I just participated in a WOAMTEC webinar giving simple and smart accounting tips and advice to hundreds of women-owned businesses, professionals and entrepreneurs. This advice applies to any small business or indenpendent contractor who doesn't have an accountant to manage their earnings. We specialize in helping them get the most out of their earnings and prtoect themselves and their families.
Share this with your friends and family who need advice on how to protect their business and earnings.
March 5, 2011
February 18, 2011
Top 5 Most Common Tax Mistakes
As we all prepare our tax filings, here are some of the most common mistakes and bad assumptions my clients make.
1. Not Paying Estimated Taxes – I see this very often since most self-employed individuals do not understand their filing requirements relative to self-employment taxes. Consequently, they do not pay them and are hit with a hefty tax bill at the end of the year and/or underpayment penalties for not paying them in the first place. Income tax is a pay as you go system and everyone who works for themselves and do not pay federal taxes via standard payroll wage deductions are required to pay into the tax system via estimated taxes quarterly throughout the year. It is also important to note that the self-employment taxes paid through estimated tax payments is the method by which self-employed individuals pay into the social security system. So it is very important for a variety of reasons that self-employed individuals understand their estimated tax filing requirements and be diligent about paying them to avoid costly tax bills down the line.
2. Being Happy About Big Refunds – Each year I see people come into have their taxes one so they can find out how much of a refund they are going to get. Generally any check from the government is a good thing but in the majority of taxpayers circumstances, the check they may receive represents their hard earned money they have worked for during the year and let the government hold, interest free, for the year. The only GOOD refund to get from the govermnt comes in the form of refundable credits such as the earned income credit or additional child tax credit. Most credits the government allows are non-refundable which mean that they only serve to reduce you liability to a maximum of zero. Any excess credit remaining is not refunded. However, in the case of refundable credits, the government allows you to use the credit to reduce your liability to zero and then keep whatever is left over after the credit. I teach my clients in their tax planning that we only want to give the IRS their due, nothing more. So with proactive planning and management of their payroll withholdings throughout the year, we are able to keep a handle of any possible excess withholdings and make adjustments as necessary so they can keep as much of their salary in their pockets as possible.
3. Making Early Withdrawals from Retirement Plans – With the economy the way it is, I have seen it more and more frequently that tax payers are cashing out their retirement plans to make ends meet not realizing they have created a taxable event that can cost them big at the end of the year. Any withdrawal made from a retirement plan by a taxpayer who is younger than 59 ½ is subject to an early withdrawal penalty that is figured on the tax return at the end o the year, not at the time the withdrawal is made. There are, however, specific exceptions to this rule and taxpayers need to understand them to see if they fall under one of those exceptions. Generally, taxpayers think by paying the withholding they are covered in terms of the tax they need to pay and forget or are unaware of the penalty associated with the distribution. Understanding that sometime you have to do what you have to do to survive in these economic times, my suggestion to my clients is always BEFORE you cash out your plan come in and see me so we can discuss the repercussions of doing that and what other avenues they have in their current life situation that can alleviate that sting of the impending tax bill to come. GOOD, PROACTIVE tax planning is key in these situations.
4. Thinking That a Tax Return is a PRODUCT rather than a SERVICE – Tax preparation is a service and the tax return is consequent to that service. Each year I always get the tire-kickers wanting the cheapest price on their tax preparation fees. This is exactly the opposite of the approach tax payers should take in their area of their financial lives. Tax payers should think of their tax professional in the same regard as their physician. The tax professional should take a proactive stance in helping that client maintain the most beneficial tax position they can throughout the year. Should things go bad (i.e. large tax liability) the client should consult with the tax professional to diagnose the problem and take steps to keep that problem form happening in the future. There is no substitute for the knowledge of a professional tax preparer.
5. Not Asking Questions – I would suspect that had Wesley Snipes asked a few questions he would not be in half of the trouble he is in right now. That is why it is crucial that taxpayers understand the number presented on their tax return as the IRS will hold the taxpayer responsible for the return once it ii filed. If you do not understand the number son your return ask what they mean. A professional tax prepare will welcome the question and take time to explain rather than push papers in your face and tell you to sign. If it still doesn’t make sense after it is explained or you are not comfortable with the return you can ALWAYS get a second opinion. Two prepares presented with the same tax information from a client should have identical if not similar (some tax laws allow for slight interpretations within reason) returns. If they do not, there is a problem.
