Showing posts with label Taxes. Show all posts
Showing posts with label Taxes. Show all posts

Tuesday, February 22, 2022

Four Things to Consider When Filing Your Taxes

Many people are finding themselves in a situation where they need to file their taxes and they don't know how to do it. There are so many different tax forms that you can be faced with and the IRS website has a lot of information about them, but not all of it is relevant to the situation you're in. The following are four things that you should consider when filing your taxes.

Home Office


1) If you have a home office, make sure that you include the space that you use as part of your income. This may seem like an obvious thing to do, but there are a lot of people who forget to include this space. 

It's easy to forget about the fact that you are allowed to deduct the cost of your office space from your income, and if you don't take advantage of this benefit, then you'll end up paying more than you should on your taxes.

Business Expenses


2) You also need to keep track of any business expenses that you incur. Many people will find that they have a lot of expenses that aren't directly related to their business, such as food or gasoline. 

If you don't have a good way of tracking these expenses, then you could end up paying a lot more than you should on your tax returns.




Self Employed


3) If you are self-employed, then you will want to keep track of your sales. You can get a lot of help with this by going online and looking at sites that allow you to keep track of your income. 

There are also websites that will allow you to keep track of what you spend on advertising and other marketing costs, and then you can calculate how much you've made.

4) Finally, you should make sure that you keep track of your mileage. If you're driving to and from work every day, then you can deduct the cost of your gas from your income. 

If you have a car that gets used for personal reasons, then you should still be able to deduct the cost of gas from your income.


Wednesday, October 13, 2021

5 Tips to Help You Plan Out Your Tax Payments

The end of the year is quickly approaching and if you're like most people, that means it's time to start thinking about your taxes. If you haven't already made preparations for this year's tax season, then now is the time to get started. 

In this article, we will go over 5 tips that will help guide you through the process of planning out your tax payments. With that said, let’s jump into these 5 tips.

Start Early


You should start planning out your tax payments as soon as you have a solid idea of how much money you're going to earn for the year. 

This is because your tax bill will change depending on whether you received a bonus at work if any extra income was brought in from side jobs, and so forth. 

If it takes you a little longer to gather up the money you owe, then tax planning as early as possible will give you more time to save.

Consider a Side Job


If you're having trouble saving up enough money for your taxes before the end of the year, then taking on a second job could be what helps get you to where you need to be. 

There are quite a few things that people do as part-time jobs in addition to their day jobs, such as cleaning tables at a local restaurant or walking the dogs in the neighborhood. 

For some extra cash, you could even sell stuff that you no longer use anymore like clothes, appliances, furniture, etc.




Be Sure to File


If you're like most people, then it can be easy to forget about your taxes until the last minute. However, if you do this and don't end up filing them in time for the tax deadline, then there's a chance that you could get hit with some pretty hefty fines. 

Many states will charge you a late filing fee of up to $100, and failing to file could result in the IRS charging you interest on your outstanding tax bill.

Use Your Deductions


If you're going to be paying taxes for the upcoming year, then it makes sense that you should try and minimize what you end up owing. 

This can be done by utilizing various tax deductions available to people who fall into specific categories, such as getting a mortgage or owning a business. 

By taking advantage of these deductions, you could end up saving a significant amount of money on your taxes when the time comes to actually file.

Make Estimated Payments


If you're worried that your tax bill is going to be higher than normal, then it would probably be wise of you to start making quarterly estimated payments

Doing this will help ensure that the IRS doesn't end up charging you late fees for not having enough money on hand when the deadline rolls around. 

The main downside with doing this is that you'll have to set up a payment plan with the IRS and if your income goes down for some reason, then there's also the possibility of having to pay back what they already gave you.


Tuesday, October 12, 2021

How to Do Your Taxes When You're Self-Employed

Whether you’re a freelancer, full-time entrepreneur, or something in between, being self-employed means it’s entirely up to you to complete the paperwork and send in the right amount of money to your tax agencies

If you want to keep as much of your hard-earned cash as possible, it’s important to be organized and stay on top of your tax responsibilities throughout the year. 

