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Smart Tax Planning Strategies Every Growing Business Should Consider

Sat, 20 Sep 2025 14:18:15 GMT

Why Smart Tax Planning Strategies Matter for Growing Businesses

If you’re running a growing business, you already know that every dollar counts. As your operations expand, so does the complexity of your financial landscape. That’s why developing effective tax planning strategies is essential—not just to keep up with compliance, but to ensure you’re maximizing business tax savings and minimizing tax liability along the way. With careful financial planning for businesses, you can position your company to thrive, reinvesting those savings into future growth and innovation.

Understanding the Value of Proactive Tax Planning

Proactive tax planning isn’t just about filling out forms at year-end. It’s an ongoing process that requires you to anticipate changes in your business, monitor regulatory updates, and adapt your strategies accordingly. By staying one step ahead, you can identify opportunities to minimize tax liability and avoid costly surprises. This approach is especially crucial as your business scales, since tax obligations often become more complex as you add employees, expand into new markets, or diversify your offerings.

Key Tax Planning Strategies for Growing Businesses

Integrating smart tax planning strategies into your business operations can help you capture valuable tax benefits while maintaining compliance. Here are some essential approaches you should consider as your company grows:

Choose the Right Business Structure : The legal structure of your business—whether it’s a sole proprietorship, partnership, S-corporation, C-corporation, or LLC—directly impacts your tax obligations. As your business evolves, reevaluating your structure can lead to significant business tax savings. For example, converting to an S-corporation might allow you to reduce self-employment taxes, while a C-corporation could offer advantages if you plan to reinvest profits.
Leverage Tax Credits and Deductions : There are numerous credits and deductions available to businesses, from the Research & Development (R&D) tax credit to deductions for qualified business expenses. Keeping detailed records and working with a knowledgeable CPA can help you identify and claim these opportunities, directly reducing your tax bill.
Optimize Depreciation Strategies : Investing in equipment, technology, or property? Accelerated depreciation methods, such as Section 179 or bonus depreciation, allow you to write off the cost of qualifying assets more quickly. This approach can improve your cash flow and support future investments.
Plan for Estimated Taxes : As your revenue grows, so does your responsibility to make quarterly estimated tax payments. Underestimating these payments can lead to penalties, while overestimating can tie up valuable cash. Accurate forecasting and regular reviews ensure your payments are aligned with your actual earnings, keeping your cash working for your business.
Implement Retirement and Benefit Plans : Offering retirement plans such as a 401(k) or SEP IRA not only helps attract and retain top talent but can also provide meaningful tax deductions for your business. These plans reduce taxable income and support your employees’ financial well-being.

Strategies to Minimize Tax Liability as You Grow

Minimizing tax liability is a multifaceted process that involves both short-term tactics and long-term planning. As your business expands, it’s important to regularly review your financials and adjust your strategies to reflect new realities. Consider the following growing business tax tips to stay ahead:

Monitor State and Local Tax Obligations : Expanding into new states or localities can trigger new tax requirements, such as sales tax collection or franchise taxes. Staying informed about these obligations helps you avoid unexpected assessments and penalties.
Utilize Income Deferral and Expense Acceleration : Timing matters when it comes to recognizing income and expenses. Deferring income to the next tax year or accelerating deductible expenses into the current year can strategically shift your tax burden, especially if you anticipate changes in tax rates or business profitability.
Review Compensation Structures : How you compensate yourself and your team can influence your overall tax picture. Consider balancing salaries, bonuses, and distributions to optimize both personal and business tax outcomes.
Take Advantage of Section 199A Deduction : If you operate as a pass-through entity, the Section 199A deduction may allow you to deduct up to 20% of qualified business income. Understanding the eligibility requirements and limitations is key to maximizing this benefit.

Integrating Tax Planning with Broader Financial Planning for Businesses

Effective tax planning strategies should never exist in a vacuum. By integrating your tax approach with broader financial planning for businesses, you’ll be better equipped to meet both your short-term cash flow needs and your long-term growth objectives. This holistic perspective ensures that you’re not just reacting to tax season, but proactively shaping your financial future.

Coordinate Tax Planning with Business Goals : Align your tax strategies with your company’s vision—whether that’s expanding your workforce, investing in new technology, or entering new markets. Strategic planning ensures that tax considerations support, rather than hinder, your progress.
Maintain Robust Financial Records : Accurate, up-to-date records are the foundation of successful tax planning. They enable you to substantiate deductions, respond to audits, and make data-driven decisions about your business’s direction.
Consult with a Trusted Tax Advisor : Tax laws change frequently, and every business is unique. Working with an experienced CPA ensures you have expert guidance tailored to your specific circumstances, helping you adapt your strategies as your business evolves.

S taying Ahead of Tax Law Changes and Compliance Challenges

The tax landscape is constantly shifting, with new regulations, credits, and compliance requirements emerging each year. For a growing business, staying informed and agile is crucial to maintaining business tax savings and minimizing risk. Regularly reviewing your tax planning strategies with your advisor helps you take advantage of new opportunities and avoid costly missteps.

Subscribe to Industry Updates : Keep an eye on legislative changes that could impact your business, from federal tax reforms to state-level incentives.
Schedule Regular Tax Check-Ins : Don’t wait until year-end to assess your tax position. Mid-year reviews allow you to make timely adjustments and capture emerging benefits.
Utilize Technology for Compliance : Modern accounting and tax software can streamline reporting, track deductible expenses, and reduce the risk of errors, freeing you to focus on running your business.

Maximizing Business Tax Savings Through Strategic Investments

As your business grows, strategic investments can play a significant role in both expansion and tax efficiency. Whether you’re upgrading equipment, expanding your facilities, or investing in research and development, understanding the tax implications of these moves is essential for optimizing business tax savings.

Capitalize on Bonus Depreciation : Recent tax reforms have expanded the scope of bonus depreciation, allowing you to immediately deduct a significant portion of qualifying asset purchases. This can boost your cash flow and support further investment.
Explore R&D Tax Credits : If your business invests in developing new products, processes, or software, you may be eligible for valuable research and development tax credits. These credits directly reduce your tax liability and encourage ongoing innovation.
Consider Energy-Efficient Upgrades : Many federal and state programs offer tax incentives for businesses that invest in energy-efficient equipment or renewable energy sources. These incentives can offset the cost of upgrades while supporting sustainability goals.

Planning for Succession and Long-Term Growth

Smart tax planning strategies aren’t just about the present—they’re also about preparing for the future. As you look ahead to succession planning or potential business sales, tax considerations will play a central role in preserving your hard-earned wealth and ensuring a smooth transition.

Evaluate Succession Options Early : Whether you plan to pass your business to family members, sell to key employees, or seek an outside buyer, early planning allows you to structure the transition for optimal tax efficiency.
Utilize Gifting and Estate Planning Techniques : Transferring ownership interests through gifts or trusts can help minimize estate and gift taxes, preserving more value for your chosen successors.
Coordinate with Legal and Financial Advisors : Collaborative planning with legal, tax, and financial professionals ensures your succession strategy aligns with your personal and business goals, while minimizing tax liability along the way.

Tax Planning Strategies for Managing Cash Flow Effectively

When your business is on a growth trajectory, managing cash flow becomes more than a matter of tracking income and expenses—it’s about making strategic decisions that keep your operations agile and sustainable. Smart tax planning strategies can directly impact your cash flow, giving you more flexibility to invest in new opportunities while maintaining stability.

Project Tax Obligations Throughout the Year : Rather than scrambling at year-end, forecasting your tax liability on a quarterly basis helps you anticipate and prepare for upcoming payments. This proactive approach reduces the risk of cash shortages and allows you to allocate resources efficiently.
Align Major Purchases with Tax Benefits : Timing significant equipment or property purchases to maximize deductions, such as Section 179 or bonus depreciation, can yield immediate business tax savings. Coordinating these investments with your overall financial planning for businesses ensures you’re optimizing both operational capacity and tax advantages.
Monitor Accounts Receivable and Payable : Efficiently managing when you collect payments and settle bills can influence taxable income. For example, accelerating payables or deferring receivables at the end of the tax year can help minimize tax liability in certain circumstances.

Tax-Efficient Compensation and Employee Incentives

As your team expands, structuring compensation packages with tax efficiency in mind can benefit both your business and your employees. Incorporating tax planning strategies into your human resources approach supports retention, motivation, and overall financial health.

Consider Fringe Benefits : Offering benefits such as health insurance, transportation allowances, or educational assistance can be tax-deductible for your business and often tax-free for employees. These incentives enhance your compensation package without increasing payroll tax burden.
Implement Stock Option Plans : For companies poised for rapid growth, employee stock options can be an effective way to reward performance and align interests. Understanding the tax implications for both the business and recipients is essential to avoid unexpected liabilities.
Utilize Deferred Compensation Arrangements : Deferring a portion of executive compensation to future years can provide tax deferral benefits for employees while helping your business manage cash flow and minimize current tax liability.

Leveraging Technology for Tax Planning and Compliance

Technology is transforming how businesses approach tax planning strategies, offering tools that streamline compliance, enhance accuracy, and provide valuable insights. As your business grows, harnessing these digital solutions supports smarter decision-making and ongoing business tax savings.

Cloud-Based Accounting Platforms: Modern accounting software automates data entry, tracks deductible expenses, and generates real-time financial reports. This visibility enables you to identify tax-saving opportunities as they arise.
Integrated Payroll Solutions: Automated payroll systems ensure accurate tax withholding, timely filings, and compliance with changing regulations. This reduces the risk of costly errors and frees up your team to focus on core business activities.
Tax Planning Analytics: Advanced analytics tools can model various tax scenarios, helping you forecast the impact of different strategies on your overall tax liability. This data-driven approach supports more informed financial planning for businesses.

International Expansion and Cross-Border Tax Considerations

If your business is considering international growth, understanding the tax implications of cross-border operations is crucial. Expanding beyond domestic markets introduces new layers of complexity, but with the right tax planning strategies, you can navigate these challenges while maximizing business tax savings.

Navigating Double Taxation: Operating in multiple countries can expose your business to double taxation. Leveraging tax treaties and foreign tax credits can help reduce your overall tax burden.
Transfer Pricing Compliance: Setting prices for transactions between related entities in different countries requires careful documentation to satisfy tax authorities and avoid penalties.
Managing Value-Added Tax (VAT) and Sales Tax: Understanding local indirect tax requirements ensures compliance and prevents disruptions to your supply chain.

Year-End Tax Planning Strategies for Growing Businesses

Year-end is a prime opportunity to review your financial position and implement strategies to minimize tax liability before closing the books. Thoughtful year-end planning can yield substantial business tax savings and set the stage for a successful new year.

Accelerate Deductible Expenses : Pay outstanding bills, prepay certain expenses, or make charitable contributions before year-end to increase your deductions for the current tax year.
Defer Income : If cash flow allows, consider postponing invoicing or other income-generating activities until the following year to defer taxable income.
Review Asset Purchases : Evaluate whether acquiring new equipment or technology before year-end can take advantage of immediate expensing options.
Conduct a Tax Loss Harvest : For businesses with investment portfolios, selling underperforming assets to realize losses can offset gains and reduce overall tax liability.

Staying Compliant with Changing Tax Laws

Tax regulations are constantly evolving, and remaining compliant is essential to protect your business from penalties and missed opportunities. Proactive monitoring and adaptation of your tax planning strategies ensure your business is always aligned with the latest requirements.

Regular Policy Reviews : Schedule periodic reviews of your tax policies and procedures to incorporate legislative changes and new interpretations.
Employee Training : Train your finance and accounting staff on current tax rules, reporting requirements, and best practices for documentation to minimize errors.
Collaborate with Tax Professionals : Maintain open communication with your CPA or tax advisor to receive timely updates and expert guidance on emerging issues.

Using Tax Planning to Support Business Innovation

Innovation is the lifeblood of business growth, and tax planning strategies can fuel your ability to invest in new ideas. By leveraging available incentives and structuring your investments with tax efficiency in mind, you can stretch your resources further and accelerate progress.

Claiming R&D Credits : Invest in research and development to qualify for tax credits that directly reduce your tax bill, making innovation more affordable.
Patent Box Regimes : Explore whether your jurisdiction offers reduced tax rates on income derived from intellectual property, such as patents or trademarks.
Collaborative Ventures : Consider joint ventures or strategic alliances that allow you to share costs and risks while accessing additional tax benefits.

Tax Planning Strategies for Business Owners’ Personal Finances

Your personal financial situation is closely tied to your business success. Integrating personal and business tax planning strategies can help you minimize overall tax liability and achieve your long-term financial goals.

Optimize Owner Compensatio n: Balance salary, dividends, and profit distributions to achieve the most favorable tax outcome for both you and your business.
Utilize Retirement Accounts : Maximize contributions to retirement plans such as solo 401(k)s or SEP IRAs to reduce current taxable income while building wealth for the future.
Plan for Capital Gains : Strategically timing the sale of business assets or equity can help you take advantage of lower long-term capital gains tax rates.

Building a Culture of Tax Awareness in Your Organization

Embedding tax awareness into your company culture empowers everyone—from leadership to staff—to make decisions that support business tax savings and compliance. A well-informed team can identify opportunities, flag risks, and contribute to a more resilient organization.

Regular Training and Communication : Host workshops or distribute updates on tax changes that may affect your operations or employees’ responsibilities.
Encourage Collaboration : Foster open communication between departments—such as finance, HR, and operations—to ensure tax considerations are factored into business decisions.
Reward Tax-Efficient Innovations : Recognize and incentivize employees who propose or implement strategies that result in measurable tax savings.

Preparing for Audits and Tax Authority Inquiries

Even with the best tax planning strategies, audits and inquiries from tax authorities can occur, especially as your business grows and attracts greater scrutiny. Being prepared ensures you can respond confidently and maintain business continuity.

Maintain Comprehensive Documentation : Keep thorough records of income, expenses, and supporting documentation for all deductions and credits claimed.
Implement Internal Controls : Establish processes for reviewing and approving tax-related transactions to reduce the risk of errors or omissions.
Engage Experienced Advisors : Work with a CPA who is familiar with your business and industry to help you navigate the audit process and address any questions from authorities.

Adapting Tax Planning Strategies to Industry-Specific Needs

No two industries face the same tax challenges. Customizing your tax planning strategies to reflect the unique aspects of your sector ensures you’re capturing every available advantage and maintaining compliance with industry-specific regulations.

Manufacturing : Take advantage of credits for domestic production, inventory accounting methods, and energy efficiency incentives.
Professional Services : Structure compensation and retirement plans to maximize deductions and minimize self-employment taxes.
R etail and E-Commerce : Stay current with evolving sales tax laws, especially for online transactions and multi-state operations.
Technology : Leverage R&D credits and intellectual property-related tax incentives to support ongoing innovation.

Tax Planning Strategies for Navigating Business Mergers and Acquisitions

Growth often brings opportunities for mergers or acquisitions, which can create new avenues for business expansion but also introduce complex tax considerations. Understanding and applying effective tax planning strategies during these transactions can help you minimize tax liability and secure business tax savings that support your financial goals.

Due Diligence on Tax Exposure : Before finalizing any deal, conduct thorough due diligence to uncover potential tax liabilities, such as unpaid taxes or unresolved audits. This step protects your business from unexpected costs and compliance issues.
Structure Transactions for Tax Efficiency : Asset purchases and stock purchases have different tax implications. Consulting with a CPA can help you determine which structure offers the most favorable tax outcome for your specific situation.
Utilize Loss Carryforwards : If you acquire a business with net operating loss carryforwards, proper structuring may allow you to use those losses to offset future taxable income, resulting in significant business tax savings.
Plan for Integration Costs : Many integration expenses can be deductible. Document these costs carefully to ensure you claim all eligible deductions in the appropriate tax year.

Tax Planning Strategies for Real Estate and Property Investments

As your business grows, investing in real estate or expanding your physical footprint can be a strategic move. Smart tax planning strategies in this area can help you both minimize tax liability and enhance your financial planning for businesses.

Depreciation and Cost Segregation : Accelerate depreciation deductions by performing a cost segregation study, which separates building components for faster write-offs. This approach can free up cash for reinvestment.
1031 Like-Kind Exchanges : When selling business property, consider a 1031 exchange to defer capital gains taxes by reinvesting proceeds into a similar property. This strategy preserves capital and supports continued growth.
Interest Deductibility : Review how your property investments are financed to maximize the deductibility of interest expenses, which can reduce taxable income.
Energy Efficiency Incentives : Federal and state programs often provide credits or deductions for energy-efficient renovations or new construction, contributing to business tax savings.

Tax Planning Strategies for Technology and Digital Transformation

Embracing new technologies can propel your business forward, but it also requires thoughtful financial planning for businesses to ensure you’re optimizing tax benefits. Integrating tax planning strategies into your digital transformation initiatives can help you achieve greater efficiency and savings.

R&D and Technology Credits : Investments in developing new software, digital platforms, or automated systems may qualify for research and development tax credits. Document your innovation efforts to maximize these benefits.
Capitalizing vs. Expensing : Determine whether technology purchases should be capitalized and depreciated or expensed immediately to achieve optimal business tax savings.
Cloud and Subscription Services : Evaluate the deductibility of cloud-based software and IT subscriptions, which can often be expensed in the year incurred, improving your cash flow.

Tax Planning for Business Expansion and New Market Entry

Expanding into new markets brings fresh opportunities and unique tax challenges. Strategic tax planning strategies are essential for managing compliance and minimizing tax liability as you grow.

Evaluate Nexus and State Tax Obligations : Entering new states or regions can trigger sales tax, franchise tax, or income tax requirements. Review nexus rules to ensure compliance and avoid unexpected penalties.
Leverage Local Incentives : Explore tax credits or grants available to businesses investing in specific regions or industries. These incentives can significantly reduce your overall tax burden.
Plan for Workforce Mobility : Hiring remote employees or opening new offices may affect your tax obligations. Coordinate with your CPA to manage withholding, unemployment taxes, and benefit plans across multiple jurisdictions.

Tax Planning Strategies for Managing Inventory and Cost of Goods Sold

Inventory management is a critical aspect of financial planning for businesses, especially as you scale operations. The methods you choose for valuing and managing inventory can have a direct impact on your taxable income and business tax savings.

Choose the Right Inventory Method : Methods such as FIFO, LIFO, or weighted average can influence your cost of goods sold and taxable income. Select the method that aligns with your business model and market conditions.
Write-Downs and Obsolescenc e: Regularly review inventory for slow-moving or obsolete items and record appropriate write-downs. These adjustments can reduce taxable income and free up working capital.
Track Inventory for Tax Credits : Certain industries may qualify for tax credits based on inventory investments, such as manufacturing or food production. Consult your CPA to identify eligible credits.

Tax Planning Strategies for Charitable Giving and Community Engagement

Giving back to your community is not only rewarding but can also provide meaningful business tax savings when approached strategically. Incorporate charitable contributions into your tax planning strategies to maximize both impact and financial benefits.

Deductible Donations : Cash and in-kind donations to qualified organizations are generally deductible, reducing your taxable income.
Charitable Sponsorships : Sponsoring community events or initiatives may offer additional marketing benefits and potential deductions.
Donating Inventory or Services : Donating goods or services can result in deductions based on the fair market value, supporting both your community and your business tax savings goals.

Tax Planning Strategies for Business Continuity and Risk Management

Protecting your business from unexpected disruptions is vital. Integrating risk management and continuity planning with tax planning strategies can help you minimize tax liability while ensuring your business remains resilient.

Insurance Premium Deductions : Premiums for business insurance policies are generally deductible, lowering your overall tax bill.
Disaster Loss Deductions : If your business suffers from a federally declared disaster, you may be eligible to deduct casualty losses, providing timely relief.
Reserve Funds : Establishing reserve funds for future liabilities or emergencies can be structured to maximize tax efficiency and support long-term stability.

Tax Planning Strategies for Succession and Exit Planning

Preparing for eventual succession or an exit event is a hallmark of smart financial planning for businesses. Thoughtful tax planning strategies can help you preserve wealth and minimize tax liability during these transitions.

