tax preparation http://www.wisebread.com/taxonomy/term/7875/all en-US Tax Document Checklist: What to Gather Before Doing Your Taxes http://www.wisebread.com/tax-document-checklist-what-to-gather-before-doing-your-taxes <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/tax-document-checklist-what-to-gather-before-doing-your-taxes" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/4095687741_44c827e819_z.jpg" alt="documents" title="documents" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>It&rsquo;s that time of year again, and you may start feeling overwhelmed when you think about getting your paperwork together and calculating your income tax payment or refund. Tax season can cause anxiety for even the most relaxed people! Steady your nerves with this checklist to help you prepare for filing your taxes and go into everybody's least favorite season with an organized plan of attack. (See also:&nbsp;<a href="http://www.wisebread.com/15-surprising-facts-about-income-tax">15 Surprising Facts About Income Tax</a>)</p> <h2>Gather Personal Information</h2> <p>You need several documents to get started.</p> <ul> <li>Social Security number</li> <li>Spouse's and/or dependents' Social Security numbers</li> <li>Last year&rsquo;s tax return</li> </ul> <h2>Gather Financial Information</h2> <p>As you get ready to file your income taxes, take some time to locate the following documents. If you&rsquo;re like me, they&rsquo;re not already in an organized filing cabinet where they really should be!</p> <ul> <li>Employment W-2s</li> <li>Income statements for self-employment or business, including MISC-1099s and Schedule K-1s</li> <li>Information for any taxes you have paid during the tax year (estimated tax payments, property tax, sales tax)</li> <li>Mortgage interest statement if you own a house</li> <li>College tuition statements, student loan interest, education expenses (if you are a college student)</li> <li>Retirement account contributions or distribution documents</li> <li>Charitable donations made throughout the year</li> <li>Medical expense statements and receipts, <a href="http://www.wisebread.com/10-ideas-for-using-your-fsa-before-year-end">medical savings account</a> contributions</li> <li>Job search expenses or moving related expenses</li> <li>1099-C forms, if you cancelled any debt during the year</li> <li>Investment forms for dividends or interest income earned</li> <li>Record of alimony received</li> <li>Health insurance payments (if self-employed)</li> <li>Energy efficient home improvement records and receipts</li> <li>Child care records, if you have children and pay for daycare or babysitters so you can work</li> </ul> <h2>Gather Home Business Information</h2> <p>If you run a business out of your home, you&rsquo;re going to need additional information to complete your taxes.</p> <ul> <li>Records for income</li> <li>Office and supply expenses</li> <li>Utility expenses</li> <li>Total square footage of your home</li> <li>Square footage of your office space or supply storage (so you can deduct a percentage of your utility bill, rent or mortgage, etc.)</li> <li>Car mileage or expense records if you use your vehicle for business</li> </ul> <h2>File Your Taxes</h2> <p>Once you have all of the necessary documents in an organized pile, you will find it much easier to file your taxes, whether you do them by hand or use tax preparation software to help. Even if you enlist the service of a <a href="http://www.wisebread.com/3-reasons-to-hire-a-tax-professional-even-if-you-dont-mind-the-work">professional tax preparer</a>, having everything you need in hand, before you schedule your appointment, will make the entire process easier &mdash; and a lot less stressful.</p> <p><em>What do you do to make your tax filing go as smoothly as possible?</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/debbie-dragon">Debbie Dragon</a> of <a href="http://www.wisebread.com/tax-document-checklist-what-to-gather-before-doing-your-taxes">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-3"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/five-easy-steps-to-keeping-track-of-expenses-for-the-self-employed">Five Easy Steps to Keeping Track of Expenses for the Self-Employed</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/to-shred-or-not-to-shred-how-long-to-keep-your-tax-records">To Shred or Not to Shred: How Long to Keep Your Tax Records</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-to-hire-a-tax-professional-even-if-you-dont-mind-the-work">3 Reasons to Hire a Tax Professional (Even If You Don&#039;t Mind the Work)</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-you-should-fire-your-accountant">When You Should Fire Your Accountant</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/budgeting-for-people-who-hate-planning">Budgeting for People Who Hate Planning</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Organization Taxes checklist financial organization tax preparation Mon, 18 Feb 2013 11:25:50 +0000 Debbie Dragon 967771 at http://www.wisebread.com When You Should Fire Your Accountant