Luckily, there are plenty of apps and services out there that can help you do this. Here are four tips for doing your taxes when you’re self-employed:

Work With a Professional


Don’t do your taxes yourself—find an accountant to help you. Working with a professional can save you money in the long run. If you are just taking advice from random people online or inexperienced friends, you are probably paying too much in taxes.

Many accountants offer free consultations so take advantage of this service. It’s worth getting an outside opinion as there are many deductions and exemptions entrepreneurs would otherwise miss out on.

Keep Your Documents Organized


Experts from companies like Right Choice Insurance and Taxes Inc. encourage entrepreneurs to keep their business and personal expenses, receipts, and other documents organized throughout the year. 



Organizing is key to simplifying your taxes come April. You should also save money throughout the year to ensure you have enough money to pay for your taxes once the paperwork is complete.

Use Software to File Your Taxes


If you’re self-employed, you likely know all too well how complicated it can be to file your taxes. Thankfully, there are plenty of options for filing your taxes that are designed with independent contractors in mind. 

These programs streamline much of what is involved in filing taxes, making it easier than ever to accurately report income and expenses. The best programs also offer tips for deductions and credits you may not have considered.

Don't Forget Your Deductions


Knowing what deductions are available to you when you're self-employed is important, but can be tricky to navigate. Self-employed workers may deduct many of their business expenses in much the same way that employees do. 

Office supplies, computer equipment, and Internet service can all qualify as deductions if they're used exclusively for your work.

If you’re self-employed, filing your taxes can be quite confusing. Save yourself from the headache of mishandling your taxes by considering these four tips.



Wednesday, September 22, 2021

How Retirement Can Affect Your Taxes

As you plan for and ultimately begin your retirement, you'll be thinking about the many things you want to do and places you want to see. But to see many of these plans come to fruition, it takes money. 

Though you've been a careful planner for many years, you may not understand just how many ways retirement can affect your taxes. To help you make the right decisions regarding your retirement accounts and taxes, here are some important tips to remember.

Paying Income Taxes


If you assumed paying income taxes was a thing of the past once you retired, you may need to rethink this idea. Should you have income that is not tax-exempt, filing and paying taxes will still be part of your life each year. 

As of the tax year of 2020, if you filed jointly with your spouse who is also at least 65 years old and your income exceeded $27,400, this income could be taxed. Also, if you have income from a part-time job, you may meet the threshold necessary for you to pay taxes.

Maximize Benefits with Roth IRA


Since any contributions you make to a Roth IRA are done so with after-tax dollars, this means any withdrawals you make from this account during your retirement are tax-free. 

By working with a tax preparation expert on this, you can enjoy a steady retirement income without paying income taxes. Be sure to find a professional since handling your taxes incorrectly could result in serious legal consequences.



Take Advantage of Tax Credits


Once you retire, take full advantage of any and all tax credits that are available for you and your situation. For many retirees over age 65, the Credit for the Elderly or Disabled can be very helpful, especially if both you and your spouse are over age 65 and have a lower income.

Self-Employment and Retirement


If after retiring from your 9-5 job you decided to become self-employed, you can take advantage of some deductions regarding Medicare. 

In fact, you can deduct your Medicare Part B and Part D premiums, so long as you do not currently have access to healthcare through your spouse's employer. 

Also, even if you do not itemize on your taxes, you are allowed to deduct your costs for Medicare Advantage or any supplemental Medicare coverage, which could save you thousands of dollars per year.

Since you spent so many years planning for your retirement, it makes sense to do the same regarding your taxes after you're retired. From maximizing your Roth IRA contributions to knowing which tax credits you can take, you'll soon have even more money to spend on the fun things in life.



Tuesday, July 27, 2021

What Happens When You Fail a Tax Audit?

