Corporate extension deadline Aug 15, 2017. Personal extension deadline Oct 15, 2017.
Call Mike McVay, Tax Accountant to receive $50.00 off your 2016 extension deadline taxes.
You may be tempted to forget all about taxes during summertime, when “the livin’ is easy,” as the Gershwin song goes. But if you start your tax planning now, you may avoid an unpleasant tax surprise when you file next year. Summer is also a good time to set up a storage system for your tax records. Here are some tips: Take action when life changes occur. Some life events (such as marriage, divorce, or the birth of a child) can change the amount of tax you owe. When they happen, you may need to change the amount of tax withheld from your pay. To do that, file a new Form W-4 with your employer. If you make estimated payments, those may need to be changed as well. Keep records accessible but safe. Put your 2016 tax return and supporting records together in a place where you can easily find them if you need them, such as if you’re ever audited by the IRS. You also may need a copy of your tax return if you apply for a home loan or financial aid. Although accessibility is important, so is safety. A good storage medium for hard copies of important personal documents like tax returns is a fire-, water- and impact-resistant security cabinet or safe. You may want to maintain a duplicate set of records in another location, such as a bank safety deposit box. You can also store copies of records electronically. Simply scan your documents and save them to an external storage device (which you can keep in your home safe or bank safety deposit box). If opting for a cloud-based backup system, choose your provider carefully to ensure its security measures are as stringent as possible. Stay organized. Make tax time easier by putting records you’ll need when you file in the same place during the year. That way you won’t have to search for misplaced records next February or March. Some examples include substantiation of charitable donations, receipts from work-related travel not reimbursed by your employer, and documentation of medical expenses not reimbursable by insurance or paid through a tax-advantaged account. For more information on summertime tax planning or organizing your tax-related information, contact us. 850-725-5696
When you are trying to figure out how to best conserve cash as a small business owner, a PEO looks like the answer to all your prayers. There are many choices in which PEOs are the right ones but, which PEOs are the most economical for a small business owner?
The biggest is not always the best and is usually not the lowest cost either. Likewise, a smaller, regional PEO may not suit your needs now or support expansion efforts in the future. Which one will save you the most money really depends on your individual circumstances and growth strategy over the next few years
WHICH PEOS in PENSACOLA WILL SAVE THE MOST MONEY FOR A SMALL BUSINESS. There is a difference between cheap and economical. It is best to not confuse the two. Before you start going too deep into your search for the most economical PEO, you probably should back up and decide exactly what economical looks like to you. Of course you want it to cost less than what you are paying for everything now, but what are you paying now?
You will need to come up with a budget on what you are willing to spend for employee benefits, payroll and HR management and your payroll taxes. Hopefully, you have some idea of what you have been spending to manage all that through individual providers. If not, there are some other ways you can put together what a budget should look like.
Questions for those who have been managing all this themselves:
THE HARD COST OF DIY HR MANAGEMENT. Spending any time at all managing employees requires HR Management. How well are you doing that? This is just a sample of the very real things you are required to do if you run a business that has more employees than you. Failing to do any of these can have disastrous legal consequences. If you are not managing your small business’s in Pensacola HR issues well, you will need to get your mind around the idea that more is required if you plan on keeping your business or even your own personal assets!
What does your HR Management strategy look like?
FIGURE OUT WHICH PEOS ARE THE MOST ECONOMICAL FOR YOU. Now that you have your real costs calculated, you can now figure out which PEOs make the most financial sense for your business. There are considerations there as well.
Here are some questions you need to ask yourself:
PEO brokers know the industry, they understand which businesses work best with which PEOs and what is best for a given company based on their individual goals and strategies. You can work through all of these questions yourself and ask each PEO you talk to if they would work for you, or you can have a quick phone call and give your answers to a PEO broker and let them tell you which ones are the right ones for you.
What is the cost of doing all this yourself? It is at least worth not having to spend some money on pain relievers for your headaches. Payroll in Pensacola and NW Florida does not have to be a headache. With McVay Business Services Payroll is a breeze. 850-725-5696
McVay is a broker for the well respected and quality PEO company Integrity Employee Leasing, Inc. http://www.integrityel.com/. Integrity meets all of these top questions ask above.
