new program is the same for 2011, except for taxpayers in the highest penalty category.

For the new program, the penalty framework requires individuals to pay a penalty of 27.5 percent of the highest aggregate balance in foreign bank accounts/entities or value of foreign assets during the eight full tax years prior to the disclosure. That is up from 25 percent in the 2011 program. Some taxpayers will be eligible for 5 or 12.5 percent penalties; these remain the same in the new program as in 2011.

Participants must file all original and amended tax returns and include payment for back-taxes and interest for up to eight years as well as paying accuracy-related and/or delinquency penalties.

Participants face a 27.5 percent penalty, but taxpayers in limited situations can qualify for a 5 percent penalty. Smaller offshore accounts will face a 12.5 percent penalty. People whose offshore accounts or assets did not surpass $75,000 in any calendar year covered by the new OVDP will qualify for this lower rate. As under the prior programs, taxpayers who feel that the penalty is disproportionate may opt instead to be examined.

The IRS recognizes that its success in offshore enforcement and in the disclosure programs has raised awareness related to tax filing obligations. This includes awareness by dual citizens and others who may be delinquent in filing, but owe no U.S. tax. The IRS is currently developing procedures by which these taxpayers may come into compliance with U.S. tax law. The IRS is also committed to educating all taxpayers so that they understand their U.S. tax responsibilities.


More details will be available within the next month on IRS.gov. In addition, the IRS will be updating key Frequently Asked Questions and providing additional specifics on the offshore program.

Security Tax Services LLC

North Sound                                       South Sound

2802 Wetmore Ave, Suite 212           33530 1st Way S, Suite 102

Everett, WA 98201                             Federal Way, WA 98003

425.339.2400                                     253.237.0751

fax 425.259.1099                               fax 253.237.0701

www.securitytaxservices.com

9 Things to Know About the Making Work Pay Credit and Payroll Tax Cuts (Forbes)

   My inbox continues to be chock full of questions about the Making Work Pay Credit for 2011. Taxpayers, it seems, are still confused about whether the credit was extended and how it relates to the payroll tax cuts. So let me see if I can set the record straight for you:

1. The Making Work Pay Credit was not extended into 2011. The Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act which was signed into law on December 17, 2010, did not renew the credit. The credit ended in the calendar year 2010.
   
   
2. If you qualified for the credit, you would have received it as part of your 2010 federal income tax return which was filed during the 2011 tax season.
   
   
3. Since there was no Making Work Pay Credit in 2011, you will not report the credit when you file your 2011 federal income tax return during the 2012 tax season.
   
   
4. If you did not receive the benefit of the Making Work Pay Credit in 2010, the last year the credit was available, you can amend your return. First, make sure that you qualified for the credit. Also check to make sure that the credit wasn’t already applied since the IRS was making an effort to apply the credit for qualifying taxpayers who did not complete a Schedule M. Keep in mind that you have three years from the date of filing your original return or two years from the date of paying the tax (whichever is earlier) to claim a refund.
   
   
5. The Payroll Tax Holiday was in effect for 2011 and was intended to make up for the loss of the Making Work Pay Credit. If you’re an employee, you should have noticed a few extra dollars in your paycheck each pay period this year. That’s because, on the employee side, payroll tax contributions for federal purposes have been reduced by 2%: instead of paying in at 6.2% for Social Security taxes, contributions are 4.2% for Social Security taxes. Contributions for Medicare remained the same.
   
   
6. If you are an employee subject to withholding, you will not receive an additional break on your federal income tax return as a result of the payroll tax cuts when you file in 2012. You’ve already received the benefit of the payroll tax holiday on an “as you go” basis since your employer should have adjusted your withholding for Social Security accordingly.
   
   
7. If you are self-employed, you will receive the benefit of the payroll tax holiday when you file your federal income tax return in the form of an adjustment to your SE tax due. Your SE tax will be reduced by 2%; the SE tax rate of 12.4% is reduced to 10.4%.
   
