Your Tax Place, Inc. - Tax Savings Strategies

  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 ...

  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...