This article by Gina Noy, was originally posted at noytaxassociates.com. Gina will be teaching Tax Freedom through Planning, a class + lab on tax planning for independents at NWCU.

With 2011 coming to an end many popular deductions will be ending as well. This is the last year to take advantage of the favorable tax benefits.

1. Social Security Taxes.

For 2011 only, Social Security tax was reduced to 4.2% for employees and to 10.4% for self-employed (SE) person. In 2012, the Social Security tax will revert to its regular rate of 12.4%, with half (6.2%) paid by employers and the other (6.2%) paid by employees. SE person will pay the full 12.4% rate as part of SE tax.

2. Tuition and Fees Deduction

The above the line deduction for college tuition expires at the end of 2011. Lifetime Learning Credit and American Opportunity credit will be available for college students in 2012.

3. Alternative Minimum Tax

First, 2011 will be the last year when personal tax credits will be allowed to offset both the regular tax and the AMT. Starting in 2012 and forward, tax credits will offset the regular income tax, but not AMT. Second, temporarily patched exemptions for AMT will end in 2011. For 2012 and future years, the AMT exemption amounts will revert to a lower stator amounts ranging from $22,500 to $45,000. This will result in more taxpayers being subject to the AMT, and will increase the adjustments for taxpayers already subject to this tax.

4. Mass Transit Benefit

Mass Transit tax-free exclusion, for 2011 is $230 a month. The amount for 2012 for mass transit benefit eligible for tax-free treatment is $125 a month and parking benefit is set at $240 per month.

5. Mortgage Insurance Premiums

Deduction for mortgage insurance premiums expires at the end of 2011.

6. Bonus Depreciation

Special 100% bonus depreciation is allowed for the purchase of new equipment placed in service for 2011. In 2012, bonus depreciation goes to 50% of the purchase price of newly acquired equipment. After 2012 the deductions is eliminated.

7. Section 179 Deduction

Section 179 allows up to $500,000 in current deduction to be taken on purchased equipment. For 2012, the deduction is only $125,000 and for 2013 and later the limit will be $25,000. For 2010 and 2011 you can deduct up to $250,000 of qualified improvement costs for certain kinds of real property; interiors of leased non-residential buildings, restaurant buildings, and interiors of retail buildings. Improvements, if needed, should be done in 2011 because the tax break won’t be available after 2011 unless Congress extends them.

8. Leased Car for Business Use

In 2011, some leased cars are allowed 1st year depreciation deduction of 100% for business property, if it is acquired after September 8, 2010 and before January 1, 2012 and put into use by January 1, 2012. The FMV of the leased car must bye $18,500 or more.

9. Business Startup Costs

Startup Costs are “amount paid or incurred for creating an active trade or business, or investigating the creation or acquisition of an active trade or business”. Starting in 2010, business can deduct up to $10,000 for start-up costs, there is a dollar-for-dollar reduction of the $10,000 deduction if start-up costs exceed $60,000.

10. Home Office Expenses

If you are working from home make sure that you are using the office regularly and exclusively for business purposes, make a floor plan showing the area you use for your business and the percentage of the square feet of the home. Also take photo of your home office so it is on file if there any questions later and please keep detailed records of expenses to substantiate your deductions.

Disclaimer: If and only to the extent that this publication contains contributions from tax professionals who are subject to the rules of professional conduct set forth in Circular 230, as promulgated by the United States Department of the Treasury, the publisher, on behalf of those contributors, hereby states that any U.S. federal tax advice that is contained in such contributions was not intended or written to be used by any taxpayer for the purpose of avoiding penalties that may be imposed on the taxpayer by the Internal Revenue Service, and it cannot be used by any taxpayer for such purpose.

In the film “The Princess Bride”, Inigo Montoya, a despondent yet valiant swordsman sworn to avenge his father’s murder, joins an equally valiant adventurer named Westley in his quest to rescue Buttercup, Westley’s childhood sweetheart, from an evil king.  After many adventures, Inigo and Westley, joined by Fezzik, the Giant, successfully enter the king’s palace.  While Westley is busy rescuing Buttercup, Inigo encounters the six-fingered man who murdered his father.  In order to fortify himself so that he can recover from a terrible wound and enact his revenge, he repeats the following: “My name is Inigo Montoya.  You killed my father.  Prepare to die.”  With each repetition, Inigo grows stronger, more confident, unwavering in his path.

