Did You Know
Did You Know? (Tips to approve your tax filing experience.)
Starting A Business, What You Need To Know
Employer ID Number (EIN)
An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity. Find out if you need an EIN and how to apply for one.
Recordkeeping
Unless you are a professional bookkeeper, you probably don't like to spend valuable business time keeping records. But keeping good records can actually help you save money.
Business Name Change
Explanation for businesses on how to make a name change.
Businesses with Employees
If you operate a business and have employees, then this section has the information you will need. You will find resources on hiring, recordkeeping and other topics such as employment taxes, and wage reporting requirements.
Paying Independent Contractors
If you pay independent contractors, you may have to file Form 1099-MISC, Miscellaneous Income, to report payments for services performed for your trade or business.
What is Taxable and Nontaxable Income?
You can receive income in the form of money, property, or services. This section lists many kinds of income that are taxable or nontaxable.
Filing and Paying Your Business Taxes
This section discusses business taxes you may have to pay and the forms you may have to file. It also discusses taxpayer identification numbers.
e-File Form 940, 941 or 944 for Small Businesses
Learn your options for e-filing form 940, 941 or 944.
Estimated Taxes
Federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay as you go: withholding, and estimated taxes.
Business Expenses
You can deduct the cost of operating your business. These costs are known as business expenses. These are costs you do not have to capitalize or include in the cost of goods sold.
Business Tax Credits
A list of forms for claiming business tax credits, and a brief explanation about when carryovers, and credits cease.
Intangibles
Intangible Property is property that has value but cannot be seen or touched. Generally, you can either amortize or depreciate intangible property.
Avoiding Problems
This section provides links to resources to help the small business owner create a recordkeeping system, get the latest on the cash vs. accrual accounting methods, and tips on understanding their IRS notice, what to do if you haven’t filed a tax return, and how to recognize and avoid tax scams.
Closing a Business
There is more involved in closing your business than just locking the doors. This section provides procedures for getting out of business, including what forms to file and how to handle additional revenue received or expenses you may incur.
IRS Tax Calendar for Small Businesses and Self-Employed
The tax calendar is available for downloading and printing, or you can view it online.
Retirement Plans
The advantages of a retirement plan are numerous. There are economic, business and tax advantages for your business, for your employees and for you. A retirement plan may give you an important competitive edge in attracting and keeping the best employees - and help you plan for your own retirement years. Visit the IRS Video Portal and search keyword "retire" for a more information about choosing, operating and maintaining your retirement
An Employer Identification Number (EIN) is also known as a federal tax identification number, and is used to identify a business entity. Find out if you need an EIN and how to apply for one.
Recordkeeping
Unless you are a professional bookkeeper, you probably don't like to spend valuable business time keeping records. But keeping good records can actually help you save money.
Business Name Change
Explanation for businesses on how to make a name change.
Businesses with Employees
If you operate a business and have employees, then this section has the information you will need. You will find resources on hiring, recordkeeping and other topics such as employment taxes, and wage reporting requirements.
Paying Independent Contractors
If you pay independent contractors, you may have to file Form 1099-MISC, Miscellaneous Income, to report payments for services performed for your trade or business.
What is Taxable and Nontaxable Income?
You can receive income in the form of money, property, or services. This section lists many kinds of income that are taxable or nontaxable.
Filing and Paying Your Business Taxes
This section discusses business taxes you may have to pay and the forms you may have to file. It also discusses taxpayer identification numbers.
e-File Form 940, 941 or 944 for Small Businesses
Learn your options for e-filing form 940, 941 or 944.
Estimated Taxes
Federal income tax is a pay-as-you-go tax. You must pay the tax as you earn or receive income during the year. There are two ways to pay as you go: withholding, and estimated taxes.
Business Expenses
You can deduct the cost of operating your business. These costs are known as business expenses. These are costs you do not have to capitalize or include in the cost of goods sold.
Business Tax Credits
A list of forms for claiming business tax credits, and a brief explanation about when carryovers, and credits cease.
Intangibles
Intangible Property is property that has value but cannot be seen or touched. Generally, you can either amortize or depreciate intangible property.
Avoiding Problems
This section provides links to resources to help the small business owner create a recordkeeping system, get the latest on the cash vs. accrual accounting methods, and tips on understanding their IRS notice, what to do if you haven’t filed a tax return, and how to recognize and avoid tax scams.
Closing a Business
There is more involved in closing your business than just locking the doors. This section provides procedures for getting out of business, including what forms to file and how to handle additional revenue received or expenses you may incur.
