All posts by TL Wall

I'm the owner of TL Wall Accounting, located in North Syracuse, NY
Tax Preparation

5 Reasons People Wait Until The Last Minute To Pay Their Taxes

We’re about 3 weeks away from when both state and federal taxes are supposed to be submitted. Believe it or not, this means that around 33% of the population hasn’t even started the process at this juncture. Also, out of those who have, around 73% have already received their refunds.

Tax Planning
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It’s not a question of whether it’s beneficial or not to submit taxes early; it’s more of a question as to the types of things that make people wait until the last minute… even if that last minute is a couple of weeks before they’re due. What are the issues? Let’s take a tongue in cheek look at it.

1. Don’t think a refund’s coming

“If I’m not getting a benefit why put in the effort.” Unfortunately, it seems to apply to taxes like pretty much everything else in life. Most people see getting a refund as the ultimate tax benefit, even though for most people it’s really not. Married couples suffer the most with this, which probably explains why it’s more often families than individuals who take the longest to put everything together.

2. Think I might owe something

This is a totally different feeling than the previous one because it comes with a dose of fear. We tend to put off things that we feel will bring us grief, which naturally correlates into tax worries. In many ways it’s not a bad strategy if true because one might not hear from the IRS about it until July or August, and you don’t have to start dealing with the issue until then. However, you still have to submit your taxes on time, and you’ll still be generating interest on your balance because they expect you to have paid something.

3. People forget

By law, everyone expecting a W-2 is supposed to have it before the end of January. Whether it happens or not, “out of sight, out of mind” works well here. If you got it but you’re not one of those people who immediately takes it to a tax preparer it’s possible you might forget. If you never got it you probably would never even think about it until the last possible moment… even then, it just might escape your mind; we’ve seen it happen.

4. Procrastination is the way

Another word for procrastination is nonchalance. Some folk are so cool that not even the pressure of having to get one’s taxes done can shake them. After all, it’s just another “thing” and there are plenty of other things going on that take time precedence. It’s probably not a good strategy if you’re not doing your own taxes however; other people might end up coming before you.

5. Mad at the government

Some people wait until the last minute because they either don’t like paying taxes or are mad at the government. The first part is understandable; the second isn’t. No one likes paying taxes but no one gets out of it… kind of. Even people who get refunds paid something to get it.

But being mad at the government… the government won’t know, and probably isn’t thinking about you. Matter of fact, we’ve known people who haven’t filed taxes in upwards of 3 years, yet never received notice from the government that they owed it. Of course, that means when a person finally gets around to do it that there will be exorbitant penalties to deal with. When that happens, being mad at the government isn’t going to get them paid.

Of course there are more things, but let’s stop with these and see if you wish to share any others.
 

Health Care, Managing Money

Shopping Around For Health Products

No matter who you are, you probably know that the cost of health related supplies or pharmaceuticals can be pretty costly. Even though you can write off some of these costs, you can’t be happy paying high prices for it up front; no one is.

What we find is that people tend to go to the store or pharmacy that’s closest to home. It turns out those stores don’t often offer the best deals. In some cases, there are stores and pharmacies that will offer special deals for people with specific diseases like diabetes and cholesterol issues. This is helpful to know when your insurance company either doesn’t cover the bulk of the cost of your medication or other supplies.

For instance, one local store considers itself the friend of diabetics. If you’re on insulin and have a valid prescription, they’ll give you syringes for no cost. As a comparison, most of the other stores in the area charge between $30 and $45 for the same 100 syringe supply; you can’t save any more money than that.

Another local store offers some cholesterol reducing medication at a drastically reduced rate than most other stores. For instance, at most stores a prescription of Pravastatin at 20MG costs around $40 for a 30-day supply. This one particular store offers it at $37 for a 3-month supply.

Most people are willing to do a lot of shopping for the lower price of things like groceries and appliances, but when it comes to health care related items, even health care services, for some reason people are reluctant to try to find the best prices available. While it’s true that the cost of health care can be high sometimes, there are still deals of all sorts to be found by taking a little bit of time, picking up the phone and calling around.

For that matter, sometimes you can look online and find lower prices for some medical supplies you might need. It turns out eBay is a pretty good place to find a lot of medical supplies at a reduced rate. Sometimes the seller requires you have a prescription for those items, but most of the time it’s just a straight up transaction. For some items you might have to check out expiration dates, but in doing some research we’ve found that most supplies are actually good past those dates for up to a year.

You can save a lot of money if you’ll take the time to shop around for the best deal possible. As always, don’t drive 30 miles to save a dollar, but if you can save a lot for the same thing then it’s worth exploring.
 

Budgeting

Do You Want A Tax Refund?

Every year there are a lot of people who end up being very happy because they’re getting refunds from both state and federal tax returns. This allows people to plan different ways of spending all that newly found money; who wouldn’t want to do that?

Actually, there are a lot of people who purposely try to minimize their tax refund, to the point that if they can break even they feel like they’ve maximized their money all year. What are they possibly thinking?

If you get a big refund, it means you paid more tax than you needed to. In essence, you’ve allowed the government to use your money to grow their own instead of you being able to enjoy it or even invest it yourself so that you could benefit from the fruits of your labor.

Being able to spend extra money during the year might sound like a lot of fun. Investing that extra money makes a lot more sense.