What is the cost of doing all this yourself? It is at least worth not having to spend some money on pain relievers for your headaches. Employee leasing specialist, Mike McVay is excited to offer these great services to his clients and friends in Pensacola, Ft Walton Beach and Destin. 850-725-5696 - Mike@MikeMcVay.com
Most accountants have tools to seamless integrate your payroll information into products like QuickBooks Online.
Don’t Forfeit Past Tax Refunds
Does this sound familiar? A few years back your yearly earnings were pretty low so you figured you wouldn’t owe any income tax. Thus, when April 15 rolled around the following year you didn’t bother filing a tax return, knowing you wouldn’t be penalized.
Even if your income fell below the threshold at which you’d owe anything, chances are taxes were deducted from your paycheck throughout the year. (Check your year-end W-2 form). If so, you probably left a sizeable tax refund on the table.
And you wouldn’t be alone. The IRS estimates that each year close to a million people don’t bother filing federal tax returns, thereby forfeiting around $1 billion in refunds they were due — refunds that average several hundred dollars apiece.
Here’s the good news: The IRS generally gives you a three-year window to go back and file a past year’s tax return if you want to claim an unpaid refund. For example, to collect a refund for 2010 you have until April 15, 2014, to file a 2010 return. After that, the money becomes the property of the U.S. Treasury.
You can order current and prior year tax forms and instructions from the Forms and Publications page at IRS.gov or by calling 800-TAX-FORM (800-829-3676). If you’re missing any supplementary paperwork (e.g., W-2 or 1099 forms), you’ll need to request copies from your employer, bank or other payer. If that doesn’t work, file IRS Form 4506-T to request a free transcript showing information from these year-end documents.
Keep in mind that if you file to collect a refund on your 2010 taxes but have not also filed tax returns for 2011 and 2012, the IRS may hold onto the refund until you file those subsequent returns. Also, past refunds will be applied to any amounts you still owe to the IRS or your state tax agency, and may be used to offset unpaid child support or past-due federal debts, such as student loans.
(Important note: The same three-year time period generally also applies when you need to file an amended tax return because you discovered an error on a previous year’s return. See my previous blog, When You Should File an Amended Tax Return, for more details.)
Another good reason to consider going back and filing a previous year’s tax return: the Earned Income Tax Credit (EITC). Chances are, if the reason you didn’t file a return was because you didn’t earn enough to owe taxes, you may have been eligible for the EITC, a “refundable” tax credit for low- to moderate-income working taxpayers. (“Refundable” means that if you owe less in tax than your eligible credit, you not only pay no tax but also get a refund for the difference.)
As an example, for tax year 2010, a married couple filing jointly with three or more qualifying children whose adjusted gross income was less than $48,263 were eligible for an EITC of up to $5,666. To find out how EITC works and whether you qualify, read IRS Publication 596.
Tax deadline approaches. For the rest of us, April 15 looms as the deadline for filing our 2013 taxes. At the very least you should request a filing extension by then; otherwise the penalty on any taxes you owe increases dramatically.
Typically you’ll have to pay an additional 5 percent of taxes owed for each full or partial month you’re late, plus interest, up to a maximum penalty of 25 percent. However, if you file your return or request an extension on time, the penalty drops tenfold to 0.5 percent per month, plus interest.
Here’s how it can add up: Say you owe $2,500 in federal income tax. If you don’t request an extension in time, you’ll be charged an additional $125 (5 percent), plus interest, for each month you’re late in paying off your bill. Had you filed for an extension, the penalty would drop to only $12.50 per month (0.5 percent) plus interest.
Be sure to contact the IRS early if you won’t be able to pay on time so you keep as many payment options open as possible — they may even waive the penalty, depending on your circumstances. Call 800-829-1040 or visit your local IRS office. Also check out this IRS website for helpful information.