IRS Tax Calendar for Small Businesses and Self-Employed
The tax calendar is available for downloading and printing, or you can view it online.
Retirement Plans
The advantages of a retirement plan are numerous. There are economic, business and tax advantages for your business, for your employees and for you. A retirement plan may give you an important competitive edge in attracting and keeping the best employees - and help you plan for your own retirement years. Visit the IRS Video Portal and search keyword "retire" for a more information about choosing, operating and maintaining your retirement
Deducting Business Expenses
Business expenses are the cost of carrying on a trade or business. These expenses are usually deductible if the business operates to make a profit.
• What Can I Deduct?
• Cost of Goods Sold
• Capital Expenses
• Personal versus Business Expenses
• Business Use of Your Home
• Business Use of Your Car
• Other Types of Business Expenses
Note: If you do not carry on the activity to make a profit, you must report all of the gross income (without deductions) from the activity on Form 1040, line 21. Special limits apply to what expenses for a not-for-profit activity are deductible; for detailed information, refer to Publication 535, Business Expenses.
What Can I Deduct?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is important to separate business expenses from the following expenses:
• The expenses used to figure the cost of goods sold,
• Capital Expenses, and
• Personal Expenses.
Cost of Goods Sold
If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Some of your expenses may be included in figuring the cost of goods sold. The cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense.
The following are types of expenses that go into figuring the cost of goods sold.
• The cost of products or raw materials, including freight
• Storage
• Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
• Factory overhead
Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs.
This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.
For additional information, refer to the chapter on Cost of Goods Sold, Publication 334, Tax Guide for Small Businesses and the chapter on Inventories, Publication 538, Accounting Periods and Methods.
Capital Expenses
You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. In general, there are three types of costs you capitalize.
• Business start-up costs (See the note below)
• Business assets
• Improvements
Note: You can elect to deduct or amortize certain business start-up costs. Refer to chapters 7 and 8 of Publication 535, Business Expenses.
Personal versus Business Expenses
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.
For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules.
Business Use of Your Home
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Refer to Home Office Deduction and Publication 587, Business Use of Your Home, for more information.
Business Use of Your Car
If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses. For a list of current and prior year mileage rates see the Standard Mileage Rates.
• Retirement Plans - Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees' retirement.
• Rent Expense - Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
• Interest - Business interest expense is an amount charged for the use of money you borrowed for business activities.
• Taxes - You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
• Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.
This list is not all inclusive of the types of business expenses that you can deduct. For additional information, refer to Publication 535, Business Expenses.
• What Can I Deduct?
• Cost of Goods Sold
• Capital Expenses
• Personal versus Business Expenses
• Business Use of Your Home
• Business Use of Your Car
• Other Types of Business Expenses
Note: If you do not carry on the activity to make a profit, you must report all of the gross income (without deductions) from the activity on Form 1040, line 21. Special limits apply to what expenses for a not-for-profit activity are deductible; for detailed information, refer to Publication 535, Business Expenses.
What Can I Deduct?
To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your trade or business. A necessary expense is one that is helpful and appropriate for your trade or business. An expense does not have to be indispensable to be considered necessary.
It is important to separate business expenses from the following expenses:
• The expenses used to figure the cost of goods sold,
• Capital Expenses, and
• Personal Expenses.
Cost of Goods Sold
If your business manufactures products or purchases them for resale, you generally must value inventory at the beginning and end of each tax year to determine your cost of goods sold. Some of your expenses may be included in figuring the cost of goods sold. The cost of goods sold is deducted from your gross receipts to figure your gross profit for the year. If you include an expense in the cost of goods sold, you cannot deduct it again as a business expense.
The following are types of expenses that go into figuring the cost of goods sold.
• The cost of products or raw materials, including freight
• Storage
• Direct labor costs (including contributions to pensions or annuity plans) for workers who produce the products
• Factory overhead
Under the uniform capitalization rules, you must capitalize the direct costs and part of the indirect costs for certain production or resale activities. Indirect costs include rent, interest, taxes, storage, purchasing, processing, repackaging, handling, and administrative costs.
This rule does not apply to personal property you acquire for resale if your average annual gross receipts (or those of your predecessor) for the preceding 3 tax years are not more than $10 million.
For additional information, refer to the chapter on Cost of Goods Sold, Publication 334, Tax Guide for Small Businesses and the chapter on Inventories, Publication 538, Accounting Periods and Methods.
Capital Expenses
You must capitalize, rather than deduct, some costs. These costs are a part of your investment in your business and are called capital expenses. Capital expenses are considered assets in your business. In general, there are three types of costs you capitalize.
