Income Tax
Time to Start Thinking About Taxes Again
You may have already filed your taxes for this year and consider it all a distant memory. But don’t close the books on your taxes yet. Now is a perfect time to do some small business accounting and tax planning for next year. If you found yourself writing a big check to the IRS, or [...]
High Income Tax Bill? Don’t Gripe, Count Your Profits!
We often hear grumblings this time of year about how high their income tax bill is. Sometimes, it seems to us that people would rather make less money than to have to pay taxes. We believe this is the wrong attitude. To our way of thinking, a big tax bill means only one thing, they [...]
Don’t Pay Until You Have the W-9
January 31st has come and gone, but if you are still stressed from compiling 1099s, it’s time for a change. Maybe you didn’t collect Form W-9 from everyone and had to spend a lot of time and effort hunting people down after the fact. Form W-9 may seem like a formality since you don’t actually [...]
How long should I keep records for accounting and tax purposes?
The length of time you should keep a document depends on the action, expense, or event the document records. Generally, you must keep your records that support an item of income or deductions on a tax return until the period of limitations for that return runs out. The period of limitations [...]
Keep an Auto Log to Track Business Expenses
The IRS increased the standard mileage rates for the last six months of this year. The rate increased to 55.5 cents a mile for all business miles driven from July 1, 2011, through Dec. 31, 2011. This is an increase of 4.5 cents from the 51 cent rate in effect for the first six months [...]
Don’t Delay on W-9s
Outsourcing various duties of your business to independent contractors can save you a lot of time and money compared to doing it yourself or hiring full time staff. Making the decision to outsource is easy, but make sure you are aware of the IRS guidelines for paying freelancers. You are required to report annual payments [...]
Ten Ways to Avoid an Audit
We wanted to pass along these valuable tax tips from the website of Indianapolis-based Lawrie CPA Group: 10 Ways to Avoid an Audit This week we thought we’d share some great advice from our friend Dan Lacy (www.DynastyBuilder.com). This is the second of a 2 part series on ways you can avoid an audit. Here [...]
Some Clarification About the 940 (FUTA) Tax for 2010
I have gotten a couple of emails and calls regarding the 940 (FUTA) taxes for 2010. So I thought I would pass this information on: A company usually pays .008 percent for employees wages on the first $7,000.00 for each employee. But Indiana has to pay another .003 percent=.011 percent. This is from the IRS [...]
Social Security Rates Change for 2011
New tax regulations took affect on January 1 that will effectively give employees a 2% raise. The new tax bill reduces employees’ Social Security (OASDI) tax rate from 6.2% to 4.2%, which will be reflected in the form of a higher net paycheck. This rate is effective for employees’ incomes of up to $106,800. If [...]
IRS Audit Red Flags, Part 4
In the previous installment of this series, we looked at three issues affecting both individuals and businesses that can raise a red flag with the IRS and trigger a tax audit. In this last installment we address two issues that often get red-flagged by the IRS due to the complexity of the issues, Self-Employment and [...]