Financial Bookkeeping Tips for Contractors

Meeting The Challenge — A 5 Step Financial Guide For Parents Of A Child With Special Needs

Posted by on Sep 27, 2016 in Uncategorized | Comments Off on Meeting The Challenge — A 5 Step Financial Guide For Parents Of A Child With Special Needs

Planning for your financial future when you have children is important, but when one of those children has special needs, it becomes vital. Both before and after you pass away, there are a few key preparations to make in order to ensure your child has what they need as they grow up. Here is a primer to the 5 most important elements of your financial parenting plan. Learn about Costs. As soon as you learn about your child’s special situation, it’s a good time to begin educating yourself about his or her future requirements. By working with your doctors, therapists, parent groups, advocates, and local school personnel, you can often get an idea of what future care will call for in financial terms. Having an objective idea of what you will need to pay for over the years will help you formulate a plan to get there.  Form a Plan for Yourself. This is not the time to DIY your finances and try to go it alone. Instead, meet with a qualified financial planner with experience dealing with family financial planning. Be open and clear about your child’s long-term care needs so that the planner can help you reach your goals. But don’t forget to include your other family financial needs, such as your own retirement goals, education for any other children, and future home purchases.  Create a Special Needs Trust. Work with a lawyer to implement a special needs trust in which to place money for your child’s care and life expenses — both now and later, if you prefer. Why is a trust important? Because, if a disabled individual has more than about $2,000 in assets in their own name, it may affect his or her ability to qualify for Supplemental Security Income or Medicaid benefits. Place any inherited, gifted, or other received money in this trust while you’re still alive as well. Most of the time, parents are designated as the trustee to manage this money, but you will also want to name a designated trustee to take over if anything happens to you. Write a Will. Once the trust is in place, coordinate this with your own will so that your assets will go to the trust instead of directly to your child. A will also helps reduce legal confusion and prevent any lag in between your passing away and your child receiving the benefits of your assets.  Build Savings. Beef up your own savings as quickly and regularly as possible in order to provide properly for your family. Savings provide a buffer for regular family emergencies, care and maintenance of your home, and meeting surprise challenges in your child’s care or education. Insurance may not cover everything your child needs (such as therapies, treatments, or classes), so the more you have available to work with, the less stressful it will be when these challenges arise. By following these financial steps, you can help ensure your entire family’s future, no matter whether you can be there in person or...

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Brotherly Love — How Caring For A Disabled Sibling Affects Your Taxes

Posted by on Aug 17, 2016 in Uncategorized | Comments Off on Brotherly Love — How Caring For A Disabled Sibling Affects Your Taxes

If you are taking on the care and responsibility for a disabled or special needs sibling, caring for your finances as well can be complicated. One thing that can help tremendously is understanding how your sibling (or other disabled family member) can help reduce your taxes and increase your bottom line. Here is a handy guide. Qualification. For the purposes of claiming most tax benefits of caring for a disabled person, you will need to have certification from a doctor that your family member is permanently and totally disabled. This generally means that they cannot care for themselves either physically or mentally, cannot engage in substantial gainful activity (such as earning a living for themselves), and that this condition is expected to continue for at least a year.  Dependents. If your sibling lives with you for at least half the year and doesn’t provide more than half of his or her own financial support, you can probably claim them as a dependent. This can reduce your taxes owed or increase your refund quite a bit for several reasons. First and foremost, it may allow you to claim Head of Household instead of Single as your filing status — automatically reducing your taxable income by $3,000 in 2016.  Exemptions. Having a dependent to claim reduces your taxable income by $4,050 (the amount of the dependent exemption in 2016). This generally means you pay less in taxes based on your income. Credits. You may be able to claim certain credits if you have to pay expenses to help care for a disabled family member who lives with you. The Child and Dependent Care Credit, for example, allows you to deduct care costs if your sibling cannot care for themselves while you work or go to school. He or she may also count as a qualifying child for the Earned Income Credit, which can net you additional thousands in a refundable credit (which means that you can get the money even if you owe no taxes).  Deductions. As a dependent, some of your sibling’s expenses may be deductible for you. Medical expenses like visits to the doctor or prescriptions, mobility devices, mileage to doctors’ offices and certain therapies can often be deducted from your taxable income. You can find a list of qualifying medical expenses at the IRS’s website. If you need to hire help to file taxes while claiming any of these extra tax benefits, you can also deduct that expense if you itemize your deductions. If your dependent is paying such things as student loans, these may also often be claimed on your own taxes.  If you’re unsure about whether or not your can claim a disabled sibling on your taxes and how to gain any available tax benefits, it may be a good idea to work with a professional accountant. While you may be able to prepare your own taxes in future years, but getting off to a good start is an investment that can pay off for years to come. Contact a professional such as Kenneth L Lahner CPA for more...