A tax audit is a thorough examination of your taxable income and deductions by tax attorneys to verify that your tax records are accurate. 

Detection of tax errors in your tax reports could result in heavy penalties, including imprisonment. The following are some of the things that happen whenever you fail a tax audit.

The IRS Issues You With a Written Notification


Once the tax attorneys discover that you have failed in your tax audit, they issue you with a written report informing you of the tax audit findings. 

The tax attorneys normally send their findings to you within thirty days and allow you to fill in for any appeal. The audit report usually highlights the amount that you owe and the reason why you are guilty.

Assessing the Audit Report


As soon as you receive the tax audit report, the tax attorneys expect you to analyze it and send your opinion feedback. If you determine that you are guilty, you can pay the amount you owe and terminate the case. Tax auditors assume that you plead guilty to tax offenses whenever you fail to respond to the notification.

Court Appeal


The court process begins as soon as you fail to respond to IRS notification where you are assumed to be guilty. At this stage, you are allowed to present your case and defend yourself from the litigation process. 



After this, the court of law could determine that you are guilty and you have committed a tax offense. The court judge will give you reasons as to why you are guilty and charge you accordingly.

Jail Imprisonment


The court can imprison you for a term of about one year whenever they discover that you intentionally failed to file your tax returns. You are also subject to spending five years in prison whenever the court determines that you engaged in tax evasion during a specific time.

Hefty Court Fines


You can also be fined heavily in a year for every additional tax return you do not file. The court will add another fine whenever the tax attorney establishes that you filed fraudulent tax returns.

Failing in your tax audits is a severe offense that will result in hefty fines and imprisonment. It is crucial that you file your returns on time and reveal the correct information. You can appeal against the penalties imposed by the IRS in case you fail a tax audit.


Sunday, June 27, 2021

Who to Consult About Your Taxes

Filing taxes is a process that is not always possible to do alone. There are several, major types of professionals to contact about your taxes. 

The type of provider you choose depends on your specific tax needs. Become more familiar with the various tax experts and their duties in helping the taxpaying community.

Tax Accountants


Tax accountants handle the numbers and calculations that must be filled into tax returns. They assist clients in filling out returns correctly and meeting IRS deadlines

They provide their expertise before, during, and after an IRS audit. They keep up to date on current tax laws that can affect anything from penalties to deadlines and tax incentives.

Tax Attorneys


Tax attorneys assist with the legal aspects of paying taxes. They understand the basic overviews of local, state, and federal tax laws that most people find to be too complicated. Many of these rules are written in legal jargon, seem contradictory, and tend to be ever-changing.

Tax Preparers


There are different types of tax preparers that vary based on their uses and benefits to each client. Certified public accountants have passed the CPA exam for meeting high standards in accounting. Enrolled agents focus more on taxes than accounting. 




They are federally recognized tax preparers who provide services for clients who are dealing with the IRS. Non-credentialed tax preparers do not have professional credentials but practice in preparing taxes.

Tax Advisors


Tax advising is a broad field that comprises certified public accountants, attorneys, enrolled agents, and non-credentialed tax preparers. 

There are professional tax consultants who specialize in developing strategies to reduce tax fees and increase savings over time. They go beyond answering basic questions to develop complex, individualized solutions on how to handle one's taxes every year.

Many tax advisors are available online to provide services to their clients at home. Some professionals provide 24/7 help, which is especially helpful for tax procrastinators. 

Online advising is recommended for people who have all types of questions from basic and generic to specific and detailed.

Today, many people are filing their taxes online through software programs. When there are errors in your tax returns or you're facing an audit, finding a professional to work with is recommended. 

Most tax professionals are not generic and have specialties that distinguish them from others. It's the taxpayer's duty to know which expert to consult the most for a tax problem.


Wednesday, May 26, 2021

What People Won't Tell You But You Need to Know About Taxes and Retirement

Whether you have only recently retired or are preparing to do so in the next few years, chances are you may not feel as confident about the years ahead as you had hoped. 