   
8. The payroll tax holiday has been extended for 2012 – but only for two months. Expect that to change.
   
   
9. The “recapture” tax for taxpayers, that additional income tax for taxpayers who receive more than $18,350 in wages during the first two months of 2012, will not affect your 2011 taxes. The extra tax is payable in 2013 when you file your 2012 federal income tax return.
   

Hopefully, that makes sense.

And if you’re having problems sorting it out, don’t blame your tax pro, blame your Congressional rep. This is the kind of confusion that happens when Congress plays the “let’s get more votes” revolving door of credits and deductions. Consistency, folks. Is it too much to ask for?

 Article originally published on Forbes.com by Kelly Phillips Erb - 01/04/2012

If you have questions on the Making Work Pay Credit, Payroll Tax Cuts, or any other tax issue, call or email us. We're your partner and we're here to make your business better.

Security Tax Services LLC

North Sound                                       South Sound

2802 Wetmore Ave, Suite 212           33530 1st Way S, Suite 102

Everett, WA 98201                             Federal Way, WA 98003

425.339.2400                                     253.237.0751

fax 425.259.1099                               fax 253.237.0701

www.securitytaxservices.com

The Best Time to Buy Anything in 2012 (Lifehacker)

  A bit of planning can save you a ton of money when it comes to buying... well, just about anything. Here's your comprehensive guide on the best times to buy everything in 2012.

Originally Posted on Lifehacker By Whitson Gordon

Jan 3, 2012 8:00 AM

Each year, we compile a list of the best times to buy stuff based on when stores are trying to push out old stock, when they're dropping prices for upcoming holidays, or even when they start having sales for no good reason. This year, with more research and help from our readers, our list is bigger and more comprehensive than ever. Check out the chart below for an easy view of the year, or read on for more details.

We've drawn this information from a lot of places, including our original sources, Freeshipping.org's Best Time to Buy guide from last year, and PC World's gadget-specific buying guide. We've also learned a bit from Mark Di Vincenzo's book Buy Ketchup in May and Fly at Noon: A Guide to the Best Time to Buy This, Do That, and Go There, as well as comments from you guys.

First Quarter (Jan/Feb/March)

• Gas Grills & Air Conditioners: They're obviously off-season (at least in the colder states), and unless you're a serious air conditioning enthusiast, you probably aren't itching to get the latest and greatest.
  
• Wedding Supplies: Everyone wants a wedding in the spring, which means it's a lot easier to find a venue and negotiate prices for a service in the winter.

Photo by woodleywonderworks.

January

• Bicycles & Sporting Goods: The dead of winter isn't when most people are buying their summer gear, so you're likely to get some good deals. Again, this could vary if you're in a warmer climate.
  
• Broadway Tickets: Broadway's slower months are in the winter and fall, so January's a great time to seek out some discounts. You probably won't find them for the more popular shows, but if you're looking to branch out, this is the time to do it.
  
• Calendars: Paper calendars make a great stocking stuffer, so if you aren't too picky about what you get, grab them after the holidays for some bargain bin deals.
  
• Carpeting & Flooring: According to Carpet SuperSite, most people buy carpets at the end of the year in preparation for the holidays. Once January rolls around, prices will go down.
  
• Digital Cameras: After the big trade shows like CES come around in mid-January, you'll see that older model cameras drop in price to prepare for the newly-announced ones.
  
• Furniture: Most furniture companies release new products twice a year: in February and August. That means they'll be giving some sweet deals in January to make room for the new products next month.
  
• Gift Cards: You wouldn't think there would be a best time to buy gift cards, but you'd be wrong. Just after the holidays, you're bound to find better deals on gift card exchange sites like Plastic Jungle, where everyone's trading in their unwanted cards for cash.
  
• HDTVs & Home Theater Gear: These stay on sale pretty much right up until the super bowl, so even if you aren't a football fan, you can take advantage of the sales brought on by extra competition.
  
