Archives for Tax Advice

8 Necessary Steps to Prepare Your Business for Tax Season

Now that the end of January is upon us, it is time to begin to receive important taxation documents. This is a particularly busy season for business owners because they have a legal obligation to get their employees the proper taxation documents by the end of January. If you are struggling with how to organize your finances in the last days of January as a business owner, it is essential to devise a strategy to comply with your legal taxation obligations. Should you do so, you will be in a better position in the coming years for your business. If your business is located in the Miami area, then it is wise to reach out to local professionals that have the proper skill set to assist you during tax season. Here are eight necessary steps to prepare your business for tax season:

1. Consider Miami Bookkeeping: Hiring a firm that specializes in bookkeeping services in Miami is an excellent way to receive the expertise that you need in order to get your finances in line to calculate what payroll taxes you owe to your employees. Investing in a service of this nature is something that will save you a great deal of time in a part of the year that you are the most busy. That being said, it is wise to invest in a firm that you have researched carefully. It may be wise to interview their prior clients to see if they were actually experts in preparing tax returns in order to avoid problems with the IRS down the road. Should you discover that they are the right fit, you will benefit a great deal from their expertise and services.

2. Delegate Your Tasks to Employees Effectively: There are many managers that do not delegate their workload properly, which leads to a great deal of stress in the office. Be sure that you make a list of what you need to get accomplished in this tax year. If you do so, you will be able to take the workload off of yourself and create a more pleasant environment for your employees that are already going to be stressed out during tax season.

3. Put a Plan in Place for Errors in Employee Tax Returns: If you have a larger corporation, there are times where an employee’s W2 form gets lost or does not get to them on time. It is important to remember that this puts your firm at a great deal of risk. Help the employee to recover the documents and have a plan in place to get them their missing documents promptly. Having these steps in place beforehand will provide you with a peace of mind when you are overwhelmed.

4. Establish a Good Relationship with the IRS: Be sure that you are not neglecting any of your duties as a business owner with the IRS. These dishonest behaviors will come back to haunt you in the future. This is why it is best to be honest from the beginning. In doing so, you are putting yourself in a position to be successful and not pay substantial fines with your business.

5. Get Ready to File Your Business Tax Return: Once your employee’s payroll taxes are taken care of, you also have to take care of the taxation documents for your company and/or companies. Make sure that you have organized any and all necessary documents to pay your taxes on time. In doing so, you will be positioning yourself to be fiscally ahead because once you pay the bill, the invoice goes away for that year and you can go back to focusing on making profits for your business rather than paying the IRS.

6. Know the Taxation Deadlines: Taxation deadlines are something that are strict, but do have extensions. If you are having the feeling that you are running late, tell the IRS. This way, you will possibly have fees, but it will show a good faith effort to pay on time. Ideally, it is wise to memorize all of the taxation deadlines so that you have them mentally noted or physically noted on your calendars. If you take the time to do this, you will be positioning yourself to be ahead of the game rather than barely filing your tax return on time.

7. Assess Your International Holdings: In Miami, many companies have a presence in different countries. It is wise to have expert lawyers and accountants look over the nature of your work and how that affects your income within the United States. At times, there are ways to save money on taxation, but they have to be legal. Having experts assist you with this aspect of your tax return is essential to having a return that will not be audited later on.

8. Watch Out for Audits: If you have filed your taxes early and have been selected for an audit, do not panic. Be sure that you have kept accurate records of your transactions. If you have done so, you will find yourself at ease because you will have all of the documentation ready to present to the IRS. If you have not been organized, treat this as a learning curve to organize your finances better next year.

It is essential that you take the time to properly prepare your business for tax season. If you have a larger firm, this is especially true. It is wise that you have several plans in place to delegate your workload. Outsourcing your bookkeeping to a reliable professional is always a viable choice because it will save you a great deal of work. Additionally, make sure that you are careful with your overseas operations and how you are accounting for their incomes, you should not run into trouble with the IRS. When working with the IRS, be sure to meet their deadlines and to comply with any audit requests. If you prepare yourself adequately for any outcome, you will be able to have a smooth tax season for your business both this year and the years to come.

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3 Tips To Help You Save on Employment Taxes

If you are self-employed, you will have to set money aside for your employment taxes. This can be a challenging task, especially if your business is short on cash. However, if you do not pay your employment taxes, you will be subject to penalties and interests that will cost you a lot more money. Read about three tips that will help you ensure you have the employment taxes paid.

Understand Business Deductions

There are several tax deductions you can take when you own a business. Vehicles, mileage and depreciating values of work equipment are all deductions that will save you money on your tax bill. Deduct the actual expenses from your vehicle or the standard mileage rate. It is important that you keep meticulous accounting records for your business deductions. It is a good idea to hire a tax consultant before you start your own business to prevent getting behind on taxes.