Installment Sales : Spreading the sale of your business over several years can help you manage capital gains taxes and maintain a steady income stream.
Employee Stock Ownership Plans (ESOPs) : Selling to employees through an ESOP can provide tax advantages for both you and your business while ensuring continuity.
Gifting and Trusts : Transferring ownership interests through gifts or trusts can help reduce estate and gift taxes, safeguarding your legacy.

Partnering with a CPA to Implement Tax Planning Strategies

Navigating the complexities of business tax savings, compliance, and financial planning for businesses requires more than just a once-a-year review. Working with a CPA who understands your industry and growth journey ensures you’re equipped with the right tax planning strategies at every stage.

Personalized Planning : Receive guidance that reflects the unique needs and goals of your business, from entity selection to succession planning.
Ongoing Support : Benefit from regular check-ins, updates on tax law changes, and proactive recommendations to keep you ahead of the curve.
Trusted Partnership : Build a long-term relationship with a CPA who is invested in your success, providing peace of mind as you focus on growing your business.

Get Expert Guidance on Tax Planning Strategies for Your Growing Business

As your business continues to grow, you deserve a partner who is committed to helping you pay less tax and keep more of your money. With a proven track record of supporting business owners through every stage of growth, you can access accounting and tax preparation services that are designed to fit your needs and ambitions. If you’re ready to explore how strategic tax planning can drive your business forward, reach out directly to  Terry L. Barker, CPA, PC  for a personalized consultation. Start optimizing your business tax savings and financial planning by emailing  terrybarker58@gmail.com  today.

Strategic Business Funding: A Comprehensive Guide for Small Businesses to Raise Capital

Mon, 31 Mar 2025 14:04:37 GMT

For many small business owners, the journey from a fledgling startup to a thriving enterprise is fraught with challenges, one of the most significant being the acquisition of capital. Strategic business funding is not just about securing money; it's about finding the right kind of financial support that aligns with your business goals and growth trajectory. This is especially crucial for small businesses that are transitioning from personal returns to managing larger company finances, a journey familiar to many of our clients.

Identifying the Biggest Pain Point: Access to Capital

One of the most persistent pain points for small business owners is access to capital. Many entrepreneurs find themselves at a crossroads, needing funds to expand operations, hire additional staff, or invest in new technology, yet struggling to find suitable funding sources. This challenge is compounded by the complexities of navigating different funding options, each with its own set of requirements and implications for the business's financial health.

Exploring Different Types of Business Funding

Understanding the various funding options available is the first step towards making an informed decision. Here are some common types of business funding:

1. Bootstrapping

Bootstrapping involves using personal savings or revenue from the business to fund operations. While this method allows for complete control over the business, it often limits growth potential due to restricted financial resources.

2. Bank Loans

Traditional bank loans are a popular choice for many small businesses. They offer a substantial amount of capital, but the process can be lengthy and requires a strong credit history and collateral.

3. Venture Capital

Venture capital is a form of private equity financing provided by investors to startups and small businesses with high growth potential. While it can provide significant funding, it often involves giving up a portion of business ownership.

4. Crowdfunding

Crowdfunding platforms allow businesses to raise small amounts of money from a large number of people, typically via the internet. This method is beneficial for businesses with a strong social media presence and a compelling story.

Evaluating Which Funding Option is Right for You

Choosing the right funding option requires a thorough evaluation of your business's current needs, future goals, and financial health. Here are some factors to consider:

1. Business Stage

The stage of your business plays a critical role in determining the most appropriate funding option. For example, startups may benefit more from venture capital, while established businesses might find bank loans more suitable.

2. Risk Tolerance

Different funding options come with varying levels of risk. It's essential to assess your risk tolerance and understand the potential implications of each funding type on your business operations and ownership.

3. Repayment Terms

Understanding the repayment terms and interest rates associated with each funding option is crucial. This will help you gauge the long-term financial impact on your business and ensure that the chosen funding aligns with your cash flow capabilities.

Leveraging Accounting Expertise for Better Financial Decisions

Ensuring that your business is financially sound requires more than just securing funds. It's about making informed decisions that will sustain growth and profitability. This is where the expertise of a seasoned CPA like Terry L. Barker, CPA, PC comes into play. With over 30 years of experience in accounting and tax preparation, Terry L. Barker, CPA, PC offers tailored services that help you minimize taxes and retain more of your earnings.

Understanding the Importance of Strategic Business Funding

Identifying the Biggest Pain Point: Access to Capital

Maximizing Your Funding Success with a Strategic Approach

To increase the likelihood of securing the right funding for your business, it's crucial to adopt a strategic approach. This involves not only understanding your funding options but also preparing your business to be an attractive candidate for potential investors or lenders. Here are some key strategies to consider:

1. Build a Strong Business Plan

A well-crafted business plan is essential for demonstrating your business's potential to investors and lenders. It should clearly outline your business model, market analysis, competitive landscape, and financial projections. A strong business plan not only helps you secure funding but also serves as a roadmap for your business's growth.

2. Maintain a Healthy Credit Score

Your credit score is a critical factor that lenders consider when evaluating loan applications. Maintaining a healthy credit score involves paying bills on time, reducing debt, and regularly checking your credit report for errors. A strong credit score can significantly enhance your chances of securing favorable loan terms.

3. Network with Potential Investors

Building relationships with potential investors can open doors to funding opportunities. Attend industry events, join business networks, and engage with investors on social media platforms to expand your network. Personal connections can often lead to funding opportunities that may not be publicly advertised.

Common Pitfalls to Avoid When Seeking Business Funding

While seeking funding, it's important to avoid common pitfalls that can hinder your success. Here are some mistakes to watch out for:

1. Overlooking Due Diligence

Failing to conduct thorough due diligence on potential investors or lenders can lead to unfavorable agreements. Ensure you understand the terms and conditions of any funding arrangement and seek legal advice if necessary. This will help you avoid agreements that could negatively impact your business.

2. Not Diversifying Funding Sources

Relying on a single funding source can be risky. Diversifying your funding sources can provide a safety net and increase your financial stability. Consider combining different funding options, such as bank loans, venture capital, and crowdfunding, to create a balanced financial portfolio.

3. Ignoring Cash Flow Management

Effective cash flow management is crucial for sustaining your business, especially when dealing with loan repayments or investor expectations. Create a detailed cash flow forecast and regularly monitor your financial performance to ensure you can meet your financial obligations.

How Terry L. Barker, CPA, PC Can Help

At  Terry L. Barker, CPA, PC  , we understand the complexities and challenges that small businesses face when seeking funding. Our expertise in accounting and tax preparation can help you make informed financial decisions that align with your business goals. With over 30 years of experience, we are committed to helping you minimize taxes and keep more of your earnings, ensuring your business remains financially sound.

If you're ready to explore your funding options and make strategic financial decisions, contact us at  terrybarker58@gmail.com  . Let us help you navigate the path to financial success with confidence and clarity.

Tax Errors? Stay Calm and Follow These Steps for a Hassle-Free Resolution

Mon, 24 Feb 2025 13:59:33 GMT

In the world of business, especially for small business owners, tax errors can be a significant source of stress. These errors not only have the potential to disrupt financial stability but also to strain the relationship with the tax authorities. For many, the fear of penalties and additional scrutiny can be overwhelming. Therefore, understanding the impact of tax errors is crucial for maintaining peace of mind and ensuring the smooth operation of your business.

Common Tax Errors and How They Occur

Tax errors can arise from a variety of situations. Some of the most common include misreporting income, incorrect deductions, and errors in tax credits. These mistakes often occur due to a lack of understanding of the complex tax code or simple oversight. For small business owners who frequently juggle multiple responsibilities, the risk of such errors is even higher. Recognizing and understanding these common errors is the first step in preventing them.

Misreporting Income

One of the most frequent errors is misreporting income. This can happen when all sources of income are not accurately reported, either due to oversight or misunderstanding. For example, failing to report income from side gigs or freelance work can lead to discrepancies. It's essential to maintain thorough records and ensure that every source of income is accounted for in your tax filings.

Incorrect Deductions

Another common issue is claiming incorrect deductions. Business owners often struggle with understanding which expenses are deductible and which are not. This confusion can lead to either missing out on legitimate deductions or erroneously claiming ineligible ones. Keeping detailed records and consulting with a tax professional can help accurately identify and claim deductions.

Errors in Tax Credits

Tax credits can significantly reduce your tax liability, but they are often complex and subject to specific eligibility criteria. Errors in claiming tax credits can result from misunderstanding these criteria or miscalculating the amount. Ensuring that you meet all requirements and accurately calculating the credit can prevent these errors.

Steps to Resolve Tax Errors

Once a tax error is identified, it's important to address it promptly to minimize potential penalties and interest. Here are some steps to help you navigate the resolution process:

Review Your Tax Return

Start by thoroughly reviewing your tax return to identify the error. Compare your records with the information reported to ensure accuracy. This step is crucial in understanding the nature and extent of the error.

Amend Your Tax Return

If the error is significant, you may need to file an amended tax return. This involves submitting a corrected version of your tax return to the IRS. It's important to provide all necessary documentation and explanations to support the corrections made.

Consult a Tax Professional

Consulting with a tax professional can provide guidance and support throughout the resolution process. They can help you understand the implications of the error, assist in filing an amended return, and communicate with the IRS on your behalf if necessary.

Preventing Future Tax Errors

While resolving current tax errors is important, preventing future ones is equally crucial. Implementing effective strategies can help you avoid similar issues in the future and maintain compliance with tax regulations.

Maintain Accurate Records

Keeping accurate and organized records is essential for preventing tax errors. This includes maintaining receipts, invoices, and other documentation that supports your income and deductions. Regularly updating and reviewing your records can help ensure accuracy in your tax filings.

Stay Informed About Tax Changes

Tax laws and regulations are subject to change, and staying informed about these changes is crucial. Subscribing to updates from the IRS or consulting with a tax professional can help you stay current with any new requirements or opportunities for deductions and credits.

Use Tax Software or Professional Services

Utilizing tax software or hiring professional tax services can significantly reduce the likelihood of errors. These tools and services are designed to help you accurately report income, claim deductions, and calculate tax credits, minimizing the risk of mistakes.

Mitigating the Stress of Tax Errors

For many small business owners, the stress associated with tax errors can feel overwhelming. The fear of penalties, the pressure of potential audits, and the anxiety of dealing with tax authorities can all contribute to a taxing experience. However, there are strategies that can help mitigate this stress and make the process more manageable.

Understanding Your Rights as a Taxpayer

One of the most empowering steps you can take is to understand your rights as a taxpayer. The IRS provides a Taxpayer Bill of Rights that outlines your rights in dealing with the agency. Familiarizing yourself with these rights can help you feel more confident and in control when addressing tax issues.

Communicating Effectively with Tax Authorities

Effective communication with tax authorities is crucial when resolving tax errors. It's important to approach these interactions calmly and professionally. Clearly explain the error and provide any supporting documentation needed. Remember that tax authorities are there to help resolve issues, and maintaining a positive relationship can facilitate a smoother resolution process.

Seeking Professional Support

When in doubt, seeking the support of a tax professional can alleviate a significant amount of stress. Professionals like Terry L Barker CPA PC have the expertise to navigate the complexities of tax errors, ensuring that your issues are resolved efficiently and effectively. They can handle communications with tax authorities on your behalf, allowing you to focus on running your business.

Leveraging Technology for Tax Management

In today's digital age, technology offers numerous tools to help manage taxes more efficiently. Leveraging these tools can significantly reduce the risk of errors and streamline the tax preparation process.

Utilizing Accounting Software

Accounting software can automate many aspects of tax preparation, from tracking income and expenses to generating reports. These tools can help ensure accuracy and provide a clear overview of your financial situation, making it easier to spot potential errors before they become issues.

Exploring Tax Apps and Online Resources

There are numerous tax apps and online resources available that can assist with various aspects of tax management. From calculating deductions to providing updates on tax law changes, these resources can be invaluable for small business owners looking to stay compliant and reduce their tax burden.

Benefits of Cloud-Based Solutions

Cloud-based solutions offer the advantage of accessibility and security. Storing your financial records in the cloud ensures that they are safe from physical damage and can be accessed from anywhere, providing flexibility and peace of mind.

Adopting these technological tools not only aids in accuracy but also saves time, allowing you to focus more on growing your business rather than getting bogged down by tax-related tasks. It's a smart move for any savvy entrepreneur looking to optimize their financial management.

Building a Tax-Savvy Business Culture

Another approach to minimizing tax errors is fostering a tax-savvy culture within your business. This involves educating your team about the importance of accurate financial reporting and the potential consequences of errors. Encouraging a culture of transparency and accountability can go a long way in preventing mistakes.

Training and Development

Investing in training for your staff can significantly reduce errors. This could include workshops on financial literacy, tax regulations, and the use of accounting software. A well-informed team is better equipped to handle the complexities of tax preparation and compliance.

Regular Financial Audits

Conducting regular internal audits can help catch errors before they escalate. These audits provide an opportunity to review financial records, ensuring that everything is in order and that any discrepancies are addressed promptly. This proactive approach can save time and resources in the long run.

Creating a Feedback Loop

Establishing a feedback loop within your organization can help identify areas for improvement. Encourage your team to share insights and suggestions on how to enhance financial processes. This collaborative approach can lead to more efficient tax management and a stronger, more resilient business.

The Role of Terry L Barker CPA PC in Your Tax Journey

At  Terry L. Barker, CPA, PC  , we are committed to helping small business owners navigate the complexities of tax preparation and compliance. Our personalized services are designed to address your unique needs, ensuring that you pay less tax and retain more of your hard-earned money.

With over three decades of experience, we have built enduring relationships with our clients, offering expert guidance and support every step of the way. Whether you're dealing with tax errors or seeking to optimize your tax strategy, we're here to help.

Don't let tax challenges hold you back. Reach out to us at  terrybarker58@gmail.com  to discover how we can assist you in achieving financial success and peace of mind. Our team is ready to provide the expertise and support you need to thrive in today's competitive business landscape.

10 IRS Tax Audit Triggers You Need to Know and Avoid

Wed, 29 Jan 2025 13:55:39 GMT

When it comes to running a business, one of the most daunting prospects is the possibility of an IRS tax audit. For many small business owners, the fear of an audit can be overwhelming, especially when considering the potential financial implications. Understanding what triggers an IRS audit is crucial for business owners who aim to minimize their tax liabilities while maximizing their savings. At  Terry L. Barker, CPA, PC  , our goal is to help you pay less tax and keep more of your money, ensuring that your accounting and tax preparation needs are met with precision.

Understanding IRS Tax Audits

An IRS tax audit is a review of your financial accounts and information to ensure that you are reporting your tax obligations accurately. While the IRS audits only a small percentage of tax returns each year, certain triggers can increase the likelihood of an audit. For small business owners, navigating these triggers is essential to maintaining financial stability and peace of mind.

1. High Income Levels

One of the most common triggers for an IRS audit is reporting a high income. While earning a substantial income is a positive indicator of business success, it also places you under closer scrutiny. The IRS tends to focus on high earners as there is a greater potential for discrepancies. It's vital for business owners to ensure that all income is reported accurately and that supporting documentation is readily available.

2. Unreported Income

Failing to report all income is a surefire way to catch the IRS's attention. This includes income from side gigs, freelance work, or cash transactions that may not be documented through formal channels. To avoid this trigger, maintain thorough records of all income sources and report them accurately on your tax return.

3. Excessive Deductions

While deductions are a legitimate way to reduce your taxable income, excessive or unusual deductions can raise red flags. The IRS compares your deductions to industry norms, and significant deviations may prompt an audit. It's important to ensure that all deductions are justifiable and backed by proper documentation. For instance, claiming a large home office deduction without clear evidence of its necessity could be problematic.

4. Discrepancies Between Forms

Inconsistencies between the various tax forms you file can trigger an audit. For example, if the income reported on your W-2 does not match the income reported on your 1040, the IRS will likely investigate further. Double-check all forms for accuracy and consistency to avoid this potential pitfall.

5. Claiming Business Losses Year After Year

Repeatedly claiming business losses can raise suspicions with the IRS. While it's not uncommon for new businesses to experience losses, consistently reporting losses over several years might prompt an audit. The IRS may question whether your business is a legitimate for-profit venture or a hobby. To mitigate this risk, ensure your business activities are conducted with the intent to make a profit and maintain detailed records to support your claims.

6. Home Office Deduction

The home office deduction is a common area of scrutiny. To qualify, the space must be used exclusively and regularly for business purposes. If your home office doubles as a guest room or is used for personal activities, it may not meet IRS criteria. Document the use of your home office meticulously and ensure it aligns with IRS guidelines to avoid triggering an audit.

7. Vehicle Usage

Claiming vehicle expenses is another area where business owners must tread carefully. The IRS is vigilant about ensuring that vehicle use is accurately reported for business purposes. Keeping a detailed log of mileage, dates, and business purposes for each trip can help substantiate your claims. Avoid claiming 100% business use of a vehicle unless it's exclusively used for business activities.

8. Charitable Contributions

While charitable contributions can provide tax benefits, claiming excessive or unsupported donations can lead to an audit. The IRS requires proper documentation for all charitable contributions, including receipts and acknowledgment letters from the organizations. Ensure that your contributions are within reasonable limits and supported by appropriate records.

9. Cash Transactions

Businesses that frequently deal with cash transactions are often under closer scrutiny. The IRS is particularly attentive to cash-intensive businesses because of the potential for unreported income. It's crucial to maintain meticulous records of all cash transactions and ensure they are accurately reflected in your tax filings.

10. Foreign Accounts

Owning foreign accounts or investments can increase the likelihood of an audit. The IRS requires disclosure of foreign assets, and failure to report them can result in significant penalties. Ensure compliance by reporting all foreign accounts and income on your tax return to avoid any issues with the IRS.

Understanding these common IRS tax audit triggers is essential for small business owners who want to maintain financial health and avoid unnecessary stress. By being aware of these triggers and taking proactive measures, you can better protect your business from the potential disruptions of an audit.

Proactive Steps to Minimize Audit Risk

While understanding the triggers is crucial, taking proactive steps to minimize your audit risk is equally important. Here are some strategies you can implement:

Maintain Accurate and Detailed Records

Keeping accurate and detailed records is your first line of defense against an audit. Ensure that all financial transactions are documented and receipts are kept for all expenses. This includes maintaining logs for vehicle usage, documenting home office use, and keeping records of all income sources, including cash transactions.

Regularly Review Tax Returns for Consistency

Before filing your tax returns, review them for consistency and accuracy. Double-check that all income is reported correctly, and ensure there are no discrepancies between different forms. This practice can help you catch potential issues before they draw IRS attention.

Consult with a Tax Professional

Engaging with a tax professional, such as  Terry L. Barker, CPA, PC  , can provide you with peace of mind. Tax professionals have the expertise to guide you through complex tax codes and ensure your returns are accurate and compliant. They can also help you identify legitimate deductions and credits, reducing your tax liability without raising red flags.

Embrace Financial Peace with  Terry L. Barker, CPA, PC 

At  Terry L. Barker, CPA, PC  , we are committed to helping small business owners like you navigate the complexities of tax preparation and minimize the risk of IRS audits. Our personalized services are designed to meet your unique needs, ensuring that you pay less tax and keep more of your money. With our expert guidance, you can focus on growing your business while we handle the intricacies of your financial obligations.

Don't let the fear of an IRS audit keep you up at night. Reach out to us at  terrybarker58@gmail.com  and let us help you achieve financial peace of mind. Our team is ready to support you with precision and care so you can confidently steer your business toward success.

The Benefits Of Hiring A Business Consultant

Mon, 23 Dec 2024 13:50:57 GMT

Are you a business owner looking to take your company to the next level? Perhaps you're struggling to identify areas in which your business could improve or grow. If so, hiring a business consultant may be just what you need to help you achieve your goals. In this blog, we'll explore the benefits of hiring a business consultant, and how  Terry L. Barker, CPA, PC  can provide valuable insights and expertise to help your business succeed.