Beware of these pitfalls - download my white paper on easy ways to protect yourself during tax season.
To learn more about these tax delays and IRS tax forms changes, please download the income tax guide at http://taxwhitepaper.newgenesisfinancial.com/ and contact Ramona Brookins at New Genesis Financial - 321-765-8200 or Ramona@newgenesisfinancial.com
1. Not Paying Estimated Taxes – I see this very often since most self-employed individuals do not understand their filing requirements relative to self-employment taxes. Consequently, they do not pay them and are hit with a hefty tax bill at the end of the year and/or underpayment penalties for not paying them in the first place. Income tax is a pay as you go system and everyone who works for themselves and do not pay federal taxes via standard payroll wage deductions are required to pay into the tax system via estimated taxes quarterly throughout the year. It is also important to note that the self-employment taxes paid through estimated tax payments is the method by which self-employed individuals pay into the social security system. So it is very important for a variety of reasons that self-employed individuals understand their estimated tax filing requirements and be diligent about paying them to avoid costly tax bills down the line.
2. Being Happy About Big Refunds – Each year I see people come into have their taxes one so they can find out how much of a refund they are going to get. Generally any check from the government is a good thing but in the majority of taxpayers circumstances, the check they may receive represents their hard earned money they have worked for during the year and let the government hold, interest free, for the year. The only GOOD refund to get from the govermnt comes in the form of refundable credits such as the earned income credit or additional child tax credit. Most credits the government allows are non-refundable which mean that they only serve to reduce you liability to a maximum of zero. Any excess credit remaining is not refunded. However, in the case of refundable credits, the government allows you to use the credit to reduce your liability to zero and then keep whatever is left over after the credit. I teach my clients in their tax planning that we only want to give the IRS their due, nothing more. So with proactive planning and management of their payroll withholdings throughout the year, we are able to keep a handle of any possible excess withholdings and make adjustments as necessary so they can keep as much of their salary in their pockets as possible.
3. Making Early Withdrawals from Retirement Plans – With the economy the way it is, I have seen it more and more frequently that tax payers are cashing out their retirement plans to make ends meet not realizing they have created a taxable event that can cost them big at the end of the year. Any withdrawal made from a retirement plan by a taxpayer who is younger than 59 ½ is subject to an early withdrawal penalty that is figured on the tax return at the end o the year, not at the time the withdrawal is made. There are, however, specific exceptions to this rule and taxpayers need to understand them to see if they fall under one of those exceptions. Generally, taxpayers think by paying the withholding they are covered in terms of the tax they need to pay and forget or are unaware of the penalty associated with the distribution. Understanding that sometime you have to do what you have to do to survive in these economic times, my suggestion to my clients is always BEFORE you cash out your plan come in and see me so we can discuss the repercussions of doing that and what other avenues they have in their current life situation that can alleviate that sting of the impending tax bill to come. GOOD, PROACTIVE tax planning is key in these situations.
4. Thinking That a Tax Return is a PRODUCT rather than a SERVICE – Tax preparation is a service and the tax return is consequent to that service. Each year I always get the tire-kickers wanting the cheapest price on their tax preparation fees. This is exactly the opposite of the approach tax payers should take in their area of their financial lives. Tax payers should think of their tax professional in the same regard as their physician. The tax professional should take a proactive stance in helping that client maintain the most beneficial tax position they can throughout the year. Should things go bad (i.e. large tax liability) the client should consult with the tax professional to diagnose the problem and take steps to keep that problem form happening in the future. There is no substitute for the knowledge of a professional tax preparer.
5. Not Asking Questions – I would suspect that had Wesley Snipes asked a few questions he would not be in half of the trouble he is in right now. That is why it is crucial that taxpayers understand the number presented on their tax return as the IRS will hold the taxpayer responsible for the return once it ii filed. If you do not understand the number son your return ask what they mean. A professional tax prepare will welcome the question and take time to explain rather than push papers in your face and tell you to sign. If it still doesn’t make sense after it is explained or you are not comfortable with the return you can ALWAYS get a second opinion. Two prepares presented with the same tax information from a client should have identical if not similar (some tax laws allow for slight interpretations within reason) returns. If they do not, there is a problem.
Beware of these pitfalls - download my white paper on easy ways to protect yourself during tax season.
