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 ...

 Sole Proprietor, LLC or Corporation Which is the best for your business? As a business owner, you should be aware of what each type of business entity offers in terms of taxes, liability protection, and control over the business. The easiest and most common business type is the Sole Proprietorship. As a sole proprietor, you automatically get the new (and misunderstood) responsibility of "self employment" taxes. Sole Proprietorship You have NO LIABLITY protection for your personal assets in case of a lawsuit You have COMPLETE CONTROL over how to run and manage your business There are not usually any start up fees required Most new businesses start out this way until they get a better education about the other options. LLC business type The LLC is also very popular choice among new business owners, but it is not always chosen for the right reason.  Some people claim that there are more tax advantages than a sole proprietorship. However, the truth is, an LLC does not differ...

  2022 tax season is about to begin, here are a few things that I experienced with my clients that you will want to do in preparation of the next tax season: 1. Get your receipts organized NOW and sent to your tax preparer EARLY.  If you are the DYI type and don't use a bookkeeping service, it is better for both YOU and YOUR TAX PREPARER to get your receipts separated and totaled by expense and sent to her several weeks before the due date. This will give her time to review the receipts for deductibility and accuracy before reporting it on the tax return. 2. Create a file folder to keep your tax forms like W2, 1099, Profit/Loss statements, brokerage statements, closing documents for house purchases, estimated tax payment confirmations until tax time. 3. If you purchased a home in 2022 or earlier, locate the original closing statement for the home purchase and KEEP IT FOREVER! Or, at least until you sell it. Your tax p...

 How to Maintain Success as an Owner Operator - 2022 As an Owner Operator, have you noticed your paycheck  slowly become  LESS and LESS instead of MORE and MORE in comparison with what you have experienced in the past 2 years??? Since 2020 when COVID hit, our economy has NOT BEEN STABLE and has caused many economic imbalances that have NEVER BEEN SEEN BEFORE! I have been in the trucking and transportation industry for 17 years and have NEVER SEEN the consistent $3,000 to $10,000 NET weekly payouts to drivers that I have been seeing in the past 24 months. Most of you veteran drivers have not ever seen this before, either.   And we all  say,  IT'S ABOUT TIME! Unfortunately, these Skyrocketing Rates  that are driving up your pay are NOT SUSTAINABLE , and WILL DESTROY OUR ECONOMY if left too high for long. The Trucking industry is used by economists to predict the health of the economy and to make necessary changes, which is a BIG ...

  $45.6 billion dollars was approved by the Senate to help the IRS to IMPROVE ENFORCEMENT which is causing a lot of us to become concerned.   WHAT COULD HAPPEN?    The chances of getting audited has dramatically increased.  4 Ways to Prepare in Case You are Audited  1. Be sure that all expenses claimed on your tax return are accurately supported by receipts. 2. Review your Tax Return before you sign it. Take your time and review all income/expenses claimed BEFORE SIGNING  ONLY YOU, not your tax preparer, is responsible for the information reported on your tax return AFTER YOU SIGN IT Compare your tax return with the previous year and question any differences to be sure you can support any changes Ask alot of questions to learn the laws used to prepare your tax return Have your filed tax return amended if you catch the errors BEFORE the IRS catches them 3. Hire a Reputable Tax Preparer that has a history of Assisting with Audits Confirm th...