Tips to Reduce Your 2006 Income Taxes in 2007!By Scott Sherrill

Income taxes are a substantial burden for business owners and real estate investors. There are few actions which can reduce your 2006 taxes after December 31, 2006. This article summarizes four options for reducing your 2006 federal income taxes during 2007. These include reducing revenue, increasing real estate depreciation, increasing expenses by conducting a fixed asset audit and increasing expenses by converting capital expenditures into operating expenses.

The basic process for calculating income taxes is simple:

Revenue - expenses = net income, or taxable income,

Taxable income x tax rate = income taxes

The formula is not quite as simple as stated above. The tax rate for most taxpayers steps up as their income increases. Hence, the calculation of income taxes is usually taken from a tax table. However, the above concept is correct.

Two options for reducing income taxes are to reduce revenues or increase expenses. It is not possible to change the tax rate except through congressional action. It may be possible to reduce revenue for taxpayers on an accrual accounting system. Taxpayers may be able to increase expenses by increasing real estate depreciation, personal property depreciation or operating expenses.

Accrual accounting recognizes revenue when it is earned. For example, revenue for a project completed in December would be recognized in December even though payment was not expected until January. Cash basis accounting recognizes revenue when payment is received. Accrual basis taxpayers can review revenue which has been booked but not yet received. In some cases, it may be appropriate to increase the allowance for bad debt. There is little cash basis taxpayers can do to reduce revenue (after the end of the year).

Most real estate owners can sharply increase depreciation by obtaining a cost segregation study. Cost segregation is a more accurate method of calculating depreciation than simply separating land and long-life property. The IRS has developed detailed guidelines for correctly prepareing a cost segregation study. Real estate depreciation schedules are typically established by simply separating land and long-life property. Long-life property is depreciated over 27.5 years for rental residential property and 39 years for commercial property. Cost segregation can usually increase depreciation by 50% to 100% during the first five to seven years of ownership by allocating a portion of the cost basis to 5, 7 and 15 year property. Short-life property includes items such as carpet, vinyl tile, some signs, sidewalks, landscaping and paving. In addition, real estate owners can "catch-up" depreciation under reported in prior years without filing amended tax returns.

Fixed asset audits can be a cost effective means to increase operating expenses by removing phantom assets, removing operating expenses mistakenly coded as capital expenditures and correcting the depreciable life for incorrectly coded items. Phantom assets can include assets which have been lost, stolen or disposed of without removing them from the accounting records. The undepreciated basis of these assets can be converted to an operating expense after the error is discovered. In some cases, substantial operating expenses are incorrectly added to the fixed asset listing as capital expenditures. This could include items such as substantial roof repair or parking lot repair. Another example is extensive repairs to a massive chilled water cooling system; are these repairs or a capital improvement? Accounting professionals could vehemently argue both points of view. The undepreciated basis of these items can be converted to an operating expense and written off when the error is discovered. The fixed asset listing is massive for many companies, sometimes exceeding 1,000 pages. With so many assets, it is difficult to ensure all are accurate. For items added with an incorrect and excessive depreciable life, it is possible to revise the asset life and "catch-up" depreciation under reported in prior years without filing an amended tax return. Instead, a form 3115 is filed with the tax return.

The difference between capital expenditures and operating expenses is often subjective. Are substantial roof repairs a capital expense or an operating expense? Reviewing disbursements which were listed as capital expenditures in 2006 may uncover items which can be converted to operating expenses.

Federal income taxes are a substantial expense for successful businesses. However, since it is difficult to profitably operate a business, it is worth reviewing legitimate options to keep more of what you have earned. Tax planning is less glamorous than purchasing a new company or developing a new division. However, a modest effort focused on reducing federal income taxes can sharply increase net income.

Patrick O’Connor, MAI is president of O’Connor & Associates, a 180-person real estate services firm in business since 1974. Further information on reducing income taxes is available at: http://www.poconnor.com/federal_tax_reduction_overview.asp. O’Connor can be reached at 713 686 9955 or poconnor@poconnor.com.

Patrick O’Connor, MAI is president of O’Connor & Associates, a 180-person real estate services firm in business since 1974. He can be reached at 713 686 9955 or poconnor@poconnor.com.

Article Source: http://EzineArticles.com/?expert=Scott_Sherrill

THE PURPOSE OF AN AD CAMPAIGN

Establishing Reputation

Advertising is not always required for the purpose of increasing the sales of a product, although that must be the final effect of the advertising if it does its work. It frequently happens that business organizations at various times in their careers need advertising for the extension of values along more general lines in connection with the organization and its market. Sometimes it is necessary to forestall difficulty by establishing relations of confidence with the public, not merely in connection with the product but in connection with the organization itself. It is frequently necessary to find other uses for a product and impress them upon the consumer.