1. Objective Perspective

Sometimes, it can be difficult for business owners to identify areas of their company that need improvement. As an owner, you're often too close to the business to see things objectively. Hiring a business consultant can provide a fresh perspective, as they bring a wealth of experience and knowledge from working with a variety of businesses. At  Terry L. Barker, CPA, PC  , we take the time to get to know your business and its unique challenges to provide customized solutions tailored to your specific needs.

2. Expertise and Experience

As mentioned above, business consultants have a wealth of experience and knowledge to bring to the table. At  Terry L. Barker, CPA, PC  , we have over 30 years of experience providing top-notch accounting services to businesses across Katy, Fulshear, and West Houston, TX. Our team of experts can help you identify areas of your business that need improvement, and provide actionable solutions to help you achieve your goals.

3. Time and Cost Savings

Hiring a business consultant can actually save you time and money in the long run. By identifying areas of your business that need improvement, you can take action to address these issues before they become major problems. This can save you both time and money in the long run, as you avoid costly mistakes and wasted resources. Additionally, by outsourcing certain tasks to a consultant, you can free up valuable time to focus on other areas of your business.

4. Improved Business Performance

Ultimately, the goal of hiring a business consultant is to improve your business performance. By identifying areas of your business that need improvement and implementing customized solutions, you can take your business to the next level. At  Terry L. Barker, CPA, PC  , we provide accurate, timely financial reports to help you make informed decisions about your business or personal finances. Our competent and knowledgeable team can provide superior bookkeeping and accounting services to help optimize your business performance.

Hiring a business consultant can provide a wealth of benefits to your business, including a fresh perspective, expertise and experience, time and cost savings, and improved business performance. At  Terry L. Barker, CPA, PC  , we are committed to providing personalized solutions to help you achieve your business goals. Contact us today to learn more about how we can help your business succeed. To learn more about what we have, please click here . To contact us, please click here or call us at  (713) 623-3484  .

How an Accountant Can Help a Small Business Owner

Mon, 18 Nov 2024 13:47:03 GMT

Starting and running a small business can be exciting and rewarding, but it can also be overwhelming, especially when it comes to accounting and bookkeeping. As a small business owner, you have to wear many hats, and managing your finances can be time-consuming and challenging. That's where an accountant comes in. In this blog post, we'll explore how an accountant can help a small business owner and why it's essential to have one on your team.

1. Saves You Time and Money

As a small business owner, you're always busy, and time is money. You have to focus on growing your business, developing products or services, and managing your team. When you hire an accountant, you're delegating the accounting and bookkeeping tasks to a professional who can do them faster and more accurately than you. That means you'll have more time to focus on your core business activities and make more money.

2. Provides Expert Advice

An accountant is a financial expert who can provide valuable advice on various aspects of your business. They can help you create a budget, manage cash flow, reduce expenses, and prepare for tax season. They can also provide insights into industry trends and help you make informed decisions about your business.

3. Ensures Compliance

One of the most critical roles of an accountant is to ensure that your business complies with all the relevant laws and regulations. They can help you navigate the complex tax laws and regulations and ensure that you're filing your taxes correctly and on time. They can also help you avoid penalties and fines by keeping you up-to-date with the latest regulations and requirements.

4. Helps You Plan for the Future

An accountant can help you plan for the future by creating financial projections and forecasts. They can help you identify potential risks and opportunities and develop strategies to mitigate risks and capitalize on opportunities. They can also help you plan for expansion, funding, and retirement.

At  Terry L. Barker, CPA, PC  , we understand the unique challenges that small business owners face. That's why we offer personalized accounting services that cater to your specific goals and needs. We believe that accounting processes should be fitted to the needs of the client, not the other way around. With over 30 years of experience, you can trust our competent and knowledgeable team to deliver superior bookkeeping and accounting services.

Hiring an accountant is an investment in your business's success. They can save you time and money, provide expert advice, ensure compliance, and help you plan for the future. If you're a small business owner in Katy, Fulshear, or West Houston TX, contact  Terry L. Barker, CPA, PC  , today to learn more about our accounting services and how we can help you achieve your business goals. To learn more about what we have, please click here . To contact us, please click here or call us at  (713) 623-3484  .

Benefits of Hiring Professional Tax Preparation Service

Wed, 16 Oct 2024 13:44:28 GMT

As we approach tax season, many individuals and businesses find themselves in a state of frenzy trying to prepare and file their taxes. However, filing taxes can be a complex and time-consuming process, which is why many people opt to hire a professional tax preparation service like  Terry L. Barker, CPA, PC  . In this blog post, we'll explore the benefits of hiring a professional tax preparation service and how it can help save you time, money, and stress.

1. Expertise and Experience

Professional tax preparation services like  Terry L. Barker, CPA, PC  have the necessary expertise and experience to ensure that your tax returns are prepared accurately and efficiently. With over 30 years of experience in the accounting industry, our team understands the complexities of tax laws and regulations, and can help you navigate any challenges that arise during the tax preparation process. By hiring a professional tax preparation service, you can rest assured that your tax returns will be prepared correctly and in compliance with all applicable laws and regulations.

2. Save Time and Reduce Stress

Preparing and filing taxes can be a time-consuming and stressful process, especially for individuals and businesses with complex financial situations. By hiring a professional tax preparation service, you can save time and reduce stress by outsourcing the tax preparation process to experts who can handle it for you. This allows you to focus on other important aspects of your business or personal life, without having to worry about the complexities of tax preparation.

3. Maximize Tax Savings

Professional tax preparation services can help you maximize your tax savings by identifying all possible deductions, credits, and exemptions that you may be eligible for. Our team at  Terry L. Barker, CPA, PC  is committed to helping our clients minimize their tax liability and maximize their tax savings, so you can keep more of your hard-earned money in your pocket.

4. Avoid Costly Mistakes

Filing taxes incorrectly can result in costly penalties and fines, which can be avoided by hiring a professional tax preparation service like  Terry L. Barker, CPA, PC  . Our team is dedicated to ensuring that your tax returns are accurate and error-free, so you can avoid any unnecessary penalties or fines.

5. Personalized Service

At  Terry L. Barker, CPA, PC  , we believe in providing personalized service to our clients. We understand that every individual and business has unique needs and goals, which is why we take the time to understand your specific situation and tailor our services accordingly. By providing personalized service, we can help you achieve your financial goals and maximize your tax savings.

Hiring a professional tax preparation service like  Terry L. Barker, CPA, PC  can provide numerous benefits, including expertise and experience, time and stress savings, tax savings, avoidance of costly mistakes, and personalized service. With over 30 years of experience in the accounting industry, we are committed to providing superior bookkeeping and accounting services to our clients across Katy, Fulshear, and West Houston, TX.

Contact us today to learn more about our tax preparation services and how we can help you achieve your financial goals. To learn more about what we have, please click here . To contact us, please click here or call us at  (713) 623-3484  .

Why are Quality Bookkeeping and Accounting Key to Business Success

Mon, 09 Oct 2023 13:39:46 GMT

In the dynamic business landscape of Katy, Fulshear, and West Houston, TX, every decision and action impacts your business's trajectory. Among these, maintaining accurate and comprehensive financial records might be one of the most crucial. This blog explores the pivotal role that quality bookkeeping and accounting play in ensuring your business's success and growth.

1. Informed Decision-Making: Bookkeeping, Tax Strategies, and Accountant Insights for Enhanced Financial Management

Quality bookkeeping and accounting provide a clear picture of your business's financial health. Accurate records enable you to make informed decisions about investments, expansions, and operational improvements, minimizing risks and maximizing opportunities.

2. Financial Transparency: Tax Expertise, and Accountant Insights

Transparency breeds trust, both among stakeholders and customers. Reliable financial records demonstrate your commitment to ethical business practices and financial accountability. This can lead to stronger partnerships, increased customer loyalty, and a positive reputation in the community.

3. Tax Efficiency for Financial Transparency: Informed Decision-Making with Bookkeeping and Accountant Insights

Navigating the intricacies of tax regulations requires meticulous bookkeeping. Properly categorized expenses, accurate income records, and well-maintained financial statements enable your business to claim legitimate deductions, resulting in minimized tax liabilities.

4. Effective Cash Flow Management: Achieving Tax Efficiency and Financial Transparency through Informed Decision-Making

Quality bookkeeping allows you to monitor your cash flow, tracking incoming and outgoing funds. This insight empowers you to plan for expenses, seize growth opportunities, and weather financial challenges without disrupting your business's operations.

5. Driving Future Growth and Expansion: Effective Cash Flow Management, Tax Efficiency, and Informed Decision-Making

When you maintain organized and accurate financial records, securing funding for growth becomes more accessible. Lenders and investors appreciate businesses with transparent financial histories, making it more likely for you to obtain the necessary capital for expansion.

Quality bookkeeping and accounting are the backbone of a thriving business. In the competitive landscape of Katy, Fulshear, and West Houston, TX, these services are not just administrative tasks; they're strategic tools for success. If you are looking for bookkeeping and accountant services, then contact  Terry L. Barker, CPA, PC  . By enlisting the expertise of professionals like  Terry L. Barker, CPA, PC  you're ensuring that your business is built on a solid financial foundation, ready to seize opportunities and navigate challenges.

Get in touch with us today

To learn more about what we have, please click here . To contact us, please click here or call us at  (713) 623-3484  .

5 Ways Accounting and Payroll Services Save You Time and Money

Mon, 11 Sep 2023 13:35:59 GMT

In the fast-paced world of business, time and money are invaluable resources. For businesses in Katy, Fulshear, and West Houston, TX, streamlining financial processes is crucial. This blog delves into the significant ways accounting and payroll services can not only free up your time but also save you substantial amounts of money, allowing you to focus on what truly matters: growing your business.

1. Efficient Financial Management: Accounting, Payroll, and, Tax Optimisation

Accounting services extend beyond mere number crunching. Professionals have the expertise to manage your finances meticulously. From tracking expenses and revenue to generating comprehensive financial reports, they ensure your business stays on top of its financial game.

2. Accurate Payroll Processing, Accounting, and Tax Optimization

Payroll can be a tedious and time-consuming task, prone to errors that could lead to penalties. Outsourcing your payroll to experts ensures accurate calculations, timely deposits, and compliance with tax regulations. This not only saves you time but also mitigates the risk of costly mistakes.

3. Tax Optimization and Compliance

Navigating tax regulations can be daunting. Accounting services provide expert guidance to optimize your tax strategy while ensuring compliance. By identifying applicable deductions and credits, professionals can significantly reduce your tax liability, leaving more money in your business's pocket.

4. Opportunity Cost Savings through Accurate Payroll Processing, Accounting, and Tax Optimization

Every hour spent on non-core tasks like accounting and payroll is an hour taken away from revenue-generating activities. By outsourcing these services, you can redirect your time and energy toward business development, customer engagement, and innovation, ultimately driving growth.

5. Scalability and Adaptability

As your business grows, so do its financial complexities. Accounting professionals are equipped to handle your evolving financial needs. Whether you're expanding, restructuring, or facing economic changes, their expertise ensures your financial strategies remain aligned with your goals.

Time and money are invaluable commodities in the business realm. Embracing accounting and payroll services isn't just a practical choice; it's a strategic investment.

If you're seeking efficient accounting and payroll services in Katy, Fulshear, or West Houston, TX,  Terry L. Barker, CPA, PC  is your partner in financial success. By enlisting professionals like  Terry L. Barker, CPA, PC  you're ensuring your business's financial health, compliance, and growth trajectory.

Get in touch with us today

To learn more about what we have, please click here . To contact us, please click here or call us at  (713) 623-3484  .

What are the Benefits of Hiring a Certified Public Accountant and What is the Real Value of Your CPA?

Fri, 18 Aug 2023 13:32:42 GMT

In the intricate world of finances and taxation, having a knowledgeable ally by your side can make all the difference. That's where a Certified Public Accountant (CPA) comes into play. As a business owner in Katy, Fulshear, or West Houston, TX, you might be wondering how a CPA could benefit your business. This blog will shed light on the substantial advantages of hiring a CPA and reveal the true value they bring to your financial strategy.

1. Expertise Beyond Numbers: CPA, Accountant Specializing in Financial Excellence

When it comes to financial matters, a CPA is not just a numbers cruncher; they're a strategic partner. CPAs undergo rigorous training and education to become experts in taxation, auditing, and financial planning. With their comprehensive knowledge, they can guide you through complex financial decisions and ensure your business is compliant with ever-changing regulations.

2. CPA Guide to Maximizing Tax Efficiency: Expert Tips for Financial Success

CPAs are well-versed in the labyrinthine world of tax codes. They can help your business identify deductions, credits, and strategies to minimize your tax liability while staying within legal boundaries. This proactive approach can result in substantial savings, allowing you to reinvest in your business's growth.

3. Precise Financial Analysis by CPA Accountants: Unveiling Insights for Strategic Planning

Understanding your business's financial health goes beyond basic bookkeeping. CPAs provide in-depth financial analysis that goes beyond surface-level insights. With their guidance, you can identify areas of improvement, allocate resources effectively, and make informed decisions for sustainable growth.

4. Fostering Financial Discipline: Insights from CPA Accountants for Effective Management

A CPA acts as a financial coach, promoting disciplined financial practices. They help you set realistic budgets, monitor cash flows, and plan for future expenses. This discipline not only ensures your business's stability but also prepares you for long-term success.

5. Trusted Advisor: CPA Accountants Navigating Financial Excellence

A CPA is more than just a service provider; they become a trusted advisor invested in your business's prosperity. They take the time to understand your unique financial goals and tailor their strategies accordingly. This personalized approach creates a strong foundation for a lasting professional relationship.

In the competitive business landscape of Katy, Fulshear, and West Houston, TX, having a qualified CPA like  Terry L. Barker, CPA, PC  can be a game-changer. The benefits they bring extend far beyond the numbers on a spreadsheet. By collaborating with a CPA, you're investing in the long-term success, financial health, and peace of mind of your business.

If you're looking for a CPA in Katy, Fulshear, or West Houston, TX, who can provide comprehensive accounting services and guide your business toward financial success, contact  Terry L. Barker, CPA, PC  today.

Get in touch with us today

To learn more about what we have, please click here . To contact us, please click here or call us at  (713) 623-3484  .

The Importance Of Working With A CPA For Auditing And Assurance Services

Mon, 05 Jun 2023 13:27:31 GMT

Running a business involves several complex financial and accounting tasks that require expertise and experience. One of the most important aspects of business accounting is auditing and assurance services. These services help businesses to verify their financial statements and ensure their accuracy. This is why working with a Certified Public Accountant (CPA) for auditing and assurance services is crucial. In this blog,  Terry L. Barker, CPA, PC  , will discuss why you should choose a CPA for auditing and assurance services for your business in Katy, Texas.

A CPA has the required qualifications and expertise

A Certified Public Accountant is a professional accountant who has passed the Uniform CPA Examination and has met all other state-level requirements. They have undergone rigorous training and have gained the necessary knowledge and skills to perform auditing and assurance services. By hiring a CPA, you can be sure that your financial statements are being verified by a qualified professional.

A CPA can provide an unbiased opinion

One of the most important aspects of auditing and assurance services is to provide an unbiased opinion on the financial statements of a business. A CPA can provide an objective and independent assessment of the financial statements, which is essential for stakeholders such as investors, creditors, and regulatory bodies.

A CPA can identify potential risks and errors

CPAs have a keen eye for detail and are trained to identify potential risks and errors in financial statements. By conducting an audit, a CPA can help a business to identify any weaknesses in its financial reporting process and suggest ways to improve it.

A CPA can provide assurance to stakeholders

By working with a CPA for auditing and assurance services, a business can provide assurance to its stakeholders, such as investors and creditors, that their financial statements are accurate and reliable. This can help build trust and confidence in the business and its financial reporting process.

A CPA can help a business stay compliant

CPAs are up-to-date with the latest accounting standards and regulations. By working with a CPA for auditing and assurance services, a business can ensure that it is compliant with all applicable laws and regulations.

Auditing and assurance services are essential for any business that wants to ensure the accuracy and reliability of its financial statements. Working with a Certified Public Accountant in Katy, Texas, can provide several benefits, including expertise, an unbiased opinion, identification of potential risks and errors, assurance to stakeholders, and compliance with regulations. At  Terry L. Barker, CPA, PC  , I provide high-quality auditing and assurance services to businesses of all sizes.

My CPA Accounting firm is one of the leading firms in the area. By combining my expertise, experience, and enthusiasm for my profession, each client receives close personal and professional attention. My firm is responsive. Companies who choose my CPA Accounting firm rely on competent, accurate advice and fast service. I provide total financial services to individuals, large and small businesses, and other agencies. My high-quality service and “raving fan” clients are the results of my commitment to excellence. I will answer all of your questions, as they impact both your tax and financial situations, and welcome you to contact me anytime. I offer business and personal tax services to clients across Katy, Fulshear, Cypress, West Houston, Texas, and the surrounding areas.

Get in touch with me today!

To learn more about the services I offer, please click here . To get in touch with me, please click here or give me a call at  (713) 623-3484  .

How An Accountant Can Save You Time And Money On Your Taxes

Mon, 08 May 2023 13:24:01 GMT

When it comes to filing taxes, many people find it a daunting task. The paperwork, calculations, and deadlines can be overwhelming, especially if you have a complex financial situation. This is where a Certified Public Accountant (CPA) can be of great assistance. In this blog, we will discuss how an accountant can save you time and money on your taxes. Terry Barker, CPA, PC, a certified public accountant in Katy, Texas, offers expert tax preparation services to individuals and businesses alike.

Knowledge of Tax Laws and Regulations

A certified public accountant has a deep understanding of tax laws and regulations. They keep up-to-date with changes to the tax code, ensuring that they are well-equipped to prepare your taxes correctly. As a result, they can identify deductions, credits, and exemptions that can save you money on your taxes.

Saves Time

Tax preparation can be a time-consuming task, especially if you are not familiar with the process. By hiring a CPA, you can free up your time to focus on other important aspects of your life or business. Moreover, a CPA can complete your tax return more quickly and efficiently, reducing the risk of errors or missed deadlines.

Reduces Errors

A CPA can minimize the risk of errors on your tax return. Filing an incorrect tax return can result in penalties and interest charges, which can add up quickly. A certified public accountant will ensure that your tax return is accurate, complete, and filed on time, reducing the likelihood of costly errors.

Offers Tax Planning

A CPA can provide tax planning services to help you prepare for next year’s tax return. They can analyze your current financial situation and identify strategies to minimize your tax liability. This includes strategies such as maximizing deductions, deferring income, and structuring transactions in a tax-efficient manner.

Provides Expert Advice

A CPA can provide expert advice on a range of tax-related matters. Whether you are looking to start a business, invest in real estate, or plan for retirement, a CPA can offer valuable insights and guidance. They can help you make informed decisions that will save you money in the long run.

A certified public accountant can save you time and money on your taxes in Katy, Texas.  Terry L. Barker, CPA, PC  , is a highly experienced and knowledgeable CPA who can provide you with expert tax preparation services. By hiring a CPA, you can ensure that your tax return is accurate, complete, and filed on time, reducing the likelihood of costly errors. Additionally, a CPA can offer tax planning services, expert advice, and insights that can help you make informed decisions and save you money in the long run.

Get in touch with me today!

To learn more about the services I offer, please click here . To get in touch with me, please click here or give me a call at  (713) 623-3484  .

The Benefits Of Hiring A CPA For Your Personal Finances

Tue, 11 Apr 2023 13:16:32 GMT

When it comes to managing personal finances, many people struggle to make sense of their financial situation. From tracking expenses to managing investments, there’s no doubt that managing finances can be a challenging task. That’s where a Certified Public Accountant (CPA) can be of great assistance. In this blog post,  Terry L. Barker, CPA, PC  , will discuss the benefits of hiring a CPA for your personal finances, specifically in Katy, Texas.

Tax Planning and Preparation : One of the main benefits of hiring a CPA for your personal finances is that they can help you with tax planning and preparation. A CPA has the knowledge and expertise to ensure that you are taking advantage of all tax deductions and credits available to you. They can also help you plan for future taxes and ensure that you are meeting all tax compliance requirements.