• Digital Frames: Because this is one of those things everybody seems to give for Christmas.
  
• Linens and Bedding: Ever since John Wannamaker started the first "white sale" in 1878, January has been the best month to get bedding and other linens. Of course, just as with clothing, keep an eye out all year round, since retailers will put last season's stuff on sale when new products come out.
  
• Motorcycles: It's really cold outside. Not to mention icy. It doesn't make for great cycling weather, but if you've been mulling over a motorcycle purchase, get it in January and then wait to ride it when the snow melts.
  
• Office Furniture: Business is best for office furniture retailers in January, likely due to new offices buying up stock for the new year. Grab your new ergonomic office chair now, or in April after tax day.
  
• Video Games: Most new video games come out in late fall for the holiday season, and they'll go on sale after the holidays are over. Check out Steam and other gaming retailers for discounted prices.

February

• Boats: February is boat show season, and since manufacturers are clearing out the old models, you can often get some pretty good deals. Some people recommend waiting until after the actual boat shows, so you don't have the other expenses they carries with them.
  
• Broadway Tickets: February still falls into the slow season for Broadway, so grab discounts on tickets to the less popular shows.
  
• Digital Cameras: Since the newest cameras will have just come out post-CES, you can grab last year's models for less.
  
• HDTVs & Home Theaters: Up until the Super Bowl, grab great prices on those new TVs.
  
• Video Games: Again, since video games come out in early winter for the holidays, you can grab a lot of those new games at a discounted price now.

March

• Boats: As we mentioned above, once boat show season is over, you can still grab good deals on last year's models before the brand new ones come out.
  
• Frozen Foods: It's National Frozen Food Month. It may be strange, but I'm not about to argue with them.
  
• Gardening Tools: It may not be time to break them out yet, but if you shop for those gardening tools ahead of time, you can usually get a sweet price in late winter/early spring.
  
• Golf Clubs: New models are coming out for the summer, so your local golf shop is pushing the old ones out the door. Grab last year's set cheaply and you'll forget all about how awesome the new ones are.
  
• Luggage: It's in between vacation seasons, so shops are dropping prices. Grab any extra bags you might need for the summer in March.

Second Quarter (April/May/June)

 

• Televisions and Other Electronics: Japanese manufacturers' fiscal year ends in March, so they're eager to get rid of old stock.
  
• Houses: Home buying is a tough process, but if you do it in between winter and summer, you'll find a better deal than you would in the middle of the big seasons.
  
• Boots & Winter Wear: Because who thinks about winter clothes when it's finally getting warm again?
  
• Cookware & Kitchen Accessories: Graduations are coming up, so even if you're well out of school, take advantage of the grad-based sales for everything kitchen-related.
  
• Vacuum Cleaners: New vacuums come out in June. This is pretty convenient, since you can buy a vacuum for a low price beforehand and get started on your spring cleaning.

Photo by Ming-Yen Hsu.

 

April

• Car Accessories & Parts: Since most people head out to fix their cars in the summer, you can get in on the game early for a good price. Some of you have pointed out some good places to get car parts online, too.
  
• Cruises: Since it isn't a traditional vacation month, you can often grab a cruise last-minute for less.
  
• Laptops: Laptop prices are even lower in April than they are during the back to school season. For no apparent reason.
  
• Office Furniture: If you shop after tax day—when most home businesses start up—you can usually find some great deals on those office chairs and desks.
  
• Sneakers: As the weather starts getting warmer, the less serious start getting back into the swing of working out, which means it's a great time to take advantage of spring sales at your favorite running or footwear store.
  
• Snowblowers: Obviously, no one's buying snowblowers after it's all melted. If you got snowed in this year, though, you might want to pre-emptively buy one for next year for a discounted price.

May

• Mattresses: Manufacturers are rolling out new products in the summer, so the best time to buy a mattress is now, while they're making room for all the new ones.It should still be easy to pick a great one with a bit of pre-shopping research.
  