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In the last 15 years of rapidly increasing activity along the internet lines, many concerns which have started and gained a considerable amount of business have been obligated to set themselves at work to devise advertising for the purpose of establishing an organization reputation. This has been particularly the case with organizations making a number of products, where the sale of the one product cannot altogether carry the sale of another product, but where an established organization's reputation can increase the sale of both. It is obvious that the plan of action will materially differ if this is to be the central idea. Every piece of copy and every piece of printed matter must be selected physically with the same idea so that type, border, illustration, the text of articles in the magazine, internet, or publication, and the whole atmosphere of the campaign will intensify the suggestion contained in the copy.

Extending Organization Values

Allied to this matter of establishing reputation is that of extending the value of the organization by suggesting not so much its repute but the individual character of its actions. This point of view has been necessary in a number of cases where it is difficult for the consumer to be able to determine from the appearance or general survey of a product, the value which it will possess for his purpose, and where consequently the discrimination is not exercised except in a negative way.

There are many products which to all appearances may be made to look equally good with a 50 per cent difference in cost. In such cases the only hope of the serious manufacturer is to extend his organization value to the public by showing the care that is taken in giving to the public a product which will fulfill the purposes required of it ant1 possess a value equal to the price which is asked for it. The plan which requires this point of view will not be effective particularly as to media, but it will be thoroughly effective as to copy and illustration.

Look at the clothing and accessories industry. Put a name brand on the same pair of pants and the price asked will skyrocket. This comes from convincing the consumer that the brand is worth more than other brands based on reputation and image set forth in advertising copy. Thus when you do your research into the niche market you are going for, you should have sufficient reason to ask a higher amount, if, in fact, you are setting a higher price. Much of that will be in selling your organization, which could just be you, as a superior producer of the product.

The Way Advertising Is Used

Advertising is in reality the machine, or bulk, method of selling. It takes a large portion of the public and, directing them to matters of fundamental interest, turns these matters to the advantage of the product and firm involved. It is the mass action of selling, selling to the group, handling the sales question wholesale.

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It is used, therefore, either to supplant the personal selling force, to supplement it, or act upon it. In some cases the printed method of selling in bulk is the only method used. This is the method employed by the many internet companies, which secures its business by Pay-Per-Click advertising and through search engine optimization. In this case the personal selling force is eliminated, and the whole proposition is put up to the customer, his approval secured and his order placed without the personal representative of the seller having been called in at all.


In this case, the advertising is used by directing the consumer to the product in question, and instituting discrimination among the consumers in favor of the product being sold or their acceptance of its quality and reliability.

Advertising as a Control

That part of any business organization which comes in contact with the public is the one upon which the good-will of the business depends, and the one which can be controlled only with the greatest difficulty. The work of the agent or representative can be controlled only to a very minor degree, as his time is spent where there is no check upon his actual methods of doing business. He may exaggerate, change his arguments, guarantee and do other things not consistent with the house policy, and so long as these matters do not assume vital importance, may be allowed to continue.

Theoretically the principal is responsible for all the acts of his subordinates in business, but there are a great many small minded men, and the individual methods of each of these representatives cannot effectively be held to the policy which the principal desires. Advertising aids the central control upon the conditions of sale and does this very definitely. It takes the claims, the advantages, and factors of service, puts them into the most carefully worded phrases, and, by printing them gives them a definite .character and record, which may be quoted against the concern in question at any time.

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The statement of the salesman is no longer the only statement of the house; another statement is found in the printed messenger of the organization. This statement, moreover, is authoritative because it is printed, definite, and limited. A measure of comparison is set up by this printed message by which the statements of the representative and the character of the service can be equally measured. This measure of comparison acts as a control upon the condition of sale in all its phases by fixing the estimate placed by the principal upon the services of his product, and consequently obliging all other conditions to come to this.

A Good Title Is A Work Of Genius

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A Good Title Is A Work of Genius

By Yanik Silver
http://surefiremarketing.com/?46532
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That's what Emanuel Haldeman-Julius said about changing the title of a book to increase sales. And he should know, he's the guy who single-handedly sold more than 100,000,000 "little blue books" during the first part of the 20th century (Yes, I said 100 million copies).

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His book entitled "The First Hundred Million" gives a rare glimpse into how to use certain tested title words to increase your sales. In fact, his book is one of the most scientific studies of what a title change can do for your sales.

