All posts by TL Wall

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

Trip Expenses You Can Deduct For Your Business

One of the best things about being in business for yourself is that you get to write off a lot of expenses. This includes travel; not everything, but a lot of things. We will cover some of the things you get to write off and when.

Air Travel – if you have to fly anywhere you get to write off the cost of your flight and your bags if you have to pay for that. You even get to write it off if you get to the airport and upgrade to first class because the airline is offering a deal.

Car Rental – if you have to rent a car it’s covered, but you don’t get to write off any mileage if you go that route.

Mileage – if you don’t rent a car and drive instead, you get to write off all mileage associated with your trip. Here’s the other side. While you’re out of town, you get to write off all mileage, which includes weekends. Say you’re an hour away from a beach and you’re using your own car because it’s too far to drive home every weekend. It all counts as part of mileage.

Hotel – your hotel costs are covered for write offs. Any clothing you wear for business is covered if you need to have it cleaned and pressed. However, your personal clothing isn’t covered specifically, although you might be able to get a package that includes everything but that’s rare. Meals that you eat in the hotel are covered, but not personal convenience items or snack items you might buy in the hotel store.

Meals/Food – all of your meals are covered whether you eat in the hotel or not. If you stop for ice cream or a milkshake, that’s not considered a meal so that doesn’t count. If you’re staying in an extended stay hotel and you decide to buy food at the grocery store, you can write that off.

Clothing – if you need to buy new clothes to go to your client’s office those items are covered. But if you buy something like t-shirts, shorts or sunglasses, those items won’t be covered.
 

Accounting

3 Most Important Things You Need In An Accountant

Suffice is to say, there are a lot of accountants in the world. Probably not as many as there are lawyers, but one is never really sure. Truth be told, most accountants are pretty good at what they do, otherwise they wouldn’t have any business. If someone tries to tell you they’re the best accountant in town, they’d better be talking about their search engine ranking or something other than how accurate they are.

If all accountants are pretty accurate, that means you have to have other criteria to look at so that you can judge who you want to hire. This is where intangibles come into play. What do you want in an accountant both short and long term? How do you want to be treated? What do you want to see? We can’t speak for everyone, but here’s 3 things we believe are important for any accountant that you want to work with.

1. Trustworthiness. This might seem like something that would be common among accountants until you think about it some more. Who remembers the name Arthur Andersen? That’s actually an easy one, as they were the accountants that “fixed” the numbers that, when caught, brought down both Enron and their own company, to the extent that they had to change their name just to survive.

A name that’s less known by many people who know what it’s related to is David Friehling, who was the accountant for Bernard Madoff, the man who pulled off the greatest Ponzi scheme in American history at billions of dollars over the course of 20 years.

Both of these accounting firms were very good but, as it turns out, weren’t very trustworthy. If you have an accountant that will do anything they can to hide assets or fix the books for any other reason, well, if they’ll do it for you they’ll do it to you as well.

2. Someone you can talk to. Let’s face it; a lot of people could probably do their own bookkeeping but the overwhelming number are probably better off letting someone else handle that, and other financial aspects of their business.

However, sometimes you sit down and start talking to the person handling your books and they’ll use terminology that you don’t understand. Or suddenly your mind goes off and starts watching last night’s game while your accountant is talking to you because they’re not interesting enough to listen to.

If someone is talking to you about your money you need to know what they’re talking about. And you need them to be engaging enough so that you’ll listen, and if need be ask questions. If your accountant is talking at you rather than talking to you, they’re the wrong person for you to be working with.

3. Sometimes tells you what you don’t want to hear. Sometimes things aren’t going great. Everyone knows who Elton John is, correct? Many years ago he sued his accountants because his money was low. It turned out that he was spending way too much, and his complaint was that they told him he was doing it but he thought it was their job to either stop him from spending it or helping him grow that money so that he could continue to spend as he pleased. He lost the case because the judge told said his accounting firm told him the truth, and it was his problem is he didn’t like what they were telling him; that’s paraphrasing the actual words.

Good accountants will make sure you know what’s going on, and won’t be afraid to let you know when things aren’t going well. They’ll help you by giving you advice, whether you take it or not. They won’t be afraid to do the right thing because they’re worried about losing your business, or worried that you might talk badly about them later on, possibly causing their business harm. If you can possibly with with your accountant to get things working properly, isn’t it better knowing the truth than pretending it’s not happening?
 

Tax Preparation

Are You Preparing For Next Year’s Taxes Yet?

I hear you now saying “It’s only September; why would I be ready for next year’s taxes already?”

Many people think that they should wait until the new year has begun to start getting ready for the next year’s taxes. As an accounting firm, we tend to disagree with this for many reasons.

One, what we find is that people will put things off until the last possible moment, and then suddenly start scrambling around trying to pull everything together at the last minute and are unable to find everything they need. Remember, you get to write off your business expenses, but if you’re unsure of all of them you’ll miss out.

Two, if you’ve been writing your mileage down but not properly logging it, if you do it ahead of time that’s one less task you’ll have to deal with later on. Keeping track of it monthly helps you to remember which part of travel was for business and what wasn’t business travel. For instance, if you took a quick trip to an office supplies store and bought something you’ll use in your business, in six months you’ll have forgotten that you did that and missed the opportunity to claim that mileage.