• Patio Furniture: Warm weather cometh, along with new patio furniture. Stores are going to start clearing out any old stuff to make room, so get the deals while you can. You might want to check out garage sales before you do, though.
  
• Party & Picnic Supplies: The season of outdoor eats is on its way, and even if you aren't having a barbecue until July, stock up now while the deals are good.
  
• Refrigerators: People are cleaning and upgrading their homes, and new refrigerators are coming out soon. Grab good deals on an older-model icebox in May.

June

• Champagne: Since wedding season comes around at this time, champagne makers are in furious competition with one another, and you can grab a good deal.
  
• Dishware: Wedding season brings deals on dishes to everyone, including those not getting hitched.
  
• Gym Memberships: Everyone's forgotten their New Year's resolutions, so gyms are a bit more desperate for members (not to mention everyone's working out outside). Haggle yourself a good price.
  
• Paint: The summer heat means death to painters, but it also means low prices—so if you're considering a new coat of interior or exterior paint, find your shade now and buy it for later.
  
• Tools: It's hard to complain about gender stereotypes when power tool prices are this low. Shop before Father's Day for a good sale.
  
• Suits: Like power tools, Father's Day brings low prices on the suits every dad must have.

Third Quarter (July/Aug/Sept)

• Computers: Intel and AMD start ramping up for new stuff in July, and back-to-school sales get pretty good here too.
  
• Big Appliances: Newer appliances are coming out at the end of the year, so you can get great discounts on the bigger ones all quarter.
  
• MP3 Players: In the later two thirds of the quarter, you can often find some pretty good deals on MP3 players, not the least of which is the illustrious iPod, which always has its refresh in the fall.

Photo by Masahiro Ihara.

July

• Broadway Tickets: Once again, tickets are a bit cheaper in July when fewer people are seeing shows. Even if you're buying tickets for later in the year, you can get a pretty good discount on them now.
  
• Furniture: August is the second time of year that new furniture comes out, so once again you can get good deals the month before as manufacturers are trying to get rid of the old stuff.
  
• Grills: Borrow your neighbor's grill for Independence Day, then grab a great deal after the 4th instead.
  
• Paint: As noted above, it's still pretty hot outside, so grab your paint now while it's in low demand.

August

• Linens & Storage Containers: As the kids head off to college, lots of stores have sales on new dorm supplies.
  
• Outdoor Toys & Camping Equipment: The weather won't be warm for much longer, and stores want to get rid of these summer toys that take up tons of space. You'll find some pretty great deals here if you shop around.
  
• Kids' Clothing: It's back to school season, so lots of more kid-oriented stores are having sales.
  
• School Supplies: Again, back to school sales mean good deals on lots of office supplies. You can either buy now, when the sales are going on, or later in September, when stores are getting rid of leftovers.
  
• Wine: It's still early in the harvest, but you can fine some smaller-run wines for cheap during the month of August.

September

• Bicycles: New models come out at the end of the month, which means you can get discounts on the old beaters before winter comes around.
  
• Cars: New cars usually come out at the end of the summer, so lots will be clearing out their 2012 models around this time. It should be easier to haggle down the price, too. Buy at the end of the month for extra savings.
  
• Grills & Lawnmowers: Stores have to make room for all their winter gear, which means the big summer staples will be on sale.
  
• Holiday Airfare: We've mentioned before that you should buy plane tickets two months in advance, which means now is the time to prepare your holiday visits to friends and family.
  
• Patio Furniture: Like the grills and lawnmowers, out with the summer, in with the winter.
  
• School Supplies: As mentioned above, stores'll be clearing out their inventory from all the back to school sales. Anything you don't need the first few weeks of school can be bought in September for even less.
  
• Wine: It's harvest time, which means this is the best time to stock up on wine.

Fourth Quarter (Oct/Nov/Dec)

• Cars: As we said in September, now that the new models are out, the old models are going for less. Haggle your way down to good prices on 2012 models for the rest of the year.
  