Financial Planning : A CPA can assist with financial planning by providing you with advice on budgeting, investing, and saving for your future. They can also help you create a personalized financial plan based on your specific goals and needs. With a CPA’s guidance, you can make informed financial decisions that align with your long-term objectives.

Estate Planning : A CPA can also help with estate planning, which involves organizing your assets and planning for the transfer of those assets after your death. This can include creating a will, setting up a trust, and ensuring that your beneficiaries are properly designated. With a CPA’s expertise, you can ensure that your assets are protected and distributed according to your wishes.

Business Support : If you’re a small business owner, a CPA can provide valuable support for your personal finances as well as your business finances. They can help with accounting, financial reporting, and tax preparation for your business. A CPA can also offer advice on business planning, budgeting, and forecasting.

Peace of Mind : Perhaps the most significant benefit of hiring a CPA for your personal finances is the peace of mind that comes with knowing your finances are in good hands. A CPA can provide a level of expertise and knowledge that can help you make better financial decisions and avoid costly mistakes. With a CPA on your side, you can rest assured that your finances are being managed effectively and efficiently.

Hiring a Certified Public Accountant can provide many benefits when it comes to managing your personal finances. From tax planning and financial planning to estate planning and business support, a CPA can offer valuable expertise and guidance. For those in Katy, Texas,  Terry L. Barker, CPA, PC  is a great option for anyone in need of professional accounting services.

Get in touch with me today!

To learn more about the services I offer, please click here . To get in touch with me, please click here or give me a call at  (713) 623-3484  .

Season’s Greetings From Terry L. Barker, CPA, PC

Tue, 14 Dec 2021 13:12:23 GMT

Season’s Greetings from  Terry L. Barker, CPA, PC  . We wish you and yours a wonderful holiday season and a happy, healthy, and prosperous New Year 2022!

If you need any assistance from us during this time, feel free to get in touch with us by clicking here .

Customer Spotlight: John Doe

Wed, 10 Nov 2021 13:10:13 GMT

As a Certified Public Accountant serving across Katy, Fulshear, and West Houston, TX, I cater to the diverse needs of my clients and provide insightful advice to enable them to make informed financial decisions.

In the past thirty years of business, my success has been driven by happy clients, who have given me referrals and written positive reviews about my services. While quality is something that runs through my veins, so does gratitude.

Through this post, I want to highlight a client who has assisted in building my successful reputation and portfolio by helping me with multiple referrals.

Over the last thirty-five years, John Doe* has been more than just a client. He has been an invaluable asset to my business.

In over three decades, I provided him with annual financial consultation, prepared payroll tax reports and annual individual tax returns.

What I sincerely appreciate about John Doe* is his consistency and continuity to my business. There’s a lasting friendship between us, and I have been invited and even participated in many of his and his family’s birthday parties too!

I look forward to building more relationships with clients in this manner to serve them better and increase their conscience in me.

If you need help tracking your finances and overall business goals, I can offer you competent, accurate advice and fast service. I make sure clients receive outstanding accounting services along with in-depth knowledge and expertise.

I offer a range of accounting services to clients across Katy, Fulshear, Bellaire, Cypress, West Houston, and the surrounding areas. So, the next time you’re looking for a Certified Public Accountant in Katy, Fulshear, and West Houston, TX, get in touch with me by clicking here or visit my website here . To read what other clients are saying about me, please click here .

*Due to Client Confidentiality, an assumed name has been used.

How COVID-19 Has Changed Our Lives

Thu, 01 Apr 2021 13:06:59 GMT

COVID changed the way we were coordinating a lot of the work we handle. Multiple changes were taking place with companies and businesses, not allowed to have in-person meetings, which meant that employees had to complete their work from home for the most part. Even clients and the companies they were working with had to coordinate virtually, which was quite challenging for the most part.

Most of the relationships built between clients and companies were in person. It was quite challenging to get a lot of work done remotely. Additionally, there were other challenges like companies noticing a decline in productivity and even people finding it challenging to work from their homes because there were so many distractions and errands that they had to handle.

Taxation can be a fun subject that can also get slightly challenging and tedious to deal with, especially during the lockdown and pandemic with the Government regularly updating the rules. Companies were letting go of entire divisions and sections of their staff throughout the pandemic because the markets were not as good as they used to be, and there were some challenges with trying to maintain them. With massive changes taking place, handling taxes through the pandemic was challenging and needed professionals who would go through the process and understand the changes.

If we have to foresee the changes taking place, we do not see a significant virus-related change or difference between today to the next six months. COVID-19 has been a tremendous problem for the general public, and students whether they are dealing with us or others. As time goes on and we continue to get vaccinated, the next six months will show a trend back to a semblance of normalcy. However, we foresee that it would take a lot more time for everything to be the way it used to be in the past, and with so many changes implemented, we do not see it going back to the past we remember.

COVID-19 has not had a massive effect on my business other than we all looking like bank robbers, wearing masks and not coming in contact with each other. There are times that I attend or organize meetings virtually.

I had to make a lot of changes in the way that I was coordinating with my clients. One of the most significant ones would be my communication process from then and now because we were not allowed to meet most people in person any more. Additionally, there were massive restrictions to travel as well, to contain the virus. We are now using and adjusting to Zoom meetings and facing each other wearing masks and talking through plexiglass walls. We also changed the way we were working, and for the most part, are now working remotely. In the initial days of the pandemic, I was working remotely for April and May. However, I did go back to the office in June with the loosening up the restrictions and have been working from there, over remotely.

I find remote working a challenge because I do not have full access to client files because I have those documents locked at the office. Furthermore, I cannot easily communicate with clients. I have since moved all files in the cloud and learned to participate in Zoom meetings. It has made me a more efficient worker. As a company, connecting to the work that I handle, I have a lot of it filed and offline, which was quite challenging to coordinate through the pandemic because the documents were at the office, and I was working from home.

Working from the office has not caused any problems when I am dealing with our clients. I only meet one client at a time and only by appointment. Furthermore, I make sure I have enough time between meetings, so I do not have a group of people waiting in the lobby. Additionally, in the office, I have everyone wearing a mask because that is about the only thing that has changed.

My working hours have stayed about the same as they were in the past. I didn’t want to reduce the time that my clients were spending interacting with me. With no significant restrictions on the amount of time that they could spend working, it didn’t break any rules by staying to the same working hours. Additionally, I would also spend a lot of time catching up with work outside my working hours.

Working in an industry that deals with sensitive information, including taxation information and personal finances, I am always using a secure platform when working with clients. I wanted to make sure that our records were safe because they comprise confidential information. The software that I use is Dropbox and Adobe. They have worked well for me in the past, so I didn’t think that I would have to make a change now, post-pandemic.

We were not locked up the entire time, although the first couple of months of the pandemic had restrictions that we had to follow, not allowing us to leave. They soon loosened up the rules now, and we were slowly seeing things get back to normal. We started meeting our clients face to face as long as they were open to it because we felt that these meetings were relevant to building relationships with them, and they help us discuss the work we are doing better. However, for the clients who are not open to meeting face to face, we have video conferences if that is their preference. We work with many platforms and are happy to switch from one to another based on our client’s convenience. We work with Zoom, Whatsapp, regular call or text, which are the most commonly used platforms.

I just received my first shot of the COVID vaccine, and hope that others are receiving theirs. I want everyone to be safe and healthy, which would get us in a better position to get back to normal in no time.

If you are looking for a certified public accountant, look no further than  Terry L. Barker, CPA, PC  . We have been working in this industry for more than three decades now and have a pretty decent understanding of the way it works. We also built some great relationships with our clients, but are always looking for more. If you are looking for a list of the services that we provide, please click here . If you want to get in touch with us, please click here .

Why You Should Choose Terry L. Barker, CPA, PC!

Tue, 02 Mar 2021 13:03:57 GMT

Analyzing financial statements, applying accounting principles, and filing taxes are essential to keep your finances in a favorable position. However, if you’re not familiar with these tasks, it’s crucial to hire a certified public accountant (CPA).

Therefore, if you’re looking for an accountant, you need to put in a sufficient amount of research to find someone that matches your expectations. You need to go through reviews you find online and speak to people who’ve worked with them.

At  Terry L. Barker, CPA, PC  , I’m confident about the services I provide and will not shy away from giving you references. Besides, I will be happy to tell you why I’m one of the top names in the accounting industry.

I have been in the accounting industry for over three decades and have numerous happy clients. If you’re looking for an accountant, here are a few reasons why you should work with me.

Financial planning

I liaise with my clients’ financial planners and provide frugal accounting advice. It enables them to plan for their future goals, including saving some money for a rainy day or building a nest egg for retirement.

Budgeting acumen

I help create a financial structure so that people can manage their households efficiently without getting into any unnecessary debt. Besides, I teach good investing habits that usher families closer to achieving financial freedom.

Estate planning

I render assistance with wills and work with my clients’ attorneys, ensuring that their estate planning needs get fulfilled. It provides peace of mind that their inheritance will reach their loved ones.

Experience

I have over thirty years of tax preparation expertise in individual and small business tax issues. It allows me to offer guidance regarding taking advantage of tax breaks and receiving rebates from the Internal Revenue Service.

Personable

I take the time to explain information using simple language so that clients can understand their financial situation easily. It enables them to make informed decisions and save lots of money in the process.

As a leading certified public accountant serving Katy, Fulshear, Bellaire, Cypress, and West Houston, TX, I ensure that I exceed expectations and always put you first. My services include individual, business, and tax processes.

To learn more about the services I offer at  Terry L. Barker, CPA, PC  , please click here . If you have any questions about how I can help you, get in touch with me by clicking here .

How This New Tax Law Could Affect You

Mon, 01 Feb 2021 13:00:55 GMT

The Tax Cuts and Jobs Act, which was enacted in December 2017, was the most significant amendment in several years. It made everyone sit up and think as it changed the way accountants made decisions in entity classification for clients while filing returns.

Choosing the right type of entity for your business dramatically affects the taxes you may owe, so it is worth taking it seriously. Nevertheless, as always with new tax rules, it’s a challenge for clients to understand how to comply with the changing tax code and so rely on their accountants for guidance.

However, as the tax code does not have significant changes often, accountants can become complacent with their client interactions. Suddenly when there is a significant change, the accountant will file the returns correctly, but may not do enough to take advantage of the loopholes available as they have to satisfy many clients, and have limited time.

In this type of scenario, it’s vital that you are proactive and work with an astute accountant that is continually updating their knowledge. They should also go the extra mile to educate you on the latest changes so that you can structure your business to take full advantage of the benefits.

So anytime that a particular event happens in your business and your life, it’s vital that you keep your accountant abreast of the changes, as it will help them keep you well informed.

I always keep up to date with the latest tax changes to serve my clients’ needs, so if you are looking for a reliable accountant in Katy, Fulshear, and Bellaire, Texas, that can improve your bottom line, reach out to  Terry L. Barker, CPA, PC  .

With years of experience, I offer professional accounting services that cater directly to the specific accounting goals of my clients and specialize in tax preparation for individuals and businesses.

If you have any questions about accounting, please contact me by clicking here . To learn more about the other services I have to offer, please click here .

How Terry L. Barker, CPA, PC Help Clients Correct Inaccurate Tax Returns

Tue, 13 Oct 2020 12:58:22 GMT

As a certified public accountant serving Katy, Fulshear, TX, I provide superior accounting and tax preparation services by catering to the needs or goals of my clients.

For the past three decades, I have helped individuals manage their personal finances, ensured business owers pursue growth goals, and assisted numerous clients with their tax preparation. Since I specialize in preparing tax returns and recommend the best tax-saving strategies, clients have come to trust my services and depend on my firm.

However, throughout my career, I have, on several occasions, noticed clients approach me with the same problem. Clients feel that the tax preparers they’ve worked with have prepared inaccurate tax returns and seek my services to help correct the mistake.

Whenever I encountered such cases, I would typically begin by asking clients questions. One of the first questions I would ask them is why they felt their tax returns were improperly prepared. I also asked them about their business or businesses, if they had more than one.

Next, I would take my client’s records that were provided to the previous tax preparer and evaluate all the information that had been used. Unfortunately, I usually face the most challenges during this part of the process.

Evaluating the information provided along with the additional questions about their return and their possible business; each case, depending on the complexity, took different amounts of time to resolve the errors in their ill-prepared returns.

As a taxpayer, if you feel your tax preparer has messed up your returns, do not hesitate to consult a CPA as soon as possible to avoid penalties, additional interest, or an IRS audit.

The Bottom Line

If you’re looking for a certified public accountant and qualified tax professional in Katy, Fulshear, TX, reach out to  Terry L. Barker, CPA, PC  . I keep my client’s best interest in mind at all times, uphold ethical practices, and follow the latest rules to ensure accurate results.

When clients seek my services to rectify incorrect tax returns, I educate them about the process, ask questions, request for documents or receipts, evaluate information, submit necessary forms, offer insightful advice, and so on. Regardless of the challenges that arise, I find the right solution to correct my clients’ inaccurate returns and ensure all of their concerns are solved.

I specialize in providing accounting, tax preparation, and business consulting services to clients across Cypress, Katy, Brookshire, Rosenberg, and the surrounding areas.

To learn more about the services I have to offer, please click here or visit my website for more information. To book a free consultation, get in touch with me by clicking here .

A Beginner’s Guide to Gathering Information For Your CPA

Thu, 27 Aug 2020 12:52:06 GMT

Hiring a CPA will help prepare returns and reduce the balance owed by favorably applying the tax code. However, to enable the CPA to use their expertise in tax preparation to achieve possible refunds, they should have all of the clients’ financial information in front of them.

So, to aid individuals in collecting relevant documents when first meeting a CPA,  Terry L. Barker, CPA, PC  , has put together a beginner’s guide to gathering information for your CPA. By following this guide, you, as an individual, can get peace of mind that your financial statements are in order.

Getting Started

Keep previous years return handy : When meeting with a new CPA, submitting a copy of your prior-year tax return is of utmost importance as it provides a starting point.

Gather documents : You will need to provide the CPA with all your year-end documents, including forms W-2s and 1099. If you are self-employed, a summary of your gross income and expenses is needed. Besides, include a copy of your itemized deductions if you have them. These include medical costs, property taxes, mortgage interest paid, and contributions.

Next Steps

Plan thoroughly : Write down questions to ask, and also be prepared to answer questions. Don’t be afraid to query things that you may feel sound trivial, as it could end up being something crucial.

Clear doubts : If you are not sure about an income or expense item, bring it with you to discuss. A knowledgeable accountant will tell you straight away if it is something that can get included when filing your return.

Advice From The Pros

Remain focused : The most important thing to remember is to be thorough in gathering your records in a timely manner.

Stay relaxed : If this is your first time working with a CPA, make sure that you ask many questions. You should feel comfortable that the accountant has the necessary skills to prepare your return accurately, and If you do not get sufficient answers, then you can always leave.

At  Terry L. Barker, CPA, PC  , my goal is to exceed your expectations. As the go-to expert in Katy, Fulshear, and Bellaire, TX, for all your accounting needs, I will file your tax returns effectively.

By adhering to the values of accuracy, integrity, and efficiency, I render superior accounting services that cultivate client trust. I also believe that accounting processes should fit the needs of the client, not the other way around.

My services include personal financial planning, estate planning, financial planning for seniors, balance sheet preparation, business loans, business plans, income tax preparation, tax planning, and IRS audits. Visit my website to learn more or contact  Terry L. Barker, CPA, PC  today .

Frequently Asked Questions About Dependency Claims, Filing Taxes And Proprietorship

Tue, 07 Jan 2020 12:48:46 GMT

Many people often miss out on tax claims or are unable to take their business to the next step as they lack adequate information. If you’re one such individual who has accounting and tax-related questions but finds answers difficult to come by,  Terry L. Barker, CPA, PC  , understands the stress that you may feel. To ensure you have all your doubts cleared and are armed with the most accurate information, I have answered five of the most frequently asked questions about dependency claims, filing taxes, and proprietorship.

1. Is there an age limit on claiming my child as a dependent?

To claim your child as your dependent, you must meet the qualifying child test, dependent test, and the citizen or resident test. If you have questions in determining dependency status of a child, please contact me to discuss qualifications.

2. To qualify as head of household filing status, do I have to claim my child as a dependent?

The answer is no. To claim head of household, you must be the custodial parent, but you can release the claim to exemption for the child to a non-custodial parent and still claim head of household.

3. What should I do if I made a mistake while filing my tax return?

You will likely need to file an IRS Form 1040X reporting the changes necessary to correct any mistakes in filing your return with documentation and an explanation as to why the changes are made. Amending your tax return can be a daunting task. Please contact me for help in determining if an amended return is needed.

4. Can a married couple operate a business as a sole proprietorship, or do they need to be a partnership?

A married couple can file as sole proprietors by electing to file as a qualified joint venture. They operate the business as co-owners filing a Schedule C for each of their respective interest in the business operation.

In a community property state, you can qualify to file a joint Schedule C with equal ownership.

5. Does a small company that operates as a sole proprietorship need an Employer Identification Number (EIN)?

If you do not have employees, file any excise or pension plan tax returns, you do not have to have a separate EIN. It would likely be advisable to have an EIN not to be using your SSN for an identification number. For further discussion, please contact me.

If you have any more accounting or tax-related questions, reach out to  Terry L. Barker, CPA, PC  . As a Certified Public Accountant serving Katy, Fulshear, and Bellaire, TX, I ensure that I exceed expectations and always put you first. With over twenty-nine years of experience, I have been providing professional accounting, tax preparation, and business consulting services to clients across Cypress, Katy, Brookshire, Rosenberg, Bellaire, and the surrounding areas.

To learn more about my services, please click here or contact me by clicking here .

Stay In Touch With Terry L. Barker, CPA, PC

Fri, 06 Dec 2019 12:45:38 GMT

This email newsletter is a one-stop resource for relevant news and content about  Terry L. Barker, CPA, PC  , and my accounting, tax preparation, and business consulting services.

With everything you care about in one place, it’s easy to stay in the know about all things related to accounting, bookkeeping, and tax planning.

Why should you subscribe?

Stay updated on the latest accounting and tax developments, promotions run by Terry L. Barker, CPA, PC , and knowledge guides.

Here’s what you can expect in my newsletter.

How-to guides: If you need help picking the right accounting professional, avoiding costly financial mistakes, or general business advice, my newsletter provides the guidance you need.

Interesting Articles : My newsletter includes interesting and valuable articles to keep you entertained and informed.

Industry News : Stay up-to-date on the latest accounting, business planning, and tax news.

Valuable blog posts : Preview my blog posts by clicking here , and head straight to the ones you want to read. My blog is updated regularly with accounting and business consulting advice, valuable tools, service information, and financial trends.

Unmissable promotions : From time to time, I’ll share my most exclusive promotions with my newsletter subscribers. Don’t miss out!

I promise I won’t overload your inbox!  Terry L. Barker, CPA, PC  ’s email newsletter, is sent out bi-monthly with only the most relevant content for you.

With over twenty-nine years of experience,  Terry L. Barker, CPA, PC  , is the most trusted name for accounting, tax preparation, and business consulting services across Cypress, Katy, Brookshire, Rosenberg, Bellaire, and the surrounding areas. To learn more about what I do, please click here or get in touch with me by clicking here .

Season’s Greetings from Terry L. Barker, CPA, PC

Mon, 25 Nov 2019 12:40:45 GMT

 Terry L. Barker, CPA, PC  , wishes you and your family a happy and safe holiday season, and all the best for the New Year 2020!

If you need any assistance from me during the holiday season or need to schedule an appointment for year-end tax planning, feel free to get in touch with me by clicking here .

What Makes Terry L. Barker, CPA, PC Stand Out

Fri, 05 Apr 2019 12:39:03 GMT

Thanks for stopping by our blog. If you’re looking for more information about  Terry L. Barker, CPA, PC  you’ve come to the right place.

About Terry L. Barker, CPA, PC 

I am a certified public accountant, specializing in preparing tax returns. I have been in the accounting industry for over thirty years and have extensive experience in helping my clients find the best solution to save tax.

