Jeff Haywood, CPA

Archive for the ‘Income Taxes’ Category

What If?

What if I form other businesses to keep my number of employees below 50 or 25 to get around Obamacare? If I start another related business with a different ownership group will the government look at these related but separate businesses as one?  These are the million dollar questions of the day and here is deal, as of today.

There are many unknowns here and the people with some knowledge about it recognize that any loopholes in Obamacare could be addressed and closed by the government.  So if you are wondering how your business can avoid the additional costs associated with this law you would need to take a very close look at any possible workarounds and the related costs and complexities they would add and the very real possibility that the regulations will be changed to close any perceived loophole(s).  I do not see where anyone knows if the government would look at related business with similar but different ownership groups as one combined business for the sake of determining the number of employees as related to Obamacare .  It seems the speculation is that the workforces could be combined for the purposes of the health care law.  Repeat, could be, for emphasis that there are so many unknowns that we are dealing with here.

Here are some articles I looked at for my research and relevant highlights:

http://www.entrepreneur.com/article/225559

Relevant Quote:

http://www.thepublicinsuranceoption.com/2011/reform/small-business-tax-regulations.html

Relevant Quote:

Here is an article addressing what seems to be a work around.  However, it is acknowledged in the article that regulations could change to close any loopholes.

http://www.huffingtonpost.com/2013/01/30/small-business-obamacare_n_2581653.html

Relevant Quote:

 “We’re dealing with things that don’t exist but have the theoretical possibility of existing,” Christiansen adds. “Right now, we have as the default employer-employee relationships, but that whole paradigm is potentially problematic as we have more and more restrictions imposed by government.”

So the answer to your question is likely unknown and even if it is known or becomes known it is likely to change so be careful about decisions that lock you into added costs and complexity.  My faithful readers know I value lifestyle choices that minimize complexity and stress.  But that is just me.  For you make sure you count the cost and know the existing and possible new risks moving forward.  And that is all I have to say about that…for now.

Jeff Haywood, CPA
The CPA Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Challenges/Obstacles to Starting a Business

An entrepreneur faces many challenges/obstacles when starting a new business. Many of these challenges take place in your mind. In this post we will look at unmet expectations and your response. The bigger challenge really is dealing with your emotions and not so much the unmet expectations. In the new venture my wife and I undertook, my wife had the expectation, set by someone else, that she needed to have full detailed inventory list before she began. As a CPA Superhero Bean Counter I fully understand the need for an inventory. However, success is contingent on STARTING and sometimes you have to say 1-2-3 go even without a full inventory list. When unmet expectations keep you from starting to sell your product and generating revenue that is a bigger problem than not having an inventory. (excuse me…what did the bean counter just say?)

Do You Need to be Perfect?

The other expectation my wife had was having a perfect display for her product. Expecting perfection is always an emotional killer/obstacle at the start of a business. Expecting to get to perfection eventually is the way to go. The thing is, the sooner you get started and sell product…and learn the better. Yes, you want to plan and prepare but you also have to START to make money.

Jason Motte

Being a baseball fan I liken this to the players and the coaches decisions. When a coach has a relief pitcher that has only one pitch, a fastball, and he is working on a slider the coach does not wait to put him in a game as long as he throws that fastball over 90 mph and with some control and with a little movement on it. What happens with the one pitch pitcher? He has to get into a game to learn how to pitch with his one pitch and learn from mistakes quickly. Typically a coach has several of these not fully developed relief pitchers and he puts them in games and sees who learns, adapts, and succeeds quickly without getting emotionally crippled. It was not the end of the world when Jason Motte struggled for the St. Louis Cardinals nor when others with more potential failed. But then Jason Motte figured out how to win with one pitch and he gained confidence while others could not handle occasionally failing.  So you see you do not need to be perfect.  You just need to get out there and START and learn and develop into a successful businessman.

