Over the years, I have studied the art of promotion. Unfortunately, if you don’t market yourself, nobody may ever know about your attributes of excellence.

I distinctly remember reading the book Brag by Peggy Klaus. This bestseller discussed the art of self promotion without over-doing it and the full title of the book is “Brag!: The Art of Tooting Your Own Horn without Blowing It.” In her book, she states, ” When done with grace and style, bragging promotes your best asset-you!.”

This reminds me of an interview that I had years ago with a Wall Street Firm executive . The executive of an NYSE traded company kept asking me what else I had achieved and what other credentials I had earned. Later, I discovered that the interviewer was looking for reasons to give the job to me over another similarly qualified candidate. When I told the executive that I also had membership in another organization and credentials from a relevant industry institution, he was sold, and I got the job. The moral of the story is to keep adding feathers to your cap and as Dr. Covey of the famous book “7 Habits of Highly Successful People” promotes, keep sharpening the saw.

Your resume has pertinent sections for degrees, training, certificates, diplomas, memberships, charitable endeavors, designations, awards and other distinctions. In the professional ethics courses that I teach, many students have difficulty legitimately claiming their skills, experience, or attributes. For example, many students do not add relevant summer work to the totality of their work experience. For whatever reason, many applicants do not consider part-time work or volunteer work part of their resume’s experience; however, most job candidates are smart enough to add this type of experience to their job applications. The bad news is that many competent applicants lose out because of this type of hyper-humbleness.

In the end, each of us should take a hard look at winning resumes styles and model ours to mirror what works. We should ethically add to our resume anything that helps sell our abilities to get that job or customer. Also, we can join industry organizations, join college organizations before or even after graduating, volunteer in an area of interest to gain experience, take courses online, earn certificates or supplemental diplomas, learn another language, and even engage charity to better ourselves.

Self promotion also includes your style and methods when dealing with customers. I remember one company president who said that customers shop several providers before picking his firm. He told me that all of his brochures illuminated some extra accolades that his company had achieved and he also provided one or two extra documents to each potential client explaining the benefits and safety of doing business with his company. Invariably, this extra consideration in the interview paid off and many clients came to his firm because of the value added attention to detail.

If you read Robert Green’s “The 48 Laws of Power”, you will find that it takes skill and mastery to negotiate the kings court while moving your status upward. In the same way, the job seeker must treat each decision maker with respect while letting them know how you will help them with their success and the company success.

Remember, learn to promote yourself and guard your reputation. Practice interviewing, discuss with another person what should be included on your resume or your sales pitch, and most of all, learn how to convey your best qualifications, ability to serve, and your relevant experience.

*George Mentz can be retained as a keynote speaker for your events at: www.gmentz.com

Wealth management comprises various subjects including: Economics, Banking, Investments, Risk Management, Investment/Asset Management, Estate Succession, Taxation, and Trust Planning and Retirement Planning.

Many of us simply receive W-2 and employment income and traditional company benefits primarily, but others who are self-employed or contractors are doing their best to utilize the system to declare income, pay for insurance, take mortgage deduction and so forth.

The good news is that that the tax code has become more amicable to the self employed over the last decade. Self employed individuals are able to write off or deduct more of their health care expenses while also setting aside more money pre-tax into their self directed retirement accounts.

Here are some thoughts related to Wealth Management 2012

Investments: While we are not sure what will happen with taxes going forward, several of today’s tax rates on income such as dividends and long-term capital gains are reasonable. If they go up, many people may sell out of dividend stocks or other related holdings. Dividend stocks have been particularly popular for retirees and those who don’t want CDs with the rates so low.

Thus, dividend stocks have been the alternative for income producing investments because the tax rates are at 15%. Overall, if income taxes go up on dividend stocks at this time, the hardest hit may be seniors and those who live on a fixed income.

Retirement and Education: In light of the present situation, we hope you are able to maximize your contributions to your retirement before April 15th each year. Also, setting aside money in a 529 plan is a good way to fund a child or grandchild’s education for the future. The annual gifting rules and estate and gift tax rules allow you to gift cash to others during life or at death. Therefore, now may be a good time to consider large gifts due to the generous estate & gift tax exemption for 2012.

Estates and Succession: As for estate taxes, those rates right now are the most generous ever. However, the large exemption may be reduced again to the Clinton era rates if nothing is done by Congress before 2013.

The other major estate management issues are succession documents. Do you have a valid will? Do you have health care directives? Have you considered limited powers of attorney for your financial affairs or health care affairs? Have you arranged for the guardianship of your children if something happens to you? All of these issues can be dynamic and very important?