Over the last three decades, I have journeyed from learning the ropes in an accounting firm to starting a partnership with a former colleague. I then successfully branched out on my own and began Terry Barker, CPA.

After gaining a strong reputation in Fort Worth, where I was practicing initially, I recently upped stakes and moved to the Houston area, where I’m growing my clientele strategically. My office location is in Bellaire, but I serve clients across Southwest Houston, Bellaire, Cypress, Katy, and Fulsher. At Katy, I'm available by appointment.

Terry Barker, CPA Difference

Trusting someone to handle your accounts can be a real challenge, which is understandable considering that money is the lifeblood of your business. You need someone who will go beyond just taking the information and reporting it, to providing valuable insights to improve your financial health.

Terry Barker, CPA specializes in being able to provide accounting advice that creates the best deductions and refunds, so that our clients pay the least amount of tax. This specialist knowledge is what truly sets us apart. I firmly believe in maintaining honesty and integrity in my business, and I’m proud to say that many of my clients have been with me for over thirty years.

I aim to go the extra mile to provide a personal touch, by making myself as accessible as possible to my esteemed clients. I make visits to my clients’ offices or receive clients at my office at hours that are more suited to them.

All these aspects constitute my endeavor to be the best personal accountant I can be for my clients, along with continuously staying up to date with the latest changes in tax laws and implementing new technology.

To learn more about all that we do at  Terry L. Barker, CPA, PC  , please click here . If you have any questions about how we can help you, we’d love to hear from you. Please contact us here .

Season’s Greetings from Terry L. Barker, CPA, PC

Wed, 19 Dec 2018 12:31:58 GMT

Here’s wishing you and your family a wonderful Holiday Season, and a happy, healthy, and peaceful New Year 2019!

If you need any assistance from  Terry L. Barker, CPA, PC  during the holiday season, feel free to get in touch with me by clicking here .

Top Five Things To Look For When Hiring An Accountant

Wed, 07 Nov 2018 12:26:02 GMT

An expert accountant or Charted Professional Accountant (CPA) is an invaluable asset to your business. They specialize in analyzing your company’s finances, activities, and business surroundings to determine its performance. Accountants help companies to save money and utilize resources to obtain maximum benefit. Besides, having an accounting professional on your team equals to three specialists in one - an advisor, a legal expert, and a consultant.

No matter how big or small your business is, it pays to have a financial expert to guide you. While looking for an accountant, it is important to take your time to review a few prospects before choosing one. You need to think of the different areas of business you need help with and the kind of expertise that will suit your needs. To make sure you keep track of all the vital features of a professional accountant during your search, here’s a list of the top five things to look for in an accountant or accounting firm.

1. Expertise.

When picking a CPA or tax preparer, the first thing you should see is the expertise of the individual or firm preparing your tax return or performing accounting services for you. It would help if you asked about their expertise in the area of services you require. Their knowledge and skills are vital to ensure you get the service you need.

2. Qualifications.

The person or firm you will be doing business with must have the necessary qualifications to perform the services you require. If it's a CPA, check for details with the relevant State Board where they are licensed. You can also check for feedback from prior and current clients on their web page or other information available about them.

3. Current.

Check if the individual or firm has kept up with current laws and changes to the tax code. No CPA or tax preparer will know all there is for every situation. However, all CPAs and tax preparers should have vast working knowledge of the tax code. At the same time, they should be able to research to get you the right answers.

4. Fit.

It is odd to put this in, but I have learned that personalities are significant. You will have a long-term relationship with your accountant, and this makes personalities vital. You must feel comfortable, and at ease with the individual or firm, you hire.

5. Location.

Business location may not be as important with the constant use of cell phones, text messages, and emails for convenient communication. However, if the individual or firm do not have a business location so you can drop by, how do you know they are an actual organization? Where do you meet with them to discuss your requirements in detail?

If you’re looking for a certified public accountant in Bellaire, TX, reach out to  Terry L. Barker, CPA, PC  . Accounting solutions should fit the unique needs of individuals and corporates. I ensure my services cater to your specific goals. With over twenty-nine years of experience in tax preparation, business consulting, and accounting, I have learned to work quickly and deliver flawless results to a variety of clients.

To learn more about the services we offer, please click here . To get in touch with us, please click here .

Busted! Don't Believe These Tax Myths!

Mon, 17 Sep 2018 12:23:20 GMT

Certified Public Accountants perform several duties. On the one hand, they analyze and record your financial data and on the other, they act as tax accountants wherein they prepare tax returns and devise strategies to minimize tax liabilities.

Unfortunately, there are tax-related myths that have been floating around. This has continued to persist due to misinformation about taxes and often negligence on the part of the taxpayer. Listening to bad advice or believing misconceptions without any clarification can end up costing you thousands of dollars.

To help you avoid falling prey to these misconceptions,  Terry L. Barker, CPA, PC  has debunked a few of the most widely believed myths about taxes.

Myth 1: Tax preparers are all similar.

When it comes to tax preparation, it is my perception that clients consider all tax preparation companies and individual preparers as the same.

This idea clients have regarding tax preparation is far from the truth. There is no licensing or educational requirement for tax preparation which can set up a bad situation for the client. The client is entirely responsible for their tax return preparation and compliance. Clients must exercise due diligence during tax preparation and assistance.

Myth 2: Tax preparers are responsible for any mistakes.

Another myth in tax preparation is thinking that if you hire someone to file your taxes, they will be responsible and liable for errors made when preparing for the return. This is wrong. As a taxpayer, you are the responsible party liable for return. So, it is important to be careful when choosing tax preparation services.

Myth 3: You don’t need to report any illegal money.

Another myth is assuming that if it is illegal money, it does not have to be reported. You have to report any income even if it is illegal. You cannot deduct unlawful expenses that are derived from illegal income, but you still have to report the income.

The best way to avoid these myths and mitigate any stress is to employ professional accounting services. To get the best accounting and tax services, reach out to  Terry L. Barker, CPA, PC  . My firm specializes in accounting, tax preparation, and business consulting services. My primary goal is to provide insightful advice to enable my clients to make informed financial decisions.

For a complete list of my services, please click here . If you have any questions about accounting, I’d love to hear from you. Please contact me here .

Common Mistakes People Make When Preparing Their Tax Return

Wed, 29 Aug 2018 12:18:54 GMT

Whether you are an individual taxpayer or a business entity, the process of filing taxes can be exhausting. To simplify the complex task, assistance from a reputed tax specialist or accounting firm might be the best option. They will represent you in every tax-related matter and ensure you get the most out of your tax refund.

Attempting to prepare tax returns on your own may not have the same accuracy as a professional tax advisor and may result in a delay due to errors. When filing income tax returns, in particular, failing to pay careful attention can cost you a significant amount.

To prevent similar situations, escape the hassle of faulty tax returns, and risk the ire of the Internal Revenue Service (IRS), Terry Barker CPA, has put together a list of common mistakes you should avoid when preparing your tax returns.

1. Filing taxes too quickly . This is a common tax filing mistake. The correct method is always to wait and receive all of your tax information and then file it. As a Certified Public Accountant, I work closely with clients to ensure they have all the information required to submit a complete and accurate return.

2. Not keeping a record of documents . Clients do not always maintain the best documentation of their income and expenses. However, an accurate record will reduce tax obligations and even improve your business. My accounting firm streamlines a system that clients can use to keep up with record-keeping.

3. Failing to hire a tax preparer . Clients often try to prepare their tax returns to save the cost of tax preparation. This is a big mistake. Taxes are complicated, and most clients need the help or guidance in filing returns. Using the services of a professional tax preparer will save you a great deal of tax stress.

4. Lack of knowledge . Tax rules are complicated and hard to interpret. Clients do not always understand tax laws as they are ever changing. They also lack knowledge about available deductions and credits. As a trained tax specialist, I am an expert in this area and continually update myself with the changing tax laws.

5. Omitting a dependent . Another topic clients often fail to comprehend is dependency deductions. Sometimes, they omit a dependent or take too many exemptions on their returns.

As a professional tax preparer, I have a vast knowledge about dependency deductions and can help you avoid making mistakes like these.

For all your tax and accounting needs in Bellaire, TX, reach out to Terry Barker, CPA . With over twenty-nine years of experience in tax preparation, business consulting, and accounting, I cater to the specific goal of every client. I adhere to the values of accuracy, integrity, and efficiency, offer free consultations for new clients and only work with clients who I am sure I can genuinely help.

For a complete list of my services, please click here . If you have any questions about preparing a tax return, I’d love to hear from you. Please contact me here .

Top Five Things To Look For When Hiring A Certified Personal Accountant

Tue, 03 Jul 2018 12:16:31 GMT

Excellent bookkeeping, smart tax filing, and accurate financial statements are all paramount to a business’ bottom line, and one of the most efficient ways of achieving cohesive financial management is by hiring a Certified Public Accountant (CPA).

While accountants will ensure you, or your business is legally compliant with financial policy, a CPA is licensed by a state and is more familiar with tax laws. Besides, a CPA can provide ‘assurance of certification’ and can even represent you before the IRS; something an accountant can’t do.

With the ability to help you save on your personal and corporate taxes, a CPA also offers sound advice and guidance on potential business decisions based on facts and figures, allowing business owners and individuals to stay focused on what matters to them.

For prudent financial management, one of the smartest things you can do is hire a CPA. However, picking one from the slew of options may not be easy. To help simplify the process, here’s a list of the top five things to look for when hiring a Certified Public Accountant.

1. Education.

It is essential that the CPA takes Continuing Professional Education (CPE) courses to enable them to remain updated on the latest taxing laws and mandates due to their periodical changes. These examinations qualify them to help you out with all your tax and accounting requirements.

2. Qualifications.

One of the most significant factors while assessing the abilities of a CPA would be their educational qualifications. A higher level of education generally signifies a higher level of knowledge.

3. Experience.

It is essential that you find a CPA who has experience in taxes and accounting so that they will be reliable in helping you out with your financial assessments. It’s a bonus if they’ve worked with companies in similar market sectors to yours because that will give them a better understanding of the unique needs of your industry.

4. Location.

While selecting a CPA, ask yourself how easy it would be for you to set up meetings with them and where you could meet. Or would it be feasible to drive a distance to get your taxes and accounting done? Having someone within the radius of your business will save you commute time and should there be an emergency you can reach your CPA with little to no trouble.

5. Personality.

When one thinks of a Certified Personal Accountant, the stereotypical image that comes to mind is that of a shy, quiet, conservative person. While this might be true for a select few, a successful CPA is one who is reliable, assiduous, logical, and comfortable in communicating with a diverse set of people. They should be able to explain taxes and accounting in simple layman terms making it comprehensible for a non-accountant individual.

If you’re looking for a reliable, dedicated, trustworthy Certified Personal Accountant in Cypress, Katy, Brookshire, Rosenberg, and Bellaire, Texas, reach out to  Terry L. Barker, CPA, PC  . We have over twenty-nine years of experience, and we will assist you in achieving your personal and business financial goals, as well as organize your accounts and taxes. With the belief that accounting processes should adhere to the client’s requirements, we strive to provide superior accounting services that build our client’s trust and finances. To learn more about the services we offer, please click here. To get in touch with us, please click here .

Owner Spotlight: Terry L. Barker

Wed, 18 Apr 2018 12:03:13 GMT

I’m Terry L. Barker, proud owner of Terry L. Barker, CPA, PC.

I look forward to sharing my story. I hope that you will enjoy getting to know me better.

When I was twelve years old, I knew I wanted to be a CPA. After serving time in the Army and working nights in construction, I went to college and obtained my degree. I have loved every day of my more-than-thirty year career that focuses on tax preparation.

I started working for a CPA firm and worked there for eleven years. Another employee and I bought the firm we worked for and started Barker & Fleming, P.C. I then branched out on my own and moved to Katy, TX in 2011. In 2013, I merged my clients with Gerald A. Anhalt and Associates PLLC, where I currently practice.

Over the past couple of years, I have noticed that taxes are getting a lot more complex than they used to be. The simpler Congress tries to make the filing rules, the more complicated they become. However, with the advance of computers, it has become easier to handle calculations. When I started working on income tax returns, I used to prepare them by hand and on paper. It only took handling a couple of returns to change my mind. When I initially started out, we prepared individual U.S. Individual Returns on the computer and all others by hand. Yes, times have definitely changed.

I love the diversity in clients and all the different facets of the tax code. I initially started in a small town with my clients becoming my friends. I loved that aspect of my work. I have retained some of my clients for thirty years.

My business philosophy has always been treating the client right. I intend to get my clients the best refund or to pay the least they can legally pay. I strive to be the best tax preparer my client can find. I always look forward to helping them achieve their personal and business goals by advising them to the best of my knowledge.

As an individual, I believe what sets me apart from the others are my values, mainly treating my clients as I would want to be treated myself. I attribute this same principle to my success. I am not a person to run a client in and out of the office. I spend time with them when the information is delivered and when they come to pick up their return. I feel it is important that clients understand how returns are prepared. I believe an educated client is the best client and I strive to accomplish that goal.

The most satisfying moments in my business is seeing the smiles and getting thank yous when the returns are finished. When a client keeps coming back, you know that you are taking care of them well. This has given me immense satisfaction over the years.

When I am not at work, I like playing golf and watching golf. I have not had much time to do this, but I am working on that. I am not a good golfer. As a matter of fact, I am a horrible golfer, but I love being on the course and the friendships that come from playing golf. One of my clients said ‘it was the best’ when asked about playing golf with me. His exact words were, “you will have fun, but bring your lunch because you will be there a long time.”

I have enjoyed sharing my story about the things which matter to me and how they influence the way I do business.

If you or someone you know could benefit from our expertise in taxation and filing returns, I invite you to get in touch. Please visit our website at www.terrybarkercpa.com .

Sincerely,

Terry

Announcing the new website

Wed, 28 Mar 2018 11:58:33 GMT

We are delighted to announce the launch of our new website!

Our new website provides our existing and prospective clients a simple yet interactive view of our work and the services we offer. Stay tuned to our blog for new ideas! Sign up here so you never miss an update.

For any enquiries and feedback, please write to us at  terrybarker58@gmail.com  or

call us at  (713) 623-3484  .

Small Business: Be Alert To Identity Theft

Sun, 25 Mar 2018 11:54:50 GMT

Small business identity theft is a big business for identity thieves. Just like individuals, businesses may have their identities stolen, and their sensitive information used to open credit card accounts or used to file fraudulent tax refunds for bogus refunds. As such, small business owners should be on guard against a growing wave of identity theft against employers.

Background

In the past year, the Internal Revenue Service has noted a sharp increase in the number of fraudulent Forms 1120, 1120S and 1041 as well as Schedule K-1. These fraudulent filings apply to partnerships as well as estate and trust forms.

Security Summit partners (IRS, state tax agencies, and the private-sector tax community) have expanded efforts to protect business filers better and identify suspected identity theft returns.

Identity thieves display a sophisticated knowledge of the tax code and industry filing practices and have long made use of stolen Employer Identification Numbers (EINs), which they use to create fake Forms W-2. These fake Forms W-2 are then used to file with fraudulent individual tax returns.

Fraudsters also used EINs to open new lines of credit or obtain credit cards but until recently were only targeting individuals. Now, they are using company names and EINs to file fraudulent returns.

What to Watch Out for

As with fraudulent individual returns, there are certain signs that may indicate business identity theft. Business, partnerships and estate and trust filers should be alert to potential identity theft and contact the IRS if they experience any of these issues:

Extension to file requests are rejected because a return with the Employer Identification Number or Social Security number is already on file;
An e-filed return is rejected because of a duplicate EIN/SSN is already on file with the IRS;
An unexpected receipt of a tax transcript or IRS notice that doesn't correspond to anything submitted by the filer.
Failure to receive expected and routine correspondence from the IRS because the thief has changed the address.

New Procedures to Protect Business in 2018

The IRS, state tax agency, and software providers also share certain data points from returns, including business returns, which help identify a suspicious filing. The IRS and states also are asking that business and tax practitioners provide additional information that will help verify the legitimacy of the tax return.

For 2018, these "know your customer" procedures are being put in place and include the following questions:

The name and SSN of the company executive authorized to sign the corporate tax return. Is this person authorized to sign the return?
Payment history. Were estimated tax payments made? If yes, when were they made, how were they made, and how much was paid?
Parent company information. Is there a parent company? If yes, who?
Additional information based on deductions claimed
Filing history. Has the business filed Form(s) 940, 941 or other business-related tax forms?

Sole proprietorships . Sole proprietorships that file Schedule C and partnerships filing Schedule K-1 with Form 1040 also will be asked to provide additional information items, such as a driver’s license number. Providing this information will help the IRS and states identify suspicious business-related returns.

Security . For small businesses looking for a place to start on security, the National Institute of Standards and Technology (NIST) produced the publication: Small Business Information Security: The Fundamentals. NIST is the branch of the U.S. Commerce Department that sets information security frameworks followed by federal agencies.

The United States Computer Emergency Readiness Team (US-CERT) has a special section on its website dedicated to Resources for Small and Midsize Businesses. Many secretaries of state also provide resources on business-related identity theft as well.

For more information about business-related identity theft visit the IRS website and search for Identity Protection: Prevention, Detection and Victim Assistance.

If you believe your business identity has been used for fraudulent purposes don't hesitate to call the office for assistance.

Missing Important Tax Forms? Here's What To Do

Sun, 25 Mar 2018 11:51:47 GMT

Form W-2

You should receive a Form W-2, Wage and Tax Statement, from each of your employers for use in preparing your federal tax return. Employers must furnish this record of 2017 earnings and withheld taxes no later than January 31, 2018 (allow several days for delivery if mailed).

If you do not receive your Form W-2, contact your employer to find out if and when the W-2 was mailed. If it was mailed, it may have been returned to your employer because of an incorrect address. After contacting your employer, allow a reasonable amount of time for your employer to resend or to issue the W-2.

Form 1099

If you received certain types of income, you may receive a Form 1099 in addition to or instead of a W-2. Payers have until January 31 to mail these to you.

In some cases, you may obtain the information that would be on the Form 1099 from other sources. For example, your bank may put a summary of the interest paid during the year on the December or January statement for your savings or checking account. Or it may make the interest figure available through its customer service line or Web site. Some payers include cumulative figures for the year with their quarterly dividend statements.

You do not have to wait for Form 1099 to arrive provided you have the information (actual not estimated) you need to complete your tax return. You generally do not attach a 1099 series form to your return, except when you receive a Form 1099-R, Distributions From Pensions, Annuities, Retirement or Profit-Sharing Plans, IRAs, Insurance Contracts, etc., that shows income tax withheld. You should, however, keep all of the 1099 forms you receive for your records.

When to Contact the Irs

If, by mid-February, you still have not received your W-2 or Form 1099-R, contact the IRS for assistance at 1-800-829-1040. When you call, have the following information handy:

the employer's name and complete address, including zip code, and the employer's telephone number;
the employer's identification number (if known);
your name and address, including zip code, Social Security number, and telephone number.

Misplaced W-2

If you misplaced your W-2, contact your employer. Your employer can replace the lost form with a "reissued statement." Be aware that your employer is allowed to charge you a fee for providing you with a new W-2.

You still must file your tax return on time even if you do not receive your Form W-2. If you cannot get a W-2 by the tax filing deadline, you may use Form 4852, Substitute for Form W-2, Wage and Tax Statement, but it will delay any refund due while the information is verified.

Filing an Amended Return

If you receive a corrected W-2 or 1099 after your return is filed and the information it contains does not match the income or withheld tax that you reported on your return, you must file an amended return on Form 1040X, Amended U.S. Individual Income Tax Return.

Health Insurance Forms 1095-A, 1095-B, or 1095-C

Most taxpayers will receive one or more forms relating to health care coverage they had during the previous year. If you think you should have received a form but did not get one contact the issuer of the form (the Marketplace, your coverage provider or your employer). If you are expecting to receive a Form 1095-A, you should wait to file your 2017 income tax return until you receive that form. However, it is not necessary to wait for Forms 1095-B or 1095-C in order to file.