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4 Reasons You Need A Certified Public Accountant

Posted by on Jun 22, 2016 in Uncategorized | Comments Off on 4 Reasons You Need A Certified Public Accountant

Being a business owner is certain to bring about a lot of responsibilities for you. There are numerous things that must get done on a routine basis. One of the most important aspects of your company is the financial one. Regardless if you’re dealing with the day-to-day operations of your business or other changes, you may need to rely on the expertise of a certified public accountant (CPA). By knowing some of the crucial times to hire a CPA, this may better prepare you to do so. Reason #1: Tax laws You will want to stay current on all of your income tax filings and possible business deductions that you may be granted. However, there are typically annual changes in tax laws that you should be well-informed of to avoid making any errors or to pay less for your taxes. Reason #2: Multiple streams of income If you’re a business owner that is involved in many income earning projects, you will want to rely on the expertise of a CPA. Keeping track of all of your annual income can be a real challenge and having an expert in this area is ideal. Reason #3: Improving credit score One of the ideal ways to maintain a sound financial reputation for your business is by maintaining a high credit score. However, this can be difficult to do if you have some loans that must be repaid and all for your monthly bills. The good news is that your CPA can assist you with increasing your credit score if it is lower than it should be. This professional will know precisely what steps you should take for reaching this goal. Reason #4:  Profits Being an extremely successful business person is sure to be something your aim for with your company. However, when it comes to dealing with the Internal Revenue Service and making $200,000 in profits, you will want to rely on the assistance of a CPA to help. This is because you’re much more likely to face an audit if you earn this amount or higher. The key to being able to make the most of your business and get the advice you need is by relying on a professional to assist you. Taking the time to make an appointment with a CPA from a company like Carmines Robbins & Company PLC is sure to be worthwhile and may save you money in the long...

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Don’t Make These Business Tax Filing Mistakes

Posted by on Feb 16, 2016 in Uncategorized | Comments Off on Don’t Make These Business Tax Filing Mistakes

When you run a business, you are responsible for maintaining financial records and filing taxes every quarter or on an annual basis. Unfortunately, people new to filling taxes make a variety of different mistakes. Here are some common mistakes to make sure you avoid in the future. Not Paying Self-Employment Taxes The first business tax filing mistake has to do with people who are self-employed with a low profit during the year. Even if you earn a small amount each year, you will likely still need to file your taxes. Don’t assume because you aren’t pulling in a full-time wage with your home-based business it means you don’t have to file any taxes. Consult a tax accountant or the IRS directly to find out the minimum amount requiring filing taxes with self-employment. Failing to Claim the Right Deductions When it comes to deductions, you need to know which ones apply to your business taxes, and which ones should be avoided. If you try to claim too much, you could end up with a declined tax return or audit. On the other hand, you might end up paying more than necessary if you don’t keep your receipts and claim the right things. While you should talk to an accountant for specifics, some common deductions for businesses include your office or rental space, office equipment and furniture, utilities related to your business Internet or cell phone, and gas used to meet customers or clients. Making Mistakes With Your Payroll If you have employees working for you, it is essential that you have the payroll filed correctly. If you have enter the right deductions, take too much or too little out for taxes, or you don’t enter overtime correctly for your employees, it not only affects their checks, but your business as well. When tax information is incorrect with your payroll, you are the one that ends up paying for it with various penalties. It is best to hire a professional if you are not 100 percent sure how to enter payroll information. Assuming You Don’t Need an Accountant Unless you have gone to school to learn about business taxes and payroll, make sure you hire an accountant that specializes in business-related taxes. Not only did they go to school to learn proper tax filing and deductions, but they keep up on changes with IRS rates and filing rules. It gives you peace of mind knowing your taxes are taken care of properly, and gives you more time and energy to work on other aspects of your business. For more information on tax preparation, contact a company like HBE Becker Meyer Love...