http://www.wisebread.com/when-you-should-fire-your-accountant <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/when-you-should-fire-your-accountant" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/539061478_8fc426ca8e_z.jpg" alt="arguing" title="arguing" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Having an accountant can help you keep track of finances, reduce your tax burden, and make more efficient use of your money. If you own a small business, it&rsquo;s especially important to <a href="http://www.backtaxeshelp.com/tax-blog/tax-help/small-business-accounting-services-what-cpas-do-what-to-expect.html">hire an accountant</a>, but even individuals can benefit from their services. Those advantages, however, only happen when you have a professional accountant who can do the job well. If you have had some doubts about your accountant's abilities, then you should know when it makes sense to fire your accountant and find someone else. Here are some reasons to consider firing your accountant. (See also: <a href="http://www.wisebread.com/small-business/3-things-your-accountant-may-not-be-telling-you">3 Things Your Accountant May Not Be Telling You</a>)</p> <h2>Dishonesty and Over-Billing</h2> <p>Your accountant's job isn't to scam you out of money or find ways to make your bill larger. Dishonest accountants can cost you thousands of dollars in fees every year.</p> <p>Typically you can gauge an accountant's honesty by asking him to teach you some basic accounting and bookkeeping skills that you can do on your own. Your accountant shouldn't have any problems teaching you these simple methods to help you save money. If he's unwilling, and you think it's because he wants to earn more money by performing menial tasks, then you should consider letting him go.</p> <h2>Poor Communication</h2> <p>Few people will ever know as much about your life, especially your financial life, as your accountant. Without such intimate knowledge, your accountant couldn't make educated recommendations that will help you do more with your money. &nbsp;</p> <p>Good communication based on trust, therefore, is incredibly important. If you feel uncomfortable talking to your accountant or you just don't like his communication style, then you should feel free to move on to another professional. You shouldn't expect an accountant to become your new best friend, but you should expect him to provide good information in a manner that you can understand.</p> <h2>Vague Advice</h2> <p>Your accountant needs to give you specific advice that will help you save money. Vague advice like &quot;you need to save more money for retirement&quot; doesn't get the job done. You need specifics.</p> <p>A reliable accountant should be able to give you advice that considers the advantages and disadvantages of:</p> <ul type="disc"> <li>Buying or leasing equipment for your business</li> <li>Saving money in IRA, <a href="http://www.wisebread.com/4-reasons-why-a-roth-ira-may-be-better-than-your-401k">Roth IRA</a>, and other specific <a href="http://financialmentor.com/calculator/retirement-calculator">retirement accounts</a></li> <li>Reducing your tax burden by finding more deductions</li> <li>Choosing accounting software for your business</li> </ul> <h2>Outdated Advice</h2> <p>Tax laws, <a href="http://www.irs.gov/Filing">tax filing</a>, and business regulations change all the time. Accountants have to keep up with those changes to offer their clients quality advice. Unfortunately, not all accountants are good at learning the evolving tax code and regulations.</p> <p>If you suspect that your accountant is giving you outdated advice, then you might want to make an appointment with another CPA to see what suggestions she gives you. If you find that her advice is much better and up-to-date than the advice provided by your current accountant, then it's time to move on. Getting outdated advice not only costs you money, it could get you in trouble with the IRS and regulatory agencies.</p> <p>The vast majority of accountants do their work very well. Occasionally, though, you will find one that doesn't meet your needs. When this happens, you should know the warning signs so you can fire him and move on to <a href="http://www.wisebread.com/how-to-find-the-right-accountant-for-you">someone with better skills</a>.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/debbie-dragon">Debbie Dragon</a> of <a href="http://www.wisebread.com/when-you-should-fire-your-accountant">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-5"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-reasons-to-hire-a-tax-professional-even-if-you-dont-mind-the-work">3 Reasons to Hire a Tax Professional (Even If You Don&#039;t Mind the Work)</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tax-document-checklist-what-to-gather-before-doing-your-taxes">Tax Document Checklist: What to Gather Before Doing Your Taxes</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-signs-you-probably-need-an-accountant">5 Signs You Probably Need an Accountant</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/five-easy-steps-to-keeping-track-of-expenses-for-the-self-employed">Five