Guess what. Not only do even the best baseball players fail, but businessmen fail also. How many restauranteurs fail trying to make the best food and at low prices. Meanwhile McDonald’s and Domino’s succeeded with inferior food at higher prices. They learned how to succeed with what they had and they went for it even though it was not perfect.

My wife learned to start without an inventory and without a perfect display and to charge more than she was comfortable with. What happened? She started selling jewelry and generated some cash. She had many shows with a variety of success and a couple of flops but all in all in the end she sold more then she expected to. In addition, she learned what sells well and quickly and what does not. Now she is equipped with experience and knowledge to do a better job of buying inventory that will move. But none of that would have been possible had she not STARTED.

By the way we now have an inventory list of everything that remains and its cost.  It is not perfect but it is close enough and we can move ahead.

You and Lebron James

You can get your business started, just do not expect to be perfect and say 1-2-3 Go.  Like Lebron James you will not make all of your shots but you will be a winner.

To talk to an experienced CPA about starting a business and the challenges that go with it, contact me using the information below.  See my other posts about success and business entities and taxes for further help.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

The Gifter (Generous Aunt)

If your aunt is gifting you and your brother some land there should be no immediate tax consequences other than the requirement that your aunt file a gift tax return. She should not owe any taxes as a result of making the gift as long as she has not made gifts totaling over $5 million (the current unified credit amount = current value of estate that is not taxable). The way it works is if the property gifted is worth say $350,000 and your aunt gifts it to you and your brother she gets an annual exclusion of $13,000 (this year) for each of you. So she would report the $350,000 less the $26,000 in annual exclusions which would be subtracted from her unified credit of $5 million. The difference would be the remaining amount of her estate that would not be subject to estate tax given the current exclusion amount of $5 million. Anything over the $5 million less the used unified credit used would be subject to the estate tax when she passes away.

The Giftee (You)

Now for you the gift recipients, you and your brother, you would receive the gifted property with a basis equal to your aunt’s basis, either her cost less expenses or the value when she inherited the property. When you sell the property the amount it sells for less your basis and cost of the sale would be subject to capital gains tax. When you inherit a property you get a basis equal to the current market value at the time of death. So if the value of the property was much less when your aunt obtained the property than it is now you would be better off waiting until she dies to inherit the property.

Capital Gains Tax Rates

The other thing to consider are the capital gains tax rates. The capital gains tax rates are due to increase in 2013. If your plans are to sell the property you should take the capital gains rates into consideration/tax planning.

By the way, when your aunt makes the gift, I can prepare the gift tax return for you.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

I hate to be the bearer of bad news but there is a potential increase in your taxes and reduction in your income coming in 2013.  A reduction in income tax rates is set to expire which would result in higher income tax rates.  Also as things stand now you will see an increase in payroll taxes that you pay.  The payroll taxes will increase by 2% of your gross payroll starting on January 1, 2013.  Why is this going to happen? A couple of years ago the government lowered the employee’s share of Social Security Taxes from 6.2% to 4.2% of wages. That reduction is scheduled to end January 1, 2013.  So while these changes may or may not happen it is best to be prepared for the potential reduction in your paycheck and take a look at your budget with this in mind.

I want to make sure all my clients/potential clients are prepared for this just in case it comes to fruition. Even worse than the tax increase is to be unprepared for it.  If you want to review how this scheduled change will affect you feel free to contact me using my information below.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Plan Year End Moves

A recent meeting with one of my clients uncovered an opportunity to save them at least $12,000 in taxes on their 2012 income tax returns.  The opportunities to save on your taxes are greatest this time of year.  So if you really want to make the most of your CPA a conversation this time of year can save you much money.  In the case of my client it was identifying the time to make an organizational change.  For many however there are opportunities to reduce taxes at year-end by delaying income or by accelerating expenses or both. 

