Author Archives: Administrator

Joint mortgage, but only one SSN on 1098?

What's mine is yours and what's yours is mine!

What’s mine is yours and what’s yours is mine!

So maybe you purchased a home with your fiance, spouse, parents, friend or business partner.  Each of you pays half (or some other portion) of the mortgage throughout the year.  When it comes time to file your taxes, you plan to file a return separate from the other person, but there is just one problem.  Then 1098 that was provided either list both of your names and the other persons SSN OR it simply just list the other parties information all together.  So how do you go about claiming your piece of what is reported on the 1098?

Figure Your Share
If you and another party (or multiple parties) were liable for, and make payments towards, a mortgage in which another party received the Form 1098, the first thing you must do is figure out each party’s share.   Technically the person that received the From 1098 should do this and provide the amounts to you, but in reality either party may do it.  So, for example, if each person paid 50% of the payments that yielded $9,825 of interest being reported on the Form 1098, then each one is entitled to deduct $4,912.50 on their tax return.

Attach A Statement To Your Return
To report the $4,912.20 of mortgage interest paid, each person should attach a statement to their tax return explaining this. Show how much of the interest each person paid, and give the name and address of the person who received the form. Your share of the interest is then reported on Schedule A (Form 1040), line 11, along with the words “See attached” next to the line.  The person may also deduct their share of any qualified mortgage insurance premiums on Schedule A (Form 1040), line 13.  If the property in question is a rental property, then you can follow the same procedures stated above, but enter “See attached” on line 12 of Schedule E.

For more information on the above, or reporting home mortgage interest in general, see Publication 936; Home Mortgage Interest Deduction  and refer to the section “How To Report.”


Welcome To Wilson Rogers & Company!

Welcome video with Wilson Rogers & Company CEO Jared Rogers, CPA.  Learn about the services our company offers, how Jared got started in the business and what he likes best about his job.

You can also view this on our YouTube Channel here.  If you want to know more about Jared (or his crazy escapades) then check out the Who’s The Boss category from out blog.


How To Report A 1099-A

short sale

If you borrow money from a lender to purchase a property, the lender may require the loan to be secured by the purchased property.  If the lender later acquires the secured property from you or has reason to know that you abandoned or stopped using the secured property, the lender may send you a Form 1099-A (PDF), Acquisition or Abandonment of Secured Property.  So just how do you then use this from to report the sale to the IRS?  What types of tax consequences are involved?  Is there different treatment if the form is issued in connection with you principal residence versus a rental property?  Read on to find out.

Property Sales and Capital Gains
When a property is foreclosed or abandoned, it is treated as a sale from a tax standpoint. This means that one will have to calculate what their gain or loss on the disposition of the property is.  This is usually calculated by taking the sales price and subtracting the cost (or basis) in the property.  The only problem is that unlike a normal sale, there’s no “selling price”  with regards to what the lender paid to buy the property back from you.  This is where Form 1099-A comes into play.

The Information on Form 1099-A
Form 1099-A provides you with the date of sale and the “selling price” of the property.  Taxpayers will use either the fair market value of the property or the outstanding loan balance on the property for the selling price.  Both these figures are reported on the form.

  • If the loan is recourse (one where the borrower is personally liable for the balance), the sales price will be the lesser of outstanding debt reduced by any amount for which the taxpayer remains liable, or FMV of property
  • If the loan is non-recourse, the sales prices will be the full amount of debt regardless of the FMV of property

While this is not an absolute indicator, the loan was probably a recourse loan if the bank has checked “yes” in Box 5, which asks “Was borrower personally liable for repayment of the debt?”

Reporting the Sale
Assuming the foreclosed/abandoned property was your personal residence, you must prepare and file Form 8949 and Schedule D with your tax return. Use the date of the foreclosure in Box 1 of the 1099-A as your date of sale. Then indicate the selling price. This will be either the amount in Box 2 or the amount in Box 4.

Calculate your gain by comparing the “selling price” you used to your purchase price, which is your cost basis in the property. The purchase price and date can be found on the HUD-1 closing statement you received when you purchased the property. The difference between the selling price and your cost basis is your gain or loss.  However, if you have a gain, you  may be able to exclude it so that it’s not taxable.  If you have a loss, it will be considered a a “non-deductible loss” because it is personal in nature.  The following post will go into greater detail.

