SDB Finance Information

Finance information for you

Posts Tagged tax returns

Dealing With The Internal Revenue Service

Jul 22

Posted by admin in Taxes

The mail has arrived and oh, no there is a dreaded letter from the IRS. Don?t panic yet, it maybe something as innocuous as information they think you might need, a question of where to apply a payment you made or even a refund check for an overpayment. But should it be more serious, all is not lost.

What to do should you get a notice of a payment due? First and foremost, make sure you really do owe that payment. The Internal Revenue Service is a very large organization and since they have people working for them, sometimes they make mistakes. So read the notice carefully, check your records to ascertain whether or not you have already paid the amount being requested, and whether the check has cleared.

Sometimes they are looking for a return not received. That doesn?t mean you didn?t file the return, it means they have no record of receiving it. Locate your copy (always, always keep a copy of your dated and signed return). Find the post office receipt that proves you sent in your return. You know that green card that the post office returns to you proving that you mailed something to the IRS on a particular date. Of course that ?something? might have been an empty envelope not an envelope with your return enclosed. One thing that could point to the return actually being in the envelope is that a check for payment was sent with the return and the check had cleared your bank account.

If you cannot prove a timely filing than your next step is to contact the agent listed on the letter. You may want to do this yourself, however it is probably a better idea to enlist your accountant?s or tax preparer?s help. These people have the experience to handle these situations in the best light and to your best advantage. If, however, you personally meet with the tax agent, please remember to be polite and upfront. And do not be late for your meeting. Provide the records they ask for, and answer the questions they ask truthfully and directly. Remember they are people too, and if treated with respect they will respond in kind.

There are a few things you can do in advance to make sure any future IRS dealings go more smoothly. Of course the first is to make sure you follow the rules. And one of those rules is to keep clear, complete, and accurate records. Remember the article about ?shoebox clients?. It is the business people that don?t take the necessary steps to keep a good set of books that get in the most trouble. If you think hiring a bookkeeper or bookkeeping service is expensive, wait until you try to go through an audit with unorganized financial records.

Copyright 2006 Bookkeeping R Us All Rights Reserved

Bookkeeping R Us

Writen By : Donna MacMillan

Tags: , , , , , ,

No Comments

Tax Returns Required For Businesses In Washington State

Jul 12

Posted by admin in Taxes

Your business activity must be included on a federal tax return. Which return and when it?s due will depend on your choice of entity selection. If you are a sole proprietor or a single member LLC, put it on schedule C of your individual tax return (form 1040). Otherwise, it goes on a separate tax return. If you had expenses only but no revenue, you should still complete a return to utilize the loss either this year or to create a net operating loss carry forward or carry back.

Revenue Tax: Washington State imposes a tax on total revenue. Some cities impose a similar tax. These returns are due either monthly, quarterly or annually. The state (and perhaps your city) will assign a frequency based on information you put on your business license application. Getting help from a professional can save you the trouble of completing returns more frequent than needed. The tax rate depends on the type of business. Many service businesses pay a state revenue tax of 1.5% of gross sales.

Sales Tax: Washington State imposes a sales tax on the retail sale of tangible goods and many services. This tax is reported on the same revenue return discussed above. Thus, it can be due monthly, quarterly or annually. The rate varies depending on your location.

Other State Taxes: The State imposes other taxes on specific industries. For example, hotel/motel tax, public utilities, tobacco products, refuse collection. Consult a tax professional regarding taxes for your industry.

Employment Taxes: When you hire your first employee, the government gives you a few more rolls of red tape. Both the State and the federal government impose a variety of taxes on businesses that have employees.

Federal Employment Taxes: The federal government requires all employers to complete quarterly employment tax returns (form 941). These returns are usually due the last day of the month following the quarter. Form 941 tells the IRS how much income tax you withheld from employees, how much social security and medicare you withheld and the employer?s contribution to social security and medicare.

Tax accountant John Huddleston has a law degree and masters in tax law from the University of Washington School of Law. He has been a guest tax expert on the radio. He advises small businesses in the Seattle Bellevue Kent Everett area on various tax issues. His firm, Huddleston tax accountants, also provides tax preparation service, quickbooks consulting and general accounting and bookkeeping service. Seattle Bellevue tax accountant John Huddleston is a frequent publisher of tax saving ideas.

