Preparing for Tax-Time

It is still early to be thinking about tax time, but it is just around the corner. There is still plenty of things that you can do to prepare for the opening of tax season. It is better to start planning now then wait until the last minute. Below is a list of steps you can take to be better prepared to for tax time.

  1. Gather up work receipts: If you purchased any item for your job that your employer does not reimburse you for, that item is deductible. These items include but are not limited to uniforms, legal fees related to doing your job, licenses and regulatory fees, education that is required for employment, subscriptions to professional journals and magazines, medical exams required by your employer, etc. If you car self-employed you can also deduct  items such as computers, desks, manufacturing equipment, tools, advertising fees, electricity, gas, etc. It is important to save all your receipts and keep them in a safe place. Having them all in one location will help you find what you can deduct from your taxes that is work related.
  2. Save pictures, receipts or records of charitable donations: The holiday season is coming up shortly and it is also the time where many people chose to donate to organizations. One of the added benefits to donating to a charity is the ability to deduct the contributions on your taxes. Save all records of the donations. If donating a substantial amount or item to charity it is important to document that donation with a few pictures. Formal pictures are not required, but a picture is worth a thousand words. It will also substantiate your deduction to the IRS.
  3. Gather mortgage receipts: Even thought your mortgage company will provide you a 1099 detailing the interest you have paid on your house payment, it is important to keep the receipts to make sure that the bank is accurate while providing you will some sense of what the size of the deduction will be for the year.
  4. Proof of energy efficient goods: There is a deduction of 10% of the cost of the qualified energy efficient improvements. These improvements may include adding insulations, energy-efficient exterior windows and doors, and some roofs. The credit has a lifetime limit of $500, with $200 going towards windows. The qualifying residence must be the principal residence of the taxpayer and be located in the US. New construction and rental propertied do not apply to this deduction.
  5. Locating last year’s tax return: This is probably the most important step. Locating last year’s tax return allows you to review the return. This can provide you with a wealth of knowledge and valuable items that may need to be included on this year tax return. It can tell you tax loss carry forward information, withholding information, and information on how to treat certain income such as capital gains or traditional income.
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End of Tax Season, Start Planning for Next Year!

Now that the tax season has ended, most people think “Yeah! I am done until next year.” The reality is that now is the time to start on next year’s taxes. There are a few things that can be done to help plan and prepare for next year’s taxes before January 1 starts knocking at the door.

Organize Now

You want to make tax time next year as stress-free as possible. The best way to accomplish this is to stay organized. It is extremely annoying to hunt for all the documents and receipts when it is time to start filing taxes. Start now. Have a specific location where all tax documents and receipts are kept for the year. This is where only successful if documents and receipts are filed on a regular basis. Take time to make sure that everything is in the file immediately in a file labeled for this year’s taxes.

Adjust Withholdings

Monitor payment withholding from paychecks. The goal is to withhold just enough to cover what is owed to the government. If you received a large refund, consider reducing withholdings to reduce the amount of your refund. This will cause an immediate increase in gross pay, but you can take that “extra” money and increase your IRA or 401(k) savings. This will help you prepare for your future retirement and lowers you taxes at the same time.

If you are the opposite and had to pay in a large sum to the government, consider increasing the amount deducted from your paycheck. You can do this by resubmitting the W4 form to your employer. You can choose to take out at a higher single rate or designate a specific amount to withhold from your paycheck for taxes each paycheck. If you need help figuring this amount out there are several places that offer ways of calculating anticipated taxes based on the last tax return filed.

Anyway, it is important to be thinking about what to prepare for next tax season. Stop the annual tax prep hunt and stay organized. Do not procrastinate, start now!

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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Tax Season is Finished! What to Know for Next Year

Phew! Tax Season is over, but now is not the time to sit back and relax. There is next tax season to prepare for, and there are a few simple tasks that can help make next year easier and less stressful.

Stay Organized

It may be simple, but staying organized is critical to a stress-free tax season next year. Keep all tax documents and receipts in one place so they are easy to find. Label a folder with “Taxes 2013” and use it to keep all receipts and other documents in throughout the year. No one wants to play “Look and Find” in January and February. Save yourself time by taking the time to file it now. Label what the receipt was for, especially if it is for business purposes. If the receipt is for a charitable donation, list what was donated. Take the time to file it right away so it will not be lost.

Adjust Withholdings

Believe it or not, you should not be getting a large refund from the IRS each year. The goal is to break even or only have a few hundred in a refund. If you are receiving a large refund consider adjusting your W4, which can be re-filed with your employer, to have less taken out. This will mean an immediate increase in your gross income. That “extra” money could be added to you IRA or 401(k) savings. This will help you reduce you taxes and save for your future retirement at the same time.

If you had to pay in more money to the government, then consider increasing the amount taken out of your paycheck. You can figure this amount by using a tax calculator on the IRS website. This will help you figure out how much extra will need to be withheld from your paycheck so you will not have to pay in any extra, or at least not as much as before.

Remember it is important to start now. Procrastinating will not help make tax time any easier, and being prepared will make it less stressful for you. Stay organized and make your adjustments. This will put you on the right path to a better tax season next year.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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Tax Season is Here Again– Are You Ready?

Are you one of those who wait till the last minute to do your taxes? Tax season has started; to be precise, on January 30, 2013, and that’s when our friends at the IRS begin to process personal tax or business tax returns. This is the right time to file your taxes, and this year, you have the added advantage of preparing and filing your taxes by the deadline on April 15th. Unless you get your documents in place, you will need to race to the meet deadline and then have to deal with stress that can be avoided in the first place.

