How My Tax Preparer Has Benefited Me

The Tax Differences Between A Traditional IRA And A Roth IRA

Posted by on Dec 9th, 2015 in Uncategorized | Comments Off on The Tax Differences Between A Traditional IRA And A Roth IRA

An individual retirement account is an effective vehicle to save for the future while also deferring income tax. The two most widely known types of IRAs are the traditional IRA and the Roth IRA. An individual planning to fund an IRA and defer income tax can benefit from contrasting the differences between a traditional IRA and a Roth IRA. There are a few similarities between the two account types. You must have earned income to fund either type of account. The annual contribution limit for either type of account for 2015 is generally $5,500. A noteworthy aspect of both IRA types is that you can also fund a separate IRA for a non-working spouse. The main differences in the two account types are in the timing of the tax benefits. Traditional IRA In a traditional IRA, you receive a current tax deduction for your contribution, up to the annual limit. The amount contributed to the account grows tax-free until withdrawn. When funds are eventually distributed from the account, the withdrawals are usually fully taxable. As a retiree, you may be in a lower tax bracket at that future time. Your earned income for the current year must be at least as much as the IRA deduction. The annual contribution limit is the full $5,500 if you are not covered by a retirement plan with your employer. If you are covered by an employer’s retirement plan, your deduction for a traditional IRA is reduced at higher income levels. Roth IRA In a Roth IRA, there is no tax deduction up front in the current year. As with a traditional IRA, earnings grow tax-free until eventually distributed. The distinct difference of a Roth IRA is that the entire withdrawal is generally tax-free, including the accumulated interest. Participation in an employer retirement plan has no effect on a Roth IRA, but Roth contributions are limited at higher income levels. If you are age 50 or older, you are allowed to contribute $6,500 to either type of IRA. An additional account of either type can be established for a non-working spouse if the working spouse earns more than the total contributed to both accounts. The IRA for a non-working spouse is a separate account since all IRAs are owned individually. You are not necessarily limited to one account type, but the annual contribution limit applies to IRA contributions in total. Contact a tax services specialist like RJ. Garner CPA & Associates, PLC) for more information about how individual retirement accounts affect your tax...

read more

Should You File For Bankruptcy To Stop Wage Garnishment?

Posted by on Aug 13th, 2015 in Uncategorized | Comments Off on Should You File For Bankruptcy To Stop Wage Garnishment?

Wage garnishment occurs when a creditor attends a court hearing in order to obtain a judgement against you. This judgement also gives them the right to force your employer to withhold a percentage of your salary to pay the debt that you owe. If you have received an order for wage garnishment, then you may be considering filing for bankruptcy to stop it, but is it a good idea? Here are some questions to ask yourself before making a final decision:      What is the amount of the debt? If the amount of your debt if low, such as around $500 – $1,000, then filing for bankruptcy might be a waste of time. Although having a percentage of your wages garnished can be stressful, if you can afford to pay a bankruptcy attorney, then you might want to simply pay off the debt instead. There is always the option of requesting that the filing fee be waived and choosing to represent yourself in the bankruptcy case, however, with so many new and complicated bankruptcy laws, you could make a mistake that could cause your case to go in the wrong direction. Do you have other debt? If you have a great deal of additional debt, then filing for bankruptcy might be the best option because you could stop the current garnishment, but other creditors might try garnishing your wages in the future. Bankruptcy can wipe out a majority of your debt and give you a fresh start. However, if you only have one or two outstanding bills but your credit report is otherwise blemish-free, then you may want to find another solution to your wage garnishment issue. How much of your salary is being garnished? While some states don’t allow wage garnishment at all, other states regulate the percentage that can be garnished. In some cases, up to 25% of your disposable income could be garnished. If a large percentage is being garnished from your paycheck and you’re unable to buy food or pay rent and utilities, then bankruptcy might be a viable option. It’s a good idea to consult with a bankruptcy attorney before making a final decision.  Wage garnishment can often lead to hardship and severe stress, especially in a person who is already struggling financially. However, there are ways to stop your wages from being garnished, and in some cases filing for bankruptcy is the best solution. In other situations, bankruptcy could cause more harm in the long-run, as it could lower your credit score significantly. In such a case, you might want to contact the creditor and attempt to work out an affordable payment plan. For further assistance, contact professionals, such as those from Horizon Tax...

read more

What Every Home Caregiver Should Know About Obtaining Tax Credits

Posted by on Jul 7th, 2015 in Uncategorized | Comments Off on What Every Home Caregiver Should Know About Obtaining Tax Credits