Automatic Deduction Payroll Software

Payroll software programs can make automatic deductions from your paycheck to keep you on track with your tax bill. Most payroll software companies will guarantee you will avoid tax penalties by using their software. Payroll software fills in tax forms and automatically files them. They can also send taxes electronically so you do not have to worry about filing on time. Some payroll software will pay employees, transfer data from accounts receivables and payables with accuracy guaranteed.

Schedule Quarterly Payments

Many people who own their own business make quarterly payments to the government. This ensure there are no penalties for late filing or payment of taxes. Speak with a tax advisor to figure out how much to send on a quarterly basis for your company. The amount should be slightly over the estimate to ensure you receive a few dollars back instead of paying.

Business ownership has many advantages if you pay your taxes on time. If you fall behind on tax payments, you may not be able to catch back up while running a business. The first few years of business are the hardest financially. Start your business off right by expecting to pay your taxes right away.

If you work at home, do not forget to take the deduction for a home office. A bookkeeper in Miami can help you figure out the deductions that are right for your business. Expect to work especially hard the first few years of business ownership in order to be successful.

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Three Tax Tips to Consider During the Summer

Summer is just around the corner, and you can think about is filing for taxes again next April. While you may have to hold off on getting those taxes done, summer is the perfect time to start planning and tracking your spending. Make sure to have all of your paperwork in order to make everything easier for your Miami tax preparer.

1. Your Childcare Expenses

If you forgot about it last year, don’t forget to get those receipts from your daycare for watching your children. Next April, you’ll be able to deduct childcare expenses from your taxes.

This is a must-do tax tip, especially for parents who have children who aren’t attending school during the summer. Daycare can become expensive, and you don’t want tax season to roll around without preparing your receipts first.

2. Donate Instead of Sell

Thinking about cleaning out your garage? Summer is the perfect time to do heavy cleaning, especially if you want to get rid of many of your possessions.

Having a garage sale can be a real headache, and, if you make enough money, you might have to claim the profit on your taxes. Instead, give your items to charity and enjoy a nice deduction. Make sure to keep excellent records of what you sold and how much they sold for; bookkeeping services in Miami and the IRS will want to see records if they perform an audit.

3. Deduct Major Home Improvements

Summer is the best time to make improvements on your home, and certain renewable energy installations, such as solar power, are tax deductible. Most homeowners can deduct a certain percentage of the installation costs during the following tax season.

If you own more than one property, you might be eligible to get a tax deduction for each property.

Preparing for tax season early is an essential part to getting your taxes done right. Consult with a reputable tax preparer in Miami to make sure your forms are filled out correctly and that you’ve counted every deduction possible.

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6 Ways to Qualify for the Affordable Care Act Exemption

According to current laws, most individuals must have health insurance. If an individual does not have health insurance, then he or she must pay penalty. However, there are exceptions to this law known as exemptions. Individuals who qualify for an exemption can have the penalty waived.

There are a number of ways that an individual can qualify for the Affordable Care Act Exemption. Here are six of the most common ways.

1. Hardship exemptions are one of the most common ways to qualify for an exemption. Hardships include homelessness, domestic violence, eviction or foreclosure, natural or human disasters, bankruptcy, or the death of a close family member.

2. Individuals who lost their current insurance and believe the Affordable Care Act to be affordable may also qualify for an exemption. Individuals who will spend more than 8.05% of their current household income on coverage may also be eligible for an exemption from the plan.

3. Individuals who are incarcerated are exempt from the health care act.

4. Individuals who are living abroad while studying or working are also exempt from the Affordable Care Act.

5. Members of certain religious denominations who have religious objections the Affordable Care Act are also exempt.

6. Likewise, members of federally recognized Indian tribes or individuals who are covered by an Indian Health Services Provider are also exempt.

Depending upon the circumstances, an exemption may be temporary. This is usually the case if individuals are applying for a hardship exemption. It can be very difficult for taxpayers to determine if they are eligible for exemptions. In addition, finding the necessary forms and completing those forms is time consuming. For this reason, individuals who believe they may be eligible for an exemption should consult a Miami tax preparer or an accounting services in Miami for more information on qualifying for exemptions.

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3 Tax Tips for the Self-Employed

Screen Shot 2015-02-02 at 12.40.20 PMFreelancing offers a world of freedom when it comes to being your own boss, but with respect to taxes, this luxury can come at a cost. Being self-employed means you don’t have taxes automatically deducted from your paychecks, so you will need to stay on top of your financials.

Not to worry, though, as accounting services in Miami is here to help.

Here are our 3 best tips:

Because self-employed individuals are taxed on their income minus qualifying business expenses, it is important to retain paperwork including check stubs and receipts. Having an organized system in place will make things easier come tax time because you will be able to quickly and easily obtain the documents needed to determine your tax burden.

When a large check comes in, avoid the temptation to spend it all. Keep in mind that the government is due its share. Putting aside Uncle Sam’s payment now will cause less stress come tax time.

In an effort to avoid the surprise of a substantial tax bill as well as unfriendly penalties, it is important to consider the need to pay quarterly tax payments. Using an Excel spreadsheet or one of the readily available software programs, be sure to track all of your income and expenses.

