Tag Archives: taxes

Software Taxes

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If you didn’t already know, I live in Seattle. There’s a bill that’s currently in the Washington State Legislature that, if passed, will levy a tax on all software customizations done by businesses (at least, for now, those businesses residing in the state of Washington).

You may not think this impacts you directly, but if other states (or governments in other countries) see it as a viable option, they may consider doing the same thing where you live.

Check out the legislature’s proposed HB 3191. Page 90, Part XV, Point 2, as put forth by Representatives Hunter, Conway, and Hasegawa:

In order to preserve funding for higher education, it is the legislature’s intent to use revenue generated from assessing a sales and use tax on custom software to support the state’s institutions of higher education and financial aid programs including the state need grant.

What the hell does THAT mean? Well, if you’re a business in the state of Washington, you’ll be subject to a state sales tax (currently 6.5%) on any “custom software” or customization thereof.

As ├ťbermind points out, there are two likely scenarios:

  • Scenario 1. If [a Washington company] hires an in-state consultant or consulting company, the in-state consultant or consulting company will have to collect the sales tax and pay it to the state.
  • Scenario 2. If [a Washington company] hires an out-of-state consultant, they will have to pay use tax (paid in lieu of sales tax) on their next tax bill. Again, ANY company in Washington will suddenly have to pay at least 6.5% more for these services.

I spoke with Ken Myer, President and CEO of the WTIA, to find out more about this bill – and why it’s probably not the smartest thing for small businesses here. The Washington Technology Industry Association has been fighting hard against this change.

According to Ken, approximately 2,000 Washington companies that do custom work on software will be directly impacted by this bill if it is passed. Yes, that would include the giants such as Microsoft. However, it’s also going to hit the small startup down the street… and hit it hard.

In order for small businesses to set themselves up to charge sales tax for their services and goods, they will have to raise their prices by 8% or more, just to continue breaking even. Therefore, the tax isn’t only impacting the business owners… it also just impacted YOU, the potential consumer.

As Ken says, this is the first time that a professional service is being turned into a product (and being taxed as such). As we discussed this point, a regular user in my live chat room couldn’t help but ask how a government could possibly tax something that isn’t technically “tangible,” which is a good point. A physical disc is tangible, yes. However, the services provided by businesses who are doing custom code work are not truly something tangible. Where do we draw the line here?

Pardon me, but I thought marijuana was outlawed? How else could Representatives Hunter, Conway, and Hasegawa come up with such an asinine idea? More politics behind the bill are outlined by Todd over at TechFlash.

Why sock it to small business owners who are struggling enough in a challenging economy?

It’s getting to the point where owning a small business in the state of Washington is no longer viable. There are very few incentives for me to stay here (as an operating business entity). I love the weather, I love the people, but these f*ckwits in the House have got to go.

There’s not a state in the Union that’s truly friendly to small business owners anymore.

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Now is a Great Time to Buy a New Home

This is a Sponsored Post written by me on behalf of Coldwell Banker. All opinions are 100% mine.

The tax credit for first-time home buyers was set to expire this past November. However, Congress has signed a bill which extends that credit. The new bill raises the cap for first-time home buyers, as well as allowing current homeowners to possibly receive a credit for moving up.

If you are buying a home for the first time, you can receive a tax credit up to $8,000.00! The credit also may be for you if you have lived in the same home for five of the past eight years, and are looking to move up to a different home. That type of home purchase can gain you a credit of up to $6500.00.

We have no way to predict what the economy is going to do, nor whether this credit will ever be extended again. Since it expires on April 30th, 2010, you have to have a binding contract written for your home purchase in order to take advantage of it. Your closing date also has to be schedule, prior to June 30th, 2010.

It may seem like now isn’t the time to be buying a home, with the way the economic picture looks. However, the numbers have shown that is not the case. According to the 2009 National Association of Realtors┬« Profile of Home Buyers and Sellers, the number of first-time home buyers rose to 47 percent of all home sales from 41 percent of transactions. This is the highest amount since 1981!

