Sep 10

Start planning for next year’s taxes

You can start planning now for filing your taxes next year —being organized and planning ahead can save you time and money.

Here are some IRS tips to help you prepare for next year’s taxes:

• Take action when life changes occur. Some life events can change the amount of tax you owe. Examples include a change in marital status or the birth or adoption of a child. When these happen, you may need to change the amount of tax withheld from your pay. To do that, file a new Form W-4, Employee’s Withholding Allowance Certificate, with your employer. Use the IRS Withholding Calculator tool on IRS.gov to help you fill out the form.

• Report changes in circumstances to the Health Insurance Marketplace. If you enrolled in insurance coverage through the Health Insurance Marketplace for 2017 coverage and benefit from advance payments of the premium tax credit, you should report changes in circumstances to the Marketplace now. Reporting events, such as changes in your income or family size when they happen, helps you avoid getting too much or too little advance payment of the premium tax credit. Getting too much means you may owe additional money or get a smaller refund when you file your taxes. Getting too little could mean missing out on premium assistance to lower what you pay out-of-pocket for your monthly premiums.

• Keep records safe. Establish one location where everyone in your household can put tax-related records during the year. Print and keep a copy of your tax return and supporting records together in a safe place. If you ever need your tax return or records, it will be easier for you to get them. For example, you may need a copy of your tax return if you apply for a home loan or financial aid for college. This includes Forms W-2, Forms 1099, bank records and records of your family’s health care insurance coverage.

• Shop for a tax preparer. If you want to hire a tax preparer to help you with tax planning, start your search now. Choose your tax preparer wisely. Use the Directory of Tax Return Preparers tool on IRS.gov to find tax preparers in your area with the credentials and qualifications that you prefer. • Think about itemizing. You may be able to lower your taxes if you itemize deductions instead of taking the standard deduction. Owning a home, paying medical expenses and making qualified donations to charity could mean more tax savings. See the Instructions for Schedule A, Itemized Deductions, for a list of deductions.

• Stay informed. Subscribe to IRS Tax Tips to get emails about tax law changes, how to save money and much more. You can also get Tax Tips on IRS.gov or IRS2Go, the IRS mobile app. You’ll receive tips each weekday during the tax filing season and three days a week in the summer. You’ll also get Special Edition Tax Tips at other times during the year. Each and every taxpayer has a set of fundamental rights they should be aware of when dealing with the IRS. These are explained in the Taxpayer Bill of Rights. Explore your rights and our obligations to protect them on IRS.gov. Date: September 5, 2017 ______________________________________________________________________

IRS.gov:

Publication 505, Tax Withholding and Estimated Tax

Publication 5152, Report changes to the Marketplace as they happen

Publication 17, Your Federal Income Tax, see Chapter 1, “What Records Should I Keep?”

• Premium Tax Credit Change Estimator IRS YouTube Videos:

IRS Withholding Calculator – English | Spanish | ASL

Record Keeping – English

Mar 06

QuickBooks – It’s All in the Setup

What if you were planting a vegetable garden, and you took all the seeds and mixed them together, then planted them in rows?  What would be the best way to weed that garden when the corn was mixed in with the green beans, and the squash was growing through the tomato plants?  It might be difficult to weed, and there’s no way you could use a rototiller to keep the rows clear.  Harvesting would be a mess also.  One stalk of corn here, and a green bean plant next to it, and then over there another green bean plant.

Normally, people plant the same type of plants together in rows.  That allows them to harvest the plants of the same type more efficiently.  This can also assist when weeding and fertilizing, as different plants need different types of fertilizer and bug sprays.

The same thing goes with setting up your QuickBooks chart of accounts.  Putting the right chart into place at the beginning will make it much easier to run financial statements and then help ease your tax information right into the tax form.

Talk to me about this, and I can help you.

Mar 03

“…inspired him to make poor decisions”

http://www.goerie.com/embezzler-to-get-2-years-in-meadville-case

“He unfortunately found himself in certain financial circumstances that inspired him to make poor decisions,” his attorney said.

This gentleman was running a car dealership for the owner, who was a “hands off” type owner.  Apparently, even when the business started cutting benefits and laying off employees, the owner didn’t bother to look into it.  He stole the money between June 2008 and September 2013 by writing 34 dealership checks to a fictitious marketing business that he set up. $485,800 was taken.

Prevention?  Taking a look at the financials on a regular basis and asking questions.

Mar 01

“But she was like family!”

Sara worked for the company for 8 years. She was personable, efficient, didn’t take vacation, and rarely got sick. Her boss, Joe, owned the company and felt lucky to have her. Not only did she deal well with the customers, but she handled all the paperwork. That was a lifesaver in Joe’s mind because he wasn’t one to sit at a desk. Filling out papers, paying bills, going to the bank, or using a computer didn’t feel like an accomplishment. Building garages and out buildings for customers did.

Sara was divorced with two grown children. She was close to her daughter, Taryn, who had Sara’s only grandchildren. She spent weekends babysitting while Taryn worked.

Steve, Sara’s son, lived out of town and was single. He didn’t seem to come around much, but Joe wasn’t sure why. Sara didn’t talk about him much.

Joe paid Sara the market rate for her work. She didn’t complain about money problems around the office, and Joe thought Sara was satisfied with her wage.

