Jeff Haywood, CPA

Posts Tagged ‘Tax Return’

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.

Follow Up on a One-On-One Meeting

In a previous post I wrote about 2 Steps to Make Networking Work For You.  What is the strategy after a one-on-one meeting with a potential contributor to your network?  Well depending on the first meeting you may follow up with the person to offer your services or product or that of someone else.  So you continue to think about what the person told you and when you have an idea that may help them you contact them to let them know.  It may be too that you thought of someone that may benefit from their or one of their contact’s product or service and you want to connect them.

Connecting With a Contact’s Contacts

Finally, you may be interested in meeting one of your contact’s contacts.  This is where networking gets very interesting and dynamic.  When you find they know someone that is very good at something that interests you or others that you know then you will likely want to get to know that person and start working together.  When you do this kind of follow-up and start branching out then your network really grows and your life becomes much more interesting.  As your network grows you are more enabled to help others find what they need/are interested in.   Another result is a growing network that has knowledge of you and what you have to offer.  As I mentioned in the previous post, this growth has the affect of causing your world to get smaller as you get closer to many valuable and interesting people.

This kind of follow-up takes two forms.  One is having a contact of a contact call you to meet and talk.  The other is when a contact tells you: hey I would like to meet that guy that you know that is “setting the world on fire.”  I have in my calendar an event to setup a meeting between a contact and one of my clients.  My friend and contact wants to meet my client not because he thinks my client may be a fit for his service but because he feels that it is likely my client knows people that will benefit from his service.  Both my friend/contact and my client get what networking is about and in fact have taught me quite a bit about being successful.  That meeting will prove to be very dynamic and interesting and so naturally I want to be there for the meeting.

So if you want to “set the world on fire” or want to continue to do so and would like to tap into my network then please contact me.  I would love to network with you.  By the way, if your CPA is not connecting you with people that “set the world on fire” perhaps you want a new CPA.  See my contact information below and use it.  Also, don’t keep me a secret.  Let others know about me and where to find me.

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.

Step One:

The Introduction

How do you turn those networking contacts into clients or valuable resources? Here are a two steps to make that happen. First, after meeting someone at a networking function or elsewhere immediately contact them and let them know how pleased you are to have had the opportunity to meet them.  Also make sure they have your contact information and start on a meaningful relationship by asking them if they would like to meet for a cup of coffee to explore networking opportunities.  You may need to spell out for them that you are interested in finding out more about them, what they do well, who they know and what they do well and you are willing to share the same about yourself.

A side note: It does not have to be over coffee.  I often do these meetings with people in other countries via the phone/Skype.

Step Two:

The Meeting

What is the point of this? What are you networking for? Do you need business, ideas, resources, other? What opportunities can the person you met bring to you and your business and how can you help them? When you meet with them find out what they are good at and what they need and what their friends are good at and what they need. That is the definition of networking. It is turning one contact into potentially an unlimited number of useful contacts.

When you meet should you ask them for their business? Maybe but probably not. Remember this is networking. You are developing a network of people that know, trust and value each other. That really takes time to develop. So invest in yourself and others by really networking. I like to set goals such as number of new contacts made and number of one on one meetings.  I need to add to those goals the number of follow up contacts as well.

The results have been good but not perfect. While a percentage of people will have a one on one meeting some times it does not yield much. A percentage are “live ones” that get what networking is and will work it. They talk about themselves and who they know. From showing interest in them, whether they are a potential client or not, and actually trying to help them yields dividends. They may not become a client but they likely know someone who would be a good match for your business. Real success in networking is when people start contacting you for referrals for something they or a friend need. Typically I will get an email from someone asking if I know a good attorney or plumbing guy. One of my newest clients met someone that I had met and they referred the new client to me to do help them with their business and do their income tax returns. It is a small world right? Not really, but you can make your world smaller and draw people and business to you by really networking.

Become a Connector:

Who are you?  To create a network you have to become “the guy” that makes it happen.

Often you will benefit by sharing with others what it means and how you develop a network.  Many people have the mind-set that just exchanging business cards will magically make it happen.  Others think it means trading, I refer people to you and you refer people to me.  Actually, for you to really be a source that helps people you refer people who you think are a good fit.  I am not a good fit for everyone that needs accounting and tax work.  That is why you need to get to know each other and what you do well.  This even works with your competitors.  What you are after is knowledge of people and what they do well so you can connect people who need help with those who are a good fit for them.  For further help with this concept read “The Go-Giver”. In “The Go-Giver” you will learn that 50-50 is a losing proposition.  Don’t look for a referral in return for one you give.  Be “the guy” that helps people with their needs and help people understand what a real network is and how it works.

What will result from really working a network? You will end up with a group of people who help others and look out for each others interests. Of course for that to happen you have be “that guy” for others.  Just connect and help others and you will benefit by becoming known as “that guy”, the CONNECTOR.  It works.

If you would like to network with me feel free to use my information below to contact me.

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.

Secret

Here is a secret to creating a customer that wants to do business with you and will come back for more of what you provide.  Don’t try to sell them your product or service right away.  Right away find out what is on their mind and how you can assist them.  Then assist them using what you KNOW.

For example the “Mall Guy” that tries to get you to stop to look at what they have or listen to what they have to say.  Irritating right?  How about someone that offers to help you find what you are looking for?  Yes, that works if they KNOW where it can be found.  So “Mall Guy” and the rest of us need to first try to help people with what is on their mind.  The result will be pleasant surprise that you actually cared and were helpful. 

Two Keys

First, find out what is on someone’s mind by getting them to talk about themselves.  Next, use what you KNOW to help them find what they are looking for.  The key here is what you KNOW right now.  If you have no clue where it is then suggest someone else who might help but DO NOT insist on helping them find it if you do not KNOW where it is.  You can offer to help them find it but they may not value that.  Personally I can often find items in a store faster than an employee that does not KNOW where it is.  So OFFER but don’t just say blindly follow me who is also blind.  Got it?  Also, become knowledgeable about not only your product or service but also others and their products and services (This will be a subject addressed in a following post).

Getting someone else to talk is powerful and kind.  It does give the other person control but it is a control you want them to have.  Think about “Mall Guy”…after asking if he can help a person find something and then directing them to another store, which he knows exactly where it is, then some people will stop and ask “what do you do”.  This will happen because he provided a valuable service.  People want to do business with people that are truly helpful.  So be “that guy” and people will want to do business with you and will come back to you. 

When was the last time you referred someone to a competitor because it was best for that person.  Try doing what really adds value for people and they will love you for it and you will benefit from from being “that guy”.  By the way, read the Go-Giver, which is an inspiration for this post.

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

What Every Taxpayer Should Know About Identity Theft: Tips From the IRS

It is just crazy that we need to be concerned about identity theft but that is the reality of the world we live in.  I hope these guidelines are helpful for you.  In addition if you would like the assistance of a CPA with many years of experience preparing tax returns for the public and also helping them succeed 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.

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