• Cookware & Kitchen Accessories: Holiday deals start pretty early, and cookware is one of the more popular items that you'll find on sale all quarter.
  
• Gas Grills & Air Conditioners: Again, we drift into the cold off-season, and stores start to push their older stuff.
  
• Shrubs, Bushes, Bulbs, etc.: If you have a cellar or other area that can store plants until the spring, you can pick them up now pretty cheaply.
  
• Toys & Games: Again, the Christmas sales start early at places like Toys R Us, and will continue through most of the holiday season.
  
• Wedding Supplies: Winter's back, which means finding a venue and negotiating those services is going to be a lot easier. The more deeply into winter you wait, the better it gets.

October

• Broadway Tickets: Yet another off-month for Broadway shows, so grab your tickets now for less.
  
• Health Insurance: If you're lucky enough to have a choice in when you buy, October is when most health plans accept new members, so shop around and see if you can find better benefits elsewhere.
  
• Jeans: Hit the mall in between back to school season and holiday shopping season for some mad prices on jeans.

November

• Aluminum Foil & Plastic Wrap: Yeah, it's weird.
  
• Televisions & Other Electronics: Hit the stores during Black Friday and Cyber Monday for insane deals on all sorts of electronics.

December

• Champagne: Again, this is one of those few times that prices drop because demand is so high. Champagne companies are all trying to compete with each other, so grab it now for your holiday celebrations.
  
• Golf Clubs: It's the off-season, so golf clubs are cheaper to come by.
  
• Pools: It may seem like eons away, but if you buy a pool now, you can get a great discount on next summer's fun. There are a few smaller sales during the summer, but you'd have to keep a sharp eye out to catch them.
  
• Televisions & Other Electronics: The sales continue after Black Friday and Cyber Monday, usually all the way up until the super bowl.
  
• Tools: Holiday sales are perfect for grabbing cheap tools, especially if you have a winter-related home repair you need to make.

• General Buying Tips for Any Time of Year

  Apart from the above time periods, there are other days of the week or year that are best for buying certain items (which is great if you can't wait three months for a new computer). We've mentioned a few of these around the site before, but in the interest of being comprehensive, here are some things to keep in mind:
•  
• 
  
  
  •  Appliances tend to be cheap on Sundays, when most people are out buying new ones. In addition, you're bound to find great deals on any major holiday, like Memorial Day or Independence day.
    
  • Computers & other electronics are cheapest on Mondays, when manufacturers apply their rebates. This applies to TVs, cameras, and video games as well.
    
  • Entertainment venues like museums and amusement parks often have discounts during the middle of the week, when they're less crowded. Plus, smaller crowds are always nice. Some museums might even have free admission days, so check out the venues you're interested in for more.
    
  • Gas prices are higher on the weekends, hitting their peak mid-morning on Thursday to anticipate all the weekend drivers and travelers. Fill up on Wednesdays or early morning Thursdays for the biggest savings. Also, if you fill up in the morning when it's cold, your gas will be a bit denser and you'll get a bit more fuel for your money.
    
  • Jewelry is best bought on Wednesdays, when most people tend to shop for it. However, stay away from gift giving months like Valentine's Day, Mother's Day, and Christmas.
    
  • Chocolate is great to buy after any holiday that involves chocolate: Halloween, Christmas, Easter, and Valentines's Day, for example. They'll be clearing out all their holiday-themed candy, so you can grab them up if your kids already ate their chocolate rabbits and Santas.
  
  
  And with all things, if you find an item you like, monitor it regularly. Things go on sale for no reason all the time, whether it's a Shell Shocker on Newegg, the end of a clothing season, or when a particular product goes through a refresh (like Apple computers).
  
  

  ---

  That's our big list for the year. We'll be updating you at the beginning of each month, reminding you of the best things to buy, but this should help you plan for the year ahead. 

Originally Posted on Lifehacker By Whitson Gordon

Jan 3, 2012 8:00 AM