What I am loving about this bill is the fact that it also caters to those buyers who are looking to move up. Let’s say there’s a couple who bought a home about six years ago, when they were first married. Life has changed for that couple over the years. They now have a few children, a couple of pets, and a lot of stuff. Their current house just isn’t working for them now, but they’re afraid to dive in to something larger. Having this credit out there will be a great way to help them finally make that decision, and get into a house that suits them better.

It doesn’t cost anything to look, you know. You can always check out what Realtors such as Coldwell Banker have available in your area. Do a free search right in your current home. You may be surprised at the costs of housing right now, and find that you actually are able to afford that dream house.

Visit my sponsor: 2010 Homebuyer Tax Credits

I always say to do your research before buying something new. This is absolutely no exception. Don’t only research the home you want to buy. Make sure to do your homework when it comes to the tax credit, your mortgage, and all of the many other details. Buying a home – especially for the first time – can seem like a daunting task. However, people like those at Coldwell Banker are there to help you… making the process easier, every step of the way.

Angel Djambazov – Amazon, Affiliates & Taxes

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Born in Bulgaria, Angel Djambazov has spent his professional career in the fields of journalism and online marketing. In his journalistic career he worked as an editor on several newspapers and was the founding Editor-in-Chief of Wyoming Homes and Living Magazine. Later his career path led to online marketing where while working at OnlineShoes he earned the Affiliate Manager of the Year award at the Affiliate Summit.

Currently Angel is the OPM for Jones Soda for which he won his second Affiliate Manger of the Year (2009) award at Affiliate Summit Angel also serves as OPM for Keen Footwear, Intelius, and Core Performance, has an advosiry role with PopShops.com which was awarded Best Affiliate Tool (2007 and 2008) award by ABestWeb, and is the Managing Editor for Revenews.com.

When the affiliate nexus tax, commonly known as the Amazon Tax, first appeared in New York last spring much of the marketing industry was caught off guard. Since then battles have been fought in eight states over similar legislation including a veto by Governator. We will go over how such legislation impacts you (whether or not you are affiliate or an Amazon associate); how big corporations like Amazon, Overstock and Google have reacted to such legislation; discuss similar types of legislation that may have an even more detrimental impact on ecommerce; and provide resources so you can stay informed.

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Do You Protect Yourself from Identity Theft?

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Identity theft is rampant these days. Your information can be taken faster than you can blink. However, there are several very easy ways to protect yourself. Are you careful enough? Do you know how to protect your identity? I received the following tips in an email, specifically related to tax return theft.

  • When storing a copy of your tax return on your computer, try to protect it with a complex password.
  • If you do decide to delete the file, either use the free Eraser for Windows, or Secure Delete in Mac OS X. Make sure you securely and properly delete the files. Don’t just put them in the Recycle bin. Make sure they are completely gone.
  • Ignore all refund or rebate emails that claim to come from the IRS. Never click the links in emails if they claim to be coming from an official source, unless you know for a fact it comes from who it says. My suggestion is to verify any warning on the IRS website. This will allow you to make sure if something is legit or not.
  • If someone calls you claiming to need to verify your information… hang up on them. DONT give them information. You aren’t verifying anything. Don’t give out any information or at your door, no matter how legit it seems. Check it out first.
  • Check your credit report through all the agencies periodically. Keep on top of it. If you notice a discrepancy… challenge it immediately. You never really know when your credit report can turn around and bite you. Innocent mistakes can and do happen, and affect your credit adversely. So I recommend checking it at least once a year, if not a couple of times.

These are some things in relation to tax season, but apply to every day of the year. Only deal with people, companies and websites that you know and trust. Don’t count on anyone but yourself to keep you safe.


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What Will you do with Your Tax Refund?

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My Uncle Sam just called. The day this video was recorded was April 15th… Tax Day here in America. Let’s say after I paid in taxes I deserved a refund! What am I going to spend that money on? What are you going to spend yours on? Here are some ideas I put together that I think are pretty good.