Easy Steps to Keeping Track of Expenses for the Self-Employed</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-hire-an-accountant">How to Hire an Accountant</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes accountants hiring professionals tax preparation Thu, 08 Nov 2012 10:36:51 +0000 Debbie Dragon 955161 at http://www.wisebread.com 10 Cheap, Tasty Wines to Get You Through Tax Season http://www.wisebread.com/10-cheap-tasty-wines-to-get-you-through-tax-season <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/10-cheap-tasty-wines-to-get-you-through-tax-season" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/6189663458_60586ede9b_z.jpg" alt="couple raising glass of wine" title="couple raising glass of wine" class="imagecache imagecache-250w" width="250" height="167" /></a> </div> </div> </div> <p>Pen and ink. Siegfried and Roy. Taxes and wine. None of these things can exist without the other.</p> <p>Yes, folks, it&rsquo;s that time of year again &mdash; time to crunch those numbers and throw back a few glasses of your favorite vintage.</p> <p>Even if you don&rsquo;t do your own taxes &mdash; I leave my financial fate in the hands of a capable accountant &mdash; odds are you&rsquo;ll want something to take the edge off&hellip;especially when you discover the damage.</p> <p>That&rsquo;s why I&rsquo;ve chosen 10 wines &mdash; all under $10 &mdash; that are guaranteed make this tax season an easier pill to swallow. (See also: <a href="http://www.wisebread.com/10-great-wines-under-10-dollars">10 Great Wines for Under $10</a>)</p> <h3>1. Lucky Duck Chardonnay</h3> <p>I choose my wine like I choose my elected officials &mdash; by how much I like the name and the pleasantness of overall appearance. Granted, that&rsquo;s probably why I have a hangover and high taxes, but I digress. Lucky Duck wines have a sort of modern design aesthetic (a marketing gimmick targeting young adults; it worked on me), and the Chardonnay, in particular, is decent. With notes of green apple, grapes, and pear, this buttery, somewhat acidic wine from Southeastern Australia retails for about $4 (I&rsquo;ve seen it as low as $2.97) at Walmart stores (and it's available online too). Cheers!</p> <h3>2. Frontera Cabernet-Merlot</h3> <p>Produced in Central Valley, Chile, this Cabernet Sauvignon (85%)/Merlot (15%) blend is fruity with aromas of chocolate, black plums, and vanilla &mdash; perfect for those late nights punching digits into the calculator. A medium body gives way to black cherry flavors, soft tannins, and a pleasing finish. Because this is a hybrid wine, you get the best of both worlds &mdash; the character and complexity of a Cab mixed with the elegance of a Merlot. A standard bottle is available for about $5.</p> <h3>3. Cameron Hughes Wine Lot 221 2009 Lodi Zinfandel</h3> <p>This <a href="http://store.chwine.com/lot-221-2009-lodi-zinfandel-p618.aspx">Zinfandel from Cameron Hughes</a> is a bit pricier than the other vintages on this list at $9.90, but that&rsquo;s still a steal for a 2011 L.A. International Wine Competition gold medal winner. Notes of ripe raspberries and currants invite subtle hints of clove, and cinnamon with a background of sage to make for a wine with a velvety texture that leads to a long structured finish. The deep magenta color signifies dark berries that give the wine some bite and a beautiful density indicative of the quality vineyard from which it was sourced.</p> <h3>4. Twin Vines Vinho Verde 2010</h3> <p>When you drink this white wine, it&rsquo;s as if spring comes to life in your mouth. Slightly spritzy (who doesn&rsquo;t like a little fizz), the aromatics of the <a href="http://www.ultimatewineshop.com/items/detail?itemid=427228">Twin Vines Vinho Verde 2010</a> include wisps of lemon, melon, and green apple that seem to dance around on your palate. This vintage from Portugal is an excellent pairing for those light meals on warm days, like <a href="http://www.wisebread.com/5-best-money-saving-healthy-homemade-salad-dressings">salads</a>, chicken, seafood, and spicy dishes. It&rsquo;s also not bad to celebrate that refund you were hoping for. Sells for around $6.</p> <h3>5. Columbia Crest Two Vines Cabernet Sauvignon 2009</h3> <p>This wine immediately piqued my interest because of the winemaker&rsquo;s notes &mdash; &ldquo;Strawberry, cherry, and cola aromas and flavors harmoniously flow into the silky and soft palate that culminates into a long velvety finish.&rdquo; He had me at cherry cola. This blend of 80% Cabernet Sauvignon, 18% Syrah, and 2% Merlot from Columbia Valley, Washington, boasts a black-plum fruitiness and a rich chocolaty finish. And you can enjoy it for only <a href="http://www.wine.com/v6/wineshop/Detail.aspx?product_id=111056&amp;state=NY">$8.99 from Wine.com</a>.</p> <h3>6. Jaume Serra Cristalino Brut Cava</h3> <p>After you&rsquo;ve sent your annual earnings report to Uncle Sam, relax with this refreshing dry sparkling white wine from Spain. Ripe with citrus and apple flavors, the <a href="http://www.wine.com/V6/Jaume-Serra-Cristalino-Brut-Cava/wine/6619/detail.aspx">Cristalino Brut Cava</a> is pale and creamy with a robust straw color. If you like bubbly with a tight clean finish, this non-vintage is your best buy at $7.99.