Insurance: Other topics are risk management related. Do you have proper life, health, and home insurance? Have you considered an umbrella policy or disability policy? Again, protecting yourself and your family in this way is imperative. However, you must remember that insurance contracts have beneficiaries and that each policy can have primary beneficiaries or secondary beneficiaries. Further, these assets are not controlled by your will and the beneficiary receives regardless of what your will says. Providing the policy numbers and information to your loved ones may also be a good exercise.

Banking and Investment Accounts: Additionally, if you have bank or brokerage accounts, you should consider listing your spouse or loved one as person who receives the account upon death. TOD “Transfer on Death” and POD “Payable on Death” accounts are typical choices for your accounts and this allows a loved one to have access to cash immediately if something happens to you. Sometimes, rolling over or consolidating accounts is a great exercise so as to help create a better view of the totality of your investments.

Taxation: The IRS has a tax tips section which is interesting and resourceful. Moreover, there are many great tax software programs out there to chose from that you can use privately on your computer. Thus, with good information coming from the Treasury Department and quality software, all of us have a fair opportunity to get our tax paperwork done on time.

Economics: Keep in mind that there has been a number of economic cycles in the last 20 years in the USA and Internationally. That means that we should all keep an eye on our risk tolerance and our investing time horizon. When you are getting closer to retirement, you should be moving out of riskier investments and into more stable investments or stocks with less volatility if possible. Other related problems such as an election year and global debt crisis issues domestically and abroad are also now part of the macro-economic effects.

In the end, most people are concerned with financial security. During our earning years, all of us want to work in a labor of love, earn what we can, protect our children and retirement, and worry about taxes later. In the end, the key is doing what you want to do, and have the experts handle your legal, tax and wealth management for you.

*No investment, legal or tax advice is intended to be given herein. Please see a licensed professional before making any important decision.

If you owe tax with your federal tax return, but can’t afford to pay it all when you file, the IRS wants you to know your options and help you keep interest and penalties to a minimum.

Here are five tips:

File your return on time and pay as much as you can with the return. These steps will eliminate the late filing penalty, reduce the late payment penalty and cut down on interest charges. For electronic and credit card options for paying see www.irs.gov. You may also mail a check payable to the United States Treasury.

Consider obtaining a loan or paying by credit card. The interest rate and fees charged by a bank or credit card company may be lower than interest and penalties imposed by the Internal Revenue Code.

Request an installment payment agreement. You do not need to wait for IRS to send you a bill before requesting a payment agreement. Options for requesting an agreement include:

• Using the Online Payment Agreement application at www.irs.gov, and
• Completing and submitting IRS Form 9465-FS, Installment Agreement
Request, with your return.

IRS charges a user fee to set up your payment agreement. See www.irs.gov or the installment agreement request form for fee amounts.

Request an extension of time to pay. For tax year 2011, qualifying individuals may request an extension of time to pay and have the late payment penalty waived as part of the IRS Fresh Start Initiative. To see if you qualify visit www.irs.gov and get form 1127-A, Application for Extension of Time for Payment. But hurry, your application must be filed by April 17, 2012.

If you receive a bill from the IRS, please contact us immediately to discuss these and other payment options. Ignoring the bill will only compound your problem and could lead to IRS collection action.

If you can’t pay in full and on time, the key to minimizing your penalty and interest charges is to pay as much as possible by the tax deadline and the balance as soon as you can. For more information on the IRS collection process go to www.irs.gov or see IRSVideos.gov/OweTaxes .

Just because common law classifications would allow for compensation as an independent contractor, doesn’t mean Congress agrees. An individual who meets the legal definition of an independent contractor may still be considered an “employee” for tax purposes.  Generally, these “independent contractors” that are treated as “employees” are given the name “Statutory Employees”.  As the name implies, Congress created a law that states some individuals who would normally be considered under common law as independent contractors are treated as employees for tax purposes.  Among the categorization of “Statutory Employees”, according to the Code is “full-time life insurance salesman.” [1]

A full-time life insurance salesman means “[a]n individual whose entire or principal business activity is devoted to the solicitation of life insurance or annuity contracts, or both, primarily for one life insurance company”.[2] The Treasury Regulations state that a full time life insurance salesman “ordinarily uses the office space provided by the company or its general agent, and stenographic assistance, telephone facilities, forms, rate books, and advertising materials are usually made available to him without cost.” [3]

On the contrary, an individual is not considered a full time life insurance salesman when he “is engaged in the general insurance business… the individual’s principal business activity” is not the, “solicitation of life insurance or annuity contracts, or both, for one company”.[4] Likewise, “any individual who devotes only part time to the solicitation of life insurance contracts, including annuity contracts, and is principally engaged in other endeavors, is not a full-time life insurance salesman.” [5] Also, some producer groups have contractual relationships with multiple insurance companies, so life-insurance salespeople are sometimes able to sell products for more than one company, generally excluding them from statutory employee definition.