Investment Properties
If the foreclosed property was used as a rental, then you will need to use Form 4797. For those who have had a rental property foreclosed upon, we advise them to seek assistance from a tax professional because there are additional factors to take into consideration, such as depreciation recapture, passive activity loss carryovers and reporting any final rental income and expenses on Schedule E.

Do You Need Help Reporting Your 1099-A?
If you’ve received a form 1099-A and don’t feel like dealing with the hassle of reporting it, why not give us a call?  We’ve handled this situation numerous times and would be happy to assist you.  Just shoot us an email via the address below or call us at 773-239-8850.

Discharging Taxes In Bankruptcy


Sometimes a taxpayer finds themselves in the position where they can’t pay their tax liability.  Those taxpayers may come to us and ask us if they qualify to have their taxes discharged in bankruptcy.  Our reply is that while we do help taxpayers deal with resolving their tax debt, they are best advised to consult with an attorney to investigate the bankruptcy option.  You see, only legal counsel, or someone admitted to practice before the tax court, can represent a taxpayer in tax court.  With that being said, we typically help taxpayers with administrative tax resolution methods, which the client should pursue first. These include innocent spouse relief, a request for abatement of penalties, an installment agreement or an offer in compromise (OIC).

However, if those options are insufficient, bankruptcy may be the best way for a taxpayer to either secure a reasonable payment plan (Chapter 11 or Chapter 13) or to liquidate their assets to pay off all or a portion of their tax debt (Chapter 7). Using administrative tax resolution methods help a taxpayer avoid having a “black mark” on their credit history. However, a federal tax lien listed on the debtor’s credit report may damage their credit rating just as much as a bankruptcy notation.  Needless to say, if you think you may qualify based on the information shown below, one is advised to contact an attorney who specializes in bankruptcy law.

What tax debts may be discharged in bankruptcy?
To be dischargeable, individual income tax liabilities must meet the following “technical” rules of 11 USC §§ 523(a)(1) and 507(a)(8):

  • More than three years must have elapsed since the tax return generating the liability was due, including extensions.
  • The tax return must have been filed more than two years earlier than the bankruptcy petition (generally applicable to late-filed returns). Note, however, that IRS-prepared substitute for returns (SFRs) are not considered filed returns for this purpose, and thus a tax liability assessed from them would not be subject to discharge (IRC § 6020(b)).
  • At least 240 days must have elapsed since the date of an IRS assessment (generally applicable to audit adjustments and amended returns). This time frame is extended by an OIC.

Bankruptcy Basics
A bankruptcy court filing immediately stops the collection efforts of all creditors, including the IRS. This legal protection is called the “automatic stay.” At the end of the proceedings, some or all of the petitioner’s debts—including, in some instances, tax liabilities—may be discharged, meaning they are eliminated or no longer legally enforceable. There are two types of bankruptcy:

Liquidation.   A filing under Chapter 7 liquidates assets that are not exempted under federal or state law and distributes pro rata amounts to unsecured creditors. (Keep in mind that proceeds from the forced sale of nonexempt assets in a liquidation bankruptcy may be significantly less than in an arm’s-length transaction outside of bankruptcy.) Any unsecured debts remaining after such distribution are discharged, including certain tax debts. The court forces all creditors (including the IRS) to accept the proceeds of the liquidation in full settlement of all dischargeable liabilities included in the petition. However, a tax lien recorded before the bankruptcy was filed survives the bankruptcy to the extent it attaches to property owned by the debtor at the time of the bankruptcy. Eligibility for a Chapter 7 bankruptcy is limited to debtors whose income is below a “means tested” amount or whose “non-consumer” debts exceed their “consumer” debts.

Deferred payment plans. This type of filing (Chapter 11 for individuals or Chapter 13 for businesses) forces a payment plan on debtors through a trustee. Creditors (again, including the IRS) must accept an installment schedule that pays at least as much of the dischargeable debt as would have been paid in a Chapter 7 proceeding, and which fully pays all secured and priority creditors within five years (11 USC § 1322). Nondischargeable taxes are often priority debts, which must be paid in full over the life of the plan. To qualify for Chapter 13, the debtor must have a steady stream of income: Wages, Social Security, pension payments and receipts of an independent contractor all qualify.

