Archive for the ‘Tax Records’ Category

Last Minute 2014 Tax Savings Tip

December 28, 2014

tax-deduction-time-to-save-taxes    It is not too late to consider a very easy tax deduction for 2014.  Gather up some your stuff that you no longer use, no longer fits or flatters or maybe just takes up space to make room for your new Christmas and Hanukkah gifts. If you take these to your local charity before December 31 and you itemize your deductions, you may decrease your 2014 taxable income by the fair market value of these items. If at all possible, get a receipt and take a picture of the donated items to document the deduction. If you donate by dropping it off at a collection box, take a picture of you, the donation and the collection box. Then download the pictures to your computer. The file date on your computer will be on or before December 31 so you have documented your deduction. Keep a list of what was in the bags and boxes so you can put a value on the donation. (Watch for a future blog on how to determine the value of your donation.)  And have a Happy New Year!

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Happy April 15.

April 15, 2014

Well, it is the TaxTax Deadline Preparer’s annual celebration – April 15.

There are 3 things to remember:

1. The IRS can’t eat you.

2.  They can’t take away your birthday.

3. We do not have debtor’s prison in the United States.

All that being said, even if you owe money and can’t pay your taxes, file an extension.  It is only an estimate or even a guestimate.  That’s OK.  The penalties for not filing something can be brutal

And have a great day.  For those who filed extensions – October 15 is 6 months away.

So They Paid You In Cash

October 10, 2013

Pay in CashSo your customer paid you in cash.  For some businesses that is a time to celebrate because they feel that they don’t have to report cash.  Notice we said “feel” and not “THINK”.  Let’s look at the bigger picture here and really THINK this through.

Section 61 of the Internal Revenue Code (yawn) clearly states that “… gross income means all income from whatever source derived”.  That is the law.  If it comes through your business, chances are it is gross income and should be reported.

Well, you say, I like to push the limits.  I drive over the speed limit, but not a lot.  A few bucks never hurt anyone.  That is what you tell yourself.  Rational Lies.

Consider this.  If your internal controls (or lack of them) are so loose that it is easy for you to take out cash without running it through your books, then perhaps your employees feel that they can do the same.  I mean, if you skim cash from the business then it must be OK for them to do it.  Is that really OK with you. I seriously doubt it.

Then let’s go to the extreme.  You get comfortable not reporting income and  the numbers start getting bigger and bigger.  Then the IRS comes in and they decide that they are going to make an example out of your case and prosecute you criminally for income tax evasion.  First, you will incur lots of attorney and accountants fees because, as the old adage goes, “the lawyer that represents himself has a fool for a client”.

Then you will probably go in front of a jury of your peers.  Now most of these “peers” on the jury are probably  W-2 employees and not in a position to omit any income from their tax return. They will NOT understand nor appreciate that you are trying to get away with it.  They can’t so why should you.  Guilty.

There is nothing wrong in being aggressive with your taxes.  But ask yourself, is it really worth the risk.  If you are going to take a risk, at least look at the downsides.

And also remember – Pigs get fat.  Hogs get slaughtered.

Nobody Home at the IRS

October 1, 2013

Govt ShutdownWell the Government has closed its doors for who knows how long.  That means the IRS is also closed.  That’s the good news and that’s the bad news.

The good news is that there is nobody home in the audit and collections departments.  Which means there will be a temporarily halt to phone calls and letters telling you “I’m with the IRS and I’m here to help you.”

The bad news is that there will be no refunds issued while the lights are off.  Also the clock marches onward toward the October 15 due date.  And there is nobody at the IRS to answer your questions. So, we recommend that, if you do have a question, go to Google or Bing or your favorite search engine or even IRS.gov if you want to get advice with an IRS slant.  You can also call your tax professional.

We are not certain what to tell you if the IRS has given you a deadline to take some sort of action.  If they want a payment by October 5, then I would do my best to make that payment even if the government’s doors are closed.  Most times, ties go in favor of the government so be certain that you know the risks you might be taking.

As we understand it, the IRS computers will still be functioning so you can still e-file.  We hope.

So until the IRS opens its doors again, enjoy a little peace and quiet.  But remember, they are not going away forever.


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