You may have the ability to reduce the taxable income from your business by delaying billing or receiving of payments until next year.  If you are a cash basis taxpayer you can bill customers/clients at the end of the of the year so they pay you next year.  In addition you can make purchases that are expenses to your business before year-end.  Now here is one that is quite nice…you can put an expense on your credit card before year-end and deduct it this year even if you do not pay the bill until next year.  Just remember to pay the bill in a timely manner to avoid any interest charges and penalties.  You may be able to significantly reduce your income for the year by purchasing major assets before year-end.  When making these moves you want to be careful not to spend money just to save pennies on the dollar in taxes.  After all it is about how much money you have in your pocket at the end right?  I repeat DO NOT SPEND DOLLARS ONLY TO SAVE PENNIES ON YOUR TAXES.  While you want to pay as little tax as possible, even more important should be maximizing your wealth which should lead to you paying some taxes.  Paying taxes are a good thing, you just want to keep it to a minimum and this is a great time to make some moves to accomplish that end.

Prepare for 2013 Tax Changes

In addition to tax moves you also need to be actively looking at changing your budget for tax changes for 2013.  Income tax rates are due to increase and payroll taxes are due to increase by 2% starting January 1, 2013.  Take a look at how this will affect your budget for 2013 and be prepared for this potential reduction in income.

There are other moves that you can make now like contributions to retirement or HMA accounts.  What will work for you depends and a conversation with your CPA now can result in a huge savings for you and prepare you for changes starting January 1, 2013.  What is the best in your situation depends on your situation.  So now is the time to give me a call to discuss your situation and to see what opportunities you have now to minimize your taxes for 2012 and prepare for 2013.  Please feel free to contact me using my contact information below.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

An S Corporation is a favorite of CPA’s because of the tax benefits they can bring to their clients but an S Corporation is not for everyone/business.  Now keep in mind I am writing this from a tax and not a legal standpoint since you cannot form an S Corporation solely for tax purposes.  Typically taxpayers who have their own business can save some and sometimes large sums of money in the way of taxes by forming an S Corporation if they have sizable profits.  Also, realize there are responsibilities that come with forming an S Corporation in addition to potential tax savings.

Many form S Corporations to reduce the amount of employment taxes they pay each year and also to a measure of personal protection from the liabilities of their business.  The employment taxes for a sole proprietorship show up on your personal income tax return as Self-Employment Taxes and they are the equivalent of social security and medicare taxes withheld from an employees paycheck plus the employers share since you are both the employee and the employer.  Depending on current tax law you could be looking at approximately 15% in employment taxes on your profits.  Forming the S Corporation enables you to potentially reduce some of these taxes.

How does this work?  The IRS requires S Corporations to pay their active shareholders a reasonable salary for their services performed for the corporation.   Below is part of the IRS wording on this subject.

“S corporations must pay reasonable compensation to a shareholder-employee in return for services that the employee provides to the corporation before non-wage distributions may be made to the shareholder-employee. The amount of reasonable compensation will never exceed the amount received by the shareholder either directly or indirectly.”

So this opens a door, albeit not a well defined door, for a shareholder of an S Corporation to take some of the companies profit in the form of salary for himself and some in the form of a shareholder draw that is basically his share of the business profits which may not be subject to employment taxes.   For more information on this subject including factors to consider to determine a reasonable salary see this IRS post on “S Corporation Compensation and Medical Insurance Issues”.

http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/S-Corporation-Compensation-and-Medical-Insurance-Issues

Self-Employment Taxes are where an S Corporation can save you some money.  But realize that forming an S Corporation adds a level of complexity to your business and your life.  To form an S Corporation will cost you some money and you also encounter regular reporting and required maintenance for the S Corporation.  Depending on how the S Corporation is setup you may be required to file annual minutes or other maintenance/procedural requirements.  In addition you become an employer and need to pay the shareholders salaries and conform with payroll requirements and reporting.  This often involves reporting who your employees are to the state in which you operate and filing payroll tax and unemployment tax returns on both the federal and state level.  In addition you are required for a Federal Income Tax Return for the S Corporation and likely a state return as well.