I do not encourage revenge.  However, Inigo Montoya’s approach offers an important skill that you can add to your negotiation tool kit.  Find your message and stick to it.

This article by Bathabile K. S. Mthombeni, was originally posted at 123untangle.com. Bathabile has been developing Winning Negotiation, a track of classes on negotiation techniques at NWCU.

I recently worked with a woman, let’s call her Meredith, who needed to fire a client.  Meredith is a stay-at-home mom who decided to do childcare in her home to supplement her family’s income.  A long-time friend, who was returning to work after her six-week maternity leave, asked for help with babysitting and Meredith agreed.  This long-time friend had suffered terrible losses in her past and Meredith felt sorry for her.  So she agreed to babysit her friend’s child for a fraction of what she would normally charge.

After a few weeks, problems developed with the arrangement.  Meredith’s friend began waiting longer and longer to pick up her baby.  Eventually, Meredith was caring for her friend’s child for up to fourteen hours a day.  When Meredith’s friend did arrive, she would stay at Meredith’s house for up to an hour, chatting about her day.  While Meredith enjoyed talking with her friend, she preferred to spend that time with her own children, whom she found herself neglecting as she cared for an infant.  The final straw was when her friend came to pick up her baby on a Friday evening and very casually told Meredith that she did not have the money to pay her for that week.

Meredith was furious but felt terribly conflicted about firing her friend.  She was concerned about what her friend would think of her and would say about her.  She still felt sorry for her friend, who was raising her child as a single parent while her husband worked overseas.  However, she was angry and frustrated because she felt that her friend was taking advantage of her.  Meredith was also certain that she could no longer continue to care for an infant; she preferred to care for children who were closer to her own children’s ages so that she could include her own children in their daily activities. Spending time with her own children was a primary interest for her.  However she knew that her friend would argue with her and she was afraid that she would cave in to her friend’s pleas.

That is when I told Meredith about the Inigo Montoya effect.  When you’ve made a decision, find your message and stick with it.  Meredith’s message was “I am sorry but I won’t be offering infant childcare any longer.  I need to spend more time with my own kids.  I am concerned that I have not been giving them enough attention.  I will be caring for children who are older so I can spend more time with my own kids.”

Meredith repeated her message over and over again until she could say it with utter conviction.  Practicing her message allowed her to gain comfort saying it and helped her think through the content of the message.  While it was the lack of payment that had pushed her past feeling sorry for her friend and spurred her to act on behalf of her own needs and interests, Meredith did truly feel that she could not ignore her interest in being a primary influence in her children’s lives and her need to care for older children in order to address that interest. She recognized that berating her friend about the lack of payment would only bring her secondary gain.  That is, while she would feel some momentary satisfaction from lashing out at her friend, doing that would not resolve the real issue and would ignite an argument, something she wanted to avoid.  She also took responsibility for agreeing to the arrangement in the first place.  She chose to focus on articulating her needs and interests and practiced her message so that she could do so without being swayed or distracted.

Before having a difficult conversation, decide what you need to say, make your message brief and to the point, and practice. Also, review this blog about how to say no.  You’ll thank yourself for it.

Presentations to Die For

Martha Denton  is a freelance visual communications specialist focused on design, delivery and capability building in the presentation and infographics fields. She has worked with Fortune 500 Companies, major non-profits, professional services and government entities. Prior to being freelance, Martha with McKinsey & Company for 11 years. To keep her skills sharp and her passion satiated, she volunteers as the Presentation Guru for Ignite NYC and TEDxHarlem, which involves coaching speakers and designing presentations.

Martha will also be presenting at a free Meetup Called Presentations to Die for. Get a taste for her experience at the meetup and then attend her class Presentations to Die For a 3 part course at New Work City.