  • Hardware Upgrades Why not buy that new RAM you’ve been waiting for? What about a new Hard Drive? It’s always a good time to buy new hardware, but there’s no better time than when you have that check in your hand. You could then donate your old hardware somewhere, and use it as a tax writeoff next year. Or, sell it online and make a bit more money!
  • Invest it! Why not throw your money into a six month CD at your local bank, and leave it in there for a year! This is just an example. You may want to find something with a higher interest rate. Then next year when you get your next refund, withdraw this year’s money… leave the interest… and invest the new tax check.
  • Buy a subscription Buy some kind of subscription that will last a whole year. It could be a software subscription, music, magazines… just something that will happen for a year, and remind you on a regular basis what you spent your money on.
  • Register a piece of software Let’s say there’s a demo on your computer that you have used all the time and enjoy. Why not register it finally? Or what if it’s Freeware and you use it a lot? Why not donate some money to the tool’s creator?
  • Stick cash in your Car Why would you do this? You never know when you’ll need it. Hide it somewhere in the trunk, or under a seat. What if you’re stuck somewhere that actually doesn’t take credit or debit cards? You’ll be thankful to know you always have money in the car. Also, you can hide small amounts of cash in your home. This can be an “emergency” cash stash. You never know when you might need cash, and the bank just isn’t open.

So what are you doing with your tax check this year? Leave me a comment follow-up to this video, or send an email to me at [email protected]


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How do you Relieve Stress During Tax Season?

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What do you do when you’re stressed out? More importantly, what do you do when you know you have to do something that will stress you out. Here are my recommendations for dealing with stress in these situations… such as doing your taxes!

  • Wear comfortable clothes. If you are most comfortable in jeans and a sweatshirt… or even your pajamas… wear them! If you are uncomfortable, it will make it much more difficult to focus on the task(s) at hand.
  • Surround yourself with favorite snacks. These will be like mini motivations. You can reward yourself with comfort foods after completing certain amounts of the work.
  • Tag-team if you can. Find a partner, so you don’t have to go it alone. It’s so much easier with someone else, than it is doing it alone. You can divvy up the work, and make it go much faster.
  • Take a break! I know that sounds like a given, but look at it this way: You get so wrapped up and focused, you forget to take a break. You think you’ll never get done if you take a break. You worry you’ll lose your “place” or motivation and not get it back. Take short breaks, do something relaxing.
  • Make a resolution. Track your data throughout the year. Most people scramble to gather all their information at the last minute when doing their taxes. Devise a system to keep track of everything through the year you may need come tax time. There are websites and software that can help you with this.

Whatever you do, try and reduce your stress levels to a minimum… whether it’s tax time or any other task. The more relaxed you are, the faster and easier the work will be completed.


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How to Deal with Taxes

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It’s that time of year again… tax time. *GASP* Don’t pass out on me! I know that tax season is very stressful for many people. Here are some tips that can make this year much easier to get through.

  • File early. Beat the rush and file your taxes as soon as you get your w2… or as early as possible.
  • Make sure you have all of documentation in order: w2, donation receipts, intrest payments, educational costs, and what ever else you may need for itemized deductions.
  • Decide if you’re going to prepare and file yourself, or if you will use a Tax Service… such as H&R Block. You also have the option of using an actual Accountant if you have difficult taxes or exemptions. If you aren’t 100% comfortable with what you’re doing, I highly recommend letting someone else take the load off your shoulders.
  • Make sure you fill in all of the blanks, leaving some vital informaioin missing from your return can delay your refund, or worse… leave you with the IRS on your back.
  • Lastly, and most inportant: DO NOT FORGET TO SIGN YOUR REFUND.
  • Here is a bonus tip: go to irs.gov if your Adjusted Gross Income for the year is less than $53,000. Look for the free filing link on the left side of the page. You can efile your federal return for free, and if you are lucky to live in one of the 21 state that offer free efile you don’t have to pay anything. Just make sure you choose a site that you would trust with your information.


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