</p> <h3>7. Arido Moscato 2011</h3> <p>Set sail for Argentina with this Moscatel that hails from the Mendoza region. Yellowish in color, green aromas of bright apple and pear mingle with roses. Although this white is on the sweeter side, the fruit notes are well balanced by the wine&rsquo;s soft acidity. The Arido Moscato 2011 is fairly available across the United States thanks to the San Francisco Wine Exchange. You can grab a bottle for $9.99.</p> <h3>8. Evodia Old Vine Grenache 2010</h3> <p>Sourced from Garnacha grapes in the Denominacion de Origen Calatayud, one of Spain&rsquo;s most promising wine-growing regions, Evoida is the product of a new project. Along with notes of mocha, black cherry, and black raspberry, you&rsquo;ll taste the earthy minerality resulting from grapes grown in pure schiste soils at a high elevation. Available for $9.29, the <a href="http://www.wine.com/V6/Evodia-Old-Vine-Grenache-2010/wine/111394/detail.aspx">Evodia Old Vine Grenache 2010</a> received 90 points out of a possible 100 (that's an A, y&rsquo;all) from Wine Enthusiast magazine.</p> <h3>9. Arca Nova Vinho Verde 2010</h3> <p>The nose of this wine is medium to light in intensity with notes of youthful floral, citrus fruits, and freshly cut grass. Its light-bodied, dry, medium-high acidity taste features hints of lemon and green apple with a short-medium finish. With its slight fizz on the tongue, this wine pairs well with seafood and grilled veggies. You can pick it up for $9 at <a href="http://www.bottlerocketwine.com/shop/">Bottletrocket Wine &amp; Spirit</a>.&nbsp;</p> <h3>10. Bodegas Riojanas Rioja Canchales 2010</h3> <p>Another $9 bottle from Bottlerocket Wine &amp; Spirit, this young, fresh vintage is red, dry, and light-bodied. Berries abound in the nose and mouth; first the scent of strawberries and cherries followed by red fruits and plums that peak in a medium finish. Considering sharing a few glasses over garlic <a href="http://www.wisebread.com/10-things-to-do-with-chicken-leg-quarters">chicken</a> or grilled pork cutlets to say <em>salud</em> and <em>sayonara</em> to another year of paid taxes.</p> <p><em>Disclosure: I received free wine samples for review; it&rsquo;s a dirty job but somebody had to do it.</em></p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/mikey-rox">Mikey Rox</a> of <a href="http://www.wisebread.com/10-cheap-tasty-wines-to-get-you-through-tax-season">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-2"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/15-ways-to-save-money-when-getting-your-drink-on">15 Ways to Save Money When Getting Your Drink On</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-booze-teaches-us-about-money">What Booze Teaches Us About Money</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/how-to-make-your-own-soda">How to Make Your Own Soda</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/six-cool-bar-tricks-that-anyone-can-master">SIX cool bar tricks that anyone can master.</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-kicky-drinks-without-the-caffeine">10 Kicky Drinks Without the Caffeine</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Food and Drink affordable wines drinks tax preparation Fri, 06 Apr 2012 10:24:08 +0000 Mikey Rox 915131 at http://www.wisebread.com 3 Reasons to Hire a Tax Professional (Even If You Don't Mind the Work) http://www.wisebread.com/3-reasons-to-hire-a-tax-professional-even-if-you-dont-mind-the-work <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/3-reasons-to-hire-a-tax-professional-even-if-you-dont-mind-the-work" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/business_women.jpg" alt="Two business women" title="Two business women" class="imagecache imagecache-250w" width="250" height="150" /></a> </div> </div> </div> <p>The final stretch of tax season is here, and the question of whether you should hire a tax professional is becoming an increasingly stressful matter for those who still haven't touched their tax returns. There are certainly many reasons to pursue the DIY route, especially for people who qualify for free tax filing. But on the flip side, a tax professional may be able to help you more than you think. Here are a few reasons why you should hire a tax professional this year. (See also: <a href="http://www.wisebread.com/how-to-find-the-right-accountant-for-you">How to&nbsp;Find the Right Accountant for You</a>)</p> <h3>You Can Focus on&nbsp;Saving More Money</h3> <p>Many people are surprised by the amount of time it takes to work with a certified public accountant (CPA), because it may seem like it requires even more time to work with someone than to file everything yourself.