To learn more about these tax delays and IRS tax forms changes, please download the income tax guide at http://taxwhitepaper.newgenesisfinancial.com/ and contact Ramona Brookins at New Genesis Financial - 321-765-8200 or Ramona@newgenesisfinancial.com
February 1, 2011
Great Rewards for New Genesis Customers - Tax Services
As a special thank you to our customers, we are offering tax service specials!
"Meet or Beat Pricing" for New Clients!
We will meet or beat the fee you paid last year for your preparation of your tax return provided you bring us your prior year return and paid invoice from a tax professional or tax service registered with the Internal Revenue Service. Registered preparers include their IRS registration number in the signature block of the return they prepared. We will meet or beat pricing up to our minimum return preparation fee in effect at the time of this offer. Offer good for new clients only and may not be combined with any other offers or promotions.
Tax Guide Service Offer
Receive 10% off your tax return preparation service just for downloading this guide. Offer good for new clients only and may not be combined with any other offers or promotions. http://taxwhitepaper.newgenesisfinancial.com/
Our recent press release about tax preparation and downloadable guide.
"Meet or Beat Pricing" for New Clients!
We will meet or beat the fee you paid last year for your preparation of your tax return provided you bring us your prior year return and paid invoice from a tax professional or tax service registered with the Internal Revenue Service. Registered preparers include their IRS registration number in the signature block of the return they prepared. We will meet or beat pricing up to our minimum return preparation fee in effect at the time of this offer. Offer good for new clients only and may not be combined with any other offers or promotions.
Tax Guide Service Offer
Receive 10% off your tax return preparation service just for downloading this guide. Offer good for new clients only and may not be combined with any other offers or promotions. http://taxwhitepaper.newgenesisfinancial.com/
Our recent press release about tax preparation and downloadable guide.
January 24, 2011
2010 Tax Preparation Planning Guide is Here
Tax Season is here!
Have you started collecting you paperwork yet? Are you aware of the new tax legislation? If not, we’ve created a helpful guide to get you prepared and we’ve also added some special offers to new and existing clients of New Genesis. Download your tax preparation guide today, compliments of New Genesis Financial!
Special Offers
Existing New Genesis Financial Clients get:
Meet or Beat Pricing Promotion Terms
We will meet or beat the fee you paid last year for your preparation of your tax return provided you bring us your prior year return and paid invoice from a tax professional or tax service registered with the Internal Revenue Service. Registered preparers include their IRS registration number in the signature block of the return they prepared. We will meet or beat pricing up to our minimum return preparation fee in effect at the time of this offer. Offer good for new clients only and may not be combined with any other offers or promotions.
Tax Guide Service Offer
Receive 10% off your tax return preparation service just for downloading this guide. Offer good for new clients only and may not be combined with any other offers or promotions.
“New” New Genesis Financial Clients get:
Tax Guide Service Offer
$15 off tax preparation service for just downloading the guide. Call us with the special promotion code to receive discount.
Download the New Genesis Tax Guide Today!
Tax laws are constantly changing and it is impossible to keep up with them on your own. New Genesis Financial keeps abreast of current tax laws throughout the year to minimize your tax liabilities and to maximize your future opportunities. Download this guide to prepared with a special discount:
Special Features…
Download your guide today!
Have you started collecting you paperwork yet? Are you aware of the new tax legislation? If not, we’ve created a helpful guide to get you prepared and we’ve also added some special offers to new and existing clients of New Genesis. Download your tax preparation guide today, compliments of New Genesis Financial! Special Offers
Existing New Genesis Financial Clients get:
Meet or Beat Pricing Promotion Terms
We will meet or beat the fee you paid last year for your preparation of your tax return provided you bring us your prior year return and paid invoice from a tax professional or tax service registered with the Internal Revenue Service. Registered preparers include their IRS registration number in the signature block of the return they prepared. We will meet or beat pricing up to our minimum return preparation fee in effect at the time of this offer. Offer good for new clients only and may not be combined with any other offers or promotions.
Tax Guide Service Offer
Receive 10% off your tax return preparation service just for downloading this guide. Offer good for new clients only and may not be combined with any other offers or promotions.
“New” New Genesis Financial Clients get:
Tax Guide Service Offer
$15 off tax preparation service for just downloading the guide. Call us with the special promotion code to receive discount.
Download the New Genesis Tax Guide Today!
Tax laws are constantly changing and it is impossible to keep up with them on your own. New Genesis Financial keeps abreast of current tax laws throughout the year to minimize your tax liabilities and to maximize your future opportunities. Download this guide to prepared with a special discount:
- Current Tax Issues YOU Should Know. Are Refund Anticipation Loans a thing of the past?