Writen By : John Huddleston

Tags: , , , , , ,

No Comments

I Haven\’t Filed A Tax Return With IRS In Years, What Do I Do?

Jul 10

Posted by admin in Taxes

In elementary school, kids come up with creative excuses why they did not bring in their homework. \”My dog ate it\” or \”It was stolen by invisible space aliens\” might be given as a reason why something was not turned in on time. Don\’t try those excuses with the IRS! Don\’t blame divorce, business failures, or family troubles either, because except under extreme circumstances, they won\’t register with the taxman.

If you have unfiled tax returns, you need to file at least the last 6-7 years. Although under law IRS could make you go back and file that return from the late 1970\’s when you were a disco diva or urban cowboy, the good news is that as a matter of policy they don\’t! In most cases, filing the last 6-7 years will be OK and IRS will consider you in compliance. So don\’t procrastinate any further, file the returns if you made over the standard deduction and personal exemption amounts during those years or were self-employed.

People delay filing returns for 3 main reasons:

1. They are afraid or embarrassed;

2. They have lost the records or don\’t know where to go to get the returns done; or

3. Some crackpot advised them income taxes are bogus and that they don\’t have to file.

Don\’t be afraid of filing, be afraid of what will happen if you don\’t file. IRS could file for you and you might owe more than if you would have done it yourself or IRS could send somebody out looking for you. It is not a crime to owe IRS money, it can be a crime under some circumstances for not filing a tax return or a false return.

If you lost your records relax, in most case you can get all your income data from IRS so that you can prepare the tax returns. If you had deductions, you may have to dig those up and organize your records.

IRS is a legitimate government agency and they can and do enforce the laws on filing a Federal Tax Return. It sounds good when somebody says IRS is a fraud, but it is a lie. We all have to pay taxes. If you do not file, IRS can file a tax return for you. Once that happens, it is very burdensome to get corrected.

If you havent\’t filed in years you can call the IRS at 1-800-829-1040 and after lots of time on hold and maybe a few transfers, you will eventually get somebody who can help you get your W2 info mailed to you. Your local library may have old tax forms and tax books to help you do the returns. You can do it yourself, but I suggest getting a professional to help you.

Don\’t go to some guy or gal advertising on TV with a big company. Go to a professional person or small firm where you can talk one on one with a CPA, Enrolled Agent, or Tax Attorney. It doesn\’t have to be a local person, you could hire someone across the country. With email, fax, etc. you can avoid some embarassment of going to a local tax pro if you live in a small town by hiring someone far away. But don\’t hire somebody without checking them out. Read any contract they send you. Don\’t part with your hard earned money unless you are sure of their qualifications.

Members of the following organizations must adhere to high ethical standards and might be a good choice for you: National Society of Accountants (NSA); National Association of Enrolled Agents (NAEA); or the American Insitute of Certified Public Accountants (AICPA). You might also look for professionals holding the Accredited Tax Preparer (ATP) or Accredited Tax Advisor (ATA) designation.

Don\’t let your cousin Jimmy do your returns or that nice neighbor who says he is an expert. I have seen more screwed up returns done by friends and relatives than I care to remember. Get peace of mind, file those returns. You may owe money but you may have a refund waiting. Guess what, if you file the return more than three years after the due date; you lose the refund!

Here are some sites that can give you more info:

www.irs.gov
www.naea.org
www.nsacct.org
www.aicpa.org
www.exirsman.com

James Robert Coleman, E.A., A.T.A.
Enrolled Agent

Tags: , , , , , ,

No Comments

Section 179 – Tax Relief From Depreciation Rules

Jul 8

Posted by admin in Taxes

?Depreciation.? For business owners, this word is the one most likely to inspire headaches and fits of cussing. The expanded provisions of Section 179 are just the medicine you need to cure the depreciation blues.

Depreciation

Traditionally, if your business property had a life of more than one year, the cost had to be deducted over several tax years. The number of years depended on the characteristics of the property, which made depreciation the flag-bearing example of the complexities of the tax code. Shockingly, the federal government has provided substantial relief to business owners.

Section 179 of the Internal Revenue Code has been dramatically expanded to the benefit of businesses, particularly small ones. This code allows businesses to completely deduct the cost of tangible property in the year of purchase. The tax relief comes from the expansion of the total amount that can be deducted in one year.

