Tax Blog

The small business tax world offers many benefits.  Software programs and other subscriptions that you have for your business DO apply as deductions to your business expenses. 

Originally, the cost of software and other such subscriptions had to be deducted only through depreciated cost over a full three year period.  Now, Section 179 of the Tax Law allows for you to use the full purchase price of all the shelf software that you use for your business all at one time, during the year that you purchased it. 

The business that offers things like magazine subscriptions in their waiting rooms, for example, did not have their rules changed.  These can still be deducted in the year that you purchased them against your taxable business income.

Do keep records of purchases and only deduction those software programs and subscriptions that are specifically business related.

As a small business owner, you probably go through plenty of office supplies.  Things like paper for the printer, pens to keep on your desk and even the endless amount of paper clips that you keep in your drawer are all likely tax deductions.

Office supplies qualify as long as they are purchased to actually be used for your business.  If you are purchasing supplies like construction paper and crayons, and your business does not relate to using those specific items, this could be a problem down the road.

You can claim office supplies even if you do not claim a home office, in fact.  In order to do so, keep a small file in your drawer for receipts of items that you purchase.  Then, use them on your taxes at the end of the year. These expenses do help to offset the taxable business income that you have.

Plenty of people find themselves shaking in their boots when they consider whether or not to add that tax deduction of their home office to their tax return.  After all, isn’t it an instant invitation to the Internal Revenue System to perform an audit?

Although this is commonly thought, it is not the case.  If you know what you are doing with the deduction, then you can most definitely take advantage of it.  The key is to be careful about what actually qualifies as a tax deduction. 

Only use deductions that are strictly related to your business expenses.  For example, if you are using your home phone for your business line, the IRS knows full well that you are probably getting calls that are personal as well.  Instead, get a dedicated line for your business and claim that cost.

The fact is, few home offices cause an audit on the tax return in and of itself.  Making unbelievable deductions can be a cause, though!

Beware.  Those that mess with the IRS are the most likely to find themselves in financial trouble, eventually.  One of the smartest tax considerations for any small business owner is to stay legitimate.  Do not try to cheat the IRS by making deductions that are truly personal expenses on your business account.  Don’t reduce the amount of income you are actually bringing in.  The bottom line is that eventually, it will catch up to you.

The fact is that you do not need to do this anyway.  Most small businesses will qualify for a variety of different deductions and tax breaks.  Take advantage of those and stay the line.  Those that do not may find themselves facing costly fees, hefty fines and plenty of time sorting out a large mess.  Instead of dedicating time to cheating, take advantage of available tax deductions and tax cuts instead.
 

 Tax professionals are the first to tell you that the best way to not pay taxes is to plan not to pay taxes.  Start planning on January 1st (or wherever you are right now) on ways that you can save your taxes.  This includes everything from planning your expenses properly to keeping those receipts handy.  Many find that the best way to do this is through a tax professional that can work side by side with your business.
What’s more, if you personally stay up to date on what is considered a deduction or the new taxes that head to Congress every year, then you can make better decisions for your business every day.  The best way to do that is simply by picking up the finance section of the paper and reading it.  It can be that simple to reduce your taxes significantly.

Work piling up, and too little time. Do you know that? I’m sure you do! But now is the time to continue…………………

 All the Best

Bo

To many people, this has been a historical election. Those of us who remembers Dr. Martin Luther King, think this is even more spectacular than anything else. This might be a new starting point. Congratulations to all. And all the best wishes.

Happy Thanksgiving Day

Bo Larsen

For years the only way you could do your taxes was by finding the right forms and having them sent to you in the mail or driving somewhere to get them. Then you had to fill them out and send them in through the regular mail. There are still a lot of people who prefer to do their taxes this way but now there is also a new way. You can now get onto the internet and find online tax forms.
You can find the correct online tax forms that you need and then print them out to complete them or you can fill them out online. When you want to fill out the online tax forms and then send them in, you will need to find an approved website. This means that there are only certain sites that have been approved to be able to send in your taxes for you.
You will need to check on the IRS website and the state website of where you live to find out about the approved sites. Once you find an approved site you will be able to fill out the online tax forms with just a few clicks of the mouse. Once you have the online tax forms filled out you will be able to just click a button to have it sent to the correct place.
You want to make sure that you print out a copy of your taxes or save them somewhere on your computer. That way you still have a copy of the online tax forms in case you should ever need them.
It is important that you find the right online tax forms that you need. You don’t want to send in the wrong ones or you will have to just fill out the correct ones and send them in. So you may need to do some research to find the correct online tax forms.
Doing your taxes online is becoming more popular every year because it is so much easier to do then the old way. It will still take you some time to get them completed but not nearly as much as usual. One thing that you may want to do is to have all of your information on hand so that you can do your taxes online faster.
The more prepared you are the easier it will be for you. So take the time to get your tax information together, than find the online tax forms that you need, then fill them out and send them in. That way you will be able to get them done and not have to think about it for another year.