The key takeaways?

  • In order to be dischargable in bankruptcy, the taxes generally have to be “old” in nature.
  • The primary “tax-related” downside to filing for bankruptcy protection is the additional collection time it allows the IRS. Once taxes are assessed, the IRS normally has a total of 10 years to collect them, along with penalties and interest. Therefore, once a bankruptcy case is over, the IRS will retain whatever time remained on the original 10 years, plus the time the bankruptcy case was pending, plus an additional six months (IRC 6503(h)(2)).

How To Report The Sale Of Your Home To The IRS


Sometimes when a homeowner sales their primary residence there can be tax reporting requirements. Generally, this occurs when you have a capital gain on the sale of the home or you sell a home that is not your primary residence (e.g. a vacation home).  However, simply having a gain may not be one of the reporting “triggers” so to speak.  So when do you have to report your sale and just how do you go about doing so?  Read on my friend, read on.

When you must report your sale.
Generally, there are three scenarios where you will be required to report the sale.  These are:

  • The sale results in a gain and you do not qualify to exclude all of it,
  • The sale results in a  gain and you choose not to exclude it, or
  • The sale results in a gain or a loss and the taxpayer received a Form 1099-S

The exclusion of the gain is discussed below so we won’t elaborate on it here. We’re not sure why you would NOT want to exclude the gain, so we won’t address that point either. But we will spend some time on the last point, if you receive a Form 1099-S: Proceeds from Real Estate Transactions.

Form 1099-S is used by the party that closes the real estate transaction to report it to yourself and the IRS.  This may include the settlement agent, the mortgage company, the attorney or the lender.  The key point to remember is that if you received the form, the IRS has received it as well. Now this doesn’t mean that the gain is taxable, but it does mean that you have to go through the hassle of reporting it to the IRS.  What happens if you don’t?  Well, the IRS through it’s matching process is probably going to send you a letter when they don’t see it on your tax return.  As such, we recommend that you avoid the hassle and just deal with it on the front end.

Understanding the gain exclusion.
Generally, to qualify for the exclusion, you must meet both the ownership test and the use test. These test are considered me IF you have owned and used your home as your main home for a period totaling at least two out of the five years prior to its date of sale. You can meet the ownership and use tests during different 2-year periods. However, you must meet both tests during the 5-year period ending on the date of the sale. Another thing to note is that, generally, you are not eligible for the exclusion if you excluded the gain from the sale of another home during the two-year period prior to the sale of your home.

If these test are met, a taxpayer can exclude up to $250,000 of the gain if using the single or Head of Household filing status ($500,000 on a return that is Married Filing Jointly).

How to report the sale.
To report the sale, you must know the sales price, the adjusted basis and the resulting gain.  The sales price will be pretty easy to determine.  The adjusted basis is essentially what you’ve invested in the home; the original cost plus the cost of capital improvements you’ve made.  These would include things such as a new roof, a remodeled kitchen, a swimming pool, or central air conditioning. You add these expenses to your original cost to increase your adjusted basis.  Conversely, you will also need to subtract any depreciation, casualty losses or energy credits that you have claimed to reduce your tax bill while you’ve owned the house.  Once you know the adjusted basis, you subtract it from the sales price and that will be the gain you will report.

To begin the reporting process, you would need Form 8949 Sales and Other Dispositions of Capital Assets.  Since the resulting gain is one that transpired during a period longer than one year, it is considered long term.  As such, home sales are reported using Part II of the form.  Items A-E of the form are pretty self explanatory, but it is items F-H that you will want to pay attention to.  Once the proceeds from the sale and the cost are entered, you will have the resulting gain.  Column F is where you enter in the code to enter in why you are adjusting the gain.  For home sales, this is code H.  In column G you enter in the amount of gain that you are excluding as a negative number.  Any remaining gain (which is taxable) would then be reported in column H and carried to Schedule D.