Huge Deduction Increase

As part of the Job Growth and Reconciliation Act of 2003, the one-year deduction amount was increased from $25,000 to $100,000. The 100,000 figure will be adjusted for inflation each year, which means it will continue to increase. This is very good news.

What Property Qualifies?

You can deduct the cost of the following property under Section 179:

1. Machinery and equipment

2. Furniture and fixtures

3. Computer software.

You must elect Section 179. It is not automatically given to you. Simply fill out IRS Form 4562 and attach to the returns for the business.

In Closing

As shocking as this will sound, the government should be applauded for expanding Section 179. Small businesses are burdened by too many regulations and mandatory costs. The expansion of Section 179 is a nice piece of tax relief legislation. Let?s hope more is on the way.

Richard A. Chapo is with http://www.businesstaxrecovery.com – recovery of business taxes through tax help and tax relief. Visit http://www.businesstaxrecovery.com/articles to read more business tax articles.

Writen By : Richard Chapo

Tags: , , , , , ,

No Comments

Tax Records – What You Should Keep And For How Long

Jul 4

Posted by admin in Taxes

Many taxpayers are confused about how long they should keep
tax records. The term \”tax records\” refers to your tax
returns and the documents that support the information in
the returns. These documents can include receipts, bank
statements, 1099s, etc. If you are one of the unlucky few to
be audited, these records will be vital to fending off the
IRS.

Tax Returns

To protect yourself from a nasty audit, you should keep all
of your tax returns indefinitely. The IRS has been known to
lose or misplace tax returns. While conspiracy advocates
argue that this is evidence of a nefarious scheme, the
simple fact is that the IRS receives millions of returns
over a three-month period and lost returns are inevitable.
So how do you protect yourself? You keep copies of every
single tax return.

A quick word on the IRS e-file program. If you file your
returns electronically, make sure you get copies from the
company that filed your return. All such entities are
required by law to provide you with paper copies.

Records Supporting Tax Returns

You should keep supporting tax records for a period of six
years from the date the returns were actually filed. In
general the IRS only has three years to audit you from the
filing date. For example, if you filed your 2000 tax return
on April 15, 2001, the IRS would have to start an audit by
April 15, 2004. Keep in mind that if you filed an extension,
the IRS will have three years from the date you submitted
the return. As is always case with taxes, there are
exceptions to this general time period.

If your tax return looks like the great American novel, the
running of the three-year audit period may not save you.
Failure to report more than 25% of your gross income gives
the IRS an additional three years to pursue you. Using the
previous example, the IRS would have until April 15, 2007 to
audit your 2000 tax return.

Property Records – Get A Filing Cabinet

You may need to get a filing cabinet if you hold property
for an extended period of time. For example, assume that you
purchased a home in 1980 for $100,000 and made $50,000 in
improvements over the years. You need to keep the purchase
records, mortgage statements and receipts that relate to the
improvements. When you sell the home, you will need the
records to determine the tax consequences of the sale, to
wit, your basis (original cost plus improvements) and
profit. If the IRS decides to take a closer look at the
reported profit, you will need to provide your tax records
to support your claims. Once you actually sell the property,
it is recommended that you keep all of the tax records for
an additional six years.

Divorce

Make sure you keep copies of all of your financial
documents, tax returns and supporting documents if you get
divorced. You should also keep copies of all divorce
agreements and court orders that cover property and
financial issues. When couples divorce, the tax and credit
consequences can be nightmarish. If you don?t keep records,
you will have to ask your ex-spouse for them. Get the
records now to avoid doubling your misery!

Hopefully, you will never need to show your tax records to
the IRS. If you are one of the unlucky few that is audited,
your tax records should keep your feet out of the fire.

Richard A. Chapo is with BusinessTaxRecovery.com – providing information on taxes. Visit us to read more articles about tax returns and our new tax help page.

Writen By : Richard Chapo

Tags: , , , , ,

No Comments

Free Money: Fact Or Fiction?

Jun 28

Posted by admin in Wealth Building

Yes, you have heard it all: get free money. Well, little in life is truly free, but if you are wise about it you can save a little bit of money here and a little bit of money there and accumulate wealth. Have you shaken the money tree yet? If so, tell me where it is so that I can get my fair share. Seriously, if you want free money you?ll have to put a little effort out first. Let?s examine some sources of free money just waiting for your hand out.