If you paid more than $1000 in the previous tax year, you will need to pay quarterly taxes in the current year. Additionally, if you expect to pay more than $1000 in taxes in the current year, you will also need to make quarterly payments. If you paid no taxes or received a return in the previous year, you may not have to pay quarterly taxes in the current year.

You can see that there is a level of responsibility that comes with the freelance status, but with a little planning from a Miami tax preparer, this need not be a burden for the self-employed.

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3 Ways to Wisely Invest Your Tax Refund

Money TreeThe tax season is a time when the average American begins dreaming about making big purchases. They sit around for months pondering what to do with all the money coming in their refund.

While expensive vacations, stylish clothes and flashy cars may make one feel good in the moment, the realization that the money could have been better spent can put a damper on things in the long run. So, for those who want to use their refund check responsibly, here are the top three wise ways.

1. Buy Precious Metals
Gold and silver are two commodities that humankind has used for centuries to make purchases. There is little evidence that things will change in the lifetime of anyone reading this article.

Purchasing some ounces of gold and silver can be a wise way to put a portion of a tax refund to work. These tangible investments are physical properties in the form of coins and bars. A Miami tax preparer can help find out just how much of a refund to expect from the government.

With printed currency going through wild value fluctuations, it could be time to stockpile a little precious metal. These holdings can work as hedges against instability in the volatile currency markets.

2. Open an IRA
It is never too late to begin planning for retirement. A good first step is opening up an investment retirement account (IRA). These instruments provide an income beyond Social Security and pension plans during the golden years.

Basically, the owner makes deposits into the account and then begins withdrawing earnings after leaving the workforce. It is even possible to set up a targeted retirement date with the fund manager. Most experts agree that investing in riskier positions in the beginning and then switching to a more conservative strategy later is a smart move.

There are maximum limits on deposits. Covering this entire amount at one time with the tax refund is a good decision.

3. Pay Off Credit Cards
High-interest credit card debt is something that consumes a large part of most household budgets. Paying off the balances of these albatrosses is an intelligent way to use a tax refund. With the extra disposable income each month, it could then be possible to focus on other investment priorities.

The time to get started on the road to financial health is now. Putting the tax refund to good use is essential. Finding qualified accounting services in Miami is probably the best way to ensure success.

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4 Things to Consider When Hiring a Tax Professional

4 Things to Consider When Hiring a Tax Professional

balboa_purchasingWhen you are going to pay someone to prepare your taxes for you, you need to do everything possible to make sure you are getting your money’s worth. When you trust someone to prepare your taxes for you, they have to be reliable. Here are four things you need to keep in mind when you are hiring a tax professional.

1. Get a Referral

When you know someone else has enjoyed the services of a tax pro, it can help put your mind at ease. You should ask your friends and business associates if they have any recommendations for a Miami tax preparer you can use. It doesn’t hurt to go online and look for recommendations as well.

2. Interview Candidates

You should not just jump at the first tax preparer you come across. Picking someone to do your taxes is kind of an intimate thing. You need to make sure you can find someone who you are comfortable with. The best way to do this is to sit down and interview tax professional before you hire one.

3. Find a Tax Preparer with Good Credentials

When you are looking accountants to do your taxes, you should make sure that they have solid credentials before you hire them. Look for accounting services in Miami that are staffed by CPAs who are members in good standing with the Florida licensing board. If you can find CPAs with the personal financial specialist (PFS) designation, it is a good sign that they know what they are doing.

4. Check out the Fees Carefully

Make sure that you know exactly who much you are going to be charged before you hire a tax preparer. You need to look out for any tax preparer who does not give you a clear, easy-to-understand breakdown of the fee structure. Do not use any tax preparer who bases his fee on a percentage of your return, which is a warning sign that the tax preparer is not fully on the level. Tax preparers who work on a percentage basis have an incentive to use questionable accounting tactics that may get you in trouble with the IRS down the road.

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Will You Hire an Accountant or Do Your Taxes Yourself This Year?

contact-bannerShould you hire a tax accountant, or should you do your taxes by yourself? It is a question that plagues people for a variety of different reasons. For starters, you may simply not like the idea of some stranger knowing everything about your financial history for the last year or so. Alternatively, the thought of sifting through legal jargon in the IRS tax code may send shivers up your spine. Just in case, you thought it might be a smart idea to look online in search of a savvy Miami tax preparer. You never know when a local tax professional will come in handy. If you are still on the fence, then here are a few tips that might help you to make an informed decision.

Do You Want to Spend the Time Doing Your Taxes

The first thing to consider, while searching online for accounting services in Miami, is the time involved in preparing your taxes. For a simple return, time may not be much of an issue. For a more complicated return, the prep time could extend into numerous laborious hours. A tax filing that involves a change in marital status, recently purchased property, gifts, investments and other oddities will inevitably cause a person to question if they want to go it alone. You still have to gather documents and arrange receipts to get your tax preparer everything they need in order to take the burden off your hands; consequently, if you are not a strongly detailed oriented person, then it is probably best to let someone else prepare your taxes in such a case.