Form 1095-A . If you enrolled in 2017 coverage through the Health Insurance Marketplace, you should receive Form 1095-A, Health Insurance Marketplace Statement in early 2018.

Forms 1095-B or 1095-C . If you were enrolled in other health coverage for 2017, you should receive a Form 1095-B, Health Coverage, or Form 1095-C, Employer-Provided Health insurance Offer and Coverage by early March.

If you have questions about your Forms W-2 or 1099 or any other tax-related materials, don't hesitate to contact the office.

Tips For A Stress-Free Tax Season

Sun, 25 Mar 2018 11:47:08 GMT

Earlier is better when it comes to working on your taxes but many people find preparing their tax return to be stressful and frustrating. Fortunately, it doesn't have to be. Here are six tips for a stress-free tax season.

Don't Procrastinate. Resist the temptation to put off your taxes until the very last minute. Your haste to meet the filing deadline may cause you to overlook potential sources of tax savings and will likely increase your risk of making an error. Getting a head start will not only keep the process calm but also mean you get your return faster by avoiding the last-minute rush.
Gather your records in advance. Make sure you have all the records you need, including W-2s and 1099s. Don't forget to save a copy for your files.
Double-check your math and verify all Social Security numbers. These are among the most common errors found on tax returns. Taking care will reduce your chance of hearing from the IRS. Submitting an error-free return will also speed up your refund.
E-file for a faster refund. Taxpayers who e-file and choose direct deposit for their refunds, for example, will get their refunds in as few as 10 days. That compares to approximately six weeks for people who file a paper return and get a traditional paper check.
Don't Panic if You Can't Pay. If you can't immediately pay the taxes you owe, consider some stress-reducing alternatives. You can apply for an IRS installment agreement, suggesting your own monthly payment amount and due date, and getting a reduced late payment penalty rate. You also have various options for charging your balance on a credit card. There is no IRS fee for credit card payments, but the processing companies charge a convenience fee. Electronic filers with a balance due can file early and authorize the government's financial agent to take the money directly from their checking or savings account on the April due date, with no fee.
Request an Extension of Time to File (But Pay on Time). If the clock runs out, you can get an automatic six-month extension bringing the filing date to October 15, 2018. However, the extension itself does not give you more time to pay any taxes due. You will owe interest on any amount not paid by the April deadline, plus a late payment penalty if you have not paid at least 90 percent of your total tax by that date.

If you run into any problems, have any questions, or need to file an extension, help is just a phone call away .

Donating A Car To Charity

Sun, 25 Mar 2018 11:45:17 GMT

If you donated a car to a qualified charitable organization in 2017 and intend to claim a deduction, you should be aware of the special rules that apply to vehicle donations.

Note: You can deduct contributions to a charity only if you itemize deductions using Schedule A of Form 1040.

Charities typically sell donated vehicles. If the vehicle is sold by the charitable organization you donated it to, the deduction claimed by the donor (you) and usually may not exceed the gross proceeds from the sale.

If the donated vehicle sells for less than $500, you can claim the fair market value of your vehicle up to $500 or the amount it is sold for if less than fair market value.

The taxpayer can generally deduct the vehicle's Fair Market Value (FMV), if:

The charitable organization makes a significant intervening use of the vehicle, such as using it to deliver meals on wheels.
The charitable organization donates or sells the vehicle to a needy individual at a significantly below-market price, if the transfer furthers the charitable purpose of helping a poor person in need of a means of transportation.
The charitable organization makes a material improvement to the vehicle, i.e., major repairs that significantly increase its value and not mere painting or cleaning.

If the donated vehicle sells for more than $500 and your deduction is $500 or more you must obtain written, contemporaneous (timely), acknowledgment of the donation from the charitable organization. You must also attach Form 1098-C, Contributions of Motor Vehicles, Boats, and Airplanes, to your tax return.

The written acknowledgment generally must include your name and taxpayer identification number, the vehicle identification number, the date of the contribution, and one of the following:

A statement that no goods or services were provided by the charity in return for the donation, if that was the case,
A description and good faith estimate of the value of goods or services, if any, that the charity provided in return for the donation, or,
A statement that goods or services provided by the charity consisted entirely of intangible religious benefits, if that was the case.

Note: If the written acknowledgment does not contain all of the required information, the deduction may not exceed $500.

For more information about donating a car to charity please contact the office.

Federal Tax Forms: Which One Should You Use?

Sun, 25 Mar 2018 11:43:37 GMT

U.S. citizens and resident aliens use one of three different forms for filing individual federal income tax returns: 1040EZ, 1040A, or 1040. If you're wondering which form you should use, keep reading.

Form 1040EZ

Form 1040EZ, Income Tax Return for Single and Joint Filers With No Dependents, is the least complicated federal tax form. however, if you file Form 1040EZ, you should be aware that you can't itemize deductions or claim any adjustments to income or tax credits other than the earned income credit. Use Form 1040EZ if:

Your filing status is single or married filing jointly, you claim no dependents, and were under age 65 on January 1, 2018, and not blind at the end of 2017
Your taxable income is less than $100,000 and is derived only from wages, salaries, tips, taxable scholarship and fellowship grants, unemployment compensation, or Alaska Permanent Fund dividends
Your taxable interest is not over $1,500
You don't owe any household employment taxes on wages you paid to a household employee

Note: You can't use Form 1040EZ to claim the Premium Tax Credit. You also can't use this form if you received advance payments of this credit in 2017.

Form 1040A

If you cannot use Form 1040EZ, you may be able to use Form 1040A, U.S. Individual Income Tax Return. Keep in mind, however, that you cannot itemize and you can only claim certain tax deductions such as the IRA deduction, the student loan interest deduction, and the educator expenses deduction. You can also use Form 1040A if:

Your taxable income is below $100,000 and that income is derived only from the following:
wages, salaries, tips,
Interest or ordinary dividends,
capital gain distributions,
taxable scholarships and fellowship grants,
pensions, annuities, IRAs,
unemployment compensation,
Alaska Permanent Fund dividends, and
taxable social security or railroad retirement benefits
The only tax credits you can claim are:
the credit for child and dependent care expenses,
the credit for the elderly or the disabled,
education credits,
the retirement savings contributions credit,
the child tax credit,
the additional child tax credit,
the earned income credit, and/or the premium tax credit
You do not have an alternative minimum tax adjustment on stock you acquired from the exercise of an incentive stock option.
You have distributions from capital gains

Nonresident Aliens

Nonresident aliens married to a U.S. citizen or resident alien may use any one of these three forms, based on your circumstances, but only if you elect to be treated as a resident alien when you file a joint return with your spouse. Nonresident aliens may have to file Form 1040NR-EZ or Form 1040NR.

Questions about federal tax forms?

Call or make an appointment today and get the answers you need right now .

Five Tax Breaks That Survived Tax Reform

Sun, 25 Mar 2018 11:39:23 GMT

Recent tax reform legislation affected many provisions in the tax code. Many were modified, either permanently or temporarily, while some were repealed entirely. Here are five that survived.

Mortgage Interest Deduction
While the House bill repealed the mortgage interest deduction, the final version of the act retained it, albeit with modifications. First is that the allowed interest deduction is limited to mortgage principal of $750,000 on new homes (i.e., new ownership). For prior tax years, the limit on acquisition indebtedness was $1 million. Existing mortgages are grandfathered in, however, and taxpayers who enter into binding contracts before December 15, 2017, to close on the purchase of a principal residence before January 1, 2018, and who purchase such residence before April 1, 2018, are able to use the prior limit of $1 million.
Personal Taxes: State and Local Income Tax, Sales Tax and Property Tax
In prior years, taxpayers who itemize were allowed to deduct the amount they pay in state and local taxes (SALT) from their federal tax returns. Slated for repeal (with the sole exception of exception of a state and local property tax deduction capped at $10,000) under both the House and Senate versions of the tax bill, SALT remained in the final tax reform bill in modified form. As such, for taxable years 2018 through 2025, the aggregate deduction for property taxes, state, local, and foreign income taxes, or sales taxes is limited to $10,000 a year ($5,000 married filing separately).
Educator Expense Deduction
Primary and secondary school teachers buying school supplies out-of-pocket are still able to take an above-the-line deduction of up to $250 for unreimbursed expenses. Expenses incurred for professional development are also eligible. This deduction was made permanent with the passage of PATH Act of 2015 and survived tax reform legislation that passed in 2017 as well.
Plug-In Electric Drive Vehicle Tax Credit
Also slated for elimination in the House bill (but retained in the final tax reform bill) was the tax credit for the purchase of qualified plug-in electric drive motor vehicles including passenger vehicles and light trucks. For vehicles acquired after December 31, 2009, the minimum credit is $2,500. The maximum credit allowed is limited to $7,500. The credit begins to phase out for a manufacturer's vehicles when at least 200,000 qualifying vehicles have been sold for use in the United States (determined on a cumulative basis for sales after December 31, 2009).
Medical Expense Threshold Amounts
The House version proposed a repeal of the itemized deduction related to medical expenses but it was retained (and temporarily lowered) in the final tax reform legislation. For tax years 2017 and 2018, the threshold amount for medical expense deductions is reduced to 7.5 percent of AGI. Under the PATH Act of 2015, the medical expense deduction increased to 10% of AGI (effective for tax years 2013 to 2016).

Don't miss out!

If you're wondering whether you should be taking advantage of these and other tax credits and deductions, don't hesitate to call .

Tax Filing Season Begins; Tax Returns Due April 17

Sun, 25 Mar 2018 11:33:48 GMT

More than 155 million individual tax returns are expected to be filed in 2018, according to the IRS, which began accepting electronic and paper tax returns on Monday, January 29, 2018. The January 29 opening date was set to ensure the security and readiness of key tax processing systems in advance of the opening and to assess the potential impact of tax legislation on 2017 tax returns.

Note: Although the IRS began accepting both electronic and paper tax returns January 29, paper returns will not begin processing until mid-February as system updates continue.

April 17 Filing Deadline

The filing deadline to submit 2017 tax returns is Tuesday, April 17, 2018, rather than the traditional April 15 date. In 2018, April 15 falls on a Sunday, and this would usually move the filing deadline to the following Monday (April 16). However, Emancipation Day, which is a legal holiday in the District of Columbia, will be observed on that Monday. This pushes the nation's filing deadline to Tuesday, April 17, 2018. Under the tax law, legal holidays in the District of Columbia affect the filing deadline across the nation.

Refunds in 2018

The IRS anticipates issuing more than nine out of 10 refunds in less than 21 days, but there are some important factors to keep in mind.

The IRS will begin releasing refunds for taxpayers claiming the Earned Income Tax Credit (EITC) and the Additional Child Tax Credit (ACTC) starting February 15. However, these refunds--even the portion not associated with the EITC and ACTC--are not likely to arrive in bank accounts or on debit cards until the week of February 27. This date assumes that there are no processing issues with the tax return and the taxpayer chose direct deposit.

Taxpayers should be aware that many financial institutions do not process payments on weekends or holidays, which can affect when refunds reach taxpayers. For example, the three-day holiday weekend involving Presidents' Day may affect the timing of refunds for EITC and ACTC filers.

Don't hesitate to call if you have any questions or need assistance filing your tax return this year.

Who Should File A 2017 Tax Return?

Sun, 25 Mar 2018 11:31:42 GMT

Most people file a tax return because they have to, but even if you don't, there are times when you should--because you might be eligible for a tax refund and not know it. The six tax tips below should help you determine whether you're one of them.

General Filing Rules. Whether you need to file a tax return this year depends on several factors. In most cases, the amount of your income, your filing status, and your age determine whether you must file a tax return. For example, if you're single and 28 years old you must file if your income, was at least $10,400 ($20,800 if you are married filing a joint return). If you're self-employed or if you're a dependent of another person, other tax rules may apply.
Premium Tax Credit. If you purchased coverage from the Marketplace in 2017 you might be eligible for the Premium Tax Credit if you chose to have advance payments of the premium tax credit sent directly to your insurer during the year; however, you must file a federal tax return and reconcile any advance payments with the allowable premium tax credit.
Tax Withheld or Paid. Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? Did you overpay last year and have it applied to this year's tax? If you answered "yes" to any of these questions, you could be due a refund, but you have to file a tax return to receive the refund.
Earned Income Tax Credit. Did you work and earn less than $53,930 last year? You could receive EITC as a tax refund if you qualify with or without a qualifying child. You may be eligible for up to $6,318. If you qualify, file a tax return to claim it.
Additional Child Tax Credit. Do you have at least one child that qualifies for the Child Tax Credit? If you don't get the full credit amount, you may qualify for the Additional Child Tax Credit and receive a refund even if you do not owe any tax.
American Opportunity Credit. The AOTC (up to $2,500 per eligible student) is available for four years of post-secondary education. You or your dependent must have been a student enrolled at least half-time for at least one academic period. Even if you don't owe any taxes, you still may qualify; however, you must complete Form 8863, Education Credits, and file a return to claim the credit.

If you have any questions about whether you should file a return, please contact the office.

Updated Withholding Tables For 2018

Sun, 25 Mar 2018 11:29:55 GMT

Updated income-tax withholding tables have been released for 2018 reflecting changes made by the tax reform legislation enacted last month.

The updated withholding information, available on IRS.gov, shows the new rates for employers to use during 2018. Employers should begin using the 2018 withholding tables as soon as possible, but not later than February 15, 2018. They should continue to use the 2017 withholding tables until implementing the 2018 withholding tables.

Many employees will begin to see increases in their paychecks to reflect the new law in February. The time it will take for employees to see the changes in their paychecks will vary depending on how quickly the new tables are implemented by their employers and how often they are paid, generally weekly, biweekly or monthly.

To minimize the burden on taxpayers and employers, the new withholding tables are designed to work with the Forms W-4 that workers have already filed with their employers to claim withholding allowances. Employees do not have to do anything at this time.

Under the new law there are a number of changes for 2018 that affect individual taxpayers. The new withholding tables reflect the increase in the standard deduction, repeal of personal exemptions and changes in tax rates and brackets.

For people with more simple tax situations, the new tables are designed to produce the correct amount of tax withholding. The revisions are also aimed at avoiding over- and under-withholding of tax as much as possible.

To help people determine their withholding (and adjust as needed), the IRS is revising the withholding tax calculator on IRS.gov and should be available by the end of February.

Don't hesitate to call if you need help figuring out your withholding in 2018 .

Employers: Beware Of The Form W-2 Scam

Sun, 25 Mar 2018 11:28:08 GMT

The Form W-2 scam has emerged as one of the most dangerous phishing emails in the tax community. During the last two tax seasons, cybercriminals tricked payroll personnel or people with access to payroll information into disclosing sensitive information for entire workforces.

Last year, more than 200 employers were victimized, resulting in hundreds of thousands of employees with compromised identities. The scam affected all types of employers, from small and large businesses to public schools and universities, hospitals, tribal governments, and charities.

What is a Form W-2?

Employers engaged in a trade or business who pay remuneration for services performed by an employee must file a Form W-2 for each employee from whom:

Income, social security, or Medicare tax was withheld.
Income tax would have been withheld if the employee had claimed no more than one withholding allowance or had not claimed exemption from withholding on Form W-4, Employee's Withholding Allowance Certificate.

Additionally, employers must issue W-2s to any employee (including an employee who is related to the employer) who had the following:

Non-cash payments of $600 or more for the year
Non-cash payments of any amount if any income, social security, or Medicare tax was withheld

The Form W-2 contains the employee's name, address, Social Security number, income, and withholdings. Criminals use that information to file fraudulent tax returns, or they post it for sale on the DarkNet.

How the Form W-2 Phishing Scam Works

Cybercriminals do their homework, identifying chief operating officers, school executives or others in positions of authority. Using a technique known as business email compromise (BEC) or business email spoofing (BES), fraudsters posing as executives send emails to payroll personnel requesting copies of Forms W-2 for all employees.

In many cases, the email starts off as a friendly exchange before the fraudster asks for all Form W-2 information. In several reported cases, after the fraudsters acquired the workforce information, they immediately followed that up with a request for a wire transfer.

What to do

Employers should be aware that cyber criminals' scams constantly evolve. Finance and payroll personnel should be alert to any unusual requests for employee data.

If your businesses or organization falls victim to the scam or receives a suspect email but does not fall victim to the scam send the full email headers to phishing@irs.gov and use "W2 Scam" in the subject line.

Owing Back Taxes Could Affect Passport Renewal

Sun, 25 Mar 2018 11:24:53 GMT

Starting in February 2018, individuals with "seriously delinquent tax debts" will be subject to a new set of provisions courtesy of the Fixing America's Surface Transportation (FAST) Act, signed into law in December 2015.

The FAST Act requires the IRS to notify the State Department of taxpayers the IRS has certified as owing a seriously delinquent tax debt and also requires the State Department to deny their passport application or deny renewal of their passport. In certain instances, the State Department may revoke their passport.

Taxpayers affected by this law are those with a seriously delinquent tax debt, generally, an individual who owes the IRS more than $51,000 in back taxes, penalties and interest for which the IRS has filed a Notice of Federal Tax Lien and the period to challenge it has expired, or the IRS has issued a levy.

Taxpayers can avoid having the IRS notify the State Department of their seriously delinquent tax debt by doing the following:

Paying the tax debt in full
Paying the tax debt timely under an approved installment agreement,
Paying the tax debt timely under an accepted offer in compromise,
Paying the tax debt timely under the terms of a settlement agreement with the
Department of Justice,
Having requested or have a pending collection due process appeal with a levy, or
Having collection suspended because a taxpayer has made an innocent spouse election or requested innocent spouse relief.

However, a taxpayer's passport won't be at risk under this program if an individual:

Is in bankruptcy
Is identified by the IRS as a victim of tax-related identity theft
Has an account that the IRS has determined is currently not collectible due to hardship
Is located within a federally declared disaster area
Has a request pending with the IRS for an installment agreement
Has a pending offer in compromise with the IRS
Has an IRS accepted adjustment that will satisfy the debt in full

For taxpayers serving in a combat zone, and who also owe a seriously delinquent tax debt, the IRS postpones notifying the State Department and the individual's passport is not subject to denial during this time.

Taxpayers who are behind on their tax obligations should come forward and pay what they owe or enter into a payment plan with the IRS and may qualify for one of several relief programs, including the following:

Taxpayers can request a payment agreement with the IRS by filing Form 9465, Installment Agreement Request. Taxpayers can download this form from IRS.gov and mail it along with a tax return, bill or notice. Some taxpayers may be eligible to use the online payment agreement to set up a monthly payment agreement for up to 72 months.
Financially distressed taxpayers may qualify for an offer in compromise, an agreement between a taxpayer and the IRS that settles the taxpayer's tax liabilities for less than the full amount owed. The IRS looks at the taxpayer's income and assets to determine the taxpayer's ability to pay.

If you owe back taxes and are worried your passport could be revoked because of unpaid taxes, please contact the office .

Tax Due Dates For February 2018

Sun, 25 Mar 2018 11:21:13 GMT

February 12

Employees - who work for tips. If you received $20 or more in tips during January, report them to your employer. You can use Form 4070.

Employers - Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of 2017. This due date applies only if you deposited the tax for the quarter in full and on time.

Farm Employers - File Form 943 to report Social Security and Medicare taxes and withheld income tax for 2017. This due date applies only if you deposited the tax for the year in full and on time.

Certain Small Employers - File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2017. This tax due date applies only if you deposited the tax for the year in full and on time.

Employers - Nonpayroll taxes. File Form 945 to report income tax withheld for 2017 on all nonpayroll items. This due date applies only if you deposited the tax for the year in full and on time.

Employers - Federal unemployment tax. File Form 940 for 2017. This due date applies only if you deposited the tax for the year in full and on time.

February 15

Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in January.

Employers - Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in January.

All businesses . Give annual information statements to recipients of certain payments you made during 2017. You can use the appropriate version of Form 1099 or other information return. This due date applies only to the following types of payments:

All payments reported on Form 1099-B, Proceeds From Broker and Barter Exchange Transactions.
All payments reported on Form 1099-S, Proceeds From Real Estate Transactions.
Substitute payments reported in box 8 or gross proceeds paid to an attorney reported in box 14 of Form 1099-MISC.

