In this guest posts, Russell J. White, shares some insights on success and failure.

Did the leaders of Enron start out trying to lie to their investors? Did Bernie Madoff intend on defrauding those who trusted and believe in him? Did you wake up this morning intent on getting so upset in a 2 pm meeting where you said things in anger that could cost you your job? No, but it happens every day.

Have you ever asked how did we get here? 

Every day we are faced with infinite possibilities and hundreds of decisions. The path those decisions leads us on has us end up where we brought ourselves to. Without question there is randomness and luck involved in the decisions we face. Read Malcolm Gladwell’s excellent book Outliers on the impact fortune has on our lives.

What we do with those decisions is our choice and ultimately leads us to face the next set of choices along that path. Most of us have faced decisions to try cigarettes, alcohol, drugs, illicit activity, and to cheat, to lie, to over-indulge, we get to prioritize our lives as we decide. These become significant choices that significantly impact who we become. Each day we set our path face critical moments that propel us along.

How have the decisions you made as a teenager impacted you today?

What did you decide six months ago that has you now reaping those results?

There is no one path to success or one path to ruin. We choose our own way. The critical moments occur in considering the choices you make on each decision. With each decision ask yourself, “Does this get me to where I want to go?” Whether it is personal choices or professional choices, you need to consider which direction each step takes you.

Know where you want to go.

Know the direction you want to take to reach that end point.

With each step make progress along the path of your choosing.

I often hear people wanting to experience success and they always ask, “How do I get there?” You can’t borrow another person’s playbook because it won’t fit your decisions you face. You achieve success with each step in the right direction. Choose your decision steps with the desired result in mind.

Russell J. White, President of PinnacleSolutions.org is one of America’s leading business growth strategists. He is an author, consultant, international speaker and business expert on leadership, marketing and growth strategies. Since 1991 Russell has worked with hundreds of clients.  He has been a frequent guest on television and radio. He is considered both a motivational speaker and a business expert.  Russell also writes and publishes the Grow Your Business blog.  Contact him at 803-984-9448 or RJWhite@PinnacleSolutions.org

I think it is time for a little lesson on 1099′s for everyone.  Forgive my rant, but every year people start begging for their 1099′s in early January.  They say they “need their 1099 to file their taxes.”  This is simply untrue and tells me that many of them are probably cheating on their taxes.

A 1099-MISC form is issued to a person or unincorporated entity that is paid more than $600 in the calendar year.  If they pay you less than $600, the payor does not have to issue a 1099-MISC but that does not mean it is not income to the receiving party.  The purpose of the 1099 is to notify the IRS that this person should be claiming the income and paying taxes on it.  The IRS then matches this amount reported to the proper return and if it is not reported, the IRS sends out a lovely balance due notice.  Are these individuals that “have” to have a 1099 in order to do their taxes excluding the income from the ten vendors that paid them $500 each that were not required to send a 1099?

Independent contractors are self-employed are businesses whether they know it or not.  Just like any other business, they should keep a proper set of books and records to substantiate their income and expenses.  They are also eligible to deduct qualifying expenses against the income before paying taxes on it.

With electronic filing being done for most returns today, no statements like W2s have to be submitted to the IRS with the returns.  Even with paper filing, you only attach statements showing how much was withheld and remitted to the IRS.  1099s do not normally have withholding so they are not required and never have been required to be submitted to the IRS.

So when I hear someone asking for their 1099, I hear a business owner saying “I do not keep books and records.  I do not keep up with my business as a business.” and “I plan to only claim the income that is sent to the IRS.”  This is a recipe for pure trouble and is the reason the IRS scrutinizes self-employed filers so much.  The truth is that this one the highest concentration of tax cheating that exists in our tax system today.

Do yourself a favor.  If you are a business owner, require all potential 1099 vendors to complete the form W-9 from the IRS before they receive any payments from you.  If they are planning to cheat on their taxes, remember that they may not always be the best vendor for you.  Have a backup!

Sales and use tax has always been a confusing issue and every state has different laws to add to the confusion.  The general rule of thumb has been that if it is tangible, it is taxable.  Usually labor and services are not subject to sales tax.  Well, throw that rule out the window when it comes to digital property in North Carolina.

Effective for 2010, digital property is now taxable even if it is delivered electronically.  “Digital works” includes (1) an audio work; (2) an audiovisual work; (3) a book, a magazine, a newspaper, a newsletter, a report, or another publication; (4) a photograph or a greeting card.  These are some big changes and the issue has not been publicized much.

Sellers of these products should take note of the changes and begin to charge sales tax if they are required to collect in North Carolina.  Buyers should also beware — use tax may be due.  If the seller is not required to collect tax in NC and you as the purchaser are in NC, you should still remit the applicable tax as use tax.

For the full detail of the changes from the North Carolina Department of Revenue, please review the notice at http://www.dornc.com/taxes/sales/impnotice_digital_property09.pdf.

Rising gas prices may capture headlines, but today’s soaring health care costs are an even more consistent financial threat. The National Coalition on Health Care reports that in 2006, the average family health insurance premium topped $1,200 per month. That’s more than the average family’s mortgage—and health care costs are rising faster than interest rates!

Raising your health insurance deductible just a few thousand dollars can cut your premium by up to half. But that leaves you responsible for out-of-pocket costs. And even if you itemize, those are deductible only to the extent they exceed 7.5% of your adjusted gross income. Is there a way to capture premium savings from high-deductible insurance and tax savings for out-of-pocket expenses?

If you have self-employment income, even from a startup or sideline business, you can take advantage of a little-known tax break to save a bundle on your family’s health care costs. Medical expense reimbursement plans (“MERPs”) let you reimburse your employees, their spouses, and their dependents for uninsured medical costs. Plan benefits are deductible by the business, and nontaxable to the employee. Here’s how they work:

• You have to establish the plan for employees. If you operate as a proprietorship, partnership, LLC, or “S” corporation, you’re considered “self-employed,” and not eligible. If you’re single, you can establish a C corporation and pay benefits to yourself as an employee. If you’re married, you can hire your spouse and pay benefits to them. (If you operate as an S corporation, you and your spouse are both considered self-employed. In that case, segregate part of your income through a proprietorship or C corporation and pay benefits through that entity.)
• You have to offer benefits to all employees. However, you can exclude those under age 25; those who regularly work less than 35 hours per week; those who work less than nine months out of the year; and those who have worked for you for less than three years.
• You’ll need a written plan document. No special IRS filings are required for plans with less than 100 employees. You’ll deduct benefits as “employee benefits” on your business return, which may also lower self-employment tax bill.

Example: You’re self-employed as a real estate agent. You hire your spouse to provide marketing support, and establish a MERP for his or her benefit. The plan covers your employee, their spouse (meaning you!) and your dependents.

Once you’ve established the plan, you can still deduct 100% of your health insurance costs. This includes major medical and supplemental coverage, Medicare Parts A and B coverage, qualified long-term care, and “Medigap” coverage. You can even reimburse your spouse for any after-tax premiums they pay through their employer.

You can also write off 100% of your out-of-pocket costs and bypass the 7.5% floor for itemized deductions. This includes routine expenses such as co-pays, deductibles, and prescriptions; occasional expenses such as eyeglasses, teeth cleaning, and chiropractic care; and  big-ticket items like orthodontics, fertility treatments, and schools for learning-disabled children. It also includes nonprescription medicines and health-care supplies. You can reimburse your employee, or you can use business dollars to pay health-care providers directly. For more information, see our office.

MERPs won’t make your visit to the doctor less painful. But they may be the best kind of tax strategies because they give you new deductions for money you’re already spending. Enjoy them in good health!