• Navigating Gift Card Taxes

The correct accounting for gift cards is fairly complicated and I urge you to speak to your accountant to make sure you are getting it right.

I would suspect that many smaller retailers and restaurants may just deposit the money obtained from gift cards and not worry about the liabilities or tax effects until the gift cards are cashed in. That's probably not the correct way of accounting for gift cards.

When you sell a gift card, your business is not actually receiving income. You are getting cash for your gift card. However, as soon as you have received that cash, your business now has a liability. In simple terms, you may take in $25 in cash for selling a gift card (or $25 in credit card receipts). Your business now owes that gift card purchaser $25. You have not made any income. Although you have taken in $25 in cash (or equivalent), your business now has a $25 liability to the gift card purchaser.

From an accounting standpoint, your business does not make any income on the sale of the gift card until your customer actually uses the gift card. Once the $25 gift card is used, that is when your business can actually declare the income from the sale of the gift card. Obviously, when the gift card is used, you can also declare your expenses related to the use of the gift card such as your cost of goods sold.

However, to make matters even more complicated, the IRS usually requires that you pay tax on the income immediately rather than wait for the customer to actually use the gift card.

That being said, the IRS does have ways that allow your business to defer the income from unused gift cards for up to three years.

In order to defer gift card income to a future year (up to three years in the future when a customer actually redeems the gift card), a business must accurately track each gift card separately and be able to substantiate the date sold, date redeemed, and date expired for each gift card. Failure to do so will result in loss of the income tax deferral.

Furthermore, if you decide to declare your gift card income when received, you should discuss what expenses you wish to offset related to that income with your accountant.

To read the entire article Navigating Gift Card Taxation go to:

http://www.pizzamarketplace.com/blog/4825/Navigating-gift-card-taxation

• 1.7 Million IPhones Sold in 3 Days and Now Verizon

There are some companies still doing well and Apple is one of them.

They have sold 1.7 Million IPhones in 3 days and Verizon will soon start selling IPhones in January (according to Bloomberg News).

Somehow, Apple has figured out how to get consumers to spend $299 for a phone plus at least $39.95 for voice service (450 minutes) plus an additional $25 per month for data services (connection to the internet). You can also add an additional $5 per month for text messaging. Your total cost for an IPhone will cost you about $70 per month depending on your plan.

Your minimum monthly cost is going to be about $54.95 per month (including 450 minutes of talking and 200 MB's of data and internet access). Most likely, you are going to be paying $64.95 per month (which includes a reasonable amount of data and internet access). Your data access fees also go towards receiving and sending emails.

Add about 25% more to the above amounts for taxes, access fees, and other items that the government requires you to pay that we may not really understand.

For $20 per month extra, you can add Tethering. This is actually a nice addition that allows you to connect your IPhone to your notebook computer and get full wireless internet access.

For business owners. computer geeks, college students, and most of the world, the IPhone is the greatest thing ever.

But, I have to admit that I am part of the 300 million people that still doesn't own an IPhone. Believe me, I love gadgets. I love computers. But, I'm not sure that I want to pay $50 or $100 per month so that I can mindlessly walk down the street staring at an IPhone.

Who does own an IPhone?

The average IPhone user is under 30 years old. That leaves me out.

Reading emails is the top function of IPhone users. I receive about 200 emails per day. Some of my emails are related to business and investment matters. Most of the emails I receive are advertisements. I actually enjoy reading some of the advertisements and never miss reading the pcAmerica Newsletters. On the other hand, I can do without my daily ad for all types of wonder drugs and diets. Certainly, I don't need to read my emails constantly and having a device that is always reminding me that I just received a new email is not something that I really need. I am happy to read my emails in the privacy of my home at a time that I am ready to read them.

28% of IPhone users carry an IPhone in place of a Notebook computer.

IPhone users are not just youngsters. Half of IPhone users are above 35 years old. The numbers don't exactly sound correct statistically but you have very few IPhone owners between the age of 0 and 18.

About half of IPhone owners under 30 are college students. I guess when I went to college, we used to date. College students seem to have replaced dating with texting.

40% of all IPhone users have an income over $100,000 per year.

IPhone users tend to be old and more successful than Android phone owners.

So what does this interesting stuff have to do with your business? Using Social Media such as Facebook and Foursquare and Twitter can be very helpful to your business (all supported within Cash Register Express and Restaurant Pro Express). No matter how you feel about spending a thousand dollars per year on an IPhone or similar device, it is important to understand your customers.

Personally, I do not have an IPhone, but I will be one of the first people on line when it arrives at Verizon. I'm not sure that I really need one, but I don't want to be left out. Those of you who are pretty good with computers can limit those emails being sent to your IPod to those emails you really need to see immediately. Using Microsoft Outlook or most other email programs, you can automatically sort out your emails and only forward essential emails to your IPhone.

To read about the IPhone coming to Verizon, go to:

http://www.bloomberg.com/news/2010-06-29/verizon-wireless-said-to-start-offering-iphone-ending-at-t-s-exclusivity.html

Who owns an IPhone? Go here:

http://seekingalpha.com/article/70781-who-iphone-owners-are-and-what-they-want

or here:

http://gorumors.com/crunchies/income-level-distribution-of-iphone-users/

• Are You the Only Person in the World that Does Not Own an IPhone?

