What Do We Do When Tax Season Has Passed?
I think that some people are under the misconception that when their tax returns have been completed and filed that everyone in the DiSalvo and Company CPA Offices just goes on vacation. While that might be a nice idea, other than perhaps taking a day or two off after tax season, we are here, ready to work with you during the remainder of the year. Continue reading
Financial News About In-Home Care for Seniors
Some of us have parents who are now in their mid 80’s, and taking care of a home, and themselves, is becoming more difficult. There are medications to manage, physical limitations that weren’t an issue before have cropped up, and the memory may be slipping a little as well.
Why Start Your Own Business?
I can tell you why I started my own business. I like controlling the quality of the work I do.I like the feeling of accomplishment I get with a job well done. I like surrounding myself with good people whom I have chosen to hire and associate my name with. Continue reading
Student Debt
Since the year 2000, the number of students who took out loans to pay for their education rose to 42 million. The dollar amount is now approaching 1.1 trillion dollars. It is believed that the recession caused more students to borrow than would have normally. Continue reading
The Scoop on Workman’s Comp
Workman’s Compensation rules and regulations vary from state to state. What stays the same, however, is that each employer with a certain number of employees MUST carry Workman’s Comp. In Florida, if have a company, other than construction company, and have four (4) or more full-time or part-time employees, our laws state that you are required to carry workers’ compensation coverage. Continue reading
Tax Advice From A CPA
This time of year can be exciting for some, and frustrating for others. For us CPA’s and Tax Accountants it is a little bit of both. It’s exciting when we get Income Taxes filed for our clients. All done and buttoned up nicely. It gets frustrating when our clients only give us half the information, or only parts of the information necessary to file a complete tax return.
At DiSalvo & Company CPA when you are a regular client, we can take what we know from past Tax Returns and use that information to help fill out the current returns. If you are a relatively new client, then we don’t know that much about you yet.
We know that if you want to lower the amount you pay in taxes, then it’s a good idea to fund your IRA or 401k. If you have been actively looking for work there are also certain deductions we can take, that is IF you have kept records.
Have you moved recently for a new promotion or job opportunity? There are expenses relating to relocation which are deductible. According to the IRS.Gov site:
” The distance between your new job and your former home must be at least 50 miles farther than your previous employer is from that home. For example, if your previous commute to work was five miles each way, then the distance from your new job location to your old home must be at least 55 miles.”
“The deduction covers the reasonable expenses you incur to transport your personal effects and household items to your new home. You can even include the cost of renting a storage unit for up to 30 days if you are unable to move into your new home immediately after leaving your former home.
“You can also include the cost of traveling to the new location for yourself and other members of your household. If you drive to the new location in a personal vehicle, you can include the actual cost of oil, gasoline, parking fees and highway tolls. In lieu of using the actual cost of gasoline and oil, the IRS permits you to calculate those costs using the standard mileage rate. For long-distance moves, you can deduct the cost of airline and train tickets.”
At one of our offices we can offer professional advice about what deductions you can use to make certain you only pay the amount of income tax that you should.
Pete DiSalvo CPA
What About Next Year?
You have gathered all of the information you need for us to prepare your taxes. When you look at this information with a different eye, what do you see? Is it hard to see anything but income and expenses? That’s where we come in. Continue reading
Tax Time is Here!!
DiSalvo and Company, Certified Public Accounting firm, is ready for you. It’s that time of the year when you dedicate an entire weekend to pulling out all of your receipts, all of your book keeping, and income only to bring them to us. At DiSalvo and Company, we are a professional service which takes care of all your accounting & tax preparation needs. Continue reading
Book Keeping
It’s here again. Tax time. At DiSalvo and Company, PA, we are always grateful to our clients who take bookkeeping seriously. Those are the clients who’s tax returns are much easier to prepare. Everything is in the books. Expenses, properly categorized, income, also properly categorized. All in one place.
Not all of our clients take the time to do their own bookkeeping,or spend the money for a bookkeeping service, and that is a shame. Because in the long run, if you take the time to properly do the books, when you want to see what your financial picture is, it can be done with a keystroke. When its tax time, you won’t need to spend a whole week preparing for your appointment with us.