Three, sometimes you forget what items were business expenses after awhile. For instance, if you’re a corporate consultant your business clothes are a legitimate write off, and if you remembered to keep the receipt and write something on it so your accountants know, that’s a good thing. But if you just tossed it into a receipts folder and now it’s months later, you might not remember what that purchase was for unless you went to a specialty shop specifically for clothes.

Four, you might want to think about paying some of your estimated quarterly taxes if your income was high enough so that it’ll reduce some of your tax payments for the new year. This means you’ll have had to be tracking your income as well to make sure you don’t pay too little or too much. And you’ll want to make sure you’ve indicated in some fashion on your bank statements which payments went to that.

Five, bank statements. Sometimes it’s not enough to have them, as you know. For your business account, if you make money in multiple ways and you want to track it all then you probably go through the process of pulling out your statement and going through it marking everything. If you do it ahead of time you’ll save yourself the frustration of coming to certain items and wondering what they were.

These are only some of the things you probably want to think about ahead of time, and with only 3 months left in the calendar year, getting a jump on things would probably ease your mind a bit.
 

Budgeting

Claiming Dependents On Your Weekly Or Biweekly Paycheck

How many dependents do you claim on your taxes? I’m not talking the once a year tax-preparation, but the daily or weekly or biweekly taxes that are deducted from your paycheck.

Most people across the country will claim the same number of dependents that they do on their yearly tax form. What this is supposed to do is remove enough tax so that when you file your income taxes for the year you’ll either have paid everything that you owe or will either owe a little bit more or get a very small refund.

What some people do is claim fewer dependents on their paycheck so that more money is taken out at every pay period. What this does is guarantees them a refund when their taxes are done, and many people plan around that refund. However, it might not be the best use of their money. Let me explain.

Getting a refund from the government is nice. However, by taking more money out of your check it’s the government that gets to use that extra money to build interest on than you. If you have no problems with the government using your extra money then that’s fine. But if you’d like to use that extra money you might think about claiming one less dependent and then rolling that money over into some kind of investment. Not only would you be growing money for yourself, but because you’re investing it you get that extra bit tax-free for a while, which means you won’t have to pay much more on your yearly taxes, if you have to pay anything at all.

Did you know that you can claim anywhere up to nine dependents for your pay checks whether you have that many dependents or not? This is not a recommendation by the way, but it’s something you should probably know.

Every once in a while if you need a little bit of extra cash, it might not hurt to look into claiming more dependents for a pay period or two. What you’re doing in essence is borrowing against yourself instead of having to take out a loan or asking someone else for money. If you claim 9, for instance, you might not have any taxes taken out of your check or very little, and you can roll that money into something else. You could even roll it over into some kind of investing, but the tax amount that you’ll owe on it at the end of the year will still be higher than what you might want to deal with if you decided to do it more than a couple of pay periods.

That’s the main thing you needs to think about if you decide to claim more dependents than you actually have. You will still owe the government its money, and if you don’t plan for that then when you do your taxes at the end of the year you might be shocked to find out how much money you owe. Of course you could probably keep doing the same thing and borrowing against yourself, but that’s not a wise thing to do. Still, if you ended up having to make a deal with the government to pay back outstanding taxes, it will cost you a lot less than the interest on a credit card.

This is just something to think about if you’re ever in a spot where you need a little bit more money, or maybe want to take some of the money and invest it so that you’re making money rather than allowing the government to make money off of you. Of course you’ll want to talk to your accountant or money manager to see how this type of thing will work for you if you’re going to invest it, as well as talking to your accountant if you’re planning on upping your dependents for a short period of time so you can be warned as to around how much that might end up costing you if you don’t catch back up later on.

Accounting

5 Items You Can Deduct From Your Taxes

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Most people don’t itemize, but for those that do, especially if you’re self employed, you will find that there are lots of little ways you can save some money on your taxes, which could end up gifting you a refund if you’re lucky. Let’s look at 5 of these things.

1. Health care costs. Actually, you won’t save money on medical bills per se, but you can write off any health insurance you pay for right now if it’s a business expense, and once the health care bill kicks in you can write that off if you end up having to pay out of pocket for it. Right now you can also write off some of your expenses if you have a Health Savings Account.

2. Mileage. Almost everyone with a small business knows that they can write off mileage, but many people forget to track it. You might need to either start carrying around a notebook or track the mileage once for those places you visit often and then remember to track that whenever you go to those places again.

3. Cell phone costs. If you pay for your cellphone and you use it for business you can write off certain portions of your bill. You won’t be able to write off the entire amount if you’re on a family plan but you can certainly write off half of it. If your bills are exorbitant you might be asked to prove which calls were for business and which ones weren’t, but if you’re under control you should be fine.

4. Home office expenses. Not only can you write off all the things you buy to use in your home office but you can also write off a portion of the house expenses that you use while you’re in your office. This includes your mortgage, electricity, if you have someone who cleans the house and even if you have someone who cuts your grass, although that one might be harder to track. If you have any maintenance done in your office such as painting the walls you can write that off. Don’t push things like trying to get a discount on your cable because you have a TV in your office though.

5. Travel. If you’re a small business you actually get to write off one business trip a year whether you really take one or not. You have to be incorporated to do this however, and it’s a way to get a deduction from taking a family trip. You get to claim at least one night of your trip as a shareholders meeting, and if you conduct any type of business at all you can claim other days as well. However, you won’t get away with claiming an entire cruise as a business trip unless you were hired by the cruise line so don’t even try.