• Business start-up costs (See the note below)
• Business assets
• Improvements
Note: You can elect to deduct or amortize certain business start-up costs. Refer to chapters 7 and 8 of Publication 535, Business Expenses.
Personal versus Business Expenses
Generally, you cannot deduct personal, living, or family expenses. However, if you have an expense for something that is used partly for business and partly for personal purposes, divide the total cost between the business and personal parts. You can deduct the business part.
For example, if you borrow money and use 70% of it for business and the other 30% for a family vacation, you can deduct 70% of the interest as a business expense. The remaining 30% is personal interest and is not deductible. Refer to chapter 4 of Publication 535, Business Expenses, for information on deducting interest and the allocation rules.
Business Use of Your Home
If you use part of your home for business, you may be able to deduct expenses for the business use of your home. These expenses may include mortgage interest, insurance, utilities, repairs, and depreciation. Refer to Home Office Deduction and Publication 587, Business Use of Your Home, for more information.
Business Use of Your Car
If you use your car in your business, you can deduct car expenses. If you use your car for both business and personal purposes, you must divide your expenses based on actual mileage. Refer to Publication 463, Travel, Entertainment, Gift, and Car Expenses. For a list of current and prior year mileage rates see the Standard Mileage Rates.
Other Types of Business Expenses
• Employees' Pay
- You can generally deduct the pay you give your employees for the services they perform for your business.• Retirement Plans - Retirement plans are savings plans that offer you tax advantages to set aside money for your own, and your employees' retirement.
• Rent Expense - Rent is any amount you pay for the use of property you do not own. In general, you can deduct rent as an expense only if the rent is for property you use in your trade or business. If you have or will receive equity in or title to the property, the rent is not deductible.
• Interest - Business interest expense is an amount charged for the use of money you borrowed for business activities.
• Taxes - You can deduct various federal, state, local, and foreign taxes directly attributable to your trade or business as business expenses.
• Insurance - Generally, you can deduct the ordinary and necessary cost of insurance as a business expense, if it is for your trade, business, or profession.
This list is not all inclusive of the types of business expenses that you can deduct. For additional information, refer to Publication 535, Business Expenses.
Child Education
If I claim my daughter who is a full-time college student as a dependent, can she claim her own personal exemption when she files her return?
Answer:
If you can claim an exemption for your daughter as a dependent on your income tax return, she can't claim her own personal exemption on her income tax return. Your daughter should check the box on her return indicating that someone else can claim her as a dependent.
Answer:
If you can claim an exemption for your daughter as a dependent on your income tax return, she can't claim her own personal exemption on her income tax return. Your daughter should check the box on her return indicating that someone else can claim her as a dependent.
Can I Receive a Tax Refund?
Can I receive a tax refund if I owe for a prior year's federal taxes since I am currently making payments under an installment agreement or payment plan?
Answer:
No, one of the conditions of your installment agreement is that any refund due to you, the IRS will automatically apply against taxes you owe. Because your refund isn't applied toward your regular monthly payment, continue making your installment agreement payments as scheduled until you pay your liability, including accrued penalties and interest, in full.
If your refund exceeds your total balance due on all outstanding liabilities including accruals, and you don't owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support, you'll receive a refund of the amount over and above what you owe. For more information on these non-IRS refund offsets, you can call the Bureau of the Fiscal Service (BFS) at 800-304-3107 (toll-free).
Abusive Return Preparer
Taxpayers should be very careful when choosing a tax preparer. While most preparers provide excellent service to their clients, a few unscrupulous return preparers file false and fraudulent tax returns and ultimately defraud their clients. It is important to know that even if someone else prepares your return, you are ultimately responsible for all the information on the tax return.
Answer:
No, one of the conditions of your installment agreement is that any refund due to you, the IRS will automatically apply against taxes you owe. Because your refund isn't applied toward your regular monthly payment, continue making your installment agreement payments as scheduled until you pay your liability, including accrued penalties and interest, in full.
If your refund exceeds your total balance due on all outstanding liabilities including accruals, and you don't owe certain past-due amounts, such as federal tax, state tax, a student loan, or child support, you'll receive a refund of the amount over and above what you owe. For more information on these non-IRS refund offsets, you can call the Bureau of the Fiscal Service (BFS) at 800-304-3107 (toll-free).
Abusive Return Preparer
Taxpayers should be very careful when choosing a tax preparer. While most preparers provide excellent service to their clients, a few unscrupulous return preparers file false and fraudulent tax returns and ultimately defraud their clients. It is important to know that even if someone else prepares your return, you are ultimately responsible for all the information on the tax return.