Managing cash flow is difficult when your invoices are not promptly sent out each month . So rather than doing them by hand, you might want to set up a bookkeeping software program. That way you only have to enter the specific charges for a regular client. If you have a new client, you enter their information one time, and then next time you need to invoice them, you just type in their name and the invoice will populate for you.
If you need a loan for your business, all the data is there, just print out a profit and loss and you could be ready to go. When you are trying to build a new business plan for the year, you can see where your money went over the past year. Advertising? Promotions? Website? All of those expenses are there.
At DiSalvo and Company, we use Quickbooks. Our staff can train you or your staff on how to use Quickbooks, and make your business life less stressful.
Estimated Taxes
It’s not just self-employed individuals who are required by the IRS to pay estimated taxes.
There are numerous advantages to being self-employed. The top benefit that most full-time, must-report-to-the-office employees most envy the most is your ability to establish your own work schedule. You don’t have the commuting expenses, nor the hassle. No endless meetings with co-workers, and no dealing with office politics.
Self-employment has one major disadvantage, though: the self-employment tax. One of the benefits of being a W-2 employee of a company is, well, the W-2, which documents how much you paid into Social Security, as well as the big chunk your employer kicked in.
Others Owe, Too
But estimated taxes are not just for the self-employed. They’re owed by anyone who has at least some income that isn’t subject to withholding by an employer. For example, if you receive interest or dividends, rent, or income from selling an asset, you are required to pay estimated taxes.
Figure 1: The IRS establishes a payment schedule for your estimated tax payments.
In addition, if you’re not deducting enough income tax deducted from your salary, pension, or other income, you’re obligated to send the IRS a payment four times a year.
This is why it’s so important that you enter the correct number of allowances on your W-4 (and even add an additional amount if necessary), and that you track all income.
Failure to submit enough income tax dollars prior to filing your 1040 – and by the IRS’ scheduled deadlines — will result in penalties, even if the IRS owes you a refund.
How to Pay
The form you use to submit your estimated tax payments depends on what type of business entity you are. If you are a sole proprietor, partner, S corporation shareholder, and/or a self-employed individual, you’ll need to make quarterly estimated payments if you think you will owe $1,000 or more (after you subtract withholding and refundable credits) or more come filing time. You would use the Form 1040-ES (Estimated Tax for Individuals) to calculate and pay. Corporations should use the Form 1120-W (Estimated Tax for Corporations) if they expect to owe $500 or more when they file.
If you are sending a check or money order, you can fill out and print the vouchers included at the end of Form 1040-ES on the IRS site.
Figure 2: If you are sending a check or money order to make estimated payments, you can use these.
There are multiple ways to pay estimated taxes electronically, either by credit or debit card, or by withdrawal from a bank account. They’re listed here, and they include EFTPS (the Electronic Federal Tax Payment System), a free service provided by the U.S. Department of the Treasury.
As Always, Exceptions
There are some individuals and businesses to whom these mandates don’t apply.
Farmers and fishermen, as well as some household employers and higher-income taxpayers have different rules that are explained in the Form 1040-ES instructions.
Also, you’re not required to pay estimated taxes if:
- You were a U.S. citizen or resident alien for all of the previous year, and
- You had zero tax liability for the full 12 months of the previous year.
How to Estimate Your Estimated Taxes
That’s the tricky part, especially if you are self-employed or for some other reason don’t know for a fact how much you’ll owe in income tax for the current year. You can use the previous year’s return as a guide, but there have, of course, been tax code changes since then. And your income and deductions may well be different this year.voucher forms found on the 1040-ES page.
This is really an area where you should sit down with us and make a plan. This might involve running monthly or quarterly reports, creating projections, etc. These are good habits, especially if your income is unpredictable. Year-round tax planning will not only help you make those quarterly payments – it will provide a clearer view of your company’s overall financial health.
Any Tax Tips posted here are for informational purposes only. They are not a substitute for legal, accounting, tax, investment or other professional advice. Always consult with your trusted accounting advisor before acting upon any Tax Tip.
Connect With Us!