You Started a Business

If you started up a business this year, chances are you are a little intimidated and confused about how to file your business taxes. This is perfectly understandable. The IRS code is not intended to be clear. In fact, in many cases the tax code is artfully vague and rather easy to interpret incorrectly. Just to make sure you get everything right, it never hurts to have a tax accountant look things over with a fresh pair of eyes. You will only want to file business taxes yourself if you truly understand the IRS code inside and out. Otherwise, it is best to allow someone who specializes in business taxes to make sure you are doing things correctly.


Although it can be difficult to decide whether you should do your own taxes or hire an accountant, it is generally best to err on the side of caution. A tax professional is not there to simply prepare your taxes. They are also there to be your advocate in situations where you need someone with experience to help you handle the IRS. You never know when an audit is coming, but an experienced tax accountant should be able to help you iron things out as painlessly as possible.

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What To Look For When You Need Professional Financial Services

home-bannerWhen searching for accounting services in Miami, you’ll want to fins a professional who is seasoned and knows about tax laws, regulations and codes.

When you work with an expert tax preparer, you can expect attention to detail and friendly, reliable service. It’s important to make sure that you receive the deductions and credits that you’re entitled to, and so accuracy and dedication are needed for quality and reliability. A qualified, top-notch financial service will provide you with services and amenities, such as:

•Flexible appointment availability
•Friendly and outstanding customer service
•Attention to detail

A premier provider of tax service can help you. Whether you’re facing an audit or tax penalties– it’s crucial that you locate a group that is skilled in bookkeeping, account management, and who can attend to all of your financial needs.

Whether you need support for individual or business accounting services in Miami, or you need dependable representation for more complicated cases, it’s important that you find a service that will go above and beyond to meet your specific demands.

When it comes to locating a reputable tax preparation service, a company who employs only well-qualified, trustworthy individuals can mean your financial success.

An accountant and tax professional who is current on all of the tax laws and who’ll go over your financial documents thoroughly–providing you with detailed reports and plans–can go a long ways to improving your return on investments and increasing your ability to save more money.

A high-quality financial advisor and representative will always have your best interest at heart, and they will work hard to provide you with a mixture of valuable services, like:

•Tax preparation
•Financial statement reviews
•Tax and personal finance consulting and planning

A dedicated finance advisor and wealth manager will be able to provide you with a higher caliber of service, and will assist you in making critical financial decisions.

The key is to do your research and to make sure that you choose a service with a good reputation.

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4 Tax Tips for Independent Contractors

Screen Shot 2015-02-02 at 12.40.20 PMIf you are an independent contractor, you must pay very close attention to your taxes. The last thing that you want is to get in trouble with the IRS. Here are four tax tips for independent contractors.

Do not forget to report all of your earnings

As an independent contractor, you are obligated to report all of your income to the IRS. According to the law, independent contractors who earn $600 or more must fill out a 1099-MISC form. Although you may be tempted to exclude small jobs, make it a priority to be as honest as possible. If your income raises a red flag, you can look forward to receiving a letter fro the IRS.

Pay estimated taxes

Due to the fact that you are an independent contractor, you are responsible for paying self-employment taxes. While working for yourself has many advantages, you are still not exempt from paying taxes. In fact, most independent contractors are required to pay estimated taxes at least four times a year. If you are confused about how the estimated tax system works, be sure to consult a tax professional. Reputable accounting services in Miami will be more than happy to guide you through the process.

Keep up with all of your receipts

Receipts are very important financial documents. Fortunately, receipts can actually decrease the amount of money that you owe to the IRS. Each year, thousands of taxpayers fail to store their receipts in a safe location. Never make the mistake of throwing a precious receipt into the garbage. When it comes time to file your taxes, even small purchases can make a big difference.

Always separate personal and business expenses

Personal and business expenses should always remain separate from each other. Some of the most common business expenses include advertising, telephone service, business-related meals, legal fees, union dues, and office equipment. You can also receive a deduction for your traveling expenses. In order to receive a deduction for a home office, the room must be used only for business purposes.

Independent contractors certainly have a lot of freedom. However, their taxes should remain a top priority.

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6 Tips To Avoid Last-Minute IRS Stress

last minute irs stressProcrastination tends to cause a lot of avoidable stress. On the other hand, timely preparation helps taxpayers to stay ahead of the curve. Here are six tips to avoid last-minute IRS stress.

If necessary, request an extension to file

Most people understand that the deadline to file their federal taxes is on April 15. However, the IRS does grant deadline extensions to taxpayers. In the event that you are unable to pay your taxes on time, do not hesitate to request for a deadline extension. In some instances, you may be able set up a monthly payment plan.

File your taxes as soon as possible

Filing your taxes early is always the best approach. If you make a mistake on your tax return, filing early will give a Miami tax preparer ample time to make the necessary corrections. Prompt action will also help you to get the most possible deductions.

