by Tax Master DFW on 09/28/14
Title:
Accounting Methods - Cash and Accrual
Word Count:
332
Summary:
When starting a business, you have to determine the method you are going to use for accounting and paying taxes. The two choices are the cash method and the accrual method.
Keywords:
#Arlington_Tax_Preparation, #Tax_Preparation, #Tx_Tax_prep, #Texas_Tax_Preparation, #Arlington_Tax_Prep, #Arlington_TX, #Tax_Prep, #DFW_Tax_Prep, #Tax_Filing, #Taxes, #Lewisville_Tax_Prep, #Lewisville_Tax_Preparation, #DFW_Tax_Preparation, #Arlington, #Tarrant_County, #Reduce_Taxes, #Tax_Refunds, #Pay_Taxes, #Tax_Help, #Bookkeeping, #DFW_Bookkeeping, #Investing, #tax_bookkeeping, #DFW, #Texas, #North_Texas
Article Body:
When starting a business, you have to determine the method you are going to use for accounting and paying taxes. The two choices are the cash method and the accrual method.
Cash Method
If you are looking for simplicity, the cash method is probably your best accounting choice. Generally, income and deductions can be claimed when payment is actually received or made. This is best shown with an example.
I open a small business and have to order business cards and stationary. I receive the products and pay the invoice on November 18, 2005. Under the cash method, I can deduct the cost on my 2005 tax return.
Some businesses are restricted from using the cash method. C corporations may only use the cash method if they have less than $5 million in gross revenues for a particular year. Professional Service Corporations can use the cash method without limit, while farming corporations can due so if gross revenues are less than $25 million. Tax shelters are prohibited from using the cash method.
Accrual Method
The Accrual Method of accounting is a bit more complex. Under this method, the focus in on the date the expense is incurred, not paid. Although this may seem a small difference, it can play havoc with your books and piece of mind.
Using our previous example, assume I order business cards and stationary on the December 18, 2005. I receive the products on December 30th, but do not pay the invoice until January 20, 2006. When can the expense be claimed? It depends on when economic performance occurred.
Generally, economic performance occurs when goods or services are provided to you. In the above example, economic performance would arguably occur when the business cards and stationary were delivered with the invoice on December 30th. Thus, I would be able to deduct the expense for the 2005 tax year.
In Closing
As you can see, the cash method is the easier of the two accounting methods. To determine the best method for your business, speak with a tax professional at www.TaxmasterDFW.com
by Tax Master DFW on 09/27/14
Title:
Home Business Tax Deductions
Word Count:
315
Summary:
Dreading April?
If you are running a home business, it is important to remember that there are tax deductions for you when tax season rolls around. Of course, you do not want to try to fool the IRS (no one wants to run the risk of being audited!), but you do want to take advantage of those deductions that are rightfully yours. Running your own home business takes much of the same expenses, effort, time, space, equipment, and travel as any other business. Below are some home business deductions.
Keywords:
#Arlington_Tax_Preparation, #Tax_Preparation, #Tx_Tax_prep, #Texas_Tax_Preparation, #Arlington_Tax_Prep, #Arlington_TX, #Tax_Prep, #DFW_Tax_Prep, #Tax_Filing, #Taxes, #Lewisville_Tax_Prep, #Lewisville_Tax_Preparation, #DFW_Tax_Preparation, #Arlington, #Tarrant_County, #Reduce_Taxes, #Tax_Refunds, #Pay_Taxes, #Tax_Help, #Bookkeeping, #DFW_Bookkeeping, #Investing, #tax_bookkeeping, #DFW, #Texas, #North_Texas
Article Body:
Dreading April?
If you are running a home business, it is important to remember that there are tax deductions for you when tax season rolls around. Of course, you do not want to try to fool the IRS (no one wants to run the risk of being audited!), but you do want to take advantage of those deductions that are rightfully yours. Running your own home business takes much of the same expenses, effort, time, space, equipment, and travel as any other business. Below are some home business tax deductions to remember as April is drawing near.
If you have a home office that is dedicated solely to your home business, you can add it to your list of home business deductions. The same goes for telephone charges, office supplies, furniture, software, subscriptions, and other equipment. Do not fear an audit for making these home business tax deductions as long as these items are used exclusively for your home business.
If your business requires you to leave your home office, you can add the cost of travel, mileage, meals, entertainment, and anything else that goes along with the cost of living on the road to your home business tax deductions. During the year, make sure you keep documentation of your mileage, your trips, food, etc.
Now, what about the really big stuff? Well, when making home business tax deductions, you can also take into consideration insurance premiums (if you are self-employed and pay for your own insurance), the money you deduct for retirement, and half of what you pay towards your social security. And if your children are seventeen or younger and are working for you, you can deduct their salaries as business expenses.
This is just a quick scan of the home business tax deductions you can take advantage of. For more information, check out www.bankrate.com, and talk to a tax professional.
by Tax Master DFW on 09/27/14
Title:
Home Business Taxes
Word Count:
455
Summary:
Just the thought of taxes can scare people out of their minds. You have to keep all your records and documents in order to be able to file easier at the end of the year. Home business owners have their own set of allowable deductions that differ from other businesses. You have a chance to save a lot of money by knowing how to take advantage of you home business situation.
Know what your deductions are. There are several deductibles that the home-based business owner is entitled to.