- 2010 Tax Relief Act – What’s In It for You? Individual Tax Rates, Capital Gains/Dividends, Marriage Penalty Relief, Earned Income Tax Credit...and more!
- Tax Preparation Checklist. What items should you bring in for your tax appointment with your preparer?
Special Features…
- Direct Seller Tax Organizer (Avon, Mary Kay, Pampered Chef, etc)
- Auto Mileage Tracker
- Mileage Deduction Guide
Download your guide today!
January 18, 2011
BEWARE OF RAPID REFUND LOANS
The removal of the debt indicator will significantly impact providers of financial products and those taxpayers who seek to use them. Without the debt indicator from the IRS the loan underwriters will have no idea whether a refund calculated on a tax return will actually be paid. This means underwriting will likely carry stricter guidelines (along the lines of traditional personal loan applications) including review of credit history and other items documenting the taxpayers ability to repay the loan should the refund not be paid by the IRS as anticipated. And guess what? You are still out any costs associated with applying and underwriting the loan – whether you are approved or not!
Removal of the debt indicators implies the IRS’ discouragement of the use of such financial products and we agree with them. Our suggestion to you and all of our clients is to forget about these fiscally irresponsible rapid refund loans. Follow these steps:
- Make your tax appointment early with a reputable tax preparer
You will receive your refund in about 7-10 days and you will not have paid any additional costs to do it outside of your preparation fees.
New Genesis Financial provides tax preparation services for individuals and businesses. Based in Central Florida, we handle local, statewide and out of state returns. For information on tax preparation services offered by New Genesis Financial please visit us at http://www.newgenesisfinancial.com/taxpreparation. Our expertise is your peace of mind.
December 27, 2010
Use it or Lose it! FLEXIBLE SPENDING ACCOUNTS
An FSA saves you money by reducing your income taxes because the contributions you make to a Flexible Spending Account are deducted from your pay BEFORE your federal, state, or social security taxes are calculated and are never reported to the IRS. The end result is that you decrease your taxable income and increase your spendable income. You can save hundreds or even thousands of dollars a year. The catch, though, is that you must make all purchased you plan to have reimbursed by the end of the calendar year or you lose access to those funds AND the funds do not roll over into the next year.
Any expense that is considered a deductible medical expense by the Internal Revenue Service and is not reimbursed through your insurance can be reimbursed through the Flexible Spending Account. Examples include:
- Fees paid to doctors, dentists, surgeons, chiropractors, psychiatrists, psychologists, and Christian Science practitioners Contact lenses and eyeglasses
- Fees for hospital services, qualified long-term care services, accident and health, and qualified long-term care insurance premiums, nursing services, laboratory fees, prescription medicines and drugs, and insulin.
- Acupuncture treatments
- Inpatient treatment at a center for alcohol or drug addiction
- Smoking-cessation programs and prescribed drugs to help nicotine withdrawal
- False teeth, hearing aids, crutches, wheelchairs, and guide dogs for the blind or deaf
- Fees in excess of reasonable and customary amounts allowed by your insurance
- Cost of vasectomies, hysterectomies and birth control
- Non-elective cosmetic surgery
- Co-payments on covered expenses
- Deductibles
- Braces
- Prescription drugs or prescription co-pays
June 7, 2010
Florida Tax Amnesty Bill Signed into Law
E-Alert's prediction that Florida Governor Charlie Crist would sign H.5801, the state's tax amnesty bill, came true last Friday. This law directs the Department of Revenue to develop and implement an amnesty program for various state and local taxes (including, among others, corporate income, sales and use, severance, motor fuel and estate taxes). The program will be in effect for a three-month period beginning on July 1, 2010, and ending on September 30, 2010. The amnesty program would be a one-time opportunity for eligible taxpayers to satisfy their tax liabilities and avoid applicable criminal prosecution, penalties and interest. However, any taxpayer that has entered into a settlement of liability for state and local option taxes before July 1, 2010, would not be eligible to participate. Unlike many amnesty programs, a taxpayer may participate in the Florida amnesty program whether or not the taxpayer is under audit, inquiry, examination or civil investigation initiated by the Department of Revenue.
For more information...follow this link http://bit.ly/d9hvPG
For more information...follow this link http://bit.ly/d9hvPG
Subscribe to:
Comments (Atom)
Posts