February 28

Businesses - File information returns (Form 1099) for certain payments you made during 2017. These payments are described under January 31; however, Form 1099-MISC reporting nonemployee compensation must be filed by January 31. There are different forms for different types of payments. Use a separate Form 1096 to summarize and transmit the forms for each type of payment. See the 2017 Instructions for Forms 1099, 1098, 5498, and W-2G for information on what payments are covered, how much the payment must be before a return is required, what form to use, and extensions of time to file.

If you file Forms 1097, 1098, 1099, 3921, 3922, or W-2G electronically (except Form 1099-MISC reporting nonemployee compensation), your due date for filing them with the IRS will be extended to April 2. The due date for giving the recipient these forms is still January 31.

Payers of Gambling Winnings - File Form 1096, Annual Summary and Transmittal of U.S. Information Returns, along with Copy A of all the Forms W-2G you issued for 2017. If you file Forms W-2G electronically, your due date for filing them with the IRS will be extended to April 2. The due date for giving the recipient these forms remains January 31.

Large Food and Beverage Establishment Employers - with employees who work for tips. File Form 8027, Employer's Annual Information Return of Tip Income and Allocated Tips. Use Form 8027-T, Transmittal of Employer's Annual Information Return of Tip Income and Allocated Tips, to summarize and transmit Forms 8027 if you have more than one establishment. If you file Forms 8027 electronically, your due date for filing them with the IRS will be extended to April 2.

Health Coverage Reporting - If you're an Applicable Large Employer, file paper Forms 1094-C, Transmittal of Employer-Provided Health Insurance Offer and Coverage Information Returns, and 1095-C with the IRS. For all other providers of minimum essential coverage, file paper Forms 1094-B, Transmittal of Health Coverage Information Returns, and 1095-B with the IRS. If you're filing any of these forms with the IRS electronically, your due date for filing them will be extended to April 2.

March 1

Farmers and Fishermen - Farmers and fishermen. File your 2017 income tax return (Form 1040) and pay any tax due. However, you have until April 17 to file if you paid your 2017 estimated tax by January 16, 2018.

Important Tax Changes For 2018

Sun, 25 Mar 2018 11:17:59 GMT

As the New Year rolls around, it's always a sure bet that there will be changes to current tax law and 2018 is no different now that many of the tax provisions pursuant to the Tax Cuts and Jobs Act of 2017 (TCJA) are in full effect. From health savings accounts to tax rate schedules and standard deductions, here's a checklist of tax changes to help you plan the year ahead.

Individuals

In 2018, a number of tax provisions are affected by inflation adjustments, including Health Savings Accounts, retirement contribution limits, and the foreign earned income exclusion. Many others have been revised or eliminated due to the TCJA.

While the tax rate structure, which now ranges from 10 to 37 percent, remains similar to 2017 in that there are seven tax brackets, the tax-bracket thresholds increase significantly for each filing status. Standard deductions also rise significantly; however, personal exemptions have been eliminated through tax year 2025.

Standard Deduction

In 2018, the standard deduction increases to $12,000 for individuals (up from $6,350 in 2017) and to $24,000 for married couples (up from $12,700 in 2017).

Alternative Minimum Tax (AMT)

In 2018, AMT exemption amounts increase to $$70,300 for individuals (up from $54,300 in 2017) and $109,400 for married couples filing jointly (up from $84,500 in 2017). Also, the phaseout threshold increases to $500,000 ($1 million for married filing jointly). Both the exemption and threshold amounts are indexed for inflation.

"Kiddie Tax"

For taxable years beginning in 2018, the amount that can be used to reduce the net unearned income reported on the child's return that is subject to the "kiddie tax," is $1,050 (same as 2017). The same $1,050 amount is used to determine whether a parent may elect to include a child's gross income in the parent's gross income and to calculate the "kiddie tax." For example, one of the requirements for the parental election is that a child's gross income for 2018 must be more than $1,050 but less than $10,500.

For 2018, the net unearned income for a child under the age of 19 (or a full-time student under the age of 24) that is not subject to "kiddie tax" is $2,100.

Health Savings Accounts (HSAs)

Contributions to a Health Savings Account (HSA) are used to pay current or future medical expenses of the account owner, his or her spouse, and any qualified dependent. Medical expenses must not be reimbursable by insurance or other sources and do not qualify for the medical expense deduction on a federal income tax return.

A qualified individual must be covered by a High Deductible Health Plan (HDHP) and not be covered by other health insurance with the exception of insurance for accidents, disability, dental care, vision care, or long-term care.

For calendar year 2018, a qualifying HDHP must have a deductible of at least $1,350 for self-only coverage or $2,700 for family coverage and must limit annual out-of-pocket expenses of the beneficiary to $6,650 for self-only coverage and $13,300 for family coverage.

Medical Savings Accounts (MSAs)

There are two types of Medical Savings Accounts (MSAs): the Archer MSA created to help self-employed individuals and employees of certain small employers, and the Medicare Advantage MSA, which is also an Archer MSA, and is designated by Medicare to be used solely to pay the qualified medical expenses of the account holder. To be eligible for a Medicare Advantage MSA, you must be enrolled in Medicare. Both MSAs require that you are enrolled in a high-deductible health plan (HDHP).

Self-only coverage . For taxable years beginning in 2018, the term "high deductible health plan" means, for self-only coverage, a health plan that has an annual deductible that is not less than $2,300 (up $50 from 2017) and not more than $3,450 (up $100 from 2017), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $4,600 (up $100 from 2017).

Family coverage . For taxable years beginning in 2018, the term "high deductible health plan" means, for family coverage, a health plan that has an annual deductible that is not less than $4,600 and not more than $6,850 (up $100 from 2017), and under which the annual out-of-pocket expenses required to be paid (other than for premiums) for covered benefits do not exceed $8,400 (up $150 from 2017).

Penalty for not Maintaining Minimum Essential Health Coverage

Under the TCJA, the penalty for not maintaining minimum essential health coverage has been eliminated but only for months beginning after December 31, 2018.

AGI Limit for Deductible Medical Expenses

In 2018, the deduction threshold for deductible medical expenses is temporarily reduced to 7.5% percent of adjusted gross income (AGI). This is retroactive to the tax year starting Jan. 1, 2017 and ends on Dec. 31, 2018.

Eligible Long-Term Care Premiums

Premiums for long-term care are treated the same as health care premiums and are deductible on your taxes subject to certain limitations. For individuals age 40 or younger at the end of 2018, the limitation is $420. Persons more than 40 but not more than 50 can deduct $780. Those more than 50 but not more than 60 can deduct $1,530 while individuals more than 60 but not more than 70 can deduct $4,160. The maximum deduction is $5,200 and applies to anyone more than 70 years of age.

Medicare Taxes

The additional 0.9 percent Medicare tax on wages above $200,000 for individuals ($250,000 married filing jointly), which went into effect in 2013, remains in effect for 2018, as does the Medicare tax of 3.8 percent on investment (unearned) income for single taxpayers with modified adjusted gross income (AGI) more than $200,000 ($250,000 joint filers). Investment income includes dividends, interest, rents, royalties, gains from the disposition of property, and certain passive activity income. Estates, trusts, and self-employed individuals are all liable for the new tax.

Foreign Earned Income Exclusion

For 2018, the foreign earned income exclusion amount is $104,100, up from $102,100 in 2017.

Long-Term Capital Gains and Dividends

In 2018 tax rates on capital gains and dividends remain the same as 2017 rates (0%, 15%, and a top rate of 20%); however threshold amounts are different in that they don't correspond to new tax bracket structure as they did in the past. For taxpayers in the lower tax brackets (10 and 12 percent), the rate remains 0 percent; however, the threshold amounts are $38,600 for individuals and $77,200 for married filing jointly. For taxpayers in the four middle tax brackets, 22, 24, 32, and 35 percent, the rate is 15 percent. For an individual taxpayer in the highest tax bracket, 37 percent, whose income is at or above $425,800 ($479,000 married filing jointly), the rate for both capital gains and dividends is capped at 20 percent.

Pease and PEP (Personal Exemption Phaseout)

Both Pease (limitations on itemized deductions) and PEP (personal exemption phase-out) have been eliminated under TCJA.

Estate and Gift Taxes

For an estate of any decedent during calendar year 2018, the basic exclusion amount is $11,200,000, indexed for inflation (up from $5,490,000 in 2017). The maximum tax rate remains at 40 percent. The annual exclusion for gifts increases to $15,000.

Individuals - Tax Credits

Adoption Credit

In 2018, a non-refundable (only those individuals with tax liability will benefit) credit of up to $13,840 is available for qualified adoption expenses for each eligible child.

Earned Income Tax Credit

For tax year 2018, the maximum earned income tax credit (EITC) for low and moderate income workers and working families rises to $6,444, up from $6,318 in 2017. The credit varies by family size, filing status, and other factors, with the maximum credit going to joint filers with three or more qualifying children.

Child Tax Credits

For tax years 2018 through 2025, the child tax credit increases to $2,000 per child, up from $1,000 in 2017, thanks to the passage of the TCJA.

The enhanced child tax credit, which was made permanent by the Protecting Americans from Tax Hikes Act of 2017 (PATH), remains under TCJA. The refundable portion of the credit increases from $1,000 to $1,400 so that even if taxpayers do not owe any tax, they can still claim the credit. Under TCJA, a $500 nonrefundable credit is also available for dependents who do not qualify for the child tax credit (e.g., dependents age 17 and older).

Child and Dependent Care Credit

The Child and Dependent Care Credit also remains under tax reform. If you pay someone to take care of your dependent (defined as being under the age of 13 at the end of the tax year or incapable of self-care) in order to work or look for work, you may qualify for a credit of up to $1,050 or 35 percent of $3,000 of eligible expenses in 2018.For two or more qualifying dependents, you can claim up to 35 percent of $6,000 (or $2,100) of eligible expenses. For higher income earners the credit percentage is reduced, but not below 20 percent, regardless of the amount of adjusted gross income.

Individuals - Education

American Opportunity Tax Credit and Lifetime Learning Credits

The American Opportunity Tax Credit (formerly Hope Scholarship Credit) was extended to the end of 2018 by ATRA but was made permanent by PATH in 2017. There was no change under TCJA. The maximum credit is $2,500 per student. The Lifetime Learning Credit remains at $2,000 per return; however, the adjusted gross income amount used by joint filers to determine the reduction in the Lifetime Learning Credit is $114,000, up from $112,000 for tax year 2017.

Interest on Educational Loans

In 2018 (as in 2017), the $2,500 maximum deduction for interest paid on student loans is no longer limited to interest paid during the first 60 months of repayment. The deduction is phased out for higher-income taxpayers with modified AGI of more than $65,000 ($135,000 joint filers).

Individuals - Retirement

Contribution Limits

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government's Thrift Savings Plan increases to $18,500. Contribution limits for SIMPLE plans remain at $12,500. The maximum compensation used to determine contributions increases to $275,000 (up from $270,000 in 2018).

Income Phase-out Ranges

The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by an employer-sponsored retirement plan and have modified AGI between $63,000 and $73,000, up from $62,000 to $72,000.

For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by an employer-sponsored retirement plan, the phase-out range increases to $101,000 to $121,000, up from $99,000 to $119,000. For an IRA contributor who is not covered by an employer-sponsored retirement plan and is married to someone who is covered, the deduction is phased out if the couple's modified AGI is between $189,000 and $199,000, up from $186,000 and $196,000.

The modified AGI phase-out range for taxpayers making contributions to a Roth IRA is $120,000 to $135,000 for singles and heads of household, up from $118,000 to $133,000. For married couples filing jointly, the income phase-out range is $189,000 to $199,000, up from $186,000 to $196,000. The phase-out range for a married individual filing a separate return who makes contributions to a Roth IRA is not subject to an annual cost-of-living adjustment and remains $0 to $10,000.

Saver's Credit

In 2018, the AGI limit for the saver's credit (also known as the retirement savings contribution credit) for low and moderate income workers is $63,000 for married couples filing jointly, up from $62,000 in 2017; $47,250 for heads of household, up from $46,500; and $31,500 for married individuals filing separately and for singles, up from $31,000 in 2017.

Businesses

Standard Mileage Rates

In 2018, the rate for business miles driven is 54.5 cents per mile, up from 53.5 cents per mile in 2017.

Section 179 Expensing

Under the Tax Cuts and Jobs Act of 2017, the Section 179 expense deduction increases to a maximum deduction of $1 million of the first $2,500,000 million of qualifying equipment placed in service during the current tax year. Indexed to inflation after 2018, the deduction was enhanced to include improvements to nonresidential qualified real property such as roofs, fire protection and alarm systems and security systems, and heating, ventilation, and air-conditioning systems.

Bonus Depreciation

Businesses are allowed to immediately deduct 100% of the cost of eligible property placed in service after September 27, 2017, and before January 1, 2023, after which it will be phased downward over a four-year period: 80% in 2023, 60% in 2024, 40% in 2025, and 20% in 2026.

Section 199 Deduction for Domestic Production Activities

Under the TCJA, the Section 199 deduction was repealed for taxable years beginning after December 31, 2017.

Work Opportunity Tax Credit (WOTC)

Extended through 2019, the Work Opportunity Tax Credit has been modified and enhanced for employers who hire long-term unemployed individuals (unemployed for 27 weeks or more) and is generally equal to 40 percent of the first $6,000 of wages paid to a new hire. There was no change to this tax credit under TCJA.

Research & Development Tax Credit

Starting in 2018, businesses with less than $50 million in gross receipts are able to use this credit to offset alternative minimum tax. Certain start-up businesses that might not have any income tax liability will be able to offset payroll taxes with the credit as well. There was no change to this tax credit under TCJA.

Employee Health Insurance Expenses

For taxable years beginning in 2018, the dollar amount of average wages is $26,700 ($26,200 in 2017). This amount is used for limiting the small employer health insurance credit and for determining who is an eligible small employer for purposes of the credit.

Business Meals and Entertainment Expenses

The deduction remains at 50% for taxpayers who incur food and beverage expenses associated with operating a trade or business. For tax years 2018 through 2025, however, the 50% deduction expands to include expenses incurred for meals furnished to employees for the convenience of the employer. Amounts after 2025 are not deductible. Under the TCJA, in 2018, office holiday parties remain 100% deductible. Employee meals while on business travel also remain deductible at 50%. For tax years 2018 through 2025; however, the 50% deduction expands to include expenses incurred for meals furnished to employees for the convenience of the employer. Amounts after 2025 are not deductible. Further, the deduction for business entertainment expenses is eliminated (only meals at 50%).

Employer-provided Transportation Fringe Benefits

If you provide transportation fringe benefits to your employees, in 2018 the maximum monthly limitation for transportation in a commuter highway vehicle as well as any transit pass is $260, and the monthly limitation for qualified parking is $260. Parity for employer-provided mass transit and parking benefits was made permanent by PATH.

While this checklist outlines important tax changes for 2018, additional changes in tax law are more than likely to arise during the year ahead. Don't hesitate to call if you want to get an early start on tax planning for 2018!

Got Debt? How To Improve Your Financial Situation

Sun, 25 Mar 2018 11:11:24 GMT

If you are having trouble paying your debts, it is important to take action sooner rather than later. Doing nothing leads to much larger problems in the future, whether it's a bad credit record or bankruptcy resulting in the loss of assets and even your home. If you're in financial trouble, then here are some steps to take to avoid financial ruin in the future.

If you've accumulated a large amount of debt and are having difficulty paying your bills each month, now is the time to take action--before the bill collectors start calling.

Tip: Most automobile financing agreements permit your creditor to repossess your car any time you are in default, with no advance notice. If your car is repossessed, you may have to pay the full balance due on the loan, as well as towing and storage costs, to get it back. Do not wait until you are in default. Try to solve the problem with your creditor when you realize you will not be able to meet your payments. It may be better to sell the car yourself and pay off your debt than to incur the added costs of repossession.

Review each debt. Make sure that the debt creditors claim you owe is actually what you owe and that the amount is correct. If you dispute a debt, first contact the creditor directly to resolve your questions. If you still have questions about the debt, contact your state or local consumer protection office or, in cases of serious creditor abuse, your state Attorney General.
Contact your creditors. Let your creditors know you are having difficulty making your payments. Tell them why you are having trouble, perhaps it is because you recently lost your job or have unexpected medical bills. Try to work out an acceptable payment schedule with your creditors. Most are willing to work with you and will appreciate your honesty and forthrightness.
Budget your expenses. Create a spending plan that allows you to reduce your debts. Itemize your necessary expenses (such as housing and healthcare) and optional expenses (such as entertainment and vacation travel). Stick to the plan.
Try to reduce your expenses. Cut out any unnecessary spending such as eating out and purchasing expensive entertainment. Consider taking public transportation or using a car sharing service rather than owning a car. Clip coupons, purchase generic products at the supermarket and avoid impulse purchases. Above all, stop incurring new debt. Leave your credit cards at home. Pay for all purchases in cash or use a debit card instead of a credit card.
Pay down and consolidate your debts. Withdrawing savings from low-interest accounts to settle high-rate loans or credit card debt usually makes sense. In addition, there are a number of ways to pay off high-interest loans, such as credit cards, by getting a refinancing or consolidation loan, such as a second mortgage.

Tip: Selling off a second car not only provides cash but also reduces insurance and other maintenance expenses.

Caution: Be wary of any loan consolidations or other refinancing that actually increase interest owed, or require payments of points or large fees.

Caution: Second mortgages greatly increase the risk that you may lose your home.

You can regain financial health if you act responsibly. But don't wait until bankruptcy court is your only option. If you're having financial troubles, don't hesitate to call .

Choosing A Business Entity

Sun, 25 Mar 2018 11:09:08 GMT

When you decide to start a business, one of the most important decisions you'll need to make is choosing a business entity. It's a decision that impacts many things--from the amount of taxes you pay to how much paperwork you have to deal with and what type of personal liability you face, and with the passage of the Tax Cuts and Jobs Act of 2017, it's more important than ever to choose the business entity that benefits your business.

Forms of Business

The most common forms of business are Sole Proprietorships, Partnerships, Limited Liability Companies (LLCs), and Corporations (C-Corporations). Federal tax law also recognizes another business form called the S-Corporation. While state law controls the formation of your business, federal tax law controls how your business is taxed.

What to Consider

Businesses fall under one of two federal tax systems:

Taxation of both the entity itself on the income it earns and the owners on dividends or other profit participation the owners receive from the business. C-Corporations fall under this system of federal taxation.
"Pass through" taxation. This type of entity (also called a "flow-through" entity) is not taxed, but its owners are each taxed (more or less) on their proportionate shares of the entity's income. Pass-through entities include:
Sole Proprietorships
Partnerships, of various types
Limited liability companies (LLCs)
"S-Corporations" (S-Corps), as distinguished from C-corporations (C-Corps)

The first major consideration when choosing a business entity is whether to choose one that has two levels of tax on income or one that is a pass-through entity with only one level directly on the owners.

The second consideration, which has more to do with business considerations rather than tax considerations, is the limitation of liability (protecting your assets from claims of business creditors).

Let's take a general look at each of the options more closely:

Types of Business Entities

Sole Proprietorships

The most common (and easiest) form of business organization is the sole proprietorship. Defined as any unincorporated business owned entirely by one individual, a sole proprietor can operate any kind of business (full or part-time) as long as it is not a hobby or an investment. In general, the owner is also personally liable for all financial obligations and debts of the business.

Note: If you are the sole member of a domestic limited liability company (LLC), you are not a sole proprietor if you elect to treat the LLC as a corporation.

Types of businesses that operate as sole proprietorships include retail shops, farmers, large companies with employees, home-based businesses and one-person consulting firms.

As a sole proprietor, your net business income or loss is combined with your other income and deductions and taxed at individual rates on your personal tax return. Because sole proprietors do not have taxes withheld from their business income, you may need to make quarterly estimated tax payments if you expect to make a profit. Also, as a sole proprietor, you must also pay self-employment tax on the net income reported.