Keywords:
#Arlington_Tax_Preparation, #Tax_Preparation, #Tx_Tax_prep, #Texas_Tax_Preparation, #Arlington_Tax_Prep, #Arlington_TX, #Tax_Prep, #DFW_Tax_Prep, #Tax_Filing, #Taxes, #Lewisville_Tax_Prep, #Lewisville_Tax_Preparation, #DFW_Tax_Preparation, #Arlington, #Tarrant_County, #Reduce_Taxes, #Tax_Refunds, #Pay_Taxes, #Tax_Help, #Bookkeeping, #DFW_Bookkeeping, #Investing, #tax_bookkeeping, #DFW, #Texas, #North_Texas
Article Body:
Just the thought of taxes can scare people out of their minds. You have to keep all your records and documents in order to be able to file easier at the end of the year. Home business owners have their own set of allowable deductions that differ from other businesses. You have a chance to save a lot of money by knowing how to take advantage of you home business situation.
Know what your deductions are. There are several deductibles that the home-based business owner is entitled to. There are auto/vehicle deductions that can help with mileage, gas, insurance, and/or other related expenses. You can write off your business cards and stationary, plus any business meals and entertainment. All business traveling expenses, education, and even the interest on your business credit card can be counted in your favor. If you use a computer the Internet service and web page related expenses could be deducted as well. Office furniture, supplies, your phone and other communication devices are also necessities that have deductions. Any postage or delivery of goods charges is also considered a business expense. The home-based owner can also get deductions on rent and utilities that keep the business running. Deductions that you will want to use on your 1040 form are:
* Half of your self-employment tax amount, which can offer you a huge savings.
* As much as 100% of your medical insurance costs for you and your family.
If you make more than $600 per year in self-employment you must file your taxes. You may qualify for the C-EZ form if you have had a bad year or just got started. Your total business expenses will have to be less than $5000 for that year; you have no inventory, or have to file a 4562 form (depreciation and amortization form). Make sure first and foremost that your expenses are less than $5000 and that you have taken all the deductions you are entitled to.
A large decision is who will be doing your taxes. We obviously recommend you call us for professional assistance. You need to decide if you plan to do them yourself or if you want someone else to do them for you. There are several advantages in using a tax professional. They can save you much time and unneeded frustration. They can spot deductions you might miss or not know about. It also saves you from being responsible for any errors that were made in the preparation, which could end up saving you thousands. No matter how you decide to prepare your taxes be sure to claim all possible deductions to save you money in the long run. A business has many breaks for the taxpayer for a reason and you should make sure you know what you qualify for and how to save.
by Tax Master DFW on 09/27/14
Title:
Home Office Tax Expenses
Word Count:
403
Summary:
Self-employed individuals often work out of their own home. If this is the case with you, here is a primer on home office tax expenses you can claim on your taxes.
Keywords:
#Arlington_Tax_Preparation, #Tax_Preparation, #Tx_Tax_prep, #Texas_Tax_Preparation, #Arlington_Tax_Prep, #Arlington_TX, #Tax_Prep, #DFW_Tax_Prep, #Tax_Filing, #Taxes, #Lewisville_Tax_Prep, #Lewisville_Tax_Preparation, #DFW_Tax_Preparation, #Arlington, #Tarrant_County, #Reduce_Taxes, #Tax_Refunds, #Pay_Taxes, #Tax_Help, #Bookkeeping, #DFW_Bookkeeping, #Investing, #tax_bookkeeping, #DFW, #Texas, #North_Texas
Article Body:
Self-employed individuals often work out of their own home. If this is the case with you, here is a primer on home office tax expenses you can claim on your taxes.
Home Office Tax Expenses
America is a country built on small businesses. Yes, the big companies are the darlings of the media, but the guts of our economy are the little guys pursuing the American Dream from the extra bedroom. Fortunately, the tax code contains deductions tailored to help cut your tax bill.
When claiming home office tax expenses, it is important to keep a receipt for each and every amount you are claiming. When dealing with the IRS, receipts are your ammo. Keep them at all costs.
When maintaining a home office, taxpayers often wonder how they differentiate a business expense from a simply home expense. The key is the square footage. Simply divide the square footage of your office by the total square footage of the home. This number is typically represented by a percentage such as 20 percent. Put another way, the home office represents 20 percent of the square footage of the house. Once you have the above answer, you can multiply it by the total yearly amounts paid for rent or mortgage interest, insurance, maintenance, utilities, taxes, depreciation of the home and repairs. Each of these home office tax expenses figures can then be deducted.
In addition to the above, you can also deduct expenses completely related to the business. For instance, the purchase of a desk for the office is entirely attributable to the office and can be deducted in full.
Words of Caution
There are some limitations to home office tax expenses. If you are reimbursed by an employer for various home office expenses, you cannot also claim those expenses as a tax deduction. Sorry, no double dipping.
For some time, there has been an urban myth that the Internal Revenue Service keeps a close eye on home-based businesses. This may have been true ten years ago, but is clearly not the case today. To this end, the IRS has actually come out and issued clear statements to the contrary. Do not fail to claim home office tax expenses because of a fear of an audit. It is simply not a rational fear!
Running a small business can be both stressful and incredibly gratifying. Make sure you claim home office tax expenses to help your cash flow.