Other items to be aware of.
As with anything tax related, nothing is always as simple as it seems.  With that being said, here are some more obscure things to keep in mind when it comes time to report your sale:

  • The home sale exclusion generally does NOT apply to rental properties.  However, if you convert a former rental property to your principal residence, you may be able to exclude a portion of the gain.
  • If you or your spouse serve on “qualified official extended duty” as a member of the uniformed services, you can choose to have the five-year-test period for ownership and use suspended for up to ten years.
  • In certain cases, you can treat part of your profit as tax-free even if you don’t pass the two-out-of-five-years tests.  The key to remember with this is that this doesn’t mean that you can only exclude a portion of your gain.  It means that the $200,000/$500,000 exclusion is reduced based on the amount of time you spent in the home during the qualifying period.
  • If you inherited your home from your spouse or someone else after their death, your basis will generally be the fair market value of the home at the time the previous owner died.  Note that their are special considerations if you live in a community property state or you jointly owned the home with you spouse.
  • It is possible to extend the break to a second home by converting it to your principal residence before you sell.  However, note that 1) not all the gain will be excludable and 2) calculations will have to be performed to determine how much time the property was used as a rental (if any), primary residence and how much of this occurred after 2008 (when the rules changed)

When Both Parents Claim A Child On A Tax Return

In todays day and age, it’s not uncommon for a child’s parents to live apart (i.e. in separate homes).  This fact can sometimes cause “problems” when it comes tax time and determining who will claim the child as a dependent.  A child can only be a claimed as a dependent by one parent. Furthermore, this parent must provide more than 50% of the financial support that the child receives and the child must reside with them for more than half the tax year.

Sometimes the parents try to solve the issue by “agreeing” to trade off who gets to claim the child in what year.  Sometimes, less agreeable parents will simply try to file their tax return before the other parent, thus effectively blocking them from claiming the child.  This in itself can cause problems.  Why?  Well, if the child is claimed by both parents on two separate returns, the IRS will typically “reject” the second parents return (almost instantaneously if they are e-filing) alerting them that the child had already been claimed on another’s return.  The second parent then usually has to fix their return (or amend it if paper filed) to remove the dependent and the associated exemption.

But what if the second parent disagrees that the first parent was entitled to claim the child?  Well, the IRS is then likely to require proof from the first parent that the child either lived with them or that they had the other parent’s consent.  The latter is where Form 8332 comes in.

Form 8332 – Release of Claim to Exemption for Child by Custodial Parent
The “custodial parent” (for IRS purposes) is generally the one with whom the child lived for the greater number of nights during the year.  But if you don’t have to file a tax return, or you reach an agreement with your child’s noncustodial parent, you can let the “noncustodial parent” take the exemption by filling out Form 8332.  All that’s needed is your child’s name, the tax year, your Social Security number, your signature and date. If you prefer to release your claim to your child’s exemption for more than one tax year, enter the same information in part two rather than part one. Once complete, give the form to your child’s noncustodial parent to file with their tax return. If you release your claim for multiple tax years, you only need to fill out the form once: the other parent will attach copies of the original to their return each year.

Taking your child’s exemption back
If you decide to start claiming the exemption again after you’ve released it to the noncustodial parent, you can do so by completing part three of Form 8332. You can do this for a specific tax year or all future years.  Reclaiming the exemption isn’t effective until the tax year following the calendar year in which you complete Form 8332 and give it to the other parent. In other words, if you provide the form in 2016, the earliest you can reclaim the exemption is on your 2017 tax return which you will file in 2018.

What if someone else claimed your dependent?
If you tax return is rejected because someone else claimed your child as their dependent on their tax return, this does not necessarily mean that you do not have the right to claim the dependent.  What this does mean is that the IRS systems cannot apply the tiebreaker rules on an electronically filed return.  With that said, follow these steps:

  1. Call the IRS support line at 1-800-829-1040 and inform them of the situation.
  2. Print your tax return, sign and date it, attach any required forms, and mail it to the IRS.
  3. The IRS will examine your return and that of the other taxpayer, apply the tiebreaker rules, and inform you of the results. This process may take 8-12 weeks.

What are the Tie-Breaker rules for claiming a dependent?