Digitistas: Build your Online Buzz

The Digitistas are hosting another fantastic class for women: Build your Online Buzz: Expert Advice on Facebook, Twitter, Foursquare & Blogs

Jennifer Nedeau is an experienced writer, digital strategist and media relations professional based in New York. She is experienced in providing digital strategy and public relations for a variety of media, advocacy and corporate brands. You can learn more at www.jennedeau.com and follow her on Twitter @JenNedeau.

Digitistas is a skill-building and sharing group for women in and around the media industry and digital sphere. We provide trainings, networking events and a creative community for exchanging ideas. We are dedicated to sharing and improving women’s skills around digital and social media, the web, radio, television, video and messaging. Digitistas holds innovative, high impact classes in a supportive and fun atmosphere. Check them out on Twitter and Facebook

Winning Negotiation

Bathabile K.S. Mthombeni, J.D., is the Founder and Principal of Untangled Resolutions, a private mediation firm. She is a seasoned mediator, negotiator, educator and flourishing entrepreneur.

Bathabile will be teaching Winning Negotiation & Winning Negotiation in Three Steps

A cum laude graduate of Princeton University who earned her law degree from Columbia University, Ms. Mthombeni is a dynamic and gifted speaker who has developed and presented numerous workshops, seminars and panel presentations at venues like Columbia University, Princeton University and the New York City Bar Association.

Creative Interns: Land an Internship or Job Using Social Media

Emily Miethner and  Marny Smith co-organizers of NY Creative Interns will be hosting a class in the NWCU Space: Land an Internship or Job Using Social Media 

Think your skills at Facebook stalking, refreshing Twitter streams or Googling yourself will lead you nowhere? Think again! Social media can be a great way to build online presence, educate yourself and discover new professional opportunities.

Working on:

Independent since: October 2005

Before that: Doing Sarbanes-Oxley compliance at a large firm

Her story:

How many people do you know who have an accounting degree, a bookkeeping consultancy, and one of the premier cupcake blogs on the internet? I know one. Her name is Nichelle, and she’s as special as her resume.

Nichelle has been blogging about cupcakes since before cupcakes were cool. Hell, she was blogging about cupcakes since before blogging was cool. Why cupcakes?

“I started writing about cupcakes because I love them and enjoy sharing them with people.

“People keep saying that cupcakes are a fad, but that’s not true. Cupcakes make people happy and happiness is not a fad.”

After graduating from the University of Cincinnati’s College of Business with a degree in accounting, she was took a job with Federated Department Stores as an internal auditor. “It was a perfect first job,” Nichelle said, “I got to travel a lot.”

Nichelle bounced between several jobs at large firms over the next several years, and started her first blog, Cupcakes Take the Cake, in 2004. Less than a year later, she was working for herself full-time, doing consulting gigs and blogging constantly.

Her last day at work was on site with a client. “They were pissed I was leaving,” she said. “I was trying to do the handoff and just make it through the day.” Her last day working for someone else wasn’t marked with any fireworks or fanfare, nor was the following day.

“I just got right into hustle mode. It didn’t hit me until later.”

She joined Paragraph, a sort of coworking space for writers, as one of their first members. She built a base of clients, first with bookkeeping gigs, and eventually for social media gigs, mostly from word of mouth. LinkedIn and Craigslist, she found, were problematic. “They didn’t want to pay me what I was worth,” she said.

What kinds of challenges do independents face?

“Rates are a common problem,” she said. “People email me, asking how much they should charge. I say do a retainer, less project and hourly stuff. You’ll always underestimate.”

On the administration side? “There is no Quickbooks killer,” Nichelle said. “It’s a huge opportunity. Quickbooks is great for accountants, but accounting language is different from regular language.” In fact:

“I have a feeling a lot of people are just doing Google searches and winging it.”

Proper bookkeeping isn’t exceedingly difficult, Nichelle notes, but many are ill-prepared to manage it well, and helpful tools are hard to come by.

What’s your morning routine, if any?