As you can see by this brief (not all inclusive) overview forming an S Corporation is not a simple matter and not one that should be undertaken without conversations with your CPA and attorney.  You especially want to be careful of forming an S Corporation for a business that has not generated any profits yet as you may add expenses and complications without seeing any benefit.  So before you start a business call me to discuss your situation.  If you already have a profitable business you may be paying too much in taxes so you should contact me using my contact information below to see if an S Corporation will benefit your business.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Is success defined by money?  It is just paper and metal.  Right.  The scriptures say money is for a protection and it is needed but apparently it does not bring happiness.  Just look at the lives of the richest most successful people?  Broken marriages, relationships, rehab for addictions and sometimes attempted suicide or overdoses.   For many money and wealth is the measurement that defines success.  How about you?  What defines success for you?

I still remember my uncle coming home from work around 1 PM and going to the beach, out on his motorcycle, or to take some pictures (his true passion).  What was up with that?  My uncle worked only a few days a week and even then not full days.  He pointed out to me that he worked himself into a position that he could make his own schedule and work as much or as little as he wanted.  So he had found a niche that worked for him and his lifestyle and I began to question the accepted definitions of success.

So what are you striving for.  I know it is more than pieces of paper and metal.  From time to time we do well to ask ourselves why I am doing this and what is it giving me and others.  Evaluate, plan, execute, reevaluate, adjust and move toward real success.

Do you want a CPA that does not accept conventional thinking?  Then contact me using the information below.

Jeff Haywood, CPA
CPA Tax Superhero
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in Texas
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

I prepare the following types of tax returns:

Personal
Business
Estate/Gift
Trusts
Federal and State Returns

I especially value discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Tweet

The biggest problem new businesses encounter is paying unexpected taxes when you file your first income tax return after starting your new business.  The result can be a serious cash flow/debt problem.  How does this happen and how can you avoid it?

Starting a New Business: Plan Ahead and Prepare Yourself:

Joe starts selling widgets or his wife starts doing shows and they are shocked at how much they owe when do their income tax return.   When you operate a business on your own, without forming a corporation, your profits are subject to income tax plus self-employment tax.  Self-Employment Tax is basically the equivalent of medicare and social security taxes but both the half that was deducted from your paycheck plus the half paid by your employer that you never saw.  Yes, the self-employed pay both halves of these taxes because you are the both the employee and the employer.  While the income tax on your profit should be expected what surprises people is the self-employment tax.  The self-employment tax, in the past has been 15.3%, now is 13.3% but you can probably expect it to return to 15.3% eventually.  So if you are in a 25% tax bracket you could be paying about 38.3% in income and self employment taxes on the profit of your business.  So if your profit is $100,000 you will be paying about $38,300 of that back to Uncle Sam.  You could be expecting to pay about $25,000 and so you saved that amount during the year, OK maybe you didn’t, and now where is the $13,300 going to come from?  You have spent it already and you are investing in your growing business so now you are also going to be making payments to the IRS trying to catch up for last year.  In the meantime now your taxes for the current year are going to be more than you expected.  This is a big reason why many new businesses fail and why you should have a conversation with your CPA before you start your business.

Preparation and Actions to Take to Minimize Your Taxes:

An unexpected tax bill can be a real ‘kick in the gut’ and if you’re not careful it can cripple your business financially and it can steal your enthusiasm for your business.  It helps so much as a business person to be positive and to be one who gives energy to others.  If your tax bill hurts you emotionally you it can adversely affect your relationships with others.  So first, know upfront, before you start the business, what to expect in regard to taxes and everything associated with your business.  The successful are prepared for what is coming.  By being prepared for how much tax you will pay you can save during the year and make estimated quarterly payments to the IRS to avoid having a large unexpected tax bill at the end of the year.