Partnerships

A partnership is the relationship existing between two or more persons who join to carry on a trade or business. Each person contributes money, property, labor or skill, and expects to share in the profits and losses of the business.

There are two types of partnerships: Ordinary partnerships, called "general partnerships," and limited partnerships that limit liability for some partners but not others. Both general and limited partnerships are treated as pass-through entities under federal tax law, but there are some relatively minor differences in tax treatment between general and limited partners.

For example, general partners must pay self-employment tax on their net earnings from self-employment assigned to them from the partnership. Net earnings from self-employment include an individual's share, distributed or not, of income or loss from any trade or business carried on by a partnership. Limited partners are subject to self-employment tax only on guaranteed payments, such as professional fees for services rendered.

Partners are not employees of the partnership and do not pay any income tax at the partnership level. Partnerships report income and expenses from its operation and pass the information to the individual partners (hence the pass-through designation).

Because taxes are not withheld from any distributions partners generally need to make quarterly estimated tax payments if they expect to make a profit. Partners must report their share of partnership income even if a distribution is not made. Each partner reports his share of the partnership net profit or loss on his or her personal tax return.

Limited Liability Companies (LLC)

A Limited Liability Company (LLC) is a business structure allowed by state statute. Each state is different, so it's important to check the regulations in the state you plan to do business in. Owners of an LLC are called members, which may include individuals, corporations, other LLCs and foreign entities. Most states also permit "single member" LLCs, i.e., those having only one owner.

Depending on elections made by the LLC and the number of members, the IRS treats an LLC as either a corporation, partnership, or as part of the LLC's owner's tax return. A domestic LLC with at least two members is classified as a partnership for federal income tax purposes unless it elects to be treated as a corporation.

An LLC with only one member is treated as an entity disregarded as separate from its owner for income tax purposes (but as a separate entity for purposes of employment tax and certain excise taxes), unless it elects to be treated as a corporation.

C-Corporations

In forming a corporation, prospective shareholders exchange money, property, or both, for the corporation's capital stock. A corporation conducts business, realizes net income or loss, pays taxes and distributes profits to shareholders.

A corporate structure is more complex than other business structures. When you form a corporation, you create a separate tax-paying entity. The profit of a corporation is taxed to the corporation when earned and then is taxed to the shareholders when distributed as dividends. This creates a double tax.

The corporation does not get a tax deduction when it distributes dividends to shareholders. Earnings distributed to shareholders in the form of dividends are taxed at individual tax rates on their personal tax returns. Shareholders cannot deduct any loss of the corporation.

If you organize your business as a corporation, generally are not personally liable for the debts of the corporation, although there may be exceptions under state law.

S-Corporations

An S-corporation has the same corporate structure as a standard corporation; however, its owners have elected to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Shareholders of S-corporations generally have limited liability.

Generally, an S-Corporation is exempt from federal income tax other than tax on certain capital gains and passive income. It is treated in the same way as a partnership, in that generally; taxes are not paid at the corporate level. S-Corporations may be taxed under state tax law as regular corporations, or in some other way.

Shareholders must pay tax on their share of corporate income, regardless of whether it is actually distributed. Flow-through of income and losses are reported on their personal tax returns, and they are assessed tax at their individual income tax rates, allowing S-Corporations to avoid double taxation on the corporate income.

To qualify for S-Corporation status, the corporation must meet a number of requirements. Please call if you would like more information about which requirements must be met to form an S-Corporation.

Professional Guidance

When making a decision about which type of business entity to choose each business owner must decide which one best meets his or her needs. One form of business entity is not necessarily better than any other and obtaining the advice of a tax professional is critical. If you need assistance figuring out which business entity is best for your business, don't hesitate to call .

The Basics Of Starting A Home-Based Business

Sun, 25 Mar 2018 11:01:11 GMT

More than half of all businesses today are home-based. Every day, people are striking out and achieving economic and creative independence by turning their skills into dollars. Garages, basements, and attics are being transformed into the corporate headquarters of the newest entrepreneurs--home-based business people.

And, with technological advances in smartphones, tablets, and iPads as well as rising demand for "service-oriented" businesses, the opportunities seem to be endless.

Is a Home-based Business Right for You?

Choosing a home business is like choosing a spouse or partner: Think carefully before starting the business. Instead of plunging right in, take the time to learn as much about the market for any product or service as you can. Before you invest any time, effort, or money take a few moments to answer the following questions:

Can you describe in detail the business you plan on establishing?
What will be your product or service?
Is there a demand for your product or service?
Can you identify the target market for your product or service?
Do you have the talent and expertise needed to compete successfully?

Before you dive headfirst into a home-based business, it's essential that you know why you are doing it and how you will do it. To achieve success your business must be based on something greater than a desire to be your own boss and involves an honest assessment of your own personality, an understanding of what's involved, and a lot of hard work. You have to be willing to plan ahead and make improvements and adjustments along the way.

While there are no "best" or "right" reasons for starting a home-based business, it is vital to have a very clear idea of what you are getting into and why. Ask yourself these questions:

Are you a self-starter?
Can you stick to business if you're working at home?
Do you have the necessary self-discipline to maintain schedules?
Can you deal with the isolation of working from home?

Working under the same roof that your family lives under may not prove to be as easy as it seems. It is important that you work in a professional environment. If at all possible, you should set up a separate office in your home. You must consider whether your home has space for a business and whether you can successfully run the business from your home. If so, you may qualify for a tax break called the home office deduction. For more information see the article, Do You Qualify for the Home Office Deduction? below.

Compliance With Laws and Regulations

A home-based business is subject to many of the same laws and regulations affecting other businesses, and you will be responsible for complying with them. There are some general areas to watch out for, but be sure to consult an attorney and your state department of labor to find out which laws and regulations will affect your business.

Zoning

Be aware of your city's zoning regulations. If your business operates in violation of them, you could be fined or closed down.

Restrictions on Certain Goods

Certain products may not be produced in the home. Most states outlaw home production of fireworks, drugs, poisons, sanitary or medical products, and toys. Some states also prohibit home-based businesses from making food, drink, or clothing.

Registration and Accounting Requirements

You may need the following:

Work certificate or a license from the state (your business's name may also need to be registered with the state)
Sales tax number
Separate business telephone
Separate business bank account

If your business has employees, you are responsible for withholding income, social security, and Medicare taxes, as well as complying with minimum wage and employee health and safety laws.

Planning Techniques

Money fuels all businesses. With a little planning, you'll find that you can avoid most financial difficulties. When drawing up a financial plan, don't worry about using estimates. The process of thinking through these questions helps develop your business skills and leads to solid financial planning.

Estimating Start-Up Costs

To estimate your start-up costs include all initial expenses such as fees, licenses, permits, telephone deposit, tools, office equipment and promotional expenses.

In addition, business experts say you should not expect a profit for the first eight to ten months, so be sure to give yourself enough of a cushion if you need it.

Projecting Operating Expenses

Include salaries, utilities, office supplies, loan payments, taxes, legal services and insurance premiums, and don't forget to include your normal living expenses. Your business must not only meet its own needs but make sure it meets yours as well.

Projecting Income

It is essential that you know how to estimate your sales on a daily and monthly basis. From the sales estimates, you can develop projected income statements, break-even points, and cash-flow statements. Use your marketing research to estimate initial sales volume.

Determining Cash Flow

Working capital--not profits--pays your bills. Even though your assets may look great on the balance sheet, if your cash is tied up in receivables or equipment, your business is technically insolvent. In other words, you're broke.

Make a list of all anticipated expenses and projected income for each week and month. If you see a cash-flow crisis developing, cut back on everything but the necessities.

If a home-based business is in your future, then a tax professional can help. Don't hesitate to call if you need assistance setting up your business or making sure you have the proper documentation in place to satisfy the IRS.

Early Retirement Distributions And Your Taxes

Sun, 25 Mar 2018 10:54:28 GMT

Taxpayers may sometimes find themselves in situations when they need to withdraw money from their retirement plan early. What they may not realize is that taking money out early from your retirement plan may trigger an additional tax. Here are 10 things taxpayers should know about early withdrawals from retirement plans:

Payments you receive from your Individual Retirement Arrangement before you reach age 59 1/2 are generally considered early or premature distributions.
If you made a withdrawal from a plan last year, you must report the amount you withdrew to the IRS. You may have to pay income tax as well as an additional 10 percent tax on the amount you withdrew.
The additional 10 percent tax does not apply to nontaxable withdrawals. Nontaxable withdrawals include withdrawals of your cost to participate in the plan. Your cost includes contributions that you paid tax on before you put them into the plan.
A rollover is a type of nontaxable withdrawal. You usually have 60 days to complete a rollover to make it tax-free. Generally, a rollover is a distribution to you of cash or other assets from one retirement plan that you contribute to another retirement plan. The amount you roll over is generally taxed when the new plan makes a distribution to you or your beneficiary.
If you made nondeductible contributions to an IRA and later take early distributions from your IRA, the portion of the distribution attributable to those nondeductible contributions is not taxed.
If you received an early distribution from a Roth IRA, the distribution attributable to your prior contributions is not taxed.
If you received a distribution from any other qualified retirement plan, generally the entire distribution is taxable unless you made after-tax employee contributions to the plan.
There are several exceptions to the additional 10 percent early distribution tax, such as when the distributions are used for the purchase of a first home (up to $10,000), for certain medical or educational expenses, or if you are totally and permanently disabled. Furthermore, some of the exceptions for retirement plans are different from the rules for IRAs. Please call for details.
If you make an early withdrawal, you may need to file Form 5329, Additional Taxes on Qualified Plans (Including IRAs) and Other Tax-Favored Accounts, with your federal tax return.
The rules for retirement plans can be complex. If you need assistance, don't hesitate to call .

Extended Due Dates For Health Coverage Forms

Sun, 25 Mar 2018 10:52:03 GMT

The due date for certain entities to provide 2017 health coverage information forms to individuals in 2018 has been extended.

Insurers, self-insuring employers, other coverage providers, and applicable large employers now have until March 2, 2018, to provide Forms 1095-B or 1095-C to individuals, which is a 30-day extension from the original due date of January 31, 2018.

Insurers, self-insuring employers, other coverage providers, and applicable large employers must furnish statements to employees or covered individuals regarding the health care coverage offered to them. Individuals may use this information to determine whether, for each month of the calendar year, they may claim the premium tax credit on their individual income tax returns.

The 30-day extension is automatic, and employers and providers don't have to request it; however, the due dates for filing 2017 information returns with the IRS are not extended. For 2018, the due dates to file information returns with the IRS are:

February 28, 2018 for paper filers
April 2, 2018 for electronic filers

Due to these extensions, some individuals may not receive their Forms 1095-B or 1095-C by the time they are ready to file their 2017 individual income tax return. However, while information on these forms may assist in preparing a return, the forms are not required to file a 2017 tax return. Taxpayers do not have to wait for Forms 1095-B or 1095-C to file. Instead, they can prepare and file their returns using other information about their health coverage.

Don't hesitate to call if you have any questions about extended due dates for employers and providers that issue Health Coverage Forms to individual taxpayers in 2018.

Standard Mileage Rates For 2018

Sun, 25 Mar 2018 10:50:47 GMT

Beginning on January 1, 2018, the standard mileage rates for the use of a car, van, pickup or panel truck are:

54.5 cents for every mile of business travel driven, up 1 cent from the rate for 2017.
18 cents per mile driven for medical or moving purposes, up 1 cent from the rate for 2017.
14 cents per mile driven in service of charitable organizations.

The business mileage rate and the medical and moving expense rates each increased 1 cent per mile from the rates for 2017. The charitable rate is set by statute and remains unchanged.

The standard mileage rate for business is based on an annual study of the fixed and variable costs of operating an automobile, including depreciation, insurance, repairs, tires, maintenance, gas, and oil. The rate for medical and moving purposes is based on the variable costs, such as gas and oil. The charitable rate is set by law.

These optional standard mileage rates are used to calculate the deductible costs of operating an automobile for business, charitable, medical or moving purposes.

Taxpayers always have the option of claiming deductions based on the actual costs of using a vehicle rather than the standard mileage rates.

A taxpayer may not use the business standard mileage rate for a vehicle after using any depreciation method under the Modified Accelerated Cost Recovery System (MACRS) or after claiming a Section 179 deduction for that vehicle. In addition, the business standard mileage rate cannot be used for more than four vehicles used simultaneously. Please call if you need additional information about these and other special rules.

In addition, basis reduction amounts for those choosing the business standard mileage rate, as well as the maximum standard automobile cost that may be used in computing an allowance under a fixed and variable rate plan and the maximum standard automobile cost that may be used in computing the allowance under a fixed and variable rate (FAVR) Plan were also announced by the IRS.

If you have any questions about standard mileage rates or which driving activities you should keep track of as tax year 2018 begins, do not hesitate to contact the office.

Safe Harbors Help Taxpayers Suffering Property Losses

Sun, 25 Mar 2018 10:49:09 GMT

Safe harbor methods are used by individual taxpayers when determining the amount of their casualty and theft losses for their homes and personal belongings. Four of the safe harbor methods may be used for any qualifying casualty or theft loss, and three are specifically applicable only to losses occurring as a result of a Federally declared disaster.

For instance, one of the safe harbor methods allows a homeowner to determine the amount of loss, up to $20,000, by obtaining a contractor estimate of repair costs. Another safe harbor method allows a homeowner to determine the amount of loss resulting from a Federally declared disaster using the repair costs on a signed contract prepared by a licensed contractor. The guidance also provides a handy table for determining the value of personal belongings damaged, destroyed or stolen as a result of a Federally declared disaster.

Under the safe harbor method individuals may use one or more cost indices to determine the amount of loss to their homes as a result of Hurricane and Tropical Storm Harvey, Hurricane Irma and Hurricane Maria (2017 Hurricanes). The cost indices provide tables with cost per square foot for Texas, Louisiana, Florida, Georgia, South Carolina, Puerto Rico and the U.S. Virgin Islands (2017 Disaster Area).

These safe harbor methods are effective on Dec. 13, 2017, for losses that are attributable to the 2017 Hurricanes and that arose in the 2017 Disaster Area after August 22, 2017. IRS Publication 547, Casualties, Disasters, and Thefts provides more information on casualty and theft losses. Taxpayers can explore claiming these losses by filing an original or amended return for Tax Year 2016 or using the new revision of the 2016 Form 4684.

Questions about navigating casualty loss issues? Help is just a phone call away .

Late-Filing Penalty Relief For Partnerships

Sun, 25 Mar 2018 10:48:09 GMT

The Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Surface Transportation Act) changed the date by which a partnership, real estate mortgage investment conduits (REMICs), or other entity must file its annual return. For calendar year filers, the due date for filing the annual return or request for an extension changed from April 15 (April 18 in 2017) to March 15.

Many entities filed their returns or their extension request for tax year 2016 by the April deadline, and if not for the Surface Transportation Act, these returns and requests for extension of time to file would have been on time.

Fortunately, penalty relief is now available from the IRS for certain partnerships, real estate mortgage investment conduits (REMICs), and other entities that did not file the required returns by the new due date for tax years beginning in 2016 provided that the following conditions are met:

The partnership filed the returns (Forms 1065, 1065-B, 8804, 8805, 5471, or other returns) with the IRS and furnished copies (or Schedules K-1) to the partners (as appropriate) by the date that would have been timely before the amendment made by the Surface Transportation Act (April 18, 2017, for calendar year taxpayers); or

The partnership filed Form 7004 to request an extension of time to file by the date that would have been timely before the amendment made by the Surface Transportation Act and files the return with the IRS and furnishes copies (or Schedules K-1) to the partners by the 15th day of the ninth month after the close of the partnership's tax year (September 15, 2017, for calendar year partnerships). If the partnership files Form 1065-B and was required to furnish Schedules K-1 to the partners by March 15, 2017, it must have done so to qualify for the penalty relief.
Notice 2017-71, which amplifies, clarifies, and supersedes Notice 2017-47, provides that additional acts, such as the making of various elections, of partnerships, REMICs, and certain other entities made by the date that would have been timely prior to amendment by the Surface Transportation Act are treated as timely.

An earlier release provided this relief only to taxpayers whose taxable years began and ended in 2016, but the revised guidance also applies to fiscal-year filers whose taxable years began in 2016 but did not end until 2017.

Please contact the office if you need further clarification.

Tax Due Dates For January 2018

Sun, 25 Mar 2018 10:45:21 GMT

All employers - Give your employees their copies of Form W-2 for 2017 by January 31, 2018. If an employee agreed to receive Form W-2 electronically, post it on a website accessible to the employee and notify the employee of the posting by January 31.

All Businesses - Give annual information statements to recipients of certain payments you made during 2017. You can use the appropriate version of Form 1099 or other information return. Form 1099 can be issued electronically with the consent of the recipient.

January 10

Employees - who work for tips. If you received $20 or more in tips during December 2017, report them to your employer. You can use Form 4070, Employee's Report of Tips to Employer.

January 16

Employers - Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in December 2017.

Individuals - Make a payment of your estimated tax for 2017 if you did not pay your income tax for the year through withholding (or did not pay in enough tax that way). Use Form 1040-ES. This is the final installment date for 2017 estimated tax. However, you do not have to make this payment if you file your 2017 return (Form 1040) and pay any tax due by January 31, 2018.

Employers - Nonpayroll Withholding. If the monthly deposit rule applies, deposit the tax for payments in December 2017.

Farmers and Fisherman - Pay your estimated tax for 2017 using Form 1040-ES. You have until April 17 to file your 2017 income tax return (Form 1040). If you do not pay your estimated tax by January 16, you must file your 2017 return and pay any tax due by March 1, 2018, to avoid an estimated tax penalty.

January 31

Employers - Federal unemployment tax. File Form 940 for 2017. If your undeposited tax is $500 or less, you can either pay it with your return or deposit it. If it is more than $500, you must deposit it. However, if you already deposited the tax for the year in full and on time, you have until February 12 to file the return.

Farm Employers - File Form 943 to report social security and Medicare taxes and withheld income tax for 2017. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year in full and on time, you have until February 12 to file the return.

Certain Small Employers - File Form 944 to report Social Security and Medicare taxes and withheld income tax for 2017. Deposit or pay any undeposited tax under the accuracy of deposit rules. If your tax liability is $2,500 or more from 2017 but less than $2,500 for the fourth quarter, deposit any undeposited tax or pay it in full with a timely filed return. If you deposited the tax for the year timely, properly, and in full, you have until February 12 to file the return.

Employers - Social Security, Medicare, and withheld income tax. File Form 941 for the fourth quarter of 2017. Deposit any undeposited tax. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the quarter in full and on time, you have until February 10 to file the return.

Employers - Nonpayroll taxes. File Form 945 to report income tax withheld for 2017 on all nonpayroll items, including backup withholding and withholding on pensions, annuities, IRAs, gambling winnings, and payments of Indian gaming profits to tribal members. Deposit any undeposited tax. If your tax liability is less than $2,500, you can pay it in full with a timely filed return. If you deposited the tax for the year in full and on time, you have until February 12 to file the return.

Payers of Gambling Winnings - If you either paid reportable gambling winnings or withheld income tax from gambling winnings, give the winners their copies of Form W-2G.

Employers - Give your employees their copies of Form W-2 for 2017 by January 31, 2018. If an employee agreed to receive Form W-2 electronically, post it on a website accessible to the employee and notify the employee by January 31, 2018.

Businesses - Give annual information statements to recipients of certain payments made during 2017. You can use the appropriate version of Form 1099 or other information return. Form 1099 can be issued electronically with the consent of the recipient. This due date only applies to certain types of payments.

Individuals - who must make estimated tax payments. If you did not pay your last installment of estimated tax by January 16, you may choose (but are not required) to file your income tax return (Form 1040) for 2017 by January 31. Filing your return and paying any tax due by January 31, 2018, prevents any penalty for late payment of the last installment. If you cannot file and pay your tax by January 31, file and pay your tax by April 17, 2018.

New Website Under Construction

Wed, 21 Mar 2018 10:40:02 GMT

New Website Coming Soon!

We are currently revamping our website. Our new website will be interactive and mobile friendly!

Watch this space for updates. Just few more weeks to go!