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The most remarkable thing is that Haldeman-Julius simply advertised his books by title alone. There was no selling copy, only the title of the book. That's it.

So before you decide on any haphazard title for your next ebook, manual, ezine article or free report, you might want to take advice from this savvy marketer.

Haldeman-Julius had a policy in his business - if a title didn't sell over 10,000 copies a year it was sent to a place in his office called "The Hospital". Inside the Hospital he went to work coming up with a new title for the poorly selling book and re-releasing it. If the revised title didn't sell, the book went into the 'morgue".

He tells about a book originally being titled "The Art of Controversy" which never really sold until it was changed to "How to Argue Logically" and then it leapt up to 30,000 copies. The amazing thing is that nothing else was changed inside the book, just the title.

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And from this "in the trenches" research, Haldeman-Julius discovered certain title words that could increase the sales of almost any book when applied. For instance the words "The Truth About" increased sales for one book starting its publishing life as "Patent Medicine". This book by Dr. Arthur Cramp only sold 3,000 copies in 1925 but when the title was changed to "The Truth About Patent Medicine" it rose up to a respectable 10,000 copies.

Therefore the words "The Truth About" are magical.

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Next, he found the words "Life" and "Love" to work well. Followed by the worn, but still very powerful phrase "How To". Books with "How To" in the title were almost always placed at the top of his sales list. Take for example, the title "How to Psycho-Analyze Yourself" sold 43,000 copies while a similar title "Psycho-Analysis Explained" sold 5,000 less copies. And the title "How I Psycho-Analyzed Myself" managed to attract only 13,500 buyers.

What's more, Haldeman-Julius discovered the public was (and still is) clamoring for facts. So the words "The Facts You Should Know" proved a big winner.

So how can you apply this information?

Easy! The way you should use this wisdom from the ages is by applying it to titles, ebooks, ezine articles, free reports and your headlines. For instance, if I was a cosmetic surgeon I'd give out free ebooks like this: "The Facts You Should Know About Liposuction" or "The Truth About Laser Hair Removal" or "How To Erase The Years With Laser Resurfacing". Each of these could almost be a headline by themselves. That's what you want to strive for because that's what people want!

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Yanik Silver is recognized as the leading expert on creating automatic, moneymaking websites...and he still doesn't know how to put up a website.

He is the author, co-author or publisher of several best-selling online marketing books and tools, which can be found at http://surefiremarketing.com/?46532/?46532
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Principles and Practice of Advertising - The Importance Of Association

Given a knowledge of the target audience with their needs, and given an analysis of the product's specific qualities which may be presented to the consumer as able to satisfy those needs - the next step is the psycho-economic technique of advertising is that of establishing associations, in the thinking and the acting of the consumer, between the need and the product in question.
A common error of advertisements is in assuming that the mere repetition and constant reiteration of the name of the product, company name, or a trade mark will effect a sale by simple brute force. The theory is psychologically wrong. What is desired is not merely that the consumer be familiar with the name of the product. Familiarity may breed contempt. Connection and association, rather than brute impression is what will be effective - connection of such a kind that, given the moment of need, the product name will come to mind before any other product. Not the mere driving of one idea, but the connection of the two ideas, is the task of advertising. The following law should be kept in mind:

The Law Of Contiguity
In general, the best way of establishing mental associations between two things is by presenting them together. Thus "Abraham" at once makes you think "Lincoln" because these two words are so frequently seen together. No matter how familiar you may be with the word "Lincoln", that word will not tend to come to mind when you think "Abraham" unless this association by contiguity has been formed. Similarly, the mere repetition of "Yuban", "Yuban", "Yuban" does not lead you to think "Yuban" when you go to purchase coffee, unless, along with the word "Yuban" the idea "coffee" has also been presented. In advertising, then, the Law of Contiguity means that whenever the name of the product is mentioned it should be accompanied by the idea of the need which the product is to satisfy.

Principles and Practice of Advertising - The Law Of Sequence

The Law of Contiguity states that one thought will lead to another based on conditioning. Such as "Abraham" and "Lincoln". As a matter of fact two ideas are never present at precisely the same moment; so that "contiguity" really means "rapid succession". One idea being given, the other follows directly in its wake. So in reading advertisements one word of a headline is seen before another, one part of a paragraph follows an earlier part, so that a "train of ideas" is set up. The Law Of Sequence states that mental associations work more easily in one direction than in the other. "Forward associations", that is, associations in the direction in which ideas were originally presented, are stronger, more lively, and more easily recur than backward associations.

