Sat
12
Dec
11:27 am

Diamonds are the iconic symbol of engagement and betrothal but it is has not always been so. Throughout history, different cultures have placed different value and interpretation on the beauty and brilliance of one of the rarest, but most sought after precious stones.

Let’s dispel a modern myth immediately; the vast majority of diamonds are mined not to go on your finger or into a piece of jewelry, but to be fixed on the end of drill bit or other industrial use. Diamond is one of the hardest materials known to man, both artificial and naturally occurring and while a well-cut diamond may look like a million dollars, the hardness of the stone makes them invaluable in many industrial processes. Many people make the mistake of thinking that diamonds are “the” hardest material known to man which is incorrect, a man-made substance known as “nonorods” is actually the hardest substance known at this time.

Most diamonds are not clear or colorless; most of them are actually a shade of yellow which varies widely. An uncut stone will typically have the same color as dirty dishwater! Many stones once cut have a yellowish hue but this is minimized by clever cutting of the stone and skillful placement in a ring or jewelry setting. Pink diamonds are the rarest of all diamonds and of course, the most expensive!

The most expensive wedding dress in the world is worth a whopping $12 million, not least, because it is made with over 150 carats of diamonds!

Diamonds are thought to have been discovered over 3,000 years ago by Indians but the consumer-driven public did not believe that diamonds are a girl’s best friend until the 1940’s. The largest miner and producer of diamonds is De Beers who are based primarily in South Africa; it is they who came up with arguably the most successful marketing campaign in history. Firstly, the slogans, “Diamonds are Forever” and “Diamonds are a Girls Best Friend” where coined by their marketing people. They also managed to convey the idea that a diamond engagement ring was part of Anglo-Saxon Christian tradition and, best of all, they have been entirely successful in persuading millions of eager young men that when they come to buy a diamond engagement ring it should cost at least three months of their salary!

Is any of this steeped in any form of tradition?

Not a bit of it!

Diamonds themselves are amongst the oldest stones on the planet and are believed to have been formed around 3 billion years ago and 100 miles below the surface of the Earth.

The Ancient Romans monopolized the diamond trade from India which was then the only source of diamonds in the world until the 6th Century. The Romans also adopted the Indian belief that diamonds could ward off evil spirits and demons, and diamonds were heavily used in the manufacture of decorative talismans to protect the wearer.

The Cullinan diamond is the largest diamond ever discovered and in its rough, uncut form weighed 3,106 carats. It was cut into nine major diamond pieces and the largest, the Star of Africa, now forms the centerpiece of the Royal Sceptre forming part of the British Crown Jewels and is on display at the Tower of London in England.

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Our taxes are impacted any time we receive or pay money, and we have a lot of control whether that impact is positive or negative.

Here are a few things many of us will be doing over the coming holiday weekend and how they can impact our taxes.

What Are You Doing This Weekend That May Impact Your Taxes?

#1 Traveling

Travel always brings the opportunity to reduce your taxes by turning your travel expenses into legitimate business deductions. If you’ve been receiving my reports for awhile, you probably recognize this topic because I write about it a lot.

#2 Shopping

Who and what are you shopping for? Are you shopping for people with whom you do business? Are you shopping for business gifts?

The items you purchase may be business deductions! Keep in mind that in order for an item to be deductible in your business it must have a business purpose and be ordinary and necessary in your business.

There is one more item to keep in mind when shopping. The deductible amount of a gift is limited – even if it has a business purposes and is ordinary and necessary.

So, when you are doing your shopping, it’s important to consider if what you are buying is a gift. If it is, the deduction may be limited. If the item qualifies as something else, such as a promotional item, then the deduction is not limited…but remember it must still meet the business purpose and ordinary and necessary requirements.

#3 Getting Organized

With a long weekend usually comes the lofty goal of cleaning out certain areas of the house. If this is on your to do list, use it as an opportunity to get organized for your 2009 taxes.

Being organized is an effective tool to make sure you do not miss deductions.

#4 Going to Parties This weekend kicks off the holiday party season. Here are a few questions to ask yourself when you attend or host holiday parties.

Is the party business related? If so, your travel there is business travel. If you are taking a taxi, it’s a business deduction. If you are driving, the miles are business miles.

If you are hosting the party, is the party for business? If the party is a business event, then be sure to track all of your expenses. Generally, meals and entertainment expenses are only 50% deductible. However, an office party for the benefit of the entire office can escape this rule and be 100% deductible.

Year Round Tax Planning

Remember, every day is an opportunity to reduce your taxes. In my tax coaching teleconference last week on year-round tax planning strategies, we covered a broad range of topics, including:

Tax planning for losses and how to use reverse tax planning in this situation

Increasing the right type of income to shield disability or social security income from taxes

Determining how much to pay yourself in salary during your first year of business – many people pay too much in tax because of a common first year mistake

How adding a management company to your tax structure could result in $10,000 in annual tax savings

Whether to do fix and flips inside an IRA or outside of an IRA

All of these topics are situations we come across in our normal routines. Knowing how to turn them into an opportunity to reduce your taxes is the key to a successful tax strategy.

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