From worrying about whether you have saved enough money to hoping you don't incur a major healthcare bill, these and other issues could greatly impact how your retirement plays out. Couple these issues with taxes, and you've got a mix that will undoubtedly keep you up at night worrying about this and that. 

While you may have read plenty about taxes and retirement, here are a few things you may not have known about but should regarding your taxes and retirement.

Social Security Can be Taxed


If you are not careful once you retire in regards to your provisional income, your Social Security benefits can be taxed up to 85%. Currently, if you are an individual making over $34,000 or a couple with at least $44,000 of income, expect the government to come calling with its hand out at tax time.

Take the Larger Tax Deduction


Once you turn 65, take advantage of the largest tax deduction to which you are entitled. If you are consulting with tax attorneys prior to or following your retirement, pay close attention to the standard deduction increases for individuals and couples, which are expected to be $1,300 and $2,600 respectively.



Keep Contributing to a Roth IRA


Even though you won't be able to continue making your contributions to a traditional IRA once you are halfway between ages 70 and 71, you can still keep on making contributions to a Roth IRA

Actually, there are no age limits on this, meaning you can make contributions as long as you wish. Also, don't forget that only after-tax dollars are contributed to a Roth, with qualified distributions always being tax-free.

Choose Carefully Where You Live


Like many people who retire, you may be looking to move from your current location to perhaps a new state. If you do so, make sure the destination you select is one that is very tax-friendly to retirees

For example, nearly 15 states impose taxes on Social Security benefits, while others have high income tax rates, sales taxes, and property taxes. If you're working closely with an attorney in planning your retirement, make this part of your discussion.

Rather than be one of the many who comes to retirement with more questions than answers, start planning as soon as possible to ensure your retirement goes exactly as you expected.



Monday, July 27, 2020

How to Help Your Business Manage Taxes



Owning and maintaining a business is a challenging job. Business entails numerous things. As a business owner, a lot is expected of you, especially decision making. Different businesses have different taxes to manage. It can be a daunting task if you are not organized.


Understanding the Type of Business you have


First, you need to understand where your business stands. Is it a sole proprietorship, a partnership, or a corporation type of business? Once you are clear about the position, you will know the right kind of tax to pay. Additionally, you will avoid paying unnecessary taxes. Knowing the precise taxes, you ought to pay will also assist you in keeping proper records, i.e., business finances and financial documents.


Knowing the Different Types of Taxes you have to pay


Apart from the common types of taxes, different businesses have diverse types of taxes. Knowing the exact tax to pay will ease you the struggle of paying unnecessary penalties that you are oblivious of. For instance, in some states like New York, businesses have to pay temporary disability insurance. If you have a large business that requires employees, it’s your obligation to pay the workers’ compensation and unemployment insurance.

You also need to know the type of forms you are required to file. For example, a sole proprietor business uses form 1040, while a partnership business uses form 1065 to report their business income to the IRS.

Therefore, you must know the federal license of your business in your state.


Calculate Your Income


You must know how to calculate your gross income so that you get your taxable income. Clearly understand the difference between net and gross income. If you do not know accounts, it is highly recommended that you hire a professional accountant or use tax accounting services.




Professional accountants offer numerous services that can assist you with all tax challenges. You can also employ certified accounting software. Such software is helpful if you have knowledge in accounting.


Other Important Steps


Get employer Identification Number (EIN)

This form is acquired from the Internal Revenue Service (IRS). You need a valid Taxpayer Identification Number (TIN) to apply. You can apply for it online and get it fast.

Acquire business and professional licenses

Only acquire a license that is required in your state. Remember, these licenses may have other separate taxes attached to them.

Claim your tax credits

This claim will reduce the amount of tax you pay. But, you can only claim if you qualify.