Think about it like this. Say your refund is $500. If you invested that instead of allowing the government to use it or you spending it on your own, and you were able to get it into an investing that paid 5% on the year, you’d earn around $25 or so. That doesn’t sound like a lot of money, but stick with us.

Not only would you have started growing your own money but you don’t pay taxes on the money you’ve invested as long as you allow it to stay where it is. That wouldn’t be a major discount on what you’d pay in taxes, but it would bring what you owe down a little bit. And, if you continued adding that same $500 a year, your growth would be around $6,700 in 10 years, all nontaxable.

Of course the idea is that you’re actually investing more money than just that $500, but it all helps an it’s all tax free growth.

It’s something to think about, although if you’re using your refund for that Caribbean cruise you’ve dreamed about all summer it’s probably a tougher choice to make than it should be.

Tax Preparation

Cameras, Folders, Apps & Paper

As we get close to the time when corporate taxes need to be filed and other taxes need to be calculated, it seems proper to mention that every year many people forget to not only keep their receipts but also to log all the important information they need so they can get proper write-offs to reduce their tax liabilities. We understand how time consuming it can be, as well as how hectic life can be, so we decided it was time to offer some suggestions on what could be helpful… without advertising anyone or any company in particular.

Firefox OS Debut Poland
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Let’s start with cameras. Anyone who has a smartphone these days also has a camera. This means it can be used as a helpful work tool to help record a lot of different types of information that you can use later on to help figure out and track expenses. For instance, it can help you track mileage if you take pictures of your odometer when you start and stop a journey. You can take pictures of meal receipts instead of lugging around a lot of paper. You can probably figure out other ways cameras can help you out, and nothing says you have to save every picture you take. This also allows you to set up a digital file if you’d like to submit your receipts that way; accountants love things like this.

Next, folders. The majority of us pick up receipts, stuff them in our pockets and bags and move on with life. The problem is we get home pull all that paper out of our pockets and put it… somewhere. Later on, we might throw it all away because we forgot what it was or the possible significance of it. We’re not saying to carry folders around with you everywhere you go (although that’s not a bad idea), but it would help if you had a folder or two close to where you put all the paper you pull out so that it’ll spur your mind into thinking about some possible business purchases you might have made.

Back to the smartphone thing. There are a lot of apps out there that can help you track receipts, mileage and expenses. Some are free while some you’ll have to pay for. We haven’t spent a lot of time evaluating these which is one reason we’re not recommending anything, but we have noticed that there seems to be a generational gap as to who likes using these more than tracking information in other ways. Still, it’s something to think about because it might help.

The last thing to talk about is good ol’ reliable paper. One of our clients carries around a 3×5 index card notebook to capture mileage, write down where he’s been when making business purchases and highlight other information in case he forgets to log it all into a calendar. Other people carry steno-type notebooks, full folder folios or planners with them. These are all great… just try to remember not to throw away the pages in case you need to refer back to that information for your end of year expense calculations. 🙂
 

Managing Money

The Correct Way To Go For Your Money Goals

Back in November we wrote a post giving our advice about some financial goals to shoot for in 2016. Those are good goals at any time, and in that article we shared other goals we’ve recommended over the years.

The best thing about goals is they help us to keep on track for what we hope to accomplish. The worst thing about them is that, if we don’t reach them, sometimes we get depressed or frustrated, which leads us to giving them up.

Recently there was an article that talked about financial goals in a way that makes a lot of sense. In essence, the person who wrote the article said that most people look at the big picture when it comes to goals. For instance, if they want to make $10,000 more a year than the previous year, they start at the end, which is the $10,000, instead of at the beginning, which is figuring out how to generate more income in the first place. That’s the difference between having an actual goal and having a dream to shoot for; it’s an important distinction.

Let’s take that $10,000 as an example. If you work at a corporation making $40,000 a year and your goal is $50,000, yet the company usually only gives 3% raises every year, you don’t have a chance to hit your goal if that’s all you have to count on. This means you have to either get another job, a part time job or find another way of making money on the side.

Let’s say you did either of these things.

A part time job might do it for you, and it’s probably your best immediate option. If you found a job paying $10 an hour and committed to 100 hours a month you’d earn $12,000 in a year, which would put you at your financial goal. Or maybe you could try to find a way to create your own income. Either option is viable, as long as you recognize one important thing – it’s going to take some time.

That’s not a bad thing, but it’s something that’s hard for a lot of people to consider. That’s why goals need plans, because the plan will help you realize how long it may take you to achieve your financial goal, whether it’s making money, reducing debt, or saving money. If you invest $10 a month into stock options, it’s going to take a very long time to get that money to grow; if you could afford to pay $1,000 a month it’ll grow faster, but even there if you have big dreams for great wealth it’s going to take time to realize it.

The article recommended people get used to the idea of financial growth by thinking in small increments. If you’re looking to reduce debt, concentrate on one bill at a time as the one to pay off while still making payments on the rest. If you’re trying to increase your income, start by trying to find a way to make $100 of extra money, then see if you can expound on it.

We want to see everyone living in comfort and financial responsibility. We’re not dream providers but, as accountants, we can help you learn where you are and figure out where you might want to be financially. After that, the skies the limit if you have the patience to ride out the time.