How Do I Claim EITC?
You can't get EITC, unless you file a Federal tax return and claim it. If you have a qualifying child, you must file the Schedule EIC
listing the children with either the Form 1040A
or the Form 1040. If you do not have a qualifying child, you can use the Forms 1040EZ
or the 1040A
or 1040.
Note: If you claim the earned income tax credit (EITC) or the additional child tax credit (ACTC) on your tax return, the IRS must hold your refund until at least February 15 — even the portion not associated with EITC or ACTC.
Gather the Following Documents Before You Work on Your Tax Return
If you have someone prepare your tax return, bring the documents to your preparer to make sure your tax return is prepared correctly.
• Social Security cards, a Social Security number verification letter, or other U.S. government document verification for all persons you may list on the return.
• Birth dates for all persons you may list on return.
• Copies of last year's federal and state returns, if you have them.
• All income statements: Forms W-2 and 1099, Social Security, unemployment and other statements, such as pensions, stocks, interest and any documents showing taxes withheld. If you own or run a business or farm, collect records of all your income.
• All records of expenses, such as tuition, mortgage interest, or real estate taxes. If you own or run a business or farm, collect records of all your expenses.
• All information reporting forms such as the 1095-A, 1095-B or 1095-C.
• Bank routing numbers and account numbers to direct deposit any refund.
• Dependent child care information: name and address of paid caretakers and either their Social Security number or other tax identification number.
Note: If you claim the earned income tax credit (EITC) or the additional child tax credit (ACTC) on your tax return, the IRS must hold your refund until at least February 15 — even the portion not associated with EITC or ACTC.
Gather the Following Documents Before You Work on Your Tax Return
If you have someone prepare your tax return, bring the documents to your preparer to make sure your tax return is prepared correctly.
• Social Security cards, a Social Security number verification letter, or other U.S. government document verification for all persons you may list on the return.
• Birth dates for all persons you may list on return.
• Copies of last year's federal and state returns, if you have them.
• All income statements: Forms W-2 and 1099, Social Security, unemployment and other statements, such as pensions, stocks, interest and any documents showing taxes withheld. If you own or run a business or farm, collect records of all your income.
• All records of expenses, such as tuition, mortgage interest, or real estate taxes. If you own or run a business or farm, collect records of all your expenses.
• All information reporting forms such as the 1095-A, 1095-B or 1095-C.
• Bank routing numbers and account numbers to direct deposit any refund.
• Dependent child care information: name and address of paid caretakers and either their Social Security number or other tax identification number.
Refundable Credits
If you are claiming any refundable credits (EIC Child, Tax Credit or Additional Child Tax Credit) you must show proof of relationship and residency through documentation.
Filing Self Employed
If you are self employed you have to provide the business expenses and deductions in writing.
Qualified Deductions
The IRS states that you can only claim deduction payments that were made in 2017 even if you have payments for the same deduction. (example: If you have a two part payment on property taxes. If one the payments are made in 2017 and the other part is due in 2018. Only the payment made in 2017 is a deductible.)
Affordable Care Insurance
If you received any type of Affordable Care Insurance even if it was one payment you need to provide your 1095-A to avoid any delays on your tax return. It will not be processed without information.
Charitable Donations
With the holidays around the corner, many people will be making donations to benefit charitable organizations. However, come tax time, the person who made the donation might also benefit. That’s because taxpayers who donate to a charity may be able to claim a deduction for the donation on their federal tax return. Here are five facts about charitable donations:
1. Qualified Charities. A taxpayer must donate to a qualified charity to deduct their contributions. Gifts to individuals, political organizations, or candidates are not deductible.
2. Itemize Deductions. To deduct charitable contributions, taxpayers must file Form 1040.
3. Getting Something in Return. Taxpayers may receive something in return for their donation. This includes things such as merchandise, meals, and event tickets. Taxpayers can only deduct the amount of the donation that’s more than the fair market value of the item they received.
4. Type of Donation. For donations of property instead of cash, a taxpayer can only deduct the fair market value of the donated item. Fair market value is generally the price they would get if they sold the item on the open market. If they donate used clothing and household items, those items generally must be in good condition. Special rules apply to certain types of property donations, such as cars and boats.
5. Donations of $250 or More. If a taxpayer donates $250 or more in cash or goods, they must have a written receipt from the charity. The statement must show:
1. Qualified Charities. A taxpayer must donate to a qualified charity to deduct their contributions. Gifts to individuals, political organizations, or candidates are not deductible.