Choose a reputable accountant

In regards to experience and knowledge, accounting services in Miami can vary greatly. Before choosing an accountant to complete your tax return, be sure to research their credentials. Hiring an unqualified accountant can actually cause a lot of problems in the long run.

Always file a tax return

Even if you do not plan on getting a significant tax refund, it is still in your best interest to file a tax return. In fact, the IRS could penalize you for failing to file a tax return. Furthermore, you may get more money back than you originally predicted.

Do not be afraid to ask questions

Tax laws can be very confusing. If you are unsure about a particular tax law, be sure to ask a qualified professional. Never make the mistake of sending an incomplete tax form to the IRS.

Organize your important documents

Before attempting to file your taxes, take the time to organize all of the essential financial documents. Do not wait until the last minute to search for various receipts and sales slips. If needed, set aside some free time to arrange your financial paperwork.

Do not allow your tax return to become a last-minute headache. These five tips will surely help you to remain prepared for the current tax season.

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5 Things To Remember for the 2015 Tax Season

Screen Shot 2015-02-02 at 11.51.16 AMWhether you own a business or work for a corporation, you should always remain prepared for the upcoming tax season. Here are five things to remember for the 2015 tax season.

You can file your taxes on January 20, 2015

Each year, thousands of people find themselves scrambling to meet the April 15 tax deadline. If you do not expect to meet this very important deadline, it is a good idea to contact the IRS. If requested, the IRS will typically grant you an extension of time to file your taxes. However, you may be required to pay an extra fee.

You are now required to have health insurance

Due to the arrival of the Affordable Care Act, everyone is now required to have health insurance. If you do not have any insurance, the IRS may withhold some of your return. In the event that you are without health coverage, be sure to discuss this issue with a Miami tax preparer.

File your taxes as early as possible

While a lot of people wait until the last minute to file their taxes, the best approach is to file early. Due to the fact that some business owners may owe money to the IRS, filing early will give them ample time to make the payments. Filing your tax return early also gives accounting services in Miami enough time to seek all of the available deductions.

Gather your receipts

Before filing your taxes, take the time to gather all of your receipts from last year. This will certainly help you to get the most deductions. In fact, all your important financial documents should be scanned prior to filing your taxes.

Be careful when attempting to prepare your own taxes

Preparing taxes can be a very tedious and time-consuming process. Furthermore, a few small mistakes could jeopardize your tax return. If you want to avoid the hassle of dealing with a lot of tax forms, hire a professional to do the job.

While very few people like the idea of paying taxes, it is something that every citizen must do. With the 2015 tax season finally here, now is the time to file your taxes.

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Four Fears That Hold You Back From a Successful Retirement Plan

Screen Shot 2015-02-03 at 9.41.11 AMAll but a few of us wish to quickly reach the inevitable age of retirement. We know it is going to happen, but the thought of no longer having a job to go to may be daunting regardless of what some may say. In addition to being nervous about what you are going to do with yourself during retirement, there are other concerns which hold us back and create undue stress about retirement. Below are a few ways you can kick those fears and come up with a great retirement plan.

1. Save, save, save your money. Some plan, huh? You might be surprised to learn the number of people who forget this most basic rule. Some simply rely on their Social Security Retirement pay for their income. The simple fact is Social Security should not be your only income source.

2. Do you plan on working part-time during your retirement years? More and more people choose to work during their retirement in order generate a little income, get out of the house, stay active, and interact with people. If you plan on doing so, have a game plan. Don’t settle for the first menial job that pays minimum wage to jump on. The truth is if you do so, you are likely to grow unhappy with the situation. Find something that suites you, but not something that will occupy massive amounts of your time. Also, realize that if you work during retirement you may see smaller Social Security checks.

3. Start making an effort to become debt free before you retire. Do you plan on staying in your home? Put a little extra effort into paying your home off before you retire. Planning on buying that brand new luxury recreational vehicle to travel the country? Start saving now, while you are still working, to soften that sticker shock.

4. Do you wish to remain active during retirement, perhaps travel the world? The popular notion of traveling or opening a winery all sounds very romantic, but c’mon, a winery? For the vast number of Americans in retirement this is not a reality. If you are in the Miami area, make sure you consult with a Miami area financial consultant to help you plan for your future. It is never too early, or too late, to start planning for retirement.

Honestly, not everyone’s retirement years are comfortable. Far too many retirees struggle to make ends meet, especially during the most recent economic down turn. Remember, you don’t have to come up with a plan yourself. Contact a Miami tax consultant to get you started today.

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Four Practical Tips From a CPA That Can Save You On Your Taxes

The 2014 tax season is over with. Hopefully you filed your 2014 taxes and received a large refund check. If you didn’t get that check, perhaps next year will be your year. Below are four practical tips which might have you seeing green for the 2015 tax season.