</p> <p>In reality, though, most clients are getting more value out of the extra time they spend with a third party. When you are spending time filing your own taxes, most of the time is spent on paperwork and administration like gathering documents, adding up numbers, and figuring out which forms to fill out. You might also be spending quite a bit of time researching tax rules that may or may not apply to your case. When you work with a CPA, your time is usually spent making sure she is thinking about every deduction that applies to your situation.</p> <p>It's difficult to promise that your tax return will take advantage of every legal deduction that applies to you even if you work with the most diligent pro, but you will likely find more deductions than if you were just filing your own 1040.</p> <h3>You Can Get Advice If You Are Audited</h3> <p>I always recommend working with a tax professional who is willing to represent you in case of a tax audit, because that also implies that she will stand by the work that is being performed. But even if you are told you will be on your own if you get audited, your accountant will almost certainly give you advice if the day comes. After all, she was the person who did your tax return in the first place and will need to make sure you understand the reasons behind all those numbers.</p> <h3>You Have Another Point of Contact for Your Financial Needs</h3> <p>As you work your way up the career ladder, you will eventually have assets to manage. When that day comes, you'll want to talk to as many people as you can about how best to manage those assets. Since many accountants work with small business owners, they may know good estate planners, responsible financial advisers, and even private <a href="http://www.wisebread.com/how-to-find-free-or-cheap-health-resources">health insurance providers</a>. Take the advice with a grain of salt, because it's up to you to figure out whether the referral is worth the cost, but having the additional option for advice is always good.</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/david-ning">David Ning</a> of <a href="http://www.wisebread.com/3-reasons-to-hire-a-tax-professional-even-if-you-dont-mind-the-work">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/when-you-should-fire-your-accountant">When You Should Fire Your Accountant</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/five-easy-steps-to-keeping-track-of-expenses-for-the-self-employed">Five Easy Steps to Keeping Track of Expenses for the Self-Employed</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tax-document-checklist-what-to-gather-before-doing-your-taxes">Tax Document Checklist: What to Gather Before Doing Your Taxes</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/5-signs-you-probably-need-an-accountant">5 Signs You Probably Need an Accountant</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/get-your-money-sooner-by-starting-2016-tax-prep-now">Get Your Money Sooner by Starting 2016 Tax Prep Now</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Taxes accountants financial advice tax preparation Tue, 20 Mar 2012 09:36:56 +0000 David Ning 911744 at http://www.wisebread.com Writing Off Losses on Your Taxes http://www.wisebread.com/small-business/writing-off-losses-on-your-taxes <div class="field field-type-link field-field-url"> <div class="field-label">Link:&nbsp;</div> <div class="field-items"> <div class="field-item odd"> <a href="http://www.openforum.com/idea-hub/topics/money/article/writing-off-losses-on-your-taxes-thursday-bram" target="_blank">http://www.openforum.com/idea-hub/topics/money/article/writing-off-losses-on-you...</a> </div> </div> </div> <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/small-business/writing-off-losses-on-your-taxes" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/iStock_000008620884Small.jpg" alt="Man with business losses" title="Man with business losses" class="imagecache imagecache-250w" width="250" height="166" /></a> </div> </div> </div> <p>When you sit down with your accountant to do the taxes for your business, it's important to keep in mind that you can deduct your company's losses on your taxes &mdash; provided that you meet certain requirements.</p> <p><strong>Writing Off Business Losses</strong></p> <p>In order to ease the impact of losses on a growing business, the IRS offers business owners the chance to write off a net operating loss &mdash; a loss where your expenses for the year are more than your income &mdash; as well as unpaid invoices. The IRS's <a href="http://www.irs.gov/instructions/i1045/ar03.html">Form 1045</a> is used to calculate what portion of your business losses can be written off on your taxes. Depending on the situation, you can choose to carry back your net operating loss over the past two years or carry it over into future years in order to be able to reduce your future taxes with past losses.&nbsp;</p> <p>What you can write off is limited by several rules. The IRS does not allow you to deduct the following when calculating a net operating loss:</p> <ul> <li>Any deduction for personal exemptions</li> <li>Capital losses in excess of capital gains</li> <li>The section 1202 exclusion of 50% of the gain from the sale or exchange of qualified small business stock</li> <li>Nonbusiness deductions in excess of nonbusiness income</li> <li>Net operating loss deduction</li> <li>The domestic production activities deduction</li> </ul> <p>Essentially, these limitations can cap the total losses you can write off on your taxes. Form 1045 walks you through the process of calculating the true amount of your net-operating losses that you can write off.