by Michelle Roberts | Jul 17, 2020 | Taxes
Accounting for individuals and small business entrepreneurs is not just about that dreaded tax deadline. It’s important to think of it as an ongoing process for the entire year. This way, it becomes less overwhelming when you’re in that tax crunch in April. Here are some tips that will help you in the long run:
- Save Your Documents – Basically, whether you spent money on it or monies were remitted to you, save the financial record of it, e.g., receipts, cancelled checks, invoices, all need to be easily accessible. Make this a habit. It’ll be far less stressful for you to set aside a regular time to go over the records you have.
- Categorize Your Expenses – Keep your business and personal expenditures separate.
- Understand Your Tax Bracket – Tax brackets show you the tax rate you will pay on each portion of your income.
- Ask for Help – Hire an accountant or Tax Professional to assist you. It may be long term, but it may also be on a consultancy basis; someone to reach out to and ask specific questions or touch base with as your financial picture changes.
These things will help you build an effective and realistic budget for the foreseeable future.
by Michelle Roberts | Jul 1, 2020 | Taxes
Everyone is – or at least should be – aware of the deadline to pay our taxes, but you may not be aware that there are some long-term benefits of an overall analysis of your financial situation throughout the year in order to receive the maximum tax breaks. This is known as Tax Planning, and it can ultimately shrink your tax bill, but first, here are some things you need to know, and that a tax professional can help you with:
- Understand Your Tax Bracket – The United States has a progressive tax system. That means people with higher taxable incomes are subject to higher tax rates. People with lower taxable incomes are subject to lower tax rates.
- The Difference Between Tax Deductions and Tax Credits – Tax deductions are specific expenses you’ve incurred that you can subtract from your taxable income. They reduce how much of your income is subject to taxes. Tax credits give you a dollar-for-dollar reduction in your tax bill.
- What Kind of Deductions to Make – Deciding whether to itemize or take the standard deduction is a big part of tax planning, because the choice can make a huge difference in your tax bill.
- Knowing What Tax Records to Keep (And for How Long?) – Keeping tax returns and the documents you used to complete them is critical if you’re ever audited. Typically, it’s advised that you keep them for a period of 6 or 7 years, but it may vary depending on circumstances. A tax professional or tax preparer can help in this area.
- Move Your Money – A tax professional can advise you on a number of strategies to protect your assets from IRAs to 401ks and Flexible Spending Accounts – as well as Health Savings Accounts.
by Michelle Roberts | Jun 29, 2020 | Taxes
Did you know that Michigan has pushed all April 2020 state and city income tax deadlines to July 2020 to help taxpayers during the COVID-19 pandemic. Returns and payments otherwise due on April 15, 2020, are now due on July 15, 2020. Returns and payments otherwise due on April 30, 2020, are now due on July 31, 2020. This applies to:
- Annual state and city income tax returns and payments
- Estimated state and city income tax payments
- Estimated city income tax extension payments
Moreover, any penalties and interest for failure to file or pay will not begin to accrue until after the date of this extension deadline.