It is important to make your tax appointment early even if you won’t be able to file until February 14th because it allows your tax preparer time to research the new tax law with regards to your individual situation.
Create a checklist of things to take for your appointment such as W-2s, 1099s, 1098s, and records for taxes paid or estimates made.
We are serving clients from all across the country.
Call today. 623-466-0016.
One of the first important decisions that business owners make is “choice of entity”. Seeking advice from a qualified professional can be a real eye opener.
Many times your decision making process is better served by the advice of multiple professionals. Your attorney and CPA can assist you in making these important choices based upon the facts of your individual case.
Do you want to start out as a sole proprietor? Or are you a candidate for the LLC form? Is the S-Corp status still a viable alternative and if so, why? Who should be a C-Corp?
These and other questions regarding filing requirements, limits of liability and other key company issues can be addressed during your consultation.
We are here to serve you and your business.
Let’s get together today to discuss your choices from the options available.
I’d like to say a quick word about evaluating the tax consequences of key life events. This message is intended for those who are making decisions in the following areas:
1. Should I get married? If I get married, how will that effect my taxes?
2. Should I buy a home?
3. Should we have a child?
4. Should I start my own business?
5. Should I buy a rental property?
6. Should I retire?
You may ask any or all of these questions at some point in your life. I urge you to ask a tax professional before making these decisions. It could be yes but when? Timing is everything in taxation. For some people the answer is the sooner the better. For others I advise, let’s work on your situation a little longer before you make this life changing decision.
When we evaluate the tax consequences, we start with the taxpayer’s details such as age, income, dependents, and filing status. We evaluate the income mix for passive and active sources. We close the gap between sources and uses. We address the long term consequences of the decision, not just a one year window.
Any fork in the road deserves an informed decision. What direction will this choice take you? Are you willing to look before you leap? A second set of eyes looking at your situation objectively can shed new light on the key issues.
In order to learn all there is to learn about money, it begins with earning our first paycheck. Normally, the time between when we begin working and we receive our first paycheck for some reason seems a bit longer than expected at first. But when that first check comes, then we have the challenge of making it last to the next paycheck. This method of money management is called the “paycheck to paycheck” method. The only way out of this method is to set a side a portion of each check for future emergencies and not to go into debt unless it makes or saves you money.
If you are ready for the “Money Course”, then let’s begin.
One tenth of that first check is to be given in tithe to your church.
5% should be put into long term savings.
25 % is to be used for housing.
45% goes to Uncle Sam and the state coffers. (This percentage will be increasing with the new government spending.)
That leaves only 15% for living expenses.
There are several factors that can complicate multi-state returns.
1. The move involves more than 2 states.
2. There was no move, just a change in work location to one or more states outside of your home state.
3. Working in one state while living in another.
4. Spouse who works and lives in another state.
5. Spouse who has never even been in the state you live and work in.
These and other issues can complicate the preparation of your state return. Each scenerio is unique and should be analyzed for pertinent details of when and where you worked. Weeks of unemployment can also add to the complexity. Create a spreadsheet that allocates your work by time and state. Keep a calendar of jobs in multiple locations so you can use it at the end of the year for your worksheet. Be consistent in your method of allocation.
Sometimes, the company allocates the work for you and gives you w-2s that indicate how much was earned in each state. That is the easiest method. But sometimes you work for more than one company.
The important thing to remember is you shouldn’t have to pay twice for the same income and if you do then there is normally a credit for taxes paid to other states on your return that you should claim against the duplicate income.
This year more than any other year in the recent past people are clamouring to get their tax refunds back and the sooner the better. Most of the people I talk to are planning on spending their refunds on gadgets, electronic mostly.
I guess it is just like every other year except more and more of the people are under-employed or worse yet unemployed. This is the worst I’ve ever seen it in my lifetime. So where do we go from here? What advice or comfort can I offer to those who don’t know where they’ll be living in a month?
I’d like to think that the advice I’ve given all my life is still the same. Pay down your debt. Take odd jobs because they may lead to something bigger and better. Don’t give up. Don’t waste the time off you’ve been given but use it to help others. Volunteer. That too may lead to a job. Network everywhere you go, tell the banker, the store clerk, the pastor, your neighbors and friends. Remind them what you do and that you are still looking for work.
Start your own business if you have a good product or service. I will help you set it up and keep your books. Use your tax refund to get it going.
Invest time in your family and friends. Relationships are priceless. Value the things in life that are important.
NOL is an acronym for Net Operating Loss. An NOL is the excess of allowable deductions over gross income, computed under the law in effect for the loss year, with required adjustments for other years’ NOL carryovers or carrybacks, exemptions, and nonbusiness deductions. This means you can either carry it back or make an election to carry it forward by the due date of the return. Nonbusiness capital losses are only allowed up to nonbusiness capital gains.
Use form 1045 to carryback your NOL.
This is the time of year that I get questions about what is deductible.
| Should I Itemize? | Topic 501 |
| Medical and Dental Expenses | Topic 502 |
| Deductible Taxes | Topic 503 |
| Home Mortgage Points | Topic 504 |
| Interest Expense | Topic 505 |
| Contributions | Topic 506 |
| Casualty and Theft Losses | Topic 507 |
| Miscellaneous Expenses | Topic 508 |
| Business Use of Home | Topic 509 |
| Business Use of Car | Topic 510 |
| Business Travel Expenses | Topic 511 |
| Business Entertainment Expenses | Topic 512 |
| Educational Expenses | Topic 513 |
| Employee Business Expenses | Topic 514 |
| Casualty, Disaster, and Theft Losses | Topic 515 |
One of the best ways to find deductions is to make an appointment with a tax professional. A tax practitioner enrolled to practice before the Internal Revenue Service (IRS) is referred to as an Enrolled Agent (EA). Enrolled Agents and Certified Public Accountants (CPAs) have had to take extensive training and have had to under go strenuous testing to obtain their certifications. These professionals must complete up to 40-hours per year of continuing professional education just to maintain their licenses—many do more.
A good number of these professionals have the latest and most sophisticated tax preparation software, as well as, tax-research software tools and publications. The combination of professional level software, experience and training help to insure that you find the deductions you are entitled to. No single software application designed for home use can equal the power of an EA or CPA equipped with professional tax preparation software. The tax professional knows the right questions to ask and has the tools to find the answers.
If you consider the current tax situation complex and confusing keep in mind that the IRS has thousands of pages of tax code, and are even now busy adding more regulations. Most of the new regulations are distributed by the IRS to tax professionals in the form of a bulletin. Professional tax publications and journals publish information about how the new and existing rules should be applied in example situations and if there have been court rulings, those too are often published. Throughout the year many tax professionals are busy studying and preparing. They are trained to research tax questions quickly. No one person knows everything, but understanding tax law and having professional level tax research tools give a decided advantage in ensuring that you pay the minimum tax required by law.
When consulting on a per client basis, I find that many people face difficulty in the area of filing tools and skills. They spend a lot of time looking for important paperwork. I use a binder system with tabs that allows you to have all of your important papers in one place, supplemented by pdf back-up. The tabs include: Personal Financial, Recommendations, Auto, Business, Credit, Important, Insurance, Liabilities, Passwords, Real Estate, Retirement, Stocks,Wills, and Personal Property.
This book makes it easy to administer an estate.