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2 Reasons You Should Hire An Accountant In Mechanicsburg PA To Process Your Payroll

Posted by on Oct 22, 2015 in Uncategorized | Comments Off on 2 Reasons You Should Hire An Accountant In Mechanicsburg PA To Process Your Payroll

As a business owner, it is tempting to take care of as much of professional matters on your own as much as possible, in the interests of saving money. Unfortunately, the IRS reports that about 33% of businesses make mistakes when processing payroll that result in fines and other financial punishments. Due to that, and the complexities of payroll, it is a good idea to consider outsourcing payroll services to an experienced accountant,  so that you never have to worry about making an unfortunate and expensive mistake. It will be helpful to note that accountants have many other tasks other than simply helping you file your taxes, such as payroll services and other tasks often handled by the human resources department. By outsourcing those tasks to an accountant, your human resources specialist can spend time on more important duties. #1-An Accountant Can Help You Plan For Tax Payments It can seem as if tax forms seem to get more complicated each year and failing to file even one form on time or correctly can be a pricey error. For instance, it is not unusual for accountant that provide payroll services to use online services to simplify the tasks. That takes less of your time and makes mistakes less common, since the computer programs are able to catch most mistakes. #2-An Accountant Can Process Any Payments That Need To Be Deducted From Paychecks The laws about payroll garnishment can vary tremendously, based on The dollar amount that is owed The sum that is past due The reason for the garnishment Current family situation For instance, some states permit past due debts (that are not child support) to be subtracted from an employee’s pay. If your state does, in general, only about 25% of their wages can be taken after taxes to pay approved debts. One exception to that is child support, which all of the states enforce through paychecks if necessary. Both past-due and current child support can be garnished from pay. Back child support can take as much as 50% of an employee’s paycheck and that goes up 60% if there is not another dependent currently being supported by the worker. One obvious benefit is that when outsourcing those tasks, the employer has plausible deniability. Specifically, when an employee is paid and realizes that half or more of their paycheck has been taken, you are not the one that did it. Instead, you can refer them to your accountant and that person needs to answer their questions. You will be informed of it and must tell the employee of it, but you are not the one actually doing it, which can make for a more comfortable working relationship.  In conclusion, the use of an accountant can help you limit the job tasks of your human resources department and comply with new or on-going tax laws. In addition, you will also note that the uncomfortable issue of garnishing an employee’s pay for past due debts or child support can now be handled by an expert, with little intervention from you. For more information, talk to a payroll service like Waggoner Frutiger & Daub...

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How To Claim A Qualifying Relative As An Income Tax Dependent

Posted by on Oct 20, 2015 in Uncategorized | Comments Off on How To Claim A Qualifying Relative As An Income Tax Dependent

For federal tax purposes, there are two types of tax dependents. A qualifying child is the most widely recognized type. The other dependent type, a qualifying relative, includes more than just immediate family members. In some situations, an unrelated household member may be eligible to be claimed as a qualifying relative. The tax advantage of a qualifying relative is considerably less than that of a qualifying child. None of the income tax credits are applicable to a qualifying relative. The only advantage to claiming a qualifying relative is that your taxable income is reduced by the amount of the exemption for the dependent. Extended family For extended family members to be claimed as a dependent, they must have received over half of their support for the year from you. Also, their income for the year must have been under $3,950. Extended family members possibly eligible to be claimed as a qualifying relative include the following: Parent or grandparent Stepmother or stepfather Aunt or uncle An in-law Dependents who are typically qualifying children may sometimes be qualifying relatives if they fail to meet all the requirements of a qualifying child. The IRS definition of a qualifying child is somewhat imprecise because it also includes siblings and their descendants. A related family member who is a qualifying relative does not have to live with you to be claimed. For tax purposes, a cousin is not considered a family member. However, a cousin may possibly be claimed in the same manner as an unrelated household member. Unrelated household member The IRS definition of a qualifying relative is also a bit imprecise. An unrelated person who lives with you for the entire year may be claimed as a qualifying relative if the following conditions are also met: You provide over half the person’s support The individual earned less than $3,950 Adult children When children become too old to be claimed as a qualifying child, they sometimes become eligible to be claimed as a qualifying relative. However, their earnings must be under $3,950, and they must receive the majority of their support from you. As a related family member, they are not required to reside with you to be a qualifying relative. A qualifying relative does make a tax filer eligible to file as head of household. Even so, the additional dependent included on your tax return helps offset the cost of their support. Contact a certified public accountant for more information about tax issues concerning...

