Tax season is never fun. Man individual, especially if they are self-employed, dread the April deadline. Fortunately, it is possible for almost everyone to at least reduce their tax burden. It simply takes a keen mind and the ability to wade through quite a bit of paperwork. If you do not feel like you fall into such a category, you may want to make sure that you can find someone that will be able to help you. If you are familiar with the system, you should take the time to gather all the necessary data before filing. If not, you should make sure you work with someone that knows taxes well.
Take Your Time
In an era of quick online tax processing, one of the most important tips for a successful tax season is making sure that you take your time. Your taxes do not have to be filed the day your W-2 comes in, and it may be wise to wait a few weeks to gather the necessary information. Search out the relevant receipts from the last year, and do what you can to find out if you can take more than the average deductible. You may find that taking some time to do some research can save you hundreds, if not thousands, of dollars each year.
Whether you have exhausted all other possibilities or simply do not feel comfortable doing your own taxes, you may reach a point at which you have to find a CPA. Fortunately, there are many accounting professionals in almost every area, and finding the right professional can help you to get your taxes done quickly. A great way to find such a professional is to use a business social networking site such as SaleSpider.com. Many professionals use such sites to find clients, and finding a well-recommended individual from contacts on the site is a great way to feel safe with your choice.
If you want to succeed in filing your taxes without having to overpay, you should make sure that you take the process seriously. Do not rush through an online program, and make sure to contact a CPA if you do not feel comfortable filing on your own. Taxes can be complicated, but there is no reason to pay more than necessary merely to avoid trouble. A bit of professional help can often mean the difference between owing money and getting a refund, so always be prepared to seek out the necessary aid.
Filing taxes can be a frustrating experience. Hiring a professional for tax filing is not an option for some people. It is easy to file your own taxes with TurboTax. In fact, it is possible to file right from an iPhone.
Since many people use their smart phones to do virtually everything, tax filing should not be left out. That is why TurboTax has a app for easy filing. It is as easy as snapping pictures of required documents and the app turns them into proper forms.
There is a small charge for electronic tax filing. If the taxpayer falls below a specified income they may not have to pay a fee at all to file. Even so, filing electronically is a quick way to file. If money is owed to the taxpayer it can direct deposited right into their account. If there are no problems, the money can be in the bank in less than two weeks.
The entire process of electronic tax filing and TurboTax in particular is completely safe. Some people worry about the privacy of their documents when filing electronically, but the information sent is safe and kept confidential. Errors are also minimal with electronic filing. There is actually a greater chance for errors when filing a paper return.
Many people are switching to electronic filing over the older paper way of filing. It is more convienent, quicker and easier than traditional paper filing. TurboTax is an inexpensive way to file on-line. Try out the program and take the stress out of tax filing this year.
Some reports from an IRS watchdog have indicted the federal tax agency for certain practices regarding offshore account disclosure. An arm of the IRS known as the Taxpayer Advocate Service has been responsible for reporting these kinds of voluntary disclosure policies aimed at wealthy Americans. According to the watchdog report, the IRS has failed to cap penalties in cases of this kind of disclosure.
A standard practice of the IRS has been to reduce the penalties for those who willingly disclose that they have hidden offshore bank accounts. These taxpayers have often accumulated this wealth from overseas jobs or from family inheritances. The discovered lack of penalty caps has been linked to higher-than-necessary tax payments for some American taxpayers. Some experts believe that this lack of consistency could undermine the IRS’s credibility in the future if the agency implements similar types of programs.
Prior IRS voluntary disclosure programs have netted over $4.4 billion USD in unpaid taxes from these kinds of offshore accounts over a recent two-year period. A renewal of this disclosure is expected to bring in more names of wealthy Swiss bank account clients who have avoided their obligatory tax payments.
Information from this IRS watchdog report reveals that the ordinary cash penalty is supposed to be a maximum of $10,000 for account holders who accidentally fail to report these assets. Willful withholding of information on foreign bank accounts can carry a penalty of up to 50% of the highest account balance for each covered year of tax nonpayment.
Innocent Spouse Relief has always been available as a way for taxpayers who file joint tax returns and who were not aware, nor had any kind of reason to be aware, that her or his spouse had underpaid or understated their liability for income taxes. It was designed to offer the innocent taxpayer some protection from the faults of their partners and spouses and details of how it works were to be found in Publication 971 which was entitled Innocent Spouse Relief.
The regulations detailed in Publication 971 state that innocent spouse requests that are seeking relief from liability need to be filed within 2 years from the time that the IRS begins action for collection against the spouse. The point of this time limit was always that it was established to encourage early and swift resolution while there was still evidence remaining. However it has been announced that the IRS now intends to issue new regulations stating that they will be removing this two year time limit. In doing so they have stated that the reason for its removal is that they wish to extend the period in order to assist more innocent spouses in their relief requests.
