Tag Archives: tax preparation

Tax Preparation

Don’t Wait Until The Last Minute To Do Your Taxes

We’re in the final countdown to another tax season and, if you’re like half the population, you probably haven’t even started putting anything together to give to your accountant, or if you don’t have an accountant are worried that you might owe money so you’re putting off the bad news until the last minute.

We’re a “wait until the last minute” society and that means we’re either not disciplined or are usually expecting the worst. People who expect good things always get to them as soon as possible so they can get on with having fun, or at least being comfortable.

When it comes to taxes, you might as well face the fact that you still have to report them by April 15th (although in some states it gets delayed a day and of course one can always file for an extension, even though by rights you’re still supposed to pay something if you think you might owe). It’s in this regard that we list some things you should think about that may or may not encourage you to get to your taxes earlier.

1. You might be getting a refund. We’ve never been able to figure out why people who know they’re getting money back won’t get their taxes in sooner. If you’re a millionaire we might understand but for the rest of us, which is close to 95%…

2. You might owe something. This is what people fear but the truth is that the IRS is probably one of the few agencies in the country where they’ll work with you on paying down outstanding debt, and the interest rates aren’t really all that high. Still, it’s possible that if you do your taxes earlier and you see there’s an amount you owe that you can save up and either pay the entire thing off on the 15th or pay something toward your balance; the IRS likes that.

3. If you’re not planning on doing your own taxes the availability of someone to do them gets severely tested. In January many accountants or tax preparation companies have people just sitting around waiting for you. As it gets close to the magic date you’ll often see lines and, in some cases, you’ll have to make an appointment to see some of these folks. Talk about anxiety levels!

4. If you’re doing your own and you’ve just bought the software you could find yourself getting confused. If you have any questions at all and need to reach out to someone you’re probably going to get put on hold and have to wait while they deal with all those other people who waited until the last minute to use the software to do their taxes.

As we like to say around here, it’s always better to know than not know. If you haven’t addressed it yet… well, what are you waiting for! 🙂
 

Tax Preparation

Time To Think About What To Put Together For Next Year’s Business Taxes

Back in September 2012 we had a post titled Are You Preparing For Next Year’s Taxes. In that post we gave some general ideas of things you should have started preparing early to give to your accountants, or to have if you’re doing your own taxes, for the next year. Since it’s hard to get people moving that far in advance we decided to do it in December this year. So while you’re thinking about Christmas or other holiday gifts, keep these things in the back of your mind:

1. Mileage. We had mileage in our previous post but we’re taking it a bit further. Our hope is that you at least kept a calendar of all your business events and travel for the year, even if it was just meetings or business luncheons. Maybe you kept receipts from the post office or Fed Ex; if you had to drive to those places that counts as business mileage. Educational seminar; you can use the mileage for that as well. If you’ve kept up with it all on a monthly basis this will be a snap; if not, well, it’ll take some time, but it’ll be worth it.

2. Receipts. Do you keep all your business receipts in one place? Are they in order? They don’t necessarily have to be for some accountants but if you can help out they’ll appreciate it. If you work in a home office do you have expenses that your business takes a chunk out of such as internet access, utility bill, cellphone bills or things like that? Hey, every little bit of expense helps.

3. Amount of pre-paid taxes. Whether you’ve paid a lot or a little, it all helps your accountant figure out just what you owe. You might have to indicate it on a bank or credit card statement but hopefully you’ve kept track of it in some fashion.

4. Advertising and other business expenses. Sometimes people don’t think about this as a business expense if all that was done was printing some letters and mailing them out but if you spent money doing it, it counts. If you have a website how much as you paying for hosting and for your domain name? If you paid someone to write for you that’s another expense you get to claim.

Just a few things to help get your mind thinking about expenses to help you pay less on your taxes in the coming year; good luck.
 

Tax Preparation

5 More Things You Can Write Off On Your Taxes

We’ve had two other articles here on expenses you can deduct from your taxes if you’re a business. The first was titled 5 Items You Can Deduct From Your Taxes. The second was called Trip Expenses You Can Deduct For Your Business.

We could go on and on but we like spacing things out some; after all, we don’t want to overwhelm anyone all at once. With that, here are 5 more things you can write off that we haven’t covered yet.

1. Education. If you need continual education to keep a certification, or if you need to go to any types of classes where you’re learning something you can apply to your business, you can deduct those expenses. This includes joining networking groups because often many of them have educational programs you can partake of.

2. Costs of goods sold. Anything you have to buy to create something for a client, to ship something to a client, or in representing your client in any way that the client doesn’t immediately reimburse you back for you can write off. For instance, the client might reimburse you for sales portfolios you create but you might feel silly billing them for the paper or copying charges. If you don’t bill that to them, but if you do you can write things like that off.

3. Services you hire that help you concentrate on your business. If you hire an accountant you can write that off. If you pay for internet services for your business you can write that off. If you want the landscape around your office to look good you can write that off. Even maid services if you work from home can be written off in some fashion. Of course it’s best to talk to an accountant to find out what percentage of it you can take for some of these and other things.

4. Advertising. Anything you spend on advertising, whether you pay someone else to do it or you do it yourself, is allowable. Of course if you’re advertising on Twitter and handling it yourself you can’t write that off, but if you’re paying for a service that sends out occasional tweets promoting your business you get to write that off.

5. Clothing. Of course this one is within reason, but there are clothing items you can write off if they’re part of your business. For instance, lawyers can write off suits and shoes. Plumbers can write off the costs of their uniforms. If you’re on the road and you need to buy new clothes because your baggage got lost and you can’t get reimbursed by anyone, you can write that off, although the airlines might pay you back for some of that. However, if you’re trying to write off a $500 pair of sunglasses… you’ll want to talk to your accountant about that.
 

Tax Preparation

Preparing For Tax Season

True, it’s still 2012, but that doesn’t mean that you need to wait until the last minute to prepare for your 2013 tax returns. Before we get into that, we’d like to remind you of our previous posts Trip Expenses You Can Deduct and Are You Preparing For Next Years Taxes Yet.

Here are some highlights we’d like to remind everyone about:

Child Tax Credit is $1,000 per child now, but decreases to $500 in 2013.

Earned Income Credit up to 3 children has a maximum credit of $5,891. This year there’s certain proof you have to provide to qualify for the credit which includes school records, medical records, utility bills, and property tax records. Check out the new form to see what’s specifically required of you.

Business mileage for 2012 is 55.5 cents a mile, and in 2013 it goes up to 56.5.

There’s no increase in capital gains taxes for 2012, but in 2013 it increases to 20%.

Student loan interest gives a deduction up to $2,500.

The electronic filing date has been pushed back until January 22nd in 2013; no real idea why, but last year some people waited longer than normal for their refunds so maybe it’s related to that.

If you had a lot of medical expenses and kept all your receipts, make sure to bring them in to see if you might qualify for some write-offs.

More changes for 2013? No one knows yet. You’ve probably heard “fiscal cliff” until you’re sick of it but no one knows what’s coming just yet. We know that someone will have increased taxes but unsure of who. We also know that more changes will come to health care in 2013, though the bill officially doesn’t kick in until 2014, and we’re unsure what that might mean financially right now either.

Overall, just be prepared for anything, and of course don’t wait until the last minute to get your information to your accountant or tax professional, as corporate taxes this year are due on March 15th.
 

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.