If you are an independent home caregiver then you know the importance of filing your own taxes and using the tax credits available through the government. Though there are a few that you may know about it, there are some that you may overlook. Before you decide to handle your taxes the same way as you have before, consider the things that every home caregiver should know about obtaining tax credits and having them processed properly. Discuss Your Career When you use a tax preparing service or an accountant, you likely go in with your paperwork and just have the rest taken care of by them. This can lead to overlooking an important tax credit that your tax preparer may know about, but may not think applies to you because they don’t have a solid understanding of what services you provide. Take a moment and schedule a consultation with your tax professional and discuss what it is you do, what you provide, and if you provide any equipment or supplies. A few minutes of explanation may lead to several credits when you file. Family or Clients There are several tax credits that may apply to you if you are a certified home health care provider and you are providing those services to a family member. If you have several clients, but you also have family members as clients, let your tax professional know. Your state may have some form of tax break for this that can be applied to your next taxes. Keep in mind, you may have to provide some form of supporting documentation in order to receive the proper credit and have it processed on your next tax year. Treatments and Services There are several treatments and services that may receive a break for both you and your client. Treatments that may fall under this include denture and other dental services as well as transportation fees for taking your clients back and forth to their appointment. If you aren’t certain if you will receive a business break for these services and other services you provide, contact your tax professional and discuss your options. If possible, break down your services further to determine everything you offer instead of just a general overview of service options. These are just three of the things every home caregiver should know about tax credit processing. When you have your tax credits worked out with your tax professional, allow them to work through them and process them. They can give you the final outcome, if you owe taxes, and if you have enough credits to break even with your home health business for the year....

read more

How To Set Up Payroll Services

Posted by on Apr 29th, 2015 in Uncategorized | 0 comments

When starting up a business it is important to ensure that the payroll services are set up correctly to make sure that there are no accounting issues. One small mistake could lead to someone not getting paid for their work, or lead to a massive accounting error that could cause the government to audit you at a later date. Here is a step-by-step guide on how to set up your payroll services for your small business. Register The Business With The Government The first step to setting up payroll is to ensure that the business is registered with the government and complies with all local and federal business laws. You will need to register the business and get a master business license number that is typically issued from a local registry that will do a trademark search on the business name. Make sure that the business is registered with the state revenue agency and has a tax identification number that will allow you to collect and charge taxes. Establish Payment Method & Schedule You will need to establish a regular schedule for how you want to pay employees — options include weekly or biweekly. Make sure that you set up the schedule and stick to it so that people know exactly when their pay will arrive. Also establish if you will issue a check for each employee or if you want to set up their pay to be directly deposited into their bank account. If you choose the option of direct deposit you will need to set it up in advance with the bank and most likely require the employee to give you a void check. Establish A Secure Database For Employee Information The in house accountant will require information on each employee to process their pay each cycle. The accountant will need the employees name, current address, date of birth, and valid social security number that will allow them to legally work in the United States. They will also need to know their rate of pay to be paid hourly or if the employee is paid a base salary regardless of the amount of hours they work. This information will all need to be stored in a secure database that is protected from potential hackers that could steal private information of the business and employees. Following these steps outlined above will give you a base to build your business’ payroll and get it up and running. If you have questions about how to set up your specific payroll for your business you should always consult with a professional accountant, like those at A & C Accounting &...

read more

No 1099? Here’s How To Avoid Tax Return Mishaps

Posted by on Apr 16th, 2015 in Uncategorized | 0 comments

Earning extra money through an online work from home job definitely helps improve finances. Be mindful, however, tax liabilities come with the added income. Domestic employers file a 1099-Misc, a form that reports both to you and the IRS any “miscellaneous” earned income. If the employer is based overseas, however, no 1099 is likely to be filed and you are still required to report and pay taxes. To avoid audits, fines, and penalties, follow a few extra steps to avoid oversights and ensure all income is reported. Check the Deposits on Your Bank Account Keep a notebook logging all the payments issued by the employer. Just before tax time, double check all bank deposits to correctly assess proper accounting for each and every payment.  Remember, even if an employer does not file a 1099-Misc, the bank is going to file a 1099-INT. A 1099-INT reports interest accrued on your account and, if the amount of interest seems high for the income you reported on a tax return, the IRS could take a closer look via an audit. Reporting the proper amount of income each and every year reduces the chances of this occurring. Request Orderly Deposits Depending upon how the employer issues payment, you might be able to withdraw funds with great flexibility. Money could be requested anywhere from the minute a job is completed to once a week to once a month. This flexibility is definitely appreciated, but it could come with accounting hassles. Requesting withdrawals “here and there” makes it a lot harder to keep accurate track of total income. A better plan would be to stick with requesting withdrawals on a set time schedule such as the 1st and 15th of the month. This way, when tax time comes, you do not have to fish around looking over pages and pages of figures for the withdrawal/deposit numbers. Strategically Use a Credit Card What can you do if you have bills or expenses and need cash? Rather than start withdrawing money outside of the aforementioned deposit schedule you set, use a credit card instead. Purchase with credit and/or use the card to take cash advances. Afterwards, immediately set up online payments to occur on the day (or days) following the online deposit(s). This way, you do not end up paying a lot of interest on the card or accruing a ton of debt. Present the Forms to a Tax Preparation Service Maintaining accurate, easy-to-understand logs ensures a tax preparation professional like one from Jack Landis And Company is better able to prepare a return. He/she can compare the income on your bank statements to the received 1099s and compile an accurate return. As long as the income tax forms reflect accurate figures, you avoid a host of...

read more

About Me

The wonderful world of taxes - not something anyone wants to have to deal with. Each year, new laws are introduced and old ones can expire. How do you know what you are doing with your taxes if you don't follow the changes being made each year? Do you run a business or are you a self-employed contractor? Everything can really complicate taxes, so you should seriously consider hiring a professional tax preparer to do your taxes each year. To learn how my tax preparer has benefited me over the past few years, visit my website. Hopefully, what you learn there will convince you of how well the money spent to pay for professional preparation is worth it.

February 2016
« Dec