From now on the IRS will not be applying that 2 year limit to any equitable relief cases and any taxpayers who have previously been denied relief requests purely on the basis of the two year limit are now eligible to reapply if they wish to. To do so they need to fill out IRS form 8857. In addition, those taxpayers who have ongoing cases currently held in suspension are now going to be afforded the benefits of the new rules and need not restart their application. Similarly they will not be applying the two year restriction to any cases that are pending litigation that involve equitable relief and if litigation has become final, they will suspend collection under many circumstances.
All changes are effective immediately and can be found in Notice 2011-70.
Alex is a freelance journalist and financial blogger. He loves to write about football and jazz but spends most of his days writing about mortgages, credit cards and tax reduction.
More and more consumers are choosing to make purchases online today. Retailers lure them on line with web sites or even mobile apps for smart phones that compare prices and features on items from diverse sources. One selling point is that such transactions are usually free of state sales tax. In Massachusetts, though, that may not be the case for long.
Even as members of most committees of the legislature leave town for the summer break, the Committee on Revenue quietly sent legislation that would let Massachusetts start collecting sales tax on transactions that take place on the Internet. Supporters say this sort of tax would increase revenues by $335 million every year. The proposal has sparked intense debate on the propriety of the practice as well as the specifics of the legislation. Wal-Mart is a major funding source for groups looking to add similar legislation in other states.
The bill, H 3672, was voted out of committee with an eight to two majority. Its purpose is to permit the state to collect the already established sales tax of 6.25 per cent from vendors who sell by mail otherwise taxable items to anyone in the state by phone or on the Internet without any physical facilities in Massachusetts. Implementing the new law would require enabling legislation from the US Congress. Massachusetts would be the 24th of 50 states to request such laws from Congress. In other states, revenue has not increased as expected as the retailer Amazon has ended ties with affiliates in those states, putting them out of business, and eliminating any taxable body in the state.
Critics paint the proposal as a new tax and a barrier to economic growth. Proponents point out that it merely seeks to collect taxes due but currently not paid. The additional money would supplement revenue streams from income tax and corporate and property taxes. The dollar amounts received from existing taxes is steadily decreasing, and coupled with unpaid taxes the decreasing revenues create a need for a new revenue source. Activists also point out that online tax free sales by Internet retailers are overwhelming brick and mortar retailers in Massachusetts and elsewhere.
Accounting nightmares can be a frustrating waste of both time and money. Forgetting to turn in tax paperwork can result in various fees and penalties, and failure to pay bills on time can be costly as well as embarrassing for your company. It is imperative that all companies hire reputable accountants to ensure that all of their records are up to date and any outstanding bills are paid on time.
Business taxes are usually paid quarterly, and failure to pay these taxes may result in large penalties and could make your business a target for auditing. It is especially important that businesses with employees stay on top of their payroll taxes because the employee is dependent on the company’s accountant to figure their paychecks and withhold the proper amount of taxes from their pay. Many accounting nightmares have occurred for both businesses and employees when payroll taxes are not properly withheld and paid.
Not paying the company’s bills on time can damage your company’s reputation, even if you have plenty of income to pay the bills. It is very important that each company has a system in place for receiving bills and paying them before their due dates. The company should have an accountant that enters bills into an electronic system that keeps track of when the bills are due and the amount owed. Bills should be marked paid and filed neatly so that there is no question whether or not the bill was paid and the accountant can easily prove that the payment was made. The expenses should also be placed in categories so that expenses can easily be entered as deductions on tax forms each quarter or year.
It is equally important that accountants keep track of all monies that are owed to the business and ensure that the business collects the full amount of money they are owed. Many accounting nightmares have occurred because employees have failed to properly track the money that the business is owed and had no way to prove the debts. Good communication between people who handle accounts payable and accounts receivable for each company is essential to ensure that every item is properly entered into the computer system and filed efficiently.
The best way to avoid accounting nightmares is careful planning. It is essential that each company start a filing and accounting system as soon as it is founded so that paperwork doesn’t fall through the cracks and nightmares don’t have a chance to start. Most businesses either choose a computerized accounting program to handle their income, expenses, payroll, taxes, and other accounting needs or decide to outsource their business accounting to a local firm that can handle all of the paperwork and file reports and forms as needed. These are both great options for handling business finances.
Communication is key to streamlining business accounting and other paperwork and avoiding the hassles and nightmares that come from poor planning and shoddy accounting practices. Whether a business owner chooses an accounting firm or computer software, they should always keep an eye on the finances and make sure that they are aware of every dollar that comes in or goes out of their business.
John Smith is a now retired CMA with twenty years experience in the Canadian financial industry. John has moved into the human resources function, and now helps accountants find work, as well as helping businesses screen candidates. There is plenty of additional information on the qualities of top accountants, and there are services like accountingresume.ca that can assist in getting hired in this competitive industry.