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How To Report The Sale Of Stock On An Individual Income Tax Return

Posted by on Oct 12, 2015 in Uncategorized | Comments Off on How To Report The Sale Of Stock On An Individual Income Tax Return

Individuals who own stock in companies sell shares for a wide variety of reasons. Tax filers who have sold stock must report the transaction on their individual tax returns to determine if there is any taxable gain or loss. Corporate stock owned by an individual is referred to as a capital asset. A capital asset is an asset owned for personal use or for investment purposes. The designation as a capital asset is important because some gains on the sale of investment assets receive preferential tax treatment. Brokerage firms maintain detailed records and are required to provide a statement to their clients to summarize stock sales. Your brokerage statement is the starting point to reporting stock transactions on your income tax return. Form 1099-B After the end of each year, brokerage firms issue IRS Form 1099-B to clients who have sold stock during the year. Form 1099-B usually includes all the information necessary to report the stock sale on your tax return, including the following: Dates of acquisition and disposition Acquisition cost Sale proceeds Stock that you own for more than one year creates a long-term capital gain or loss when sold. Stock that is owned for a year or less creates a short-term gain or loss when sold. Some investors conduct numerous stock sales during the year. Because of the differing tax treatment, multiple 1099-B statements must be separated into two categories, short-term and long-term. Form 8949 IRS Form 8949 is used to report the details of your stock transactions. Form 8949 contains separate sections for short-term transactions and long-term transactions. The information from each 1099-B form is entered into the appropriate section of Form 8949. There are exceptions for situations in which Form 8949 is not required. If your 1099-B forms indicate that the basis of all of your sold stock has already been reported to the IRS, you may be able to report your sales directly on IRS Schedule D. Schedule D The detailed information on Form 8949 is only a supporting form for IRS Schedule D. The purpose of Schedule D is to combine short-term and long-term gains from all sources. The net gain or loss from Schedule D is entered on Form 1040. The tax rate on a net long-term capital gain is lower than the tax rate on ordinary income. If you have a net loss, up to $3,000 of the loss may be used to reduce your other taxable income. The remaining portion of a loss may be carried over to the next year. Contact an accountant for additional information on stock transactions. For more information, contact The Callen Accounting Group, PLLC or a similar...

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Annual Tax Reporting For A Tax-Exempt Organization

Posted by on Sep 23, 2015 in Uncategorized | Comments Off on Annual Tax Reporting For A Tax-Exempt Organization

Even though a tax-exempt organization does not pay income tax on its revenue, it still must file an annual return with the IRS. Officials of tax-exempt entities can ensure that their organizations maintain their exempt status by filing the appropriate form each year. Depending on the level of receipts, tax-exempt organizations are required to file only one out of three different IRS forms. The lengthy form required of a large national organization is very different from the short form required of a local animal rescue operation. For organizations of medium size, there is an applicable form. The three options are Form 990-N, Form 990-EZ, and Form 990. Form 990-N Organizations with revenue of up to $50,000 may file Form 990-N, which is a very short form. Form 990-N is not even available on paper and must be electronically filed. Perhaps due to its brevity, Form 990-N is also referred to by the IRS as an e-Postcard. Exempt organizations with over $50,000 in revenue cannot file the short e-Postcard. For larger organizations, your selection of form depends on both revenue and the amount of assets owned by the organization. Form 990-EZ Exempt organizations that are not eligible for the e-Postcard must file Form 990-EZ if total assets are less than $500,000 and revenue is under $200,000. Form 990-EZ requires a greater amount of detailed information about revenue, expenses, and assets. Form 990-EZ also includes a form section for listing key officials of the organization, along with their respective amounts of compensation received. Questions are also included on Form 990-EZ concerning the activities of the organization. Form 990 Form 990 must be filed by exempt organizations with revenue of $200,000 or greater. Form 990 is also required if assets total $500,000 or more. Form 990 is quite detailed and is filed by the largest exempt organizations. Maintaining your tax-exempt status is essential to ensure that contributions to your organization are tax-deductible to the donor. The IRS maintains a useful lookup tool that lists organizations eligible to receive tax-deductible donations. Smaller churches with receipts of $50,000 or less are automatically eligible to receive tax-deductible donations, but they are not required to file an e-Postcard. An organization will lose tax-exempt status for itself and for donors if it fails to file the required information return for three consecutive years. Contact an accounting firm, such as Herman & Cormany, for more information about the filing requirement for your exempt...