  1. Relationship Test: If only one of the taxpayers claiming the child is the child’s parent, then the child will be the qualifying child of the parent.
  2. Residence Test: If both parents claim the child but do not file jointly, then the child will be the qualifying child of the parent with whom the child lived for a longer time during the year.
  3. Income Test: If the child lived with both parents for an equal amount of time, then the child will be the qualifying child of the parent with the higher adjusted gross income (AGI).
  4. No Parent Can Claim: If no parent qualifies to claim the child, the child will be the qualifying child of the person claiming the child who has the highest AGI.
  5. No Parent Chooses to Claim: If either parent qualifies to claim the child, but they choose not to, the child will be the qualifying child of the claiming person with the highest AGI, but only if their AGI is higher than that of either parent (if the parents are married and filing jointly, use one half of their combined AGI).
  6. Special Rule for Unmarried Parents: If the parents are not married but lived together with their child all year and the child meets all qualifying tests for both parents, then the parents may decide which parent will claim the child as a dependent.

How I Left Corporate – Part III

Fighting foot traffic to get to the office? Not anymore!

Fighting foot traffic to get to the office? Not anymore!

If your just joining me for the final installment, let me do a quick recap of what you’ve missed.  In Part I I talked about what sparked my desire to leave, how I came across my road map and what my backup plan entailed.  In Part II I spoke on some of the intricacies of that plan and how it went from ideation to implementation.  In this post I’ll give you all the minutia of how I executed the plan and how that has played out over time.

A Day In The New Life
January 16, 2012 marked my first day heading up operations full time. In my 2012 post A Day In The Life of A Small Business CEO I speak about what that life looks like.  Four years later, daycare drop offs have been replaced with school, but the routine is still mostly the same.  Needless to say, I love what I do and I really don’t see it as work.  Our site/blog has numerous post on having passion about what you do, how to deal with fear and how manage through growth.  But the key takeaway that I would like to share about my new life is that it’s a fit for me and who I am.

Not everyone is “built for this” as I like to say, and rightly so.  Personally, I think you have to be a little bit “off” in order to strike out on your own or head up your own business.  However, if you do so, make sure that you are doing it for the right reasons.  In the 2013 post Why You Shouldn’t Become An Entrepreneur we talk about the 5 reasons you should NOT jump into this lifestyle.

Working The Bridge Plan

Can I come back as a contractor?

Can I come back as a contractor?

As I mentioned, my bridge plan was to work as a contractor via an agency.  So, when I was getting ready to leave corporate, I reached out to many of the placement agencies that I had used to get full time positions and asked them if they had a contract division.  Some of them did and some didn’t.  Needless to say, one agency found my resume in April of 2012 and got me placed on a 6 month contract.  This allowed me to pay my bills and still work on the business, which of course was in a slow period since it’s seasonal.

Now, contract work was originally only supposed to be a two year thing.  However, I found myself financially in a position where I needed to do it again in year 3 due to a lot of unexpected incidents (e.g. broken collar bone in a bike accident, car repairs, medical expenses, etc).  In year 4, I was able to reduce my schedule slightly (e.g. 2 days a week versus 5 days) and in a few weeks I will be in the business 100% (hopefully permanently but you never know).

The key point of the bridge is that it 1) is designed to tide you over until the business can support you and 2) it should also serve a purpose outside of financial motives.  What I mean by the latter is that it should enhance your skills, give you exposure to new things (e.g. industries, markets, etc), provide additional training for your new life or at a bare minimum, maintain your skills so that you can continue to be marketable.

My contract assignments kept my skills sharp as I essentially worked in the FP&A department of two different companies in two separate industries.  This essentially extended my corporate FP&A career by an additional 4 years.  It also allowed me to see how different industries worked (e.g. energy and heavy durable goods) as well as work with new teams of highly talented people.

Watching The Company Grow
Looking back at 2012 and where we’re at the end of 2015 makes my head spin.  I remember how mad I was at the end of 2012.  The short version of it was that the company performance was far off from our initial projections and I couldn’t figure out how or why.  But I quickly trained myself to focus on the mantra “the only thing I can control on a daily basis is my attempt to go out and find sales.”

Subsequent to that year I would go on to work with Intuit as an Ask A Tax Expert and in their Personal Pro product due to the acquisition of a platform I was participating in.  Our client base would grow by double digits in each of the years from 2012 thru 2015.  We got picked up by some pretty sizable companies to handle their finance function.  And somehow in the midst of all this we launched a secondary web site to help folks file all of those old tax returns!