There are other things you can do as well, like timing expenses to minimize your profit for the year.  You should always have conversations with your CPA during the year so you can be planning for the success of your business.  You especially want to have a conversation about a month before the end of your tax year to have a strategy for timing expenses and investment decisions.  To reduce your profit and hence taxes for the year you can pay for business expenses or invest in assets before the year-end.  You may even be able to put them on a credit card and deduct the full purchase amount even though you do not pay the credit card until the following year.  You will want to discuss this with your CPA, and I would be happy to serve you in this regard, but you also need to know that while moving up expenses or investments in assets into the current year could lower your profits and taxes for this year it probably also means higher profits and taxes in subsequent years.  You also want to be careful to avoid spending dollars just to save pennies.  This is why you need a good CPA who you regularly have business discussions with.

One more action to consider is forming a different entity type to use to reduce taxes.  If you are my client and you tell me you expect to have a profit of $100,000 we are going to discuss forming an S-Corporation to lower your taxes as well as to provide some protection for your personal assets.  This will be the subject of coming blog post.

Here are some other business related posts you should read:
6 Things You Should Know About Business Expenses – What Can You Deduct?
6 IRS Tax Tips About the Home Office Deduction
6 IRS Tax Tips for Self-Employed Individuals
IRS Top Six: Tax Tips For Making Estimated Payments + 1 free bonus

I am happy to take on new clients and help you prepare for success.  Feel free to contact me using my information below.

Jeff Haywood, CPA
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

Tweet

I prepare the following types of tax returns:

Personal
Business
Estates
Trusts
Federal and State Returns

I especially enjoy discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

So is this taxable? The question is asked many times every year. Here are some tips from the IRS on the subject:

Knowing what income is taxable and what is not can save you some money or some headaches with the IRS.  Filing tax returns with the IRS can be very stressful.  A good CPA not only prepares your tax returns but helps you find some calmness in the experience of filing your tax returns and pursuing your financial objectives.  For help from a CPA with years of experience preparing tax returns for the public and helping them reach their financial objectives use my information below to contact me.

Jeff Haywood, CPA
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

I prepare the following types of tax returns:

Personal
Business
Estates
Trusts
Federal and State Returns

I especially enjoy discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Tweet

If you changed your name and used the new name on your tax return and tried to e-file you may find your return rejected by the IRS. There are steps you need to take to make sure the IRS recognizes your name. Here are 5 tips from the IRS on this subject:

Often an incorrect name is the reason why an e-filed return is rejected by the IRS.  To avoid this your name on your tax return must match the way the Social Security Administration has your name as shown on your Social Security Card.  Now how about that refund?  For assistance with your tax returns from a CPA with many years experience preparing returns for the public contact me using my information below.

Jeff Haywood, CPA
972-439-1955
jeff.jhtaxes@gmail.com

This article was written by Jeff Haywood, CPA.
Jeff is a licensed CPA in both Texas and Illinois.
He has prepared income tax returns for the public for over 10 years.
He also has an MBA in Finance from Loyola University in Chicago and he has 24 years experience in Corporate Finance and Business Analysis.

I prepare the following types of tax returns:

Personal
Business
Estates
Trusts
Federal and State Returns

I especially enjoy discussions about you, your business, your dreams and goals.

Click Here to Follow Jeff Haywood, CPA on Twitter
Also, Click Here to Follow My Twitter Account: Taxesforxpats

In addition here are links to a few of my articles about income taxes for expatriates:

Income Tax Returns for Expatriates
US Income Tax Help for Expatriates
Foreign Earned Income Exclusion
Are You Required to Report Foreign Bank and Financial Accounts?

Click Here to Follow My Twitter Account: Taxesforxpats

For a full list of prior posts see the CPA Tax Blog.

Standard Disclaimer:

As always keep in mind that the content provided on this site is general in nature and may or may not apply to your particular case. It is best to check with a tax professional about your circumstances and what is best for you personally. Also, IRS regulations and tax laws are constantly changing and the information on this site is not constantly updated. Again please check with me about your particular circumstances and what will be best in your situation at the given time and law.

Comments:

If you have a comment to share about this post or for me, please email me at jeff.jhtaxes@gmail.com.

Tweet