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Top Tips For Hiring A Business Consulting Firm

Posted by on Sep 22, 2015 in Uncategorized | Comments Off on Top Tips For Hiring A Business Consulting Firm

If you have been thinking about hiring a business consulting firm, you will need to keep reading. By taking a few moments to read through the following top tips, you should have no problem ending up with the best possible business consultant for your company. Prepare A Statement Of Work A statement of work is nothing more than a document that outlines just what it is exactly you are going to expect the consultant to do for you. Do you want him or her to find new prospects, streamline your inventory, or efficiently mold your employees to be faster workers? Business consultants can do a lot of different things. However, in order to make sure that you are getting lined up with the right one, you will need to prepare a statement of work that you can hand over to anyone that you are interviewing for the position. This gives him or her the fair chance of discovering whether they would truly be a great fit for your company. If he or she is not able to fulfill the wishes of your company, you will know right away and can move on to the next candidate for the job. This saves you a lot of wasted time and money on hiring a business consultant that will not give you what you need.  Ask For Professional Organizations They Belong To A reputable and experienced business consultant should belong to a few highly respected professional organizations. Ask those who you are interviewing if they belong to any. Some of the top professional organizations include the ICCA (The Independent Computer Consultants Association), or the IMC (Institute for Management Consultants). When consultants join such organizations, they are showing their commitment to their chosen field and will have a larger group of peers to learn from, which, of course, benefits you as his or her client. Discuss The Written Contract Make sure that you are avoiding any business consultant that wants to shy away from a written contract, as this is an essential part of any business deal. Also, it is nothing more than a piece of paper that protects the interests of both the business and the consultant. As you can see, you should have no problem making sure that you are finding the best possible business consultant for the job. The sooner you start your search, the sooner you will be able to make use of the benefits that come from his or her...

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Three Ways To Successfully Handle Your Paperwork As A Small Business Owner

Posted by on Sep 9, 2015 in Uncategorized | Comments Off on Three Ways To Successfully Handle Your Paperwork As A Small Business Owner

If you have an entrepreneurial spirit, starting your own business can often be the culmination of years of dreaming and hard work. When it comes time to hire an accountant to handle your taxes, you can make life easier for the accountant — and yourself — by meticulously keeping track of your invoices, receipts and other financial documents. Even if finances aren’t particularly your strong suit, some careful preparation will avoid surprises around tax time and beyond. Here are three valuable ways to approach your paperwork before you present everything to your accountant. Divide Your Expense Receipts Into Categories Expense receipts are extremely valuable to small business owners. After all, logging these will reduce the amount of your net income and, in turn, translate into you having to pay less at tax time. Instead of simply throwing all your expense receipts into an envelope, sort them into a series of envelopes that reflect their nature. Individual envelopes can relate to office supplies, utilities and travel expenses, for example. In the latter envelope, for example, you can group all your receipts pertaining to hotels, gas and food that you ate while away from home on business. Take this systematic approach with each envelope and you’ll be well-organized when it’s time to present your paperwork to your accountant. Sort Paperwork As You Get It When your time is already at a premium, it’s easy to put off organizing your paperwork until a later date. This approach, however, not only puts you at risk of being late on paying an invoice, but can also lead to stress when your desk becomes buried under a mountain of paper. Make it a priority to deal with paperwork promptly; if not the minute you receive it, then at a scheduled time each day. Keeping track of your revenue and expenses also helps you to take a proactive role in the health of your company. If you aren’t monitoring your paperwork regularly, you won’t have an accurate depiction of the health of your business. Keep Your Personal Receipts Separate Many small business owners face the temptation of trying to figure out ways to claim personal receipts, but this strategy can put you at risk of an audit. When in doubt, keep a separate file of all your personal receipts. At tax time, meet with your accountant to determine if any of the receipts can be applicable to your business. It might be possible to use some, but an ethical accountant will advise you against being deceptive with your paperwork in order to save a little money. Contact a tax preparation service, like Jeff Baker & Associates, PS, with further...

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