1. This is the year you should finally start keeping your receipts. As we sit and try to do our taxes we know what qualifies as a deduction, but we never know exactly how much we spent on a given item. Also, having receipts for any donations you made will come in handy. When you choose to keep a receipt, be sure to write why you are saving it on the back. Doing this simple task can save you a headache the next time you file your taxes.

2. If you will be looking for a job this year, be sure to keep track of all of your job hunting expenses. If you will be spending money on résumé writing services, employment agencies fees, transportation costs, printing, postage, and the like, keep a record. No one ever really realizes just how much looking for a job can cost; that is until they add their receipts up.

3. If you are self-employed, there are a number of tax deductions you will be eligible for next year. The most important aspect of self-employment and taxes is to make sure you keep impeccable records of your transactions and expenses. Also, keep in mind you might consider making estimated tax payments throughout the year instead of all at once at the end of the year. Estimated tax is used to pay tax on income not subject to withholding.

4. If you want to receive your refund check faster next year, file your taxes electronically and opt for direct deposit option. True, at this point in time, most people already perform this function. However, you may be surprised at how many people are still using snail mail in order to receive their refund check.

The tax code changes every year. Have you ever wondered why you can’t use that tax filing program you purchased last year and this year’s taxes? If you did so, you might be headed for an audit by the IRS. Consider consulting with an accounting service in the Miami area in order to maximize next year’s return.

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Seven Last-Minute Tax Filling Mistakes People Make

The federal government has an uncanny ability to find even the most minute tax mistakes you may make. With more and more tax audits occurring each year, be sure these seven common mistakes below don’t land you under the microscope of the IRS.

1. Perhaps the biggest mistake people make is forgetting the tax deadline and filing late. Even by being only a few days late with your filing with have you paying out of pocket.

2. Another mistake individuals make is not collecting all of the required paperwork in order to do you taxes properly. Sure, W-2s are a no-brainer, but are you so sure you have all of your needed 1099s? Miscellaneous income you earn is independently sent to the IRS via a 1099, so you are not doing yourself any favors by under reporting your income. Make sure you account for all income to avoid an audit.

3. Not that you would be penalized for doing so, but if you want your return sent directly to your bank account, be sure to list the proper routing and account number. Nothing more frustrating than waiting on a tax return check which was sent to the wrong location.

4. If at all possible try to slip a few more dollars into your retirement account before filing. Nothing like reducing your tax burden by putting your hard earned dollars to work.

5. If after doing your taxes you find you owe money, don’t panic! Simply not filing your return is not the answer to this conundrum. If you cannot pay right away, the IRS will take payments over time.

6. If you need help with your taxes, but don’t want to pay to have them done, some individuals may qualify for free help. If a person earned less than $50,000 and is filing a simple tax return they can call 1-800-906-9887 to find out more information on the program.

7. Lastly, don’t forget to take all of the deductions you qualify for. There are a number of deductions some people have never considered. For example, one can take a deduction in regards to their gambling losses. Of course there are a number of steps you must take in order to prove your gambling losses, but a deduction may exist for that $1.00 scratch off lotto ticket you lost on back in June.

The IRS is a large organization which oversees the filings of millions of people’s taxes each year. Don’t make the mistake that they do not care about one individual not filing their taxes. Ask the millions of people who have been audited in the past few years, they will tell you the IRS cares about everyone!

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Obamacare’s Individual Mandate Tax and You

Regardless of your feeling towards the Affordable Care Act, otherwise known as Obamacare, there are a number of new taxes which coincide with Barrack Obama’s signature piece of legislature. The taxes may affect some more than others.

There are dozens of new taxes which accompany Obamacare. Some are big, some are small. Some will likely not even affect you, some certainly will. The number one tax most people are concerned with is the ‘individual mandate’ tax. The individual mandate is the tax penalty which requires a person to purchase healthcare coverage. Much has been made of the individual mandate and how it affects Americans. Most people do not realize the tax involved with the individual mandate increases over time. Below is a breakdown of the individual mandate tax over the next several years and beyond:

  • 2014 – $95 per person per year or 1% of your Income
  • 2015 – $325 per person per year or 2% of your Income
  • 2016 – $695 per person per year or 2.5% of your Income
  • 2017 – Tax Penalty will increase by the rate of inflation going forward, or 2.5% of your Income

As you can see, there are two penalty options per each non-covered year. Whatever dollar amount is greater is the dollar amount the government will tax you. So, in the year 2014, a single uninsured individual earning $30,000 a year will have to pay a $300 individual mandate tax if they do not obtain health insurance. If the same individual does not obtain health insurance by 2016, they will have to pay a $750 individual mandate tax.

The total penalty cannot exceed the amount it would cost you to obtain the most affordable health insurance plan. Meaning, if an Obamacare “Bronze Plan” cost $800 a year for you, the total tax penalty could only be $800. There are a number of nuances which surround the individual mandate. Each tax payer seeking coverage, or not seeking coverage for that matter, will wind up paying a different amount. Factors include income, family dynamics, and employer to name a few. Obtaining coverage online varies by state, and has been problematic thus far. There are telephone service centers which will walk a person through the process so they may obtain health care coverage.