</p> <p><strong>Writing Off Unpaid Invoices</strong></p> <p>If you find yourself in a positon where a client hasn't paid an invoice, you may be able to write it off on your taxes so that you don't get hit quite so hard by a client disappearing. However, you do have to use the accrual method of accounting in order to be eligible to deduct those unpaid invoices on your taxes. That means that the total for those invoices were already included in the gross income you reported to the IRS anyway, so it can be a little less beneficial to your tax situation as other losses you may be able to write off. If you use the cash method of accounting rather than the accrual method, you won't have reported those unpaid invoices as income and therefore won't be able to write them off. The IRS maintains <a href="http://www.irs.gov/publications/p535/ch10.html">Publication 535</a> to explain writing off bad debts.</p> <p><strong>Looking Beyond Your Business for Tax Decisions</strong></p> <p>When calculating a tax return, Martin James,&nbsp;<a href="http://www.mjamescpa.com/">CPA</a> looks at more than just the business's taxes. Family and retirement planning can be big considerations when it comes to deciding just what approach will be the best for an individual small business:</p> <blockquote><p> As a CPA for many small business clients, when it comes to losses and how we handle them, a client's business entity and family dynamics determine how we handle the losses. Many times, especially if it is a sole proprietor or partnership, we will attempt to preserve some deductions such as depreciation for future years due to the potential savings in self-employment taxes. The ideal situation would to be able to zero out the income through depreciation elections and save deductions that can be used against self-employment income in the future. The downside to that planning is that the small business owner is paying less into Social Security. However, if refundable credits are coming in to play, then we attempt to maximize those refundable credits if it makes sense. Additionally, business losses can provide an opportunity to do a Roth conversion or make Roth contributions. A little planning before the tax return is completed goes a long way. Our experience is that small business owners rely on professional advice to make the most lemonade out of the lemons. </p></blockquote> <p><strong>Get Expert Help with Your Taxes</strong></p> <p>Claiming losses on your taxes can be a tricky proposition, making it especially important to bring in a pro early in the process to help you make sure that you're handling every step correctly. It's important to work with a tax professional on any business matters, but it's doubly important when it comes to deducting losses.</p> <p>Eva Rosenberg of <a href="http://taxmama.com/">TaxMama</a>&nbsp;has had clients who thought that claiming losses would be a lot easier than it actually is.</p> <blockquote><p> One of the saddest stories about small business losses is the fellow who came into my office sometime in early March, with a nice, neat set of QuickBooks financial reports &mdash; Balance Sheet (BS) and Profit and Loss Statement (P&amp;L) &mdash; proudly showing me his $20,000 loss in the first year. He was confident that he'd done a good job with his books &mdash; and that he didn't owe a dime in taxes, other than the annual minimum S Corporation tax...I really, really hated to burst his bubble. Once I moved his asset purchases (leasehold improvements, store fixtures, etc.) off the P&amp;L, made a journal entry to record the value of his year-end inventory, and corrected a few other little things &mdash; instead of a $20,000 loss, he had a profit of $100,000! Naturally, not being prepared for it, he had not paid any estimated taxes &mdash; either corporate or personal &mdash; and was hit with a very, very large tax bill (on the corporate level, as well as personally for IRS and state). Not all losses are as they appear to be. </p></blockquote> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/thursday-bram">Thursday Bram</a> of <a href="http://www.wisebread.com/small-business/writing-off-losses-on-your-taxes">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/top-10-real-estate-tax-write-offs">Top 10 Real Estate Tax Write-Offs</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/five-easy-steps-to-keeping-track-of-expenses-for-the-self-employed">Five Easy Steps to Keeping Track of Expenses for the Self-Employed</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tax-document-checklist-what-to-gather-before-doing-your-taxes">Tax Document Checklist: What to Gather Before Doing Your Taxes</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/250-tips-for-small-business-owners">250+ Tips for Small Business