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This is especially true of such ideas as take the form of spoken words and other sort of acts that involve motor processes. Thus I have seen the letters in the word "advertising" so often, one immediately after the other, that I can begin with "a", "d", "v" and go on quickly and easily to spell the whole word. But it is a very significant fact that I cannot spell the same word backward. The letter "a" calls up "d" and these two call up "v" etc. But if I begin with "g" and try to reverse the direction of the original sequence I can proceed only with difficulty.

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In advertising this means that ideas should be presented in the order which they will later be desired to take. The first idea in the mind of the prospective purchaser will be the feeling of some particular need - such as "hotel". Effective advertising means that when this need is felt, it leads at once, by virtue of established associations, to the hotel you are advertising. First the need then the product is the sequence in the mind of the buyer. This should be, therefore, the order in which the two ideas are presented in the advertisement, in the brand-name, the trade-mark, etc. Some examples would be :

• Hotel Astor
• Academy Riverview
• Cafe Boulevard
• Encyclopedia Britannica

Contrasting with these names are those such as the following, which fail to take advantage of the law and in so doing sacrifice real association and memory value:

• Douglas Shoes
• Mennen's Talcum
• Ridgefield School

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The same law holds for the arrangement of items in the advertisement as a whole. The common practice of beginning the advertisement with the name of the brand or firm or company and following it with a description of the need it satisfies may gratify the personal vanity of the firm, but it does not establish the most effective associations in the mind of the reader. In reading the advertisement the mind should be led in the direction in which it should go on the occasion of need.

Who says 3 seconds?

In the internet marketing world there is this misconception about how long you have to get a person to make a purchase, and I wonder where it really came from and why nobody has really thought it out.

Let's put on our thinking caps for a minute and figure this one out. Use a brick and mortar mall for an example. People are "surfing" the mall all the time. Thousands of them, maybe millions. But the processes are the same as the internet. There are 4 distinct groups of people running around that mall.

Let's start with the 4th group. The group that has no idea what they want and may not want anything at all. Maybe they are waiting for the movie to start. Maybe they are waiting for the kids or friends. In other words, they are not really doing any serious shopping. They are just surfing. Today, the younger generation does this alot on the internet. I've watched this with my children and their friends. They go to websites just to "check it out". No intent to buy anything. Matter-of-fact, no MONEY to buy anything. My son loves to go to Rolls Royce websites. Like he can afford one.

How long do you have to get one of these people to buy something from you? 3 seconds? 2 seconds? Never? You really don't have much chance of a sale here and should not even bother with them. Sure. 1 or 2 may buy something or even come in and look around a bit but are they really worth your effort? Obviously you have to put SOME effort into them, but they should not be your main focus.

I'm going to jump back to Group 1. These are people who go into the mall knowing exactly what they want and who they want to get it from. These are you loyal customers. You don't have to worry about 3 seconds with them. They are already sold. You can focus on getting them to buy MORE stuff or just on making sure they remain loyal. Buyer incentives and such.

Now comes the Group 2. They probably comprise your largest group of people. They know what they want and are checking everything out. They may not have an exact idea but they know they want say a widget. They look at the directory and see what places carry widgets and go check them out.

These people are where you should be focused. What are they looking at? First thing they see is your entrance. If it is a mess and hard to get around in, they are gone. So a nice neat easy to use entrance is essential. Give them the ability to search on your site (a greeter) to find what they are looking for easily. Do the hardsell on them once you have them inside. Show them what they want but recommend upsells etc. You have more than 3 seconds but also less than 3 seconds to grab these people. If they walk up and see a nasty store front and right next to it is your competitor with a very nice front, you will lose them in less than 3 seconds. But once they are in, then you have time to get their attention and get them sold. As long as everything goes smoothly. If they get inside and find the aisles are too close together, the cash registers are hard to find, nobody to ask for assistance, etc etc they will leave.

Group 3. These may be your 3 second group. But actually they are less than that. They are wandering the mall just window shopping. They have money but no real idea what they want to spend it on. You have to grab their attention quick as they walk by. Now on the internet this is advertisements. Get them to your homepage or a landing page and grab their interest NOW. No 3 seconds, but 1 second. They have to see something they want NOW. They will not go any further into the site unless they see something that grabs their attention.

So really there is no 3 second group. Where did this idea come from? Marketing research? I've done that. While working at a big firm building e-commerce sites for companies the 4 groups above are what we found to hold true. The basic truth of the matter is that you have to have a good site that is easy to navigate and displays what people are looking for right away.