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Sample Questions
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Wondering what type of questions are asked at BIDaWIZ?
Below, we've given you a sample list of questions so you can get a better idea.
Please note that this is just a sample list of questions. BIDaWIZ Wizards are capable of answering many different types of finance and accounting questions.
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Audit
Valuation
Entertainment Expenses
Bookkeeping
Accounting Software
Direct Write-Off
Uncollectible Sales/Returns
Budgeting
Credit Card Debt
Revising Advertising Budget
Corporate Finance
Small Business Loans
Selling Business
Leases
IT Supplies
Purchase Lease Option
Mortgages
Applying For a Mortgage
Reducing Mortgage Interest Payments
Planning for College
529 Savings Plan
Student Loans
Retirement Planning
Asset Allocation
401K & IRA
Rollover IRA
Tax
Alternative Minimum Tax
Estate Tax
Gift Tax
Sales Tax
Small Business Deductions
Other
Unemployment Compensation
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Audit
Valuation [Top of Page]
I'm performing an audit for a small business that primarily focuses on selling computer software to larger corporations. The company had a decent % of cash on their balance sheet so they decided to invest the cash in auction rated securities, that at the time were composed of AAA rated securities. It appears as though these securities are illiquid & the company is not marking down these securities. I'm wondering if you have had any other clients in similar situations and was wondering what those companies did to treat those securities?
Entertainment Expenses [Top of Page]
I recently opened up a restaurant in Boston and decided to entertain some of my clients that I have from my trucking business. I know that entertainment expenses such as client meals are generally deductible but I'm know I can't deduct a meal sold in the normal course of business (i.e. for my restaurant business). I don't want to be aggressive here because I'm afraid of getting audited, but I would like to claim any deductions that I can to pay less taxes. Can you provide me some guidance for this situation? Thanks.
Bookkeeping
Accounting Software [Top of Page]
My company has been using Quickbooks accounting software for the past 5 years now. We are at the point where we need to select a software that is more customized to our business needs & have been shopping around for awhile now. We are looking for a software that can handle a high volume of transactions that can be customized to for an information services business. Please provide a detailed list as to what options are available?
Direct Write-Off [Top of Page]
My shoe store is getting ready to prepare our tax return for the fiscal year ended 2008. One of our vendors, a private school, which accounted for 15% of our sales this past year has not made a final payment for the last order of shoes that they placed with our company. This order accounted for ~5% of our sales for the year and the account receivable account has an age of 60 days when normally they pay within 30 days. We've contacted the school and they claim that a lot of students will not be returning to the school in 2009 so they are low on cash but promise to pay within 15 days. Do you think we should write-off this sale?
Uncollectible Sales/Returns [Top of Page]
I own a wine distributing company in Philadelphia and have stopped receiving payments from 25% of the vendors that placed orders for win last month. I've called all of those vendors requesting payment, but many of them say they've gotten hit by the weak economy and inventory continues to build so they need more time to make payment. Others have requested to return the items even though its been 35 days since purchase & I have a no return policy. I'm not really sure what I should do in this scenario. Should I book a bad debt expense for those that want to return the items since they seem less likely to pay me anytime soon? Any suggestions?
Budgeting
Credit Card Debt [Top of Page]
For the past year or so, I've been trying to reduce my credit card debt by doing the following: 1) paying more than the minimum payment, 2) reducing the number of credits cards I have to two, & negotiating with the credit card issuers to reduce my APR to 14% from 20%. What else can I do to improve my credit standing?
Revising Advertising Budget [Top of Page]
I work in the marketing department for an IT company that wants to revise its advertising budget for 2009. We had originally set our advertising budget 30% lower than in the prior year due to a weaker demand environment. Since that time, business has slowed dramatically and management has now asked me to lower the budget another 25% for year and only keep advertising programs that have a high Return on Investment. I'm thinking that it might be smart to focus on advertising programs that are for our service business as oppose to our hardware sales business because the service business is a necessity for most companies. What do you think? Do yo have any advice for picking high ROI programs?