Clip Coupons ? All those coupons you see in your Sunday newspaper, which come in your mail, that even pop up your computer screen are meant for you to take action. Simply cut the coupons out, march down to your local supermarket, and use the ?cents off? savings to get free money. Okay, you won?t be handed a wad of cash but you can pocket the savings nevertheless. Even better: shop at those supermarkets willing to double even triple your savings.

File Your Tax Return ? So, you didn?t file your tax returns in 2003, 2004, and 2005 because you made a pittance, eh? Well, you may be missing out on some free money. Depending on your household set up, you could be missing out on the government?s earned income tax credit for your children. If you don?t file, you don?t get the free money which could amount to several thousand dollars per year!

Rebate It ? Oh, that new color printer you bought is a real scream! Did you notice the $20 rebate that came with it? Oh sure the $99 sale price was a bargain but did you notice any additional money savings with that offer? For the price of a postage stamp you can submit a rebate and await your $20 check a few weeks later. Free money? You bet you: most people don?t bother to redeem rebates!

Property Tax Relief ? So, you are over 65 and finding it hard to make ends meet. Well, in some communities help is as near as your local property tax office. Maybe you shouldn?t pay the full property tax amount every year; some locales discount property taxes for cash strapped seniors by as much as 10% each year. That could translate into hundreds of dollars in savings especially if you live in a high tax area!

Take A Survey ? Most of those mall survey people will pay you to take a survey. Typically, you will get $5 or a coupon for a free meal at McDonald?s. In some cases you could be eligible for a much more comprehensive survey. If so, hundreds of dollars of free money could be awaiting you.

Yes, read the fine print with any offer as some are certainly ?too good to be true.? In many other cases, however, free money can be had. Check around to see what offers are available in your area?someone has to get the free money, why not you?

Copyright 2006 ? For additional information regarding Matt Keegan, The Article Writer, please visit his blog for wit, quips, and freelance writing tips.

Writen By : Matthew Keegan

Tags: , , , , , , , ,

No Comments

Make Money Online Free

Jun 28

Posted by admin in Wealth Building

Have you ever thought about how you could make money online free? Is it even possible to make money online free? Well, some would argue ?no? you can?t, but I am here to tell you that what seems impossible for some is quite possible for others including you. Are you interested in finding out how? If so, read on and we?ll cover some of the basics on creating wealth through the internet.

Make money online free is a tantalizing proposition. It can seem impossible too. Thankfully, there is a company that is encouraging individuals to create great wealth and that company is Google. What?s more, Google is providing the tools you need to make money online free. No fees, no charges, nada. Just the time and effort you decide to put into the process.

The first step you want to take is to visit www.blogger.com which just so happens to be the blogging company owned by Google. Blogger is one of the largest sites on the internet and Blogger will help you make money online free if you elect to run Google AdSense ads on your blog.

Before you sign up, think of a category that will help you make money online free. Laptops is one, student loans is another. Simply start a blog based upon hot keywords, sign up with Google and before you know it the traffic to your site will be clicking on the ads and paying you.

Fortunately, you aren?t limited to only one blog. If you have the time, the energy, and the know-how, you can start up an entire blog network consisting of tens if not hundreds of blogs. Yes, you will have to keep them up, but no doubt you will and your sites will be well visited. Before you know it you will make money online free when your first check of $100 or more arrives from Google.

To further enhance your wealth, make certain that you email all of your friends and family members to tell them about your blog network. Invite them to participate, but do not tell them to click on the ads as that is a violation of Google?s Terms of Use. If your blogs are interesting, and you place your ads strategically on each one, you can expect regular clicks without much effort on your part.

Some bloggers are making a nice side income ranging from a few hundred dollars per month to well over $1,000 per week. You may not be able to quit you day job right off the bat, but you could conceivably get enough money to finance a car payment even the mortgage on a new house!

So, next time someone tells you that you can make money free online, remember what I have shared with you: yes you can. With a little sweat and much effort on your part, you can shake the internet tree and reap a nice monthly harvest.

Copyright 2006 ? For additional information regarding Matt Keegan, The Article Writer, please visit his blog for wit, quips, and freelance writing tips.

Writen By : Matthew Keegan

Tags: , , , , , , , ,

No Comments