Do your plans this year include donating your valuable skills or services to charity? If traveling is part of the plan too, some travel expenses may be deductible for your business. While this can help lower your tax burden when filing next year’s return, you should use caution when listing those deductions. Here are three things you can write off when traveling for charity: 1. Although you can’t deduct the value of your services that you donate to charity, you may be able to deduct some out-of-pocket costs associated with your services. This can include the cost of travel, meals, and lodging, but all out-of pocket costs must meet the following criteria: The expense must be … [Read more...]
How To Avoid Becoming the Victim of a Tax Scam
Ah, summertime. Warm days, rest, relaxation, and…tax scams. Really? Yes! Thieves don’t stop victimizing unsuspecting taxpayers after April 15th. Unfortunately, tax scams happen year round and no one is immune to them. The top three scams listed on the IRS’s "Dirty Dozen" list are identity theft, phone scams, and phishing. Here is some important information to keep you protected and ready 365 days a year: 1. Identity Theft: Identity thieves steal personal and financial information such as your Social Security number or your banking information to commit fraud and other crimes. They could also file a phony tax return in your name to claim a fraudulent refund. But you don't need to … [Read more...]
Why You Might Receive a Notice from the IRS
April 15th has come and gone and the last thing you want is to hear from the IRS; however, sometimes the IRS needs to follow up on tax-related issues and they will send notices that you might need to respond to. Don’t panic! Not all of these letters contain bad news--sometimes you could even be receiving more money for your tax refund! Here are some common reasons why people receive IRS notices: Balance Due You Qualify for Additional Tax Credits A Change to Your Estimated Tax Credit Amount A Change to a Previous Year’s Refunds Overpayments Issues with Direct Deposit Changes to Filing Requirements Confirmation of Tax Return Receipt Address Update Needed To learn … [Read more...]
How to File an Amended Tax Return
We all know filing taxes is not the easiest job in the world (that’s why you hire us!) Mistakes are bound to happen, so what do you do when you realize there is an error after you’ve already handed in your returns? Well, there are two options: The first option is plain and simple: do nothing. If it’s related to a mathematical error, the IRS will usually automatically fix it. If you forgot a certain form or schedule, the IRS will usually send you a request for them. The second option is to file an amended tax return if you made an error claiming your filing status, income, deductions or credits on your original return. An Amended U.S. Individual Income Tax Return, also known as … [Read more...]
How to Prevent a Tax Headache
Is your tax headache coming? From collecting documents to reviewing write-offs, this can be a stressful time of year. The hardest part, especially for business owners, is the fear that you will owe more than you can handle. The best thing you can do during tax season to stop worrying is get organized. Knowledge is power. Figure out what papers you need, what deductions you’ll be claiming, and how you are going to file (online software, tax professional, etc.). Once your information is complete, you’ll know how much you owe, or how much you’ll be receiving. If you owe money, there are solutions that can help relieve some of the burden, as this Yahoo! Finance article explains. Not paying … [Read more...]
Mileage Logs: A Must for Tax Time
Come tax season, people are always asking me about mileage logs. A recent Tax Court case highlights the importance of keeping a log. In the case, a Mr. Keith Dunford lost $93,656 in business deductions for his business motorhome and two business cars due to lack of a business mileage log. Receipts are Not Enough Even though he had receipts for the expenses of his vehicles, his failure to keep mileage logs left the courts unable to determine the extent of the business use of his vehicles. The issues considered by the court included the ability of the Dunfords to deduct the depreciation and other expense of the motorhome and their business vehicles, whether the interest expense on the loan … [Read more...]