Corporate Finance
Applying for a Small Business Loan [Top of Page]
I'm starting up a classic car dealership & repair shop with two partners in South Florida. We have each put in $50,000 into the business but need an additional $100,000 to buy all of the equipment necessary to refurbish the cars and to fund our overhead. We've gone to a few potential outside investors to try and raise additional capital but we haven't had much luck. So, we decided to apply for a small business loan, but we were declined by many banks with the exception of one which offered an annual interest rate that was in the high single digits. Do you have any suggestions on how to try to obtain a more favorable interest rate from this bank and/or how to increase our chances of qualifying for a loan?
Selling Business [Top of Page]
I own a construction company which is a Delaware C Corporation & I'm considering selling the business next yr. I believe that if I find the right buyer I maybe able to do a stock sale or asset sale/liquidation of the business. I know that the stock sale will likely be more tax favorable to me but can I do anything else to reduce the tax consequences of the sale? Could I transfer ownership to a charitable trust & receive income payments on the trust?
Leases
IT Supplies [Top of Page]
I've decided to start a new business & am considering leasing 10 computers outright which cost $3,000 a pop as oppose to purchasing them. It seems as though I could deduct the monthly lease payments and the write-off each year would be larger than the yearly depreciation. I'm assuming this would be treated as an operating lease? I'm not really sure if this is the right way to go, do you have any suggestions?
Purchase Lease Option [Top of Page]
I'm considering entering a lease in Michigan with a purchase lease option which as you are aware, basically gives me the ability to lock in a purchase price at these low levels. I know the market probably hasn't bottomed yet and the rent is slightly higher with this purchase lease option, but I believe this might be a good opportunity for me to lock-in home ownership in the future. One of my fears with this option is the unlikely event that I would not qualify for a loan to purchase the property outright at the end of the lease term. Do you have any advice to mitigate this risk and is this a risk that I should be seriously factoring into in my decision to enter into this lease?
Mortgages
Applying For A Mortgage [Top of Page]
With mortgage rates & housing prices at really low levels, I'm considering buying a home. I've contacted a few mortgage brokers but I'm not 100% sure which option is the best for me. Can you tell me what factors I should be considering in making a decision? Also, if I provide you with the mortgage terms can you help guide me through the process?
Reducing Mortgage Interest Payments [Top of Page]
Two years ago my husband received a mortgage with a regional commercial bank. We are behind on our monthly payments because my husband recently was laid off and the income from my husband's unemployment compensation + my secretary job are not enough to pay all the bills. But since the government began implementing the Making Home Affordable Program in early March, we now believe we are entitled to reduce the annual interest rate on the mortgage to a ~2% fixed rate. The process for applying is moving very slowly right now & we're wondering if we can somehow get the mortgage moved to another bank. Do you have any advice on how to deal with this situation. What else can we do?
Planning for College
529 College Savings Plan [Top of Page]
My wife and I had a child about 2 years ago and we live in California. I believe now is the time I should set aside a money for my child's college education and beyond. Currently, I work at a warehouse making $40,000 a year and my wife is a waitress making $35,000. We are renting an apartment right now & are currently in $10,000 of credit card debt but we are making our minimum monthly payments. Anyway, I would really like to open up a 529 savings account for my child's future college education. I know there are a lot of plans available, but I'm wondering if you have any recommendations or could provide us with a comprehensive list detailing all of our options. Thanks.
Student Loans [Top of Page]
I know that I'm likely eligible to deduct $2,500 of my student loan interest from my yearly taxes, but I just lost my job and am starting to have trouble keeping up with the monthly payments. I'm considering putting my student loans on deferment. Will I be able to continue to recognize student loan interest deductions in the future for the loan amount that I put on deferment? Please Advise.
Retirement Planning
Asset Allocation [Top of Page]
I'm 55 years old and I have allocated 60% of my investments to fixed income, 20% to equities & the rest to a cash savings accounts. With the stock market down so significantly, I'm considering putting some money in the market for the longer term in relatively low risk stocks. My main investment objective is income-oriented so I'm looking at a lot of dividend paying stocks. I'm specifically screening stocks where the dividend is not at risk which is hard to predict. Can you provide me with suggested quantitative or qualitative metrics to consider for determining the safety of a dividend?