While we’re now at the point where things are starting to stabilize, I have to reiterate that it wasn’t easy.  That “not easy” part is outlined pretty well in the post Do You Really Have What It Takes To Start A Business.  Thus I would encourage you to read it if you have some time.  But in summary, if you are looking on the “how” to leave Corporate America piece, it involves:

  • Identifying what your second or new life will look like
  • Outlining how you can bridge your current and new life
  • Developing that bridge plan
  • Implementing and working that bridge as your new life takes shape
  • Adjusting and remaining fluid until you arrive at your destination

I hope that you have gotten something out of these posts.  Going from corporate to CEO took me many years.  I had to learn and work through lots of lessons, some of which I had no direct mentoring on.  But if you have the desire to make the change and the heart/drive to learn and then try new things, I am pretty confident that you can achieve the success you desire.

Best of luck in your endeavors and here is to a prosperous 2016!

Mr. Jared R. Rogers, CPA
President & CEO
Wilson Rogers & Company, Inc.

How I Left Corporate – Part II

In Part I I talked about what sparked my desire to leave, how I came across my road map and what my backup plan entailed.  In this post we’ll go over some of the intricacies of that plan and how it went from ideation to implementation.

Devising The Plan

No more Brooks Brothers, Brothers Brooks?

No more Brooks Brothers, Brothers Brooks?

The first post mentioned that it was the book by Jeff Cohen that gave me the roadmap on “how” to make my transition. I will not share everything that is in his book Working Less, Earning More, but I will highlight its essence.

Essentially, the key to working less and earning more is to margin up the payout for the time/effort that you put in. For example, if you can make $40 an hour doing part time work 40 hours a week or $500 an hour for doing 4 hours of work per week, which do you choose? You choose the second because you 1) make $2,000 versus $1,600 AND 2) you still have 36 hours in the week to make more money.

So the key to the equation is that your second life has to produce more output (money) for your input (time/effort).  Thus your “new life” can take the form of being a consultant, doing freelance work, running your own business or just living off passive income.  However, once you have identified your new life, you essentially have to “bridge” from your current one to the other. So how do you accomplish this?  Per the book you can do this by:

  1. Switching to part time work
  2. Negotiating a consulting gig (with your current employer)
  3. Working freelance assignments (at night)
  4. Creating passive income (like purchasing rental property)
  5. Cut a deal with your spouse

I already knew that my second life was running my/our own business.  However, at the time I was thinking of all of this, I was well off from the bridge phase.  Thus, my shift actually involved a “pre-bridge” phase.  As I mentioned in the first post, this pretty much involved:

  • Building the business part time
  • Creating a fallback position within corporate

I wanted to do the two things above for a few reasons.  First, I wanted to scale the business up to a point that I could then transition into it with little disruption to my finances.  Second, I wanted a “plan B” should things not work out.  If I had to come back to the corporate world, I wanted it to be at a certain level (e.g. Manager).  Thus, while the business grew, I focused on attaining said fallback position (which I did).  Once that occurred, it was just a matter of waiting for the opportune time to present itself to make my exit.

Getting Prepared 

Leaving the rat race in 3...2...

Leaving the rat race in 3…2…

Preparing to leave until all of the pieces were aligned actually involved a lot. This included:

  • Curtailing finances and my lifestyle so that I could survive the startup phase.
  • Switching to my spouses health care.
  • Agreeing that she would stay on in corporate while I transitioned full time into the business.  It’s important to outline roles going into the transition as it cuts down on friction when it actually begins to happen.
  • Outlining what I would be doing to bridge the two worlds.  I decided to do something similar to consulting, but a little more “guaranteed” so to speak.  I decided to become a contractor and persue engagements via an agency during the time outside of tax season.

Now, if you are thinking of leaving and you don’t have a spouse/partner who can help you bridge, don’t assume that all hope is lost.  This just means that you have to 1) build a longer bridge or 2) build one that is strong.  How?  You can take part time/contract work that gives you flexibility to build your business gradually.  You can work for your employer in a part time consulting position (e.g. 6 months to a year) until you train a replacement or work yourself into your new life.  The possibilities are endless; you just have to think creatively.