Claim the income reported to the IRS

The IRS has records of the 1099 forms that you get. They match the income you report against what they know you receive. Ensure that the income in the form matches what you report.

Decide when and how you are going to pay your taxes.

The frequency of filling your tax returns depends on your state, but you decide how and when you will file the revenues. Don’t wait until the deadline. File your tax returns in advance.

As a business owner, you might get distracted or engaged in work and forget to file in time, getting yourself into more debt.


Tax Debt


Failing to meet deadlines could lead to penalties or other dire consequences. If this happens, seek legal help. Such situations are tricky. The IRS Fresh Start Initiative will give you a second chance to clear the tax debt.

If you have a revenue debt and are unable to pay, you can report the situation to the IRS as Currently Not Collectable. After convincing them that you cannot pay and guaranteeing them you will pay back, they will offer you more time to clear the tax debt.

Balancing your books will give you heads-up to avoid late fees or penalties. If you don’t qualify for the fresh start relief, acquire legal help to help you get a penalty relief.

It is advisable to keep your business in order. You wouldn’t wish to crumble your hard-earned business because of tax debts. If you can’t handle taxes due to workload, seek help. This way, you will have a sober mind as you focus your energy on other important components of your business.




Wednesday, November 9, 2016

Why Would You Ever Want To Do Your Taxes Early?



If you live in the United States, why would you ever want to get your taxes done early? Well here are some things of note, that might change your mind about wanting to get your taxes done as early as possible. 

 Whenever it comes to doing taxes it usually isn’t enjoyable, thus these advantages to doing your taxes early, might just be the nudge that makes you want to get them done early this year!

FASTER TAX REFUNDS


Individuals that file their tax obligations earlier in the season will certainly obtain their refunds quicker than individuals that wait. The reason is rather simple-- less people submit earlier, so there is much less demand on the IRS team and systems to refine the return.

If you wait until later on in the period, you're sending your application throughout the optimal of the process. Generally, you placed on your own in a long line behind other procrastinators.




So if you're getting a reimbursement and you really require it, after that rush as well as submit your return. There is another alternative to your return quickly, with same day tax refund anticipation loans from Tax Refund Loans.


ADDITIONAL TIME TO PAY THE TAXES YOU OWE


Perhaps you're very certain you owe Uncle Sam money this year. It's not awfully encouraging to finish your taxes early, simply to need to pony up. Doing your taxes is boring enough as it is without needing to pay cash at the end of it.

It is essential to keep in mind that you do not have to pay Uncle Sam till the April 15th due date (April 18th in 2016), also if you do send your return early.

That means you could submit very early and make a prepare for just how you will certainly pay exactly what you owe. That's better than turning to a credit card development, 401( k) loan, or calling residence for money.


EASIER TO OBTAIN AID


Have you ever before been to an area reasonable and would like to know which food booth had the best food? There's one simple means: seek the longest lines.

Lines form for the best of the best, and also tax specialists are no various. If you can quickly reserve an appointment with a tax obligation expert on April 13th, after that you could wish to question their credentials.

On the various other hand, the professionals with the best credibility are usually reserved after mid-February. Filing early assists you in obtaining the advice you need.

Also if you have no plans to seek advice from a tax obligation specialist, you might intend to think about the "what if" factor. 


What happens if you do end up with a difficult concern? You don't intend to find out at a point where all the good accounting professionals are not available.

PROTECTING AGAINST IDENTITY THEFT


Last year, one of my pals waited till April 14th to submit her household's tax obligations. When she was to send her return online, she got a message claiming that she had already submitted her taxes.




Certainly she hadn't actually submitted her tax obligations, and this was no internet site glitch. What actually took place was that a thief sent a deceitful claim in her partner's name.

In 2014, virtually 3 million taxpayers were sufferers of tax fraud. You'll never see the cash from their bogus refund, but they will, as well as you may be left with a mess to clear.

So when thinking about doing your taxes, remember these advantages about doing them early, and you might just get them done early for once!




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