When you are good at math and following directions, there are a lot of career fields that open up for you.  Although most people would like to think that the math they learned in high school was pointless, that is simply not true.  Plenty of professions use math, including architects, bankers, and accountants.  Another profession that uses a lot of math is tax preparing.  Although this is usually a seasonal job, there is a lot of money in tax preparing and plenty of companies that are always looking for new people to hire.  If you like following directions are good with people, computers, and math, then you are very much suited for a career in tax preparing.  Now all you need is the education.  Tax preparation isn’t easy.  There are a lot of things that you need to know so that you can do the taxes of all sorts of clients and businesses.  Because of this, you should look into taking some tax preparation courses.  Surf the internet to see if there are any centers near you that teach tax preparation courses.  This way, you can go to a physical location and meet with real teachers.  Then, when you get stuck or have a question, you can ask a real person. 

If there aren’t any tax preparation courses that are being taught near you, you have some other options.  For instance, there are websites on the internet that provide tax preparation courses.  You should look at different websites that offer this because some will definitely be better than others.  You want to work with a website that has good clean information that is easy to read and understand.  Then, with that, you can know as much about this exciting career field as you possibly can.  You should also watch for prices when it comes to these courses.  Some websites will require that you pay while others will have the courses for free.  Even if you decided to learn from a pay site, you should check out the free sites too.  After all, it doesn’t hurt to learn even more information. 

Another way to take tax preparation courses is to get hired at a company first.  If you work with a large chain tax preparing company, they will likely have free courses for their employees to take.  These courses will be run by the company.  They will also usually have people who have already taken courses keep taking them throughout their career.  This is because tax law changes often and you need to keep abreast of what is going on. 

Dear Friends,

Some of us are looking forward to the election, and with that in mind think, that now it’s essential to be a little extra carefull with our planning ahead………………

All over the media, you hear all the time about how you should be protecting your finances and investing your money.  There are scores of books out there on the subject.  They tell you how to save up money so that you have a good retirement.  Something that they often leave out, though, is the importance of tax planning.  Your taxes can have a great affect on the kind of money you have throughout the year.  Here is a good example.  Let’s say you always put off handling your taxes until the last minute.  The night before they are due, you scramble to fill out the forms so that you can get them out on time.  You end up paying several thousand dollars in taxes every year.  The way you are haphazardly preparing your taxes means that you are probably missing out on ways to save money.  You could be giving a lot more money in taxes than you need to.  If you had good tax planning throughout the year though, you wouldn’t run into this problem.  Although it may sound like a scary and time consuming prospect, it is still a wise decision to put this kind of effort into your taxes.  The more that you prepare, the better off you will be.  This analogy even works for people who get the tax refund.  You could possibly be getting more money than what you file for.  it is just a better idea to instill tax planning practices so that you can have a great monetary life. 

Good tax planning happens all year round, not just during the time you file your taxes.  For starters, you should be saving any receipts that may count as deductions on your taxes.  Even if you currently don’t itemize your deductions, you never know how you’ll feel in a year’s time.  It is better to do the little extra effort so that you can make sure that everything works out in your favor.  Another thing that you should do is use some expense tracking software.  This is a good idea because you can keep track of your spending while also being very prepared just in case you ever get audited.  Regular people get audited all the time, even if their tax forms aren’t fishy at all.  The IRS does random audits every year, and you could potentially be one of them.  If you do great tax planning throughout the year, then you won’t really need to worry, though.  You will be able to show the auditor all of your information in a concise way and they will know that your tax forms were legitimate. 
Best wishes

Bo Larsen