So, here are some pointers to share with you about what the 2013 tax season brings in, right from the horse’s mouth, so you can get yourself organized.

A brand new, easy to navigate and redesigned IRS.gov is out there to welcome you. It has service options that are ready to wow you–additional video-conferencing guidance as well as tools on social media. You can easily get all the latest tax info out there, and if you are keen on learning more, you are directed to the IRS YouTube channel that you can see right here at http://www.youtube.com/user/irsvideos. IRS has further intensified its efforts to protect you, dear taxpayer, from any frauds or identity thefts.

Did you know that you could actually check the status of your tax refunds on your smartphone? With the IRS smartphone application, IRS2Go which is available for both Apple and Android users, you can also clarify any other tax related doubts when you are on the go.

While this year’s late legislation has affected several forms, details of which are listed on the IRS website, they hope to begin accepting these forms later this month and in March as well. Watch this space to find out more.

Another favorable change is in the tracking system that you would use after you have filed your returns on the “Where’s my refund” section of the IRS site. From this year onwards, you can look forward to an exact refund date, rather than the estimated date used up until last year, and this information is available after your tax returns have been processed and approved by the department.

So, let us all begin the laborious task of getting our records in place–receipts that depict your income, like your bank deposit slips, receipt books and your credit card charge slips; your purchases as well as your expenses and extend a warm welcome to the whole new tax season 2013.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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It’s Tax Season: Here’s Some Write-Offs You Should Know About

Yes, it’s the New Year, which means it’s time to gather your W-2’s and start preparing your tax return. Yes, you’ve got until April to file, but why not start getting your information together now? And a big part of these documents you should be gathering are write-offs. You should already be well aware that you can write-off charitable contributions, money you gave to church and mortgage interest, but here’s a look at some other things that you can write-off to enhance your tax return or minimize what you owe to the IRS.

Student Loan Interest: If you’re still paying off student loans, you can claim the interest paid on them as a write-off.

Business Expenses: Have you purchased items for work that haven’t been covered by your company? Perhaps calendars, electronics, a cell phone, etc.? Write the expenses off on your taxes. As long as your company didn’t buy them for you, that’s an eligible write-off.

Home Business Grant: Do you work out of your home? Then you’re likely eligible for a home business grant, where you can write-off things like energy and utility bills, Internet costs, phone bills, ink cartridges and the costs of any new office equipment on your taxes.

Job Hunting Costs: As our country still lingers from its economic recession, the reality is that many Americans are still looking for work. And with job hunting comes travel expenses, mailing costs, food and room (in the case of overnight trips) and cab fares. Don’t let the opportunity to write these expenses off pass you by should you qualify.

Relocation Costs: Did you get a job within 50 miles of your original address that requires you to move? If you’re not given a relocation allowance by your new employer, these expenses can be written off on your tax return. This includes moving expenses, parking expenses, tolls, etc.

Child Care: You should already be aware of the fact that you can claim your children as a dependent for a tax credit, but did you know that you can also claim up to 35 percent of what you pay for child care services – that is, if you have your children in child care while you’re working? You can – and it’s an opportunity you shouldn’t be passing up. Child care is expensive – don’t be shy about recouping some of the costs.

While tax season for most is anything but fun, utilizing write-offs and deductions to the fullest extent can put money back into your pocket. Now we’re talking fun!

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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Steps to Prepare for the Tax Season

The start of a new year is a busy time for any individual. Although the year has just begun, it is time to start preparing for the tax season. By starting the preparations early, it is easier to avoid mistakes and ensure the paperwork is ready before deadlines start coming up.

Gather and Organize Paperwork

Although the W2 forms are not normally sent out or even prepared until the middle to the end of January, the forms are only part of the paperwork involved in taxes. Paperwork will also include the tax deductions, charity donation receipts and other receipts related to taxes.

Gathering as much paperwork and documentation as possible beforehand will make it easier to put the information into the tax documents after the W2 forms finally arrive. Early organization and preparation simplifies the amount of organization that is required later, which makes it easier to complete and submit the IRS forms before the due date.

Write Down Questions

Tax paperwork and preparation can lead to many complicated questions. Taking extra time to write down any questions that arise will prevent confusion when the paperwork is being prepared. The taxes that are related to new events, such as filing jointly after marriage when compared to filing separately, can lead to many questions.

When new situations arise or new tax laws are applied to the paperwork, it is important to write down the questions and find out the answers before working on the paperwork. The preparatory step makes it easier to avoid accidental mistakes.

Review Any Changes to Laws

Laws related to taxes are constantly changing as world events and the situation of the country takes different paths. Since the laws can change when new regulations are passed, every individual should learn about any changes to the filing system or any regulations that might apply to a personal situation.

After learning about any changes, determine if other questions arise. The legal aspects of taxes are often confusing and complicated, particularly when it differs from previous years. If any new questions arise related to legalities, then it is important to add the question to the list.

Look for Mistakes

Financial statements are not always accurate. Before using any financial statements on tax paperwork, it is important to look for and correct any mistakes. Although mistakes are uncommon, catching problems and changing the data to accurate figures will reduce the risk of accidentally filing the wrong information.

With the tax season around the corner, it is important to start taking steps to prepare the paperwork and documentation. Early organization is a key part of simplifying the process and avoiding complications when the tax paperwork is filed.

Here at Crowley & Halloran CPA’s, our consultants would be happy to help you plan and manage your business budget. Click here to request a proposal.

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