What does it mean to be a statutory employee?  As has been discussed earlier this week, the tax treatment of the two dissimilar arrangements is significantly different.  On the one hand, an employee, including statutory employees, will file for withholding of federal income taxes on wages as well as withholding for Medicare and Social Security taxes.  Employees also are not considered to be in a trade or business.  Generally, independent contractors operate as sole-proprietors or some incorporated or limited liability business structure.  Meeting the definition of a trade or business, generally, these individuals will have gain or loss treatment in relation to their income as a tax structure.

Other examples of statutory employees include:[6]

• “A driver who distributes beverages (other than milk) or meat, vegetable, fruit, or bakery products; or who picks up and delivers laundry or dry cleaning, if the driver is [an] agent or is paid on commission.

• “A full-time traveling or city salesperson who works on your behalf and turns in orders to you from wholesalers, retailers, contractors, or operators of hotels, restaurants, or other similar establishments. The goods sold must be merchandise for resale or supplies for use in the buyer’s business operation. The work performed for you must be the salesperson’s principal business activity.

For a detailed analysis regarding the tax treatment of life insurance agent, see Tax Facts Q 361. Who is an owner-employee for purposes of the qualification requirements?

We invite your questions and comments by posting them below, or by calling the Panel of Experts.

[2] 26 C.F.R. § 31.3121(d)-1

[3] Id.

[4] Id.

[5] Id.

[6] Internal Revenue Service Publication 15-A (2010).  Page 4.

For some good news about valuation discounts, see our article in AdvisorFX Advisor’s Journal on the Jensen case.

From a tax perspective see Tax Facts Q 613. How is a closely held business interest valued for federal estate tax purposes?

After reading the analysis, we invite your questions and comments by posting them below, or by calling the Panel of Experts.

What Is a Hybrid Income Annuity?

Hybrid income annuity products are annuities that are combined with a different type of annuity within the same annuity contract. For example, a contingent deferred annuity (CDA) is an annuity that guarantees lifetime payments based on the value of the assets in the annuity account. Income payments are conditional upon the owner’s survival and the depletion of the assets in the account. Often, a GLWB rider is attached to the annuity to provide lifetime income payments that begin if there is a depletion or change in value of the annuity account’s assets. The addition of the GLWB rider is what makes the annuity a hybrid.

Synthetic hybrid income annuities, which are hybrid income annuities where the assets in the account are not owned by the insurer, are also being investigated, and would be subject to any new regulation.

For previous coverage of the guaranteed lifetime withdrawal benefits in Advisor’s Journal, see More Consumers Buy Guaranteed Living Benefits Rider.

For in-depth analysis of the different types of annuity product, see Advisor’s Main Library: E—Annuities.

As a general rule, independent contractors compensation is reported through Form 1099-MISC.  In determining net income of the sole proprietor or corporation, one will usually factor income and expenses.  Income in this context is included in Internal Revenue Code Section 61 “Gross Income” which includes “all income from whatever source derived,” including “compensation for services, [and] fees”.[1] Expenses or deductions from gross income for a trade or business are determined using Section 162 of the Code which states that a deduction may be taken for “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business”.[2]

Some expenses that the trade or business may incur include, but are not limited to: [3]

• cost of goods sold
• compensation
• salaries and wages
• repairs and maintenance
• bad debts
• rents
• depreciation
• taxes
• travel
• interest, and
• advertising

To arrive at net taxable income, expenses are generally deducted from gross income.   The taxpayer can then determine the tax liability using income and percentage charts provided by the Internal Revenue Service.

The IRS states “Self-Employed” individuals or those who carry “on a trade or business as a sole proprietor or an independent contractor”, are required to pay self employment taxes.[4] The rate for this tax is 15.4% which equals the Social Security and Medicare taxes paid by traditional employees and employers.  This tax is in addition to the federal income tax.  Self employed individuals are normally required to make estimated quarterly tax payments, based on estimated quarterly net taxable income.  In 2009 only the first $106,800 of “combined wages” was subject to the self employment tax, which means after this amount, self employment taxes are not levied on any additional “combined wages.” [5]

For a detailed analysis regarding independent contractors, see Tax Facts Q 814. How are business expenses reported for income tax purposes?

We invite your questions and comments by posting them below, or by calling the Panel of Experts.

[2] 26 U.S.C.A. 162(a)

[3] 2009 Internal Revenue Service Form 1120S

[4] “Self Employment Tax Article”.  Internal Revenue Service.  May 20, 2010. http://www.irs.gov/businesses/small/article/0,,id=98846,00.html Last Accessed 8/18/2010.

[5] Id.