Owners</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-cheap-tasty-wines-to-get-you-through-tax-season">10 Cheap, Tasty Wines to Get You Through Tax Season</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Small Business Resource Center small business taxes tax preparation tax write-offs Thu, 03 Feb 2011 21:14:37 +0000 Thursday Bram 483868 at http://www.wisebread.com Five Easy Steps to Keeping Track of Expenses for the Self-Employed http://www.wisebread.com/five-easy-steps-to-keeping-track-of-expenses-for-the-self-employed <div class="field field-type-filefield field-field-blog-image"> <div class="field-items"> <div class="field-item odd"> <a href="/five-easy-steps-to-keeping-track-of-expenses-for-the-self-employed" class="imagecache imagecache-250w imagecache-linked imagecache-250w_linked"><img src="http://wisebread.killeracesmedia.netdna-cdn.com/files/fruganomics/imagecache/250w/blog-images/receipts.JPG" alt="receipts envelope" title="receipts management" class="imagecache imagecache-250w" width="250" height="188" /></a> </div> </div> </div> <p>&nbsp;</p> <p class="MsoPlainText"><span>I have had as many as five separate businesses at once to keep track of, including proper accounting of expenses for tax purposes. And it takes me no more than 5 minutes per week to do. </span></p> <p class="MsoPlainText"><span>A big hassle for most people I know who are self-employed or in contract positions (especially in creative fields) is the boring necessity to track expenses and receipts for tax purposes. </span></p> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText"><span>There are a few methods I've seen employed that leave a little to be desired:</span></p> <p class="MsoPlainText">&nbsp;</p> <p class="MsoPlainText"><span><strong>The Shoebox Approach.</strong> </span></p> <p class="MsoPlainText"><span>This usually entails a nightly or weekly emptying of the wallet or pockets into a shoebox labelled &quot;taxes&quot;. At the end of the year, one of two things happens: The culprit dedicates long days upon days to &quot;file their taxes&quot;. Really this process is less about the <a href="http://www.wisebread.com/taxes/tax-preparation " title="Wise Bread's Guide to Tax Preparation ">tax preparation</a> itself and more about sifting through piles of receipts, tallying up everything with calculators, and hoping that everything adds up. </span></p> <p class="MsoPlainText"><span>The other option for the shoebox guru is to simply take the unkempt pile of receipts into their accountant or bookkeeper and get them to sort through everything. </span></p> <p class="MsoPlainText"><span> <br /> I see two problems with this strategy: </span></p> <p class="MsoPlainText"><span>1: The daunting task of taking time off to sift through receipts and prepare taxes makes it one of the dullest and soul-sucking chores around. So consequently throughout the year there is less motivation to save the right receipts since it will just have to be tallied at the end of the year and less receipts to tally means less of a pain in the you-know-what to contend with. It also means less tax dollars saved. </span></p> <p class="MsoPlainText"><span>2: For those that go with the bookkeeper option, you are spending more money paying somebody else to do something that could easily be maintained yourself. For the frugal business owners in us, it's not always a wise expenditure. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span><strong>The Day-timer Approach.</strong> </span></p> <p class="MsoPlainText"><span>You know those expense logs that often come with the reference pages for most day-timers and schedules? Well, I haven't actually seen anybody use them successfully, but they keep coming out every year so I have to assume that somebody uses those pages and likes them. </span></p> <p class="MsoPlainText"><span>My beef with that approach is that there is no proper filing of the receipts which are needed for the actual <a href="http://www.wisebread.com/taxes/tax-preparation " title="Wise Bread's Guide to Tax Preparation ">tax preparation</a> (which relegates even the Day-timer User to the Shoebox Approach in a manner), and when it comes down to tax time even the expense logs need to be re-categorized and<span> </span>shuffled by hand according to the types of expenses incurred. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span>Here's what I personally do with my receipts, and it seems to work out quite well for me and is not time consuming at all: </span></p> <p><span><strong>1: </strong>Whenever I incur an expense, I usually <strong>stuff the receipt in my wallet</strong> until I get home, or until there are enough receipts in my wallet that it occurs to me to take them out. (This usually happens about once a week). </span></p> <p class="MsoPlainText"><span><strong>2: </strong>Once I've pulled the pile of receipts from my wallet, it's time to deal with them right then and there. I <strong>enter the following information into a spreadsheet</strong>:</span></p> <p class="MsoPlainText"><em><span>Date</span></em></p> <p class="MsoPlainText"><em><span>Vendor</span></em></p> <p class="MsoPlainText"><span><em>Type of expense for tax purposes</em> (eg: auto, office expenses, advertising, insurance, etc)</span></p> <p class="MsoPlainText"><em><span>Amount of money spent</span></em></p> <p class="MsoPlainText"><span><em>Additional notes </em>(eg: that dinner I'm claiming was when I took John Doe out to discuss ABC business, or that auto expense is specifically for gas or repairs.)