According to estimates, 15.8 million people own IPhones in the United States. Apple has also sold over 36 million IPhones worldwide.

The population of the United States is about 307,006,550 (give or take one or two people as estimated in 2009). That's about 307 million people.

That means that about 5% of all people in the United States own an IPhone or about 1 in 20 people.

Apple has sold another 16 million or more phones outside of the United States and some people are forecasting the sale of 50 million IPhones in 2010. If you remove youngsters under 18, it is quite possible that 1 in 10 people over the age of 18 currently have an IPhone (within the United States). Adding Verizon to the mix, it is possible that 1 in 5 people in the United States will be using an IPhone within the next year or two. If you don't have an IPhone, you can have comfort knowing that 4 in 5 people won't have an IPhone in the next year or two.

• Lime Wire Going Down (What Is It?)

Lime Wire is the #1 Music Sharing website used by about 4% of the population and found on 10% or more of all computers.

Lime Wire is a FREE website and a program that allows you to download music and videos for FREE.

If you are under 21 or going to college, you are probably using Lime Wire.

Your under 21 year old kids are likely to have installed Lime Wire on their computers.

If you own or manage a retail store and allow employee access to your computers (for tasks other than point-of-sale), you are likely to have Lime Wire on one or more of your computers.

I help about a hundred computer users a year recover from virus and spyware problems. Just about every single computer I have worked on has Lime Wire on their virus infected computer.

Your kids (and probably most people under 30) will tell you that Lime Wire is great. It allows you to download as much music as you want and all for FREE. I've found that most people don't know that downloading these songs is illegal.

I'm not going to argue the point or take sides. Let me just say that by downloading music from Lime Wire, you are probably breaking the law and can be fined thousands of dollars for each song that you download.

Jay walking is also illegal. So, let me break away from the legal or ethical problems related to Lime Wire.

Here's the biggest problem with Lime Wire. If you don't use it correctly, you will get viruses or spyware on your computer. Antivirus and antispyware programs will not keep your computer safe.

Lime Wire by itself is safe. It will not harm your computer. It's the videos and music that you download and install on your computer that will harm your computer.

Here's the problem and this is a good lesson for anyone downloading music or clicking on email links. Look at this link below:

California Gurls

California Gurls (spelled correctly) is the #1 song on Billboard's Hot 100 by Katy Perry featuring Snoopy Dogg (also spelled correctly).

If you were using Lime Wire, clicking on the above link would download the song California Gurls to your computer. If you did click on the link above, it would bring you to the PC Magazine website (which is a safe site). It would not download music for you. In other words, you never know what you are going to get or where you are going to go when you click on a Lime Wire download link.

You can trust me, but you can't trust those people who post music on Lime Wire. It would be easy for me to send you to any site on the internet. It would also be easy for me to have you download a virus or spyware by clicking on the above link.

You can get a hint by right clicking on a link such as California Gurls and looking at the properties or by running your mouse over the link and looking at the full link on the bottom of your computer screen. This will give you a hint of where the link will be sending you.

Once again, my link above is a safe link. It will bring you to PC Magazine. Look how easily I fooled you though. You thought you were going to download California Gurls, but instead, I sent you to PC Magazine (which is safe!!!).

Lot's of time, clicking on a Lime Wire link will download a file that is a virus. You click on it, and a popup comes up saying to click here to download California Gurls. You click on it, and a virus or spyware is installed on your machine. You got fooled!!!

So why doesn't your Antivirus or Antispyware software save you? Because when you click on the link, you follow the instructions which tell you that you are installing California Gurls and you are giving your Antivirus/Antispyware software permission to open up the file by saying yes.

I hope you get the point. If you are using Lime Wire, you are probably breaking the law. More important, if you are using Lime Wire, you are greatly increasing the odds that your computer will be infected by a virus or spyware. It's like smoking. It will get you one day.

I always ask people who use Lime Wire why they do it? Most people over 25 have no idea that it is illegal. Most youngsters under 25 know that it is illegal and unsafe. They just like the FREE music. They understand the risks. If something happens to their computer, they just reformat it and start over.

The courts have recently ruled against Lime Wire and it is likely that Lime Wire will cease from existing in the very near future.

The people who own and run Lime Wire claim that Lime Wire is legal and is used so that people can share legal files between computers. Lime Wire is actually great for file sharing between computers. However, the courts and most of the people who use Lime Wire know that almost all the file sharing is illegal.

 I would suggest that if you own a business, you are putting your computers in jeopardy if you are using Lime Wire. Remove it!! If you allow your children to use Lime Wire, you may be teaching them to steal. If you must use Lime Wire, make sure that the link you are downloading from is a safe link. Make sure that the software you are downloading is an mp3 file (music file) and not an exe file which is likely to infect your computer. Should you insist on using Lime Wire, place the file that you download into a separate directory and check it for viruses before you click on it.

To read the latest legal news related to Lime Wire go to:

http://news.cnet.com/8301-31001_3-20009300-261.html

Learn more about Lime Wire at Wikipedia (the online encyclopedia) at:

http://en.wikipedia.org/wiki/LimeWire

...and for those of you who wish to live dangerously, just go to Lime Wire site at:

http://www.limewire.com/

Going to the site and downloading Lime Wire is safe. It is the files (music and videos) that you download that may or may not be safe.