Obamacare may not be the most agreeable program in America at the moment, but it is here to stay for the foreseeable feature. The only thing certain about taxes is there will always be more, never less, to get used to.

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5 Tax Tips for Retirees

Retirees, and those about to retire, face some daunting tax questions and dilemmas. Depending on how much you have prepared for retirement will increase your enjoyment during retirement. Unfortunately, no two retirements are the same. Regardless if you are living on a pension, social security, investments, or a combination, below are some tips a retiree will benefit from.

1. Choose the state you live in wisely. All states have different ways of taxing retirees. For instance, California and New York are considered non-tax friendly, while Arizona and Florida are considered tax friendly. The differences include: sales tax, tax on social security, property tax, income tax, and inheritance tax. Be sure to do your research, the different tax burdens state-to-state can be in the thousands of dollars.

2. While keeping the above tip in mind, choose a state which does not tax your social security earnings. Some retirees only have their social security to live off each month. Living in a state such as Nebraska or Minnesota which tax social security, may be too much for a retiree to handle.

3. Reassess your living situation. Some individuals enjoy a large home, some look for amenities, while others value a country over city living. If you prefer a large home, know a significant portion of your retirement will go towards maintenance, care, and property tax based on square footage. The size of your home is a completely personal decision, but base it off of your needs verses your desires. Shaving a few thousand dollars off of your property tax bill can make a huge difference.

4. Take advantage of credits and deductions during your yearly federal tax filings. Leaving “money on the table,” as some may say, could greatly affect your bottom line. If you usually do your taxes yourself, consider utilizing a tax preparing service during your first full year of retirement. By doing so, you will have a baseline tax return for future years. This professional prepared filing will show you ways on how to make these deductions, which may prove useful in the future.

5. Lastly, and if you have money to spare, give it away! This may sound counter intuitive, but you will receive tax benefits from gifting or donating your retirement money.

Again, no two individuals will be in the same retirement situation. What will be good for you may not be good for your neighbor. However; one thing no individual has ever been harmed by is having a solid retirement plan.

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Why Americans Struggle to Save

It has been well documented American’s have had a difficult time in terms of saving money. Regardless if you are saving for a down payment on a home, or retirement, Americans are having an increasingly difficult time. The possibilities and reasoning behind these difficulties are numerous. Below are several reasons which continually hamper our saving aspirations.

Over The Limit
It is quite obvious some Americans simply live outside their means. Do not confuse this as an individual not making enough money. A person who lives outside of their means typically will purchase a flashy home or car. They will have the latest and greatest phone or gadget which they are always replacing with “the next big thing.” They dine out regularly and sabotage their savings frequently.

Over Estimators
Individuals, especially those saving for retirement, may overestimate their savings and pensions. If an individual is saving for retirement, they may want to speak with a financial planner who is well versed on the subject. A financial planner will help you meet your goals.

Credit Junkies
Americans have an unhealthy obsession with unsecured credit debt. It is not uncommon for individuals to have three or four credit cards in their wallet. Some of these credit cards have interest rates approaching thirty percent. If an individual is to have any hope of saving money, they will have to first get from under any credit debt they may have.

Easy Access
At no point in history have Americans had such easy access to the money in their bank accounts. With an ATM machine on every corner and a debit card in every wallet, we spend money like mad. Checks are a thing of the past. No longer do we have to endure the pain of writing out a check. Today, the swipe of a card means money in our pocket. Such easy access to cash means our savings dwindle.

Though the above reasons may not particularly pertain to you, they pertain to many Americans. Some estimate two out of three American have deep concerns in their retirement savings. The American credit debt, though down, is still close to a trillion dollars. Even our federal government has a difficult time in terms of relying on credit debt. The point is, everyone is in the same boat together. Build a spending plan and stick to it. You will be on your way to saving for that Jet Ski in no time.

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4 Tax Penalties and How to Avoid Them

It is not easy to file your own taxes. In fact, when you run a business or have more than just the standard deduction, you will run into problems if you make one or two slight errors. While this is true, most issues are largely avoidable provided you know what you are doing and what to avoid. With this in mind, here are four tax penalties and how to avoid them.

Underpayment of estimated tax
Now, when filing, some people will need to pay their taxes as they go. This is often the case for retired people or entrepreneurs who run their own companies. For this reason, it is wise to pay the right amount as the IRS will penalize a consumer severely. Of course, if you have sporadic income, you can pay in four equal amounts to avoid penalty. Either way, when paying too little in taxes, you are going to have to deal with the repercussions. For this reason, if you are in a constant battle with the IRS over this, you should consider hiring a professional who can make the estimated tax payments on your behalf. Otherwise, if this problem reoccurs, you will have to pay the penalty again.