Nichelle is up by 7:00-7:30. She’d rather not get up that early, but her morning centers around stirring up her social media channels first thing in the morning. Optimal timing for posting things and engage communities vary by context, but she has at least one client for whom the morning is the best time.

Her phone is her alarm clock. Checking her messages is the first conscious thing she does.

Her computer sits near her bed, where she opens up Hootsuite, asks some questions on Facebook, and looks to see if any interesting stories are brewing. She retweets anything she finds relevant. She checks her Cupcakes Take the Cake Flickr group, which has over 100,000 photos of cupcakes on it, and blogs anything that might have shown up in the past day that’s noteworthy.

Two of over 100,000 photos from Nichelle’s Flickr group.

She opens up a new Evernote note, and documents anything of significance that happens that day. “I don’t write down everything, just the highlights.” Which vitamins she took, what she cooked, and generally what she got done. The objective? At the end of the day, she receives an email from IDoneThis, which simply asks what she got done that day. She copies her notes from Evernote and pastes them into IDoneThis, which simply records her response and keeps track of her performance.By 9:00, she’s already put out a bunch of content.

“It’s a bragging rights thing,” Nichelle explained. “I’m pissed because I missed one day, and lost my streak. It was 70 days.”

How does one know when to make the jump?

“The most time I spent at one job was two years. So many people stay at jobs a lot longer.” Nichelle notes:

“An indication of you hating your job is when you would prefer to be sick than go to work. There’s something wrong with that.”

If you find yourself in that situation, what next? Trash the boss’s office and leave photocopies of your resignation letter everywhere? Not so fast.

“Don’t quit your day job,” Nichelle warns, at least not right away. She’s seen too many people get burned leaving their jobs in a bad economy without a game plan. “Some have the temperament for this, some do not. Have a plan. Know how to make money with knowledge and skills you have.” Paraphrasing the bestseller Never Eat Alone: 

“Build it before you need it.”

Follow Nichelle on Twitter and check out her thoughts on finance at Keeping Nickels and on delectable things at Cupcakes Take the Cake.

Nichelle’s favorite resources for independents:

Betterment - NY-based index fund. “It’s the easiest way to put aside money for people who are self-employed.”
FreelanceSwitch - A treasure trove of information about making it as an independent.
LifeHacker - Productivity and good articles on technology for non-techies.
Outright - Web app that helps you organize business finances and monitor cash flow

No one masters self employment without help from others. As more and more people pursue independent careers, the need for structure, education, and shared accountability grows accordingly. Just as industries have risen to accommodate the needs of a white collar employed workforce, so too will new services be built for the new independent workforce.

To this end, we provide a platform that allows participants to to create programs that are geared toward this goal. These efforts take the forms of classes, workshops, coworking sessions, mentorships, speaker series, and more. The program is driven by a core belief that each participant has something to teach and something to learn from everyone else.

You are the captain of your own vessel. It’s up to you to run a tight ship. We’re here to help. Join us and get your ship together.

This is a free event. See description:

It’s easy to dream of quitting one’s job to pursue their dreams, but how do you really pull it off?

Join us for a special night featuring awesome people who have successfully left employed life behind. Learn what it took for them to make the jump, the challenges they faced, and how they overcame the odds to build successful careers on their terms.

Paul Canetti had a successful job at Apple Inc as a creative lead and manager. He was at the height of his professional career when he gave it up to risk it all and go freelance. In just under 3 years, Paul has founded his own company MagAppZine, which has put 12 apps on the App Store with new ones being added every week. Hear Paul share his journey and learn from his success.

By day, Angie Anderson managed national marketing campaigns for big companies like Starwood Hotels and Moleskine, but by night, she was formulating a plan to break away, start an independent graphic design company, and turn her employers into clients. In December 2010, that’s just what she did, launching Biggest Little: a small design operation with big ideas (and some big clients too). Angie shares her experience making the leap (and prepping the net).

Got an interesting story on the topic? We’d love to hear it!Contact us and let us know that you’d like to be included in the presentation.

Beer will be on hand following the discussion.

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