The Departure

Catching the last train for the last time

Catching the last train for the last time

In 2011, the IRS, claiming authority under Section 330, issued a new rule making unregistered tax return preparers subject to Circular 230.  Much noise was made about this and it looked like the opportunity I had been waiting on.  Essentially, 60% of the tax preparation market looks to paid preparers to have their taxes done.  Of the paid preparer market, 40% is comprised of Attorneys, CPAs and Enrolled Agents (EAs).  The remaining 60% is made up unregistered preparers who do not hold one of these designations.  By regulating this group of preparers (and subjecting them to testing requirements) it appeared that a large population of preparers might be withdrawing from the market (thus effectively shrinking supply and artificially elevating demand).  Unfortunately, later in 2012, the case of Loving vs. IRS was brought to trial in an attempt to stop the IRS’ actions.

Needless to say, in late 2011 my wife and I made the decision that the timing was right for me to leave.  We quickly put some of the last “planning” pieces in place and I effectively “retired” from corporate america on January 13, 2012.

In the next and final post, I will talk about how I implemented my bridge and where things are now.

How I Left Corporate – Part I

So…admittedly I haven’t been posting my personal exploits to our blog that much this year.  It hasn’t been for lack of wanting to, it’s just been because I’ve been trying to manage a company that seems to have a mind/life of it’s own at times.

Needless to say, this month I had some time to ponder some things.  Like the fact that my 4 year anniversary from departing Corporate America will be here in a matter of weeks!  So with that said, I figured I would end 2015 with a 3 day blitzkrieg of blog post related to the subject.  If you’ve ever thought about leaving the friendly confines of a gig to strike out on your own, but didn’t know “how” to do it, these post will share how I went about it.

What sparked the desire to leave?
Over the course of my 13 year corporate career, I believe that I had a nice run. I worked at four well respected employers, held several positions, made decent career progression and money to boot. I wasn’t a “superstar” when it came to politics, but I could hold my own and I understood most of the intricacies of the game.

Downtown! Where is Macklemore?

Downtown! Where is Macklemore?

So why was I considering leaving?  Probably for many of the same reasons that you may have contemplated it.  But when it came down to pinning a “single” reason, I’d have to say it centered around progression.  I don’t believe in “glass ceilings” as I think that you can get around that to a certain extent (e.g. switch employers).  But I do believe that those in the Ivory Tower will only let you hold the roles that they think you are fit for.

How many times have you seen a senior level manager or even a C Suite executive be mentioned in an announcement where it states they are “leaving to pursue other interest” or something to that effect?  Really?  This person makes like $500K+ and they are leaving?  Or did you really mean 1) you’re firing them, 2) they don’t want to go along with the plan or 3) their vision for themselves doesn’t line up with yours so they are out of here?

Needless to say, if I stayed around I think I had the credentials and smarts to make it to upper management.  But what if I wanted to run things?  Would they let me?  What if I wanted to make a million dollars?  Would they pay me that?  While the answers to those questions could have all been yes, there was one way that I could give myself a better probability of those things occurring…striking out on my own.

How I stumbled upon my roadmap
Once I made the decision to leave, I had to come up with a way to make it all happen.  I mean, I like to take risks in life, but I like for them to be calculated.  You know, the ones with sizable upside and minimal downside?  So walking into the bosses office, kicking my feet up on their desk and telling them I quit without having a backup plan was not in my game plan.

The book that gave me my entrepreneurial keys.

The book that gave me my entrepreneurial keys.

One day I was checking out at my neighborhood grocery store.  While standing in line I came across the book shown above.  Now, I was not necessarily interested in working less and earning more, but the title caught my attention.  Needless to say the book’s author, Jeff Cohen, outlined a plan for transitioning from the working a gig life to working for ones self.  So with that, I studied what the book had to offer and then moved towards building the plan.

Creating the backup plan
My plan to leave was actually broken down into the following three phases:

  • Building the business part time
  • Creating a fallback position within corporate
  • Preparing to leave once when all of the pieces were aligned

The plan began in late 2005 and culminated with my resignation in January of 2012.  So as you can see, it took almost 7 years for it to “fall into place” so to speak.  In the next post I will elaborate on each of those phases and exactly how I prepared to leave (e.g. financial, health care, etc).