Late filing
Believe it or not, even with all the technology available, many still file too late. When this happens, you will have to pay a penalty in many cases. Other times, if you did not make enough money or paid all your taxes through your employer, you may skirt by untouched. With that being said, it is wise to file on or before the filing deadline. Remember, while it is easy to procrastinate, it is not a wise thing to do too much as it is costly to file too late. Instead, when you receive your tax documentation, you should do a quick estimate on how much you will owe. Then, if you will receive a refund, you should file quickly and get your money. On the other hand, if you owe, you should fill out the forms and send them in the last possible day.

Home office deductions
While working from home, you can write off some home office costs. However, this is a tricky subject and it is wise to talk to a CPA who can advise you on your best course of action. At the same time, when using this deduction, you should remember to save your receipts and keep everything in perfect order. You must realize that the IRS cracks down on this, and you should keep perfect records. At the same time, if audited, you should be prepared to explain your situation and fight for your rights as an agent will listen if you provide the right information.

Math errors
If you make a huge math error, you may end up paying some more to the IRS. If you use a program or online-based filing service, you should not experience any issues. Of course, if you use a pen and paper, you should double-check your math and ensure there are no issues. Luckily, if the error is minor, you should only have to send in the extra money.

Without a doubt, people make mistakes when dealing with the tax authorities. If you can avoid these four common pitfalls, you can avoid any penalties.

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10 Tax Filing Mistakes to Avoid

We’re in the middle of tax season, and you may already have received a refund. If your process isn’t complete, avoid these common tax filing mistakes.

1. Not filing at all is illegal an can lead to fines. You’ll also lose out on tax refunds when you don’t file.

2. Filing too late can be costly. Prepare all your documents in January so you have plenty of time to file taxes before the April deadline. Collect receipts, W2s, 1099 forms and other paperwork, including rent certificates, well ahead of time. If you need an extension, apply for one to avoid fines.

3. Filing taxes yourself works fine when you have a simple return. However, complicated returns, small business owners and other situations require a professional.

4. Forgetting all the possible credits — claiming yourself, homestead credits and even tuition tax write-offs — can severely shrink your refund. This is especially important when you work from home.

5. Remember to add any donations to charity as write-offs on your taxes. Most charities will provide you with a receipt for your records, which you should make sure to file away safely until tax time.

6. However, lying on your taxes or writing off items such as that new car or television that aren’t actually deductible can lead to an audit by the IRS. You can make it easier by separating business and personal finances through separate accounts or creating an LLC.

7. Furthermore, make sure to add all of your income, even if it was in cash. Bloggers have learned the hard way to report any revenue over $25, and even items given to you in return for your work count as payment. Similarly, alimony and prize winnings must also be reported on your taxes.

8. Math errors can lead to greater fines or shrink your refund. Double-check your math. If math isn’t your strong suit, have someone else look at it. This might be the time to consider hiring a professional.

9. Double-check the spelling of your name, and ensure that your name is correct if you’ve recently changed it. New spouses often run into glitches because of a name change. Otherwise, the IRS might take longer to process your tax return.

10. Lack of or poor organization when it comes to taxes can be costly because you may have to file late or retrieve copies of paperwork before you can file.

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How to Do Your Taxes if You’re Paying Tuition

For those parents who feel that children are a blessing, here is yet another reason to see them as so. Parents who pay their child’s college tuition will be happy to know that thanks to Uncle Sam, they can receive education credits and tax deductions on tuition and fees, room and board, books, supplies, student loan interest payments, qualified student loan payments, and more, for a qualifying child enrolled in college.

Who Qualifies?

Students who are:

  • Full time students
  • Under 24 years of age
  • Provides less than half of his or her own support
  • Filing as single or married filing separately

  • Adults who are:

  • Paying yourself through school
  • Spouse paying for your partner’s grad school

  • Student Loan Interest Deduction

    Up to $2,500 of your student loan interest can be deducted on your taxes as long as: (1) the individual’s adjusted gross income isn’t more than $75,000 for a single person and no more than $150,000 if they are married, (2) their filing status is not “married filing separately, and (3) they can’t be claimed as a dependent on their parents taxes.

    Lifetime Learning Credit

    Parents may be eligible to claim up to $2,000 of the lifetime learning credit for qualified students enrolled in an eligible institution as long as; (1) they pay qualified education expenses for higher education, (2) the eligible student is yourself, your spouse, or a dependent the parent claims an exemption for on their taxes, and (3) parents pay education expenses for an eligible student.

    American Opportunity Credit

    If parents pay eligible college expenses for themselves or a qualified student, and they are single with an AGI less than $80,000, less than $160,000 for married couples, they may be eligible for a maximum annual credit of up to $2,500 per student.

    How to File

    Even if the parent or the parent’s child/children meet the requirements for both the Lifetime Learning Credit and the American Opportunity Credit, they can only receive one of them for each student in the same year. Parents can, however, spread the credits amongst qualifying students and alternate between them each year. According to the IRS, when doing your taxes, individuals should compare the tuition fee deductions they or their children qualify for to see which gives the biggest break then claim that credit on their tax return.

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