401K & IRA [Top of Page]
I recently decided to leave my job to start my own restaurant business. I had a 401k with my former employer which had a matching feature. But now that I have my own business, I don't enjoy that same retirement benefit. I'm thinking maybe it would be smart to roll my 401K over to an IRA? Can you provide me with a detailed table listing all of my options highlighting what you would recommend for my situation?
Rollover IRA [Top of Page]
I've been waiting on the sidelines for a market collapse to convert a good portion of my traditional IRA into a Roth IRA. Seems like now is the right time to convert to a Roth. Is there any reason why I should not do the conversion?
Tax
Alternative Minimum Tax [Top of Page]
I was shocked, this year I owe AMT and I make $90,000. I know its unavoidable but do you have any suggestion on how to minimize this tax? I know I can make charitable donations which should reduce my tentative minimum tax. What about home mortgage interest? Does it matter if I refinanced my mortgage this year?
Business Sales Tax [Top of Page]
I recently purchased some custom software and some off the shelf software from an IT company based out of New Jersey but my business is located in New York City. Am I subject to Sales Tax under New York State Law? If so, I will owe upwards of $500
Business Sales Tax [Top of Page]
If I sell clothing on the internet is it my responsibility to charge a sales tax if I work out of Vermont but ship the goods to other states? Do I have to charge a sales tax if customers come to my physical store in Vermont to purchase the clothing?
Estate Tax [Top of Page]
My mother recently passed away this year and I'm trying to figure the estate tax that I owe. The bulk of the value of the estate comes from the home which was transferred to her when my stepfather passed away two years ago. It seems as though the Fair Market Value of the home should be used to determine the tax & I'm not sure what that is right now since the housing market isn't acting rational right now. Please advise.
Estate Tax [Top of Page]
I'm considering getting an irrevocable life insurance trust to try to avoid taxes on the life insurance proceeds that normally would be assessed to my children. It seems that this is a good way to go but I'm not 100% sure about giving up ownership of the policy to a trustee. What do you think?
Gift Tax [Top of Page]
Am I Subject to a gift tax for paying my nephew's college tuition if the annual cost is over $13,000? Does it matter if I give the money to my nephew to process payment or directly to the educational institution?
Student Loan/Child Support [Top of Page]
I need to apply for a student loan to fund my college night classes. I'm 20 years old and married and have one child who lives with my ex-wife. Will I be able to deduct my Student Loan interest. Also, I work another job to pay for my living expenses & child support. Can I deduct my spousal and child support expenses. The tax rules are confusing to me on this topic, can you provide some clarity?
Small Business Deductions Tax [Top of Page]
I'm a freelancer and operate my business 100% from home. I spoke to my friend who's pretty familiar with taxes and he said that I'm probably able to treat some of my rent & telephone expenses as business expenses. I did some research and its not 100% clear to me as to what I can and cannot deduct. Can you help me figure out what I can deduct?
Other
Unemployment Compensation [Top of Page]
I recently laid off 10% of the employees at my printing company because of a weaker demand environment. The termination agreements included a severance and health care benefits for 3 months. As you maybe aware, on February 17, 2009, the Stimulus Package was Passed by Congress which includes a Cobra stimulus package. The package indicates that 65% of the monthly cost of health benefits for those laid off between September 1, 2008 and December 21, 2009 will be reimbursed by the government. It seems as though, I have to send forms to COBRA by April 18th, notifying them of those employees that should be eligible for this stimulus package. In addition, apparently my company has to pay the 65% upfront to cover those monthly health-care benefits, NOT the government. At the end of the year, my company can claim a payroll tax credit for such payments. Because of this rule, my company may have serious liquidity issues in the upcoming months, so I was wondering if you can provide some advice to improve our liquidity positions. Is there way to minimize our healthcare liability?
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