CELEBRITY TAX PROBLEM OF THE WEEK

RAP SINGER BEANIE SIGEL ENTERS GUILTY PLEA IN TAX CASE

Rap singer, Beanie Sigel has pleaded guilty in a Philadelphia federal court to charges of failing to file tax returns for three years in a row.
The 37-year-old performer admitted Tuesday to the government’s claim that he did not pay at least $348,000 that he owed in taxes on $1 million in income earned between 2003 and 2005, according to the Philadelphia Inquirer.

Prosecutors believe Sigel, whose real name is Dwight Grant, did not pay taxes in years prior to 2003, but the statute of limitations has run out. They contend that he owes up to $700,000 in unpaid taxes going back to the 1990s. He has previously been in prison on weapons possession charges, but was acquitted of an attempted murder charge. Sentencing in the tax case is scheduled for November. He faces up to three years in jail.

INCOME TAX RATES AROUND THE U.S.

The Tax Foundation's Tax Policy Blog has posted a map showing the top statutory marginal income tax rate in each state for tax year 2011. To see the Tax Foundation's map, go to the link below:

http://www.taxfoundation.org/blog/show/27237.html

PRESIDENT OBAMA'S TAX RETURN

Each April, the President and Vice President release their tax returns. President and Michelle Obama filed a joint return for 2010. With the Presidential salary and approximately $1.38 million in book royalties, their total income was $1.8 million.

The President created a Simplified Employee Pension account and funded that with $49,000 from his book royalties. President and Mrs. Obama's itemized deductions totaled $373,289. The majority of the itemized deductions were charitable gifts totaling $245,075.

The major charitable gift was $131,075 transferred to the Fisher House Foundation. This foundation maintains residential facilities and provides free or low-cost housing to families of veterans who are receiving treatment at VA Medical Centers.

President and Mrs. Obama also made a $10,000 gift to the Boys and Girls Club of America and a $15,000 gift to the Clinton-Bush Haiti Fund.

Vice President and Mrs. Biden also released their 2010 tax returns. Their income was from his Vice Presidential salary, the teaching appointment of Dr. Jill Biden at an area college, a pension and Social Security.

With an adjusted gross income of $379,179, their itemized deductions were $67,038. Most of the itemized deductions were taxes and mortgage interest. Their charitable gifts were $5,350.

Five separate gifts totaling $950 were transfers of clothing to Good Will. There was a $1,400 gift to the Northern Virginia Community College where Mrs. Biden is an adjunct professor of English. They also made a gift of $1,000 to Westminster Presbyterian Church.

QUESTION ON RECORD RETENTION

Q.I understand that I have to keep records of my travel and entertainment. What actually do I need to keep?~ Twila

A.Twila, good records are important to assure that the IRS does not disallow your deductions. As I have said on several occations, “there are only three things that are important if you are audited. They are, DOCUMENTATION... DOCUMENTATION... DOCUMENTATION."

Here is a handy chart that the IRS put out that should answer your questions. Let me know if there is anything else that I can do to assist. CHART

HOW THE DEFICIT IMPACTED TAXES

Unless you have been living in a cave for the last couple of weeks, you know that Congress finally took care of the debt limit...well maybe. By extending the amount that they could borrow, they are allowed to keep sending out checks and avoid defaulting on its debts. Surprise, surprise. Another extension will not be needed until after the 2012 elections. It sounds like a political move to me.

The question that you have to ask is, “How does this impact taxes?”

Lawmakers kicked taxes down the road as part of their grand compromise on the debt ceiling. Republicans wouldn’t accept proposals from Democrats to include billions of extra tax revenues in the package. That money was to come from a major revamping of the tax code; reducing deductions and tax breaks while lowering rates.

The goal of the revised system was to raise hundreds of billions in additional revenue than under the current law. Thus, Congress isn’t likely to tackle serious tax reform anytime soon.

While it is true that the debt deal established a bipartisan deficit reduction panel that could vote to approve tax increases, the chances of that happening are slim. And even if the panel were to propose a tax hike, the House probably wouldn’t pass it.

This whole mess pretty much guarantees that taxes will be a key issue in the 2012 elections. Both Democrats and Republicans remain convinced that a majority of voters will support their position on taxes. Time will tell.

CELEBRITY TAX PROBLEM OF THE WEEK

Longtime Rangel Aide Pleads Guilty to Tax Charges

James Capel, a former aide to Congressman Charles Rangel, D-N.Y., has pleaded guilty to failing to file tax returns for three years. Capel pleaded guilty to misdemeanor charges of one count of failure to file a tax return and two counts of tax fraud.

Rangel was censured in the House last December for various ethics violations, including failure to pay taxes on rental income from a villa in the Dominican Islands. Capel’s failure to file tax returns from 2007 to 2009 was unconnected to Rangel’s ethical lapses. However, he worked as a top advisor to Rangel for more than 10 years, according to The New York Times. He ran Rangel’s New York office, according to The New York Post. Rangel was the former chairman of the tax-writing House Ways and Means Committee until he stepped down in the midst of the ethics investigation.

Capel did have some income taxes automatically withheld from his paycheck, but his failure to file the tax returns led to about $25,000 in unpaid taxes. As part of his plea deal, he will pay over $42,000 in unpaid taxes, penalties and interest. Capel retired in February from his job, where he earned nearly $160,000 a year.

10 BUSINESS RULES FOR THE NEW (AND OLD) ECONOMY

Rule #1: Have a Clearly Defined Purpose
What do you stand for as an organization?
What values, credo or mission do you align with?

Yes, people do work for money, but to me, there has to be a higher meaning. A compelling WHY you do what you do?

Rule # 2: Do Everything You Do with Passion
Is your approach contagious and sustaining?
Do you drive action in your organization?
Do you hire or engage with people who bring passion to what they do?

Passion is one of those intangibles money can’t buy. Go in any Apple store and you will see associates smiling and passionate about their products. I read once: one person with passion is worth 40 people merely interested.

Rule #3: Have a Plan
What is your game plan for success?
How are you going to achieve your personal or your organizational goals?
What is your next step?

All great companies have a plan of action, be it a strategic, financial, marketing, or business plan. You have to know where you want to go in order to get there. Work your plan.

Rule # 4: Promote
How do you get your company products and services known?
How do you create a buzz or demand for what you do?

There are many ways to get yourself known. Social media is big today and the old standards of direct marketing, advertising in print, radio or TV still apply. Get yourself out there offering value. For example, write articles or provide a blog. Or maybe try the old fashioned, “doing something creative to get your name out there”. A new florist in my town had their staff standing at the local train station handing out free roses to all the ladies on Valentine’s Day. Be creative!

Rule # 5: Understand your Target Audience or Customer
How do you build a connection to your customer’s needs?
How do you demonstrate that you can solve their unique needs?

Today, it is all about the customer, building that connection, finding out what the customers unique needs are and then focusing on finding solutions that fit that need. It’s about asking great questions, analyzing what they are looking to achieve, and listening to them 100% of the time.