</span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span><strong>3: </strong>Once entered, I <strong>file the receipts away</strong>. I have a file folder that stores all the receipts for the year, and I clip all the receipts together by expense. For example, within my folder is an &quot;auto&quot; pile held together with a paperclip to which I attach my gas receipts. </span></p> <p class="MsoPlainText"><span>This way if I ever need to reference the original receipts again, I can easily put my hands on that specific receipt since it's already filed according to category and roughly by date as well since I enter and file the receipts regularly.</span></p> <p class="MsoPlainText"><span> <br /> That's it for the daily or weekly maintenance. No more than five minutes each week once you get into a system that works for you, I promise! </span></p> <p class="MsoPlainText"><span>When it comes to tax time, I go through a few additional steps to make things easier on my accountant: </span></p> <p class="MsoPlainText"><span> <br /> <strong>4: </strong>Since all my receipts are logged in spreadsheet format, all I have to do now is <strong>organize the spreadsheet</strong>. Using data sorts and searches, I create a page for each type of expense and print it out. For example my advertising page itemizes all the expenses I incurred for that category, showing dates, amounts, and special notes. </span></p> <p class="MsoPlainText"><span>This process can be tedious especially if you are still learning how to categorize your expenses or manipulate spreadsheet information. But it gets easier and easier each year, and at the height of my business frenzy, it sill only took me a couple of hours to do. </span></p> <p class="MsoPlainText"><span> <br /> <strong>5: </strong>I take all the printed spreadsheets (along with the original receipts just in case we need to reference them) to my accountant. I <strong>sit there with my accountant as we review the spreadsheets</strong>. If he or she feels that a certain expense is best claimed in another area, then we can easily subtract it from the total on that sheet, and add it to another sheet. It's a great learning experience for me, so the following year I can better manage my receipts and have a greater understanding of how to file taxes to get the best bang for my bucks spent. </span></p> <p class="MsoPlainText"><span> </span></p> <p class="MsoPlainText"><span>Not only is this approach easy and helps me to maintain some semblance of control over my finances, but I also save money even with my accountant, since I've already done a lot of the prep work. All he or she has to do is plug in the numbers and tell me how much money I saved!</span></p> <p class="MsoPlainText">&nbsp;</p> <br /><div id="custom_wisebread_footer"><div id="rss_tagline">This article is from <a href="http://www.wisebread.com/nora-dunn">Nora Dunn</a> of <a href="http://www.wisebread.com/five-easy-steps-to-keeping-track-of-expenses-for-the-self-employed">Wise Bread</a>, an award-winning personal finance and <a href="http://www.wisebread.com/credit-cards">credit card comparison</a> website. Read more great articles from Wise Bread:</div><div class="view view-similarterms view-id-similarterms view-display-id-block_2 view-dom-id-1"> <div class="view-content"> <div class="item-list"> <ul> <li class="views-row views-row-1 views-row-odd views-row-first"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/surprise-5-reasons-you-might-not-get-your-tax-refund">Surprise! 5 Reasons You Might Not Get Your Tax Refund</a></span> </div> </li> <li class="views-row views-row-2 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/tax-document-checklist-what-to-gather-before-doing-your-taxes">Tax Document Checklist: What to Gather Before Doing Your Taxes</a></span> </div> </li> <li class="views-row views-row-3 views-row-odd"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/what-if-i-skip-my-taxes-this-year">What If I Skip My Taxes This Year?</a></span> </div> </li> <li class="views-row views-row-4 views-row-even"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/3-tax-deductions-you-can-never-take">3 Tax Deductions You Can Never Take</a></span> </div> </li> <li class="views-row views-row-5 views-row-odd views-row-last"> <div class="views-field-title"> <span class="field-content"><a href="http://www.wisebread.com/10-reasons-you-should-really-fear-an-irs-audit">10 Reasons You Should Really Fear an IRS Audit</a></span> </div> </li> </ul> </div> </div> </div> </div><br/></br> Organization Taxes accounting bookeeping filing taxes managing taxes receipts self-employment tax preparation Fri, 28 Sep 2007 04:22:23 +0000 Nora Dunn 1223 at http://www.wisebread.com