One way to avoid this penalty is to pay by credit or debit card before the filing deadline. You’ll be charged a convenience fee, which is tax deductible if you itemize expenses. (Fees vary depending on which payment processor you choose, but typically it’s a flat-dollar fee of $2.49 to $3.95 for debit cards, or 1.87 to 2.35 percent of the amount charged, plus a convenience fee, for credit card transactions.) Just make sure you’ll be able to pay off your credit card balance within a few months; otherwise the interest you accrue might exceed the penalty. To learn more, visit this IRS payment site.
Bottom line: If you skipped filing a tax return in the last three years, go back and crunch the numbers — you may be pleasantly surprised by a hefty refund.
This article is intended to provide general information and should not be considered legal, tax or financial advice. It’s always a good idea to consult a legal, tax or financial advisor for specific information on how laws apply to you and about your individual financial situation.
Tax Day 2018: Start Planning Now
Now that tax day has come and gone, are you comfortable with the outcome? If not, there are plenty of things you can do now and steps to take to set yourself up for a successful tax day in 2018. At the beginning of each tax year ask yourself, “What are the deductions I can take to reduce my taxable income?” There are a few things to consider to improve your tax situation for the year ahead.
Utilize Pre-Tax Savings VehiclesOne of the biggest and most beneficial ways to reduce taxable income is to defer as much money as possible into an employer-sponsored retirement plan. The current maximum contribution limit is $18,000. That’s a lot of money and I know people think, “I’ll never be able to put away $18,000.” But it’s important to aim for that goal because it will reduce taxable income dollar for dollar. And a catch-up provision is available for those aged 50 and older, which allows them to contribute an extra $6,000 per year.
Contributing the maximum to a company retirement plan has more benefits than simply reducing taxable income. By doing so, you are setting yourself up for a more comfortable retirement by saving and investing a healthy portion of your current income in the future. Another simple way to reduce taxable income is contributing to a health savings account (HSA). HSAs and 401(k)s are treated similarly for tax purposes. What you put into an HSA account goes toward reducing your taxable income.
Maximize on Charitable DonationsAre you charitably inclined? Giving to charities of your choice is the second biggest way to reduce your income. Are you interested in 501(c)(3) organizations? When contributing to qualified organizations, be sure to keep track of donations as they may have the power to reduce your income dollar for dollar. Find a system that works for you, whether it’s an Excel spreadsheet or printing and keeping receipts, as donations can add up quickly. If you make donations throughout the year and don’t keep track, when April comes around and it’s time to gather your deduction info, chances are you won’t remember how much you donated or to whom. (For related reading, see: Give to Charity; Slash Your Tax Payment.)
Reduce Passive Taxable IncomeSo, you’ve already put as much as you can into a 401(k) and you’re keeping track of charitable donations. Next you’ll want to look at ways to reduce passive taxable income. If you have money invested in bonds that pay interest, like corporate bonds, that interest is taxable. Depending on your tax rate, you may want to consider putting money into a municipal bond. For federal income tax, interest paid by municipal bonds is tax-free. Additionally, if the bond is from the municipality where you live, then it is also free from state income tax. For example, if you are a Pennsylvania resident who purchases a Pennsylvania municipal bond, that bond is free from state and federal tax.
Offset Capital GainsOne final thing to do is to offset taxable gains. If you’ve taken any capital gains on your investments throughout the year, you may be able to offset those gains through tax-loss selling. The way this works is to identify investments that have declined in value since you first purchased them and sell those investments at a capital loss in order to offset the capital gains earned in that year. This may sound counter-intuitive because we never want to take a loss, but if any investments did lose value, then you can take advantage of that to offset any gains you may have reaped. For example, say you sold a stock in June and you earned a $10,000 capital gain, that’s great, but it’s taxable. Fast-forward to December. You may have made an investment that wasn’t as successful. Sell it and use that amount to offset the gain you received in June. Then, if you still really like the stock, simply wait 30 days and buy it back.
There are a number of different strategies that people can employ to reduce their taxes. Start off with these tactics and always consult your accountant or tax advisor if you have questions throughout the year.
Mike McVay, Accountant 850-725-5696. www.PensacolaFLTax.com
Mike McVay, Tax Accountant Blog
Certified QuickBooks ProAdvisor & Licensed Tax Accountant Pensacola, FL
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