Your Tax Place, Inc. - Tax Savings Strategies

How to Organize Receipts for Small Business  As a business owner, you have probably heard this statement over and over again:  KEEP YOUR RECEIPTS FOR TAXES!    Although this STATEMENT is TRUE, you should also KEEP the IRS in mind so that those RECEIPTS will count if an audit is required. Here are a few suggestions on how to KEEP THE IRS in mind when COLLECTING , STORING , AND PRESENTING those BUSINESS RECEIPTS. WHICH RECEIPTS ARE DEDUCTIBLE FOR MY BUSINESS? Owning, operating, and maintaining a business COSTS MONEY. But, when you buy things for the BUSINESS, they must be legally deductible. EXPENSES must be an ORDINARY AND NECESSARY EXPENSE  for your specific industry to be able to legally deduct it on your taxes. The WAY that you  STORE , ORGANIZE and PRESENT the receipts for business purchases as the PROOF will also be a consideration by the IRS to allow the deduction or not.  STORING and ORGANIZING...

  5 tips to Avoid Tax Filing Delays and IRS Rejection of tax return When it comes to having your tax return prepared and successfully filed, you can easily AVOID these COMMON TRAPS that managed to cause IRS REJECTIONS and FILING DELAYS for several of my clients in this past tax season. TIP #1: IPPIN - Identity Protection Personal Identification Number  If you or your spouse APPLIED to the IRS to get this 6 DIGIT PIN number to prevent others from fraudulently filing your tax return, BE SURE that your MAILING ADDRESS is correct with the IRS AND WATCH FOR A MAILED LETTER FROM THE IRS in the beginning of the year that will contain this number. Without this number, YOU CANNOT FILE your tax return; PLUS , AT THIS TIME, it is FOREVER LINKED to your SOCIAL SECURITY NUMBER and cannot be removed or received EXCEPT BY MAIL or through your IRS account. TIP #2: FORM 1095-A for HEALTH INSURANCE purchased through THE MARKETPLA...

  I'm sure you have asked this question at least one time right after you have filed your tax return every year. As a Professional Tax Preparer/Accountant, I get asked this question a lot.  So, here is the basic rule of thumb for holding onto those very important documents: • MINIMUM 3 YEARS After Date Filed for All Tax Returns and Records used to prepare the tax return. • ADDITIONAL 3 YEARS For Sale/Disposal of REAL ESTATE PURCHASED (including your home). Keep the records that show the original cost of the property (purchase price) plus improvements done over the years. • ADDITIONAL 3 YEARS For Sale/Trades of INVESTMENT SECURITIES (stocks, bonds, crypto, mutual funds, etc.). Keep the records showing the purchase amounts to include stock splits, dividend reinvestments, and nontaxable distributions. Also keep track of when any bonds or Treasury bills/notes mature. • ADDITIONAL 3 YEARS After Depleting Accounts that show payments made to NONDEDUCTIBLE IRAS or POST TAX 401...

  If you are a TRADER in the CRYPTO MARKET or are making plans to be , then you must understand how DIFFICULT  it can be to REPORT these trades accurately and timely on your tax return. Crypto currency is commonly referred to as DIGITAL ASSETS and until just recently, the trading of these assets has gone pretty much unregulated. Except for the large brokerage firms, REPORTING the amount you PAID to buy crypto (COST) and the amount you SOLD  the crypto (PROCEEDS) for has been left up to the trader to figure out on their own. Since the trading of these assets must be reported on the tax return, this information is necessary to be able to correctly report the GAINS OR LOSSE S from these trades (like stock/bond trading). As a tax preparer, I have received a variety of information from clients who typically use a CRYPTO TRADING PLATFORM which mostly provides some type of a  disorganized spreadsheet of random transactions  that don’t clearly define or m...

  What is an ASSET and WHAT Makes it DIFFERENT from SUPPLIES? Purchasing an ASSET is the easy part , but when it comes to  Deducting an ASSET  on your tax return,   it must be reported differently   than the other expenses such as  SUPPLIES. Did you buy a CB Radio, Refrigerator, a Truck or anything else to be used in your business that is expected to keep its value for more than 1 year and cost more than $100? If you did, you purchased an ASSET for your business. An ASSET is something that provides a current, future, or potential economic benefit for an individual or business or other entity and has the following characteristics: FAIR MARKET VALUE EXCEEDS $100 WHEN PURCHASED IS DESIGNED TO HAVE A USEFUL LIFE AND FUNCTION FOR MORE THAN 1 YEAR IS OWNED (not leased/rented) BY YOUR BUSINESS WAS PURCHASED NEW OR USED WAS PURCHASED BY YOUR BUSINESS AND IS USED IN YOUR BUSINESS Is both ORDINARY and NECESSARY to you...

  As we approach year end, everyone begins to wonder, "HOW MUCH MONEY WILL I OWE FOR TAXES for 2022?" As a business owner, it is extremely important to have a PROFIT/LOSS statement that either you prepare for yourself or hire a bookkeeper to prepare for you. Here is how you can figure out the taxes that you may owe by using your last Profit/Loss statement for yourself. As a business owner, nobody except YOU is required to automatically withhold taxes from your pay. And unless you withhold and pay your own taxes, YOU CAN EXPECT TO OWE TAXES ON THE PROFIT THAT YOU MADE. The only way that you will NOT OWE MONEY, is if you did NOT MAKE ANY PROFIT or YOU OVERPAID YOUR TAXES with having children or with estimated tax payments. If you don't generate a profit for any 3 of the last 5 years, the IRS will not let you claim to be a business owner any longer and take a deduction for those expenses. This is VERY DIFFERENT for first time business owners to understand. So, PLEASE R...

  Do you pay your workers as EMPLOYEES or CONTRACTORS? With the NEW YEAR now here, it's TIME TO GET THIS RIGHT! One of the most recent HOT TOPICS with both the IRS and the DOL is to investigate businesses for the MISCLASSIFICATION of their WORKERS. For the past few years, businesses have misclassified their workers as contractors instead of employees in order to save 7.65% in matching payroll taxes. Because these businesses have been able to get by without being monitored and corrected, these business owners have become comfortable with this process and don't think they are doing anything wrong. In fact, because a lot of businesses have been operating this way, new business owners starting up the same business believe that it is ok to operate like this as well. The IRS has been aware of this problem and now are about to use their newly hired employees to become very aggressive about correcting this KNOWN PROBLEM to assess back withholding taxes and penalties to those ...