Joe took his books to the accountant so she could do his taxes.  As a small business, he had not incorporated, but did have an LLC for protection of his personal assets.  When he met with her to go over the completed return, the accountant asked why his income had dropped. Joe was surprised,  He had the best year ever!

Sara had used Joe’s bank account to bail her son out of jail. She needed the money, and was planning on putting it back in Joe’s account before he found out. But she didn’t.

Feb 17

IRS Mileage or Actual Costs?

green alternative electric vehicle clipart

green alternative electric vehicle clipart

When it comes to tracking mileage and deducting it on your taxes, or turning it in to a client or employer, sometimes you have no choice. But if you do, which is the better way to go?

Typically, the mileage rate is easier. You still have to keep a log, and that’s easier with the apps available for phones. It’s done for you within the app, and you have to note the purpose of the trip. If you’re reimbursed for mileage, but less than the IRS current rate for that year, you can deduct the difference on your taxes if you itemize. It probably isn’t worth it unless you’re driving a lot, and then your employer might be better off financially giving you a company car.

Actual costs are a bit more difficult to do if you’re using the vehicle for personal as well as business use. You have to have a log, and apportion the costs between personal and business miles. There are depreciation schedules the IRS uses to write off the cost of the vehicle, and that will be portioned between the personal and business miles. Oil, gasoline, repairs are all portioned as well, and you can see it’s a lot of monkeying around.

Specialized fleet vehicles aren’t used for personal purposes, and places I’ve worked will have special arrangements for fuel, maintenance, etc. The local government unit I work for has a mechanic on staff, and gets diesel delivered to a tank when necessary. The non-profit with group homes I worked for had a gasoline tank for the group home vehicles, and a mechanic on staff.

You can find the current IRS rate at irs.gov. If you want all rates historically, there is a Table in the Tax Professionals section IRS Mileage

Fraud in Hospitality Industry

hotel_room_187631It’s not the maids.  It’s the managers. Story after story about hotel managers renting rooms at rates they decide upon, paying personal expenses with company funds, forgery, not reporting all income to IRS or partners or corporate (in the case of a franchise), contracting for items through the hotel and then having the work done/product delivered to their house – it goes on and on.

How do you catch something like this? Through internal controls, looking at your financial statements, and watching certain ratios.

Another strategy is to have a tip line.  Most frauds are caught by tips.  You can outsource this service to a place like Fraud Hotline. Someone knows, but they’re not telling you.  They don’t want to get beat up, shot, or lose their job.  But a tip line is confidential, and will cost you less than the fraud that is probably going on now…

The Typical Business Loses 5% to Fraud Each Year

money_207809Think you’re not typical? Think again.

From the Association of Certified Fraud Examiners “2014 Report to the Nations“:

“The smallest organizations tend to suffer disproportionately large losses due to occupational fraud.
Additionally, the specific fraud risks faced by small businesses differ from those faced by larger organizations, with certain categories of fraud being much more prominent at small entities than at their larger counterparts.”

Fraud is especially prevalent in small organizations because there are so few people, it’s very difficult to do everything required to run a small business with minimum staffing. You want to serve your customers with the highest quality offerings, but to do that, plus put out the day-to-day fires, the routine tasks that seem unimportant right this minute, the fact that your bookkeeper is SO helpful, SO nice, works SO hard, and doesn’t take vacations…  Guess why she doesn’t take vacations?

 

 

Mar 21

Income under $62,000? File Taxes for FREE

th1UL7O6DTIf your income is under $62,000, you may be able to use commercial software to e-file your taxes for free, rather than pay the $75+ for the software.

Filing a tax return is actually voluntary, although it doesn’t seem like it when you hear about the people that go to jail for defrauding the government by filing false returns, or none at all.  Since most of us with “regular” jobs have taxes withheld from our pay, we don’t have much choice in sending the money to the government.  Since many people have more than necessary withheld, they have to file to recover their own overpayment. This keeps the “voluntary” part working.

To make it easier for you to file, and keep costs for enforcement down, the IRS has encouraged e-filing, and private companies have gone along, hoping to sell you representation services along the way.

Check out the IRS sites listed below, and take their suggestion:

  • Remember to begin your Free File return on IRS.gov or you may be charged a fee or asked to buy additional products and services.

http://apps.irs.gov/app/freeFile/jsp/wizard.jsp?ck

http://www.irs.gov/uac/Free-File:-Do-Your-Federal-Taxes-for-Free

Mar 18

Women-Owned Businesses

One of the business types the Small Business Administration (SBA) has specific information on is Women-Owned Businesses.  Getting a federal contract, getting a loan, and finding a mentor are topics covered on their site, along with more general information about starting and growing a business. Specific information for other business types includes:

  • Nonprofit Organization
  • Green Businesses
  • Startups & High Growth Businesses
  • Home-Based Businesses
  • Online Businesses
  • Franchise Businesses
  • Buying Existing Businesses
  • Self Employed & Independent Contractors
  • Women-Owned Businesses
  • Veteran-Owned Businesses
  • Minority-Owned Businesses
  • People with Disabilities
  • Young Entrepreneurs

http://www.sba.gov/category/navigation-structure/starting-managing-business/starting-business/establishing-business/bus

http://www.sba.gov/content/women-owned-businesses

Check out this valuable resource.

Mar 15

Identity Theft and Your Taxes

IRS Tax Tips on Identity Theft .

Always a good source for tax information, the IRS website is available 24-7, with no elevator muzak!

Older posts «