2. Itemize Deductions. To deduct charitable contributions, taxpayers must file Form 1040.
3. Getting Something in Return. Taxpayers may receive something in return for their donation. This includes things such as merchandise, meals, and event tickets. Taxpayers can only deduct the amount of the donation that’s more than the fair market value of the item they received.
4. Type of Donation. For donations of property instead of cash, a taxpayer can only deduct the fair market value of the donated item. Fair market value is generally the price they would get if they sold the item on the open market. If they donate used clothing and household items, those items generally must be in good condition. Special rules apply to certain types of property donations, such as cars and boats.
5. Donations of $250 or More. If a taxpayer donates $250 or more in cash or goods, they must have a written receipt from the charity. The statement must show:
- The amount of the donation.
- A description of any property given.
- Whether the taxpayer received any goods or services in exchange for their gift, and, if so, must provide a description and good faith estimate of the value of those goods or services.
File Taxes With Us From Anywhere
Precise Accounting and Bookkeeping can file taxes for all 50 states and have your refund directly deposited into your account saving you time. Most refunds are received faster than 10 days without delay.
Plan Ahead To Avoid Refund Delays
Taxpayers can take steps to ensure smooth processing of their 2017 tax return. Here are three things taxpayers should know about the tax returns they will file this upcoming year.
1) It’s important to gather the following documents:
2) Taxpayers with expiring ITINs should renew promptly
Some people with an Individual Taxpayer Identification Number may need to renew it before the end of the year to avoid a refund delay and possible loss of key tax benefits. These ITINs expire Dec. 31, 2017:
3) Choose e-file and direct deposit for a faster refund. Combining direct deposit with electronic filing is the fastest way for a taxpayer to get their refund. With direct deposit, a refund goes directly into a taxpayer’s bank account.
1) It’s important to gather the following documents:
- Forms W-2 from employers.
- Forms 1099 from banks and other payers.
- Forms 1095-A from the Marketplace for those claiming the Premium Tax Credit.
- Last pay stub
2) Taxpayers with expiring ITINs should renew promptly
Some people with an Individual Taxpayer Identification Number may need to renew it before the end of the year to avoid a refund delay and possible loss of key tax benefits. These ITINs expire Dec. 31, 2017:
- ITINs not used on a tax return in the past three years.
- ITINs with middle digits 70, 71, 72 or 80.
3) Choose e-file and direct deposit for a faster refund. Combining direct deposit with electronic filing is the fastest way for a taxpayer to get their refund. With direct deposit, a refund goes directly into a taxpayer’s bank account.
Credit Repair
Did you know Precise Accounting and Bookkeeping is a year round Accounting Firm that specializes in back taxes issues and restoring those client that are serious about obtaining and maintaining an 800+ credit score? Just thought I would let you know all credit repair loop holes will be closed out this year, so please get your credit in order. The world is changing.
FYI: If you are signed up in any credit repair program that requires you to make monthly payments most of them are not doing anything except getting your money.
We are not a credit repair company. This is a direct connection to restoring your credit within 90 days including tax liens, medical, foreclosure, repos, etc
Call Michael Edwards AT 980-939-1628 OR 704-338-2988 SERIOUS INQUIRES ONLY.
FYI: If you are signed up in any credit repair program that requires you to make monthly payments most of them are not doing anything except getting your money.
We are not a credit repair company. This is a direct connection to restoring your credit within 90 days including tax liens, medical, foreclosure, repos, etc
Call Michael Edwards AT 980-939-1628 OR 704-338-2988 SERIOUS INQUIRES ONLY.
Wal-Mart To Wal-Mart Direct Deposit
Did you know that we have a Walmart-To-Walmart direct deposit options? A code will be sent to your phone when your refund is available. Just go to your nearest Walmart, show your ID and Code and receive your refund for a low fee of $7.
The Double Vision Youth Initiative Foundation Thanks You
Did you know that our clients play a big part in helping today's youth by filing their taxes with us. Precise Accounting and Bookkeeping gives 25 dollars of each of our client preparation fees to the Double Vision Youth Initiative Foundation assisting the youth in the community in which we serve. These contributions assist in the branding and marketing of their product to make their dream of owning their own business a reality.
Please visit www.doublevisionrt.com if you have a child that may need global brand marketing to get their product or services promoted and also www.dvyif.com to see the impact of your contributions.
Please visit www.doublevisionrt.com if you have a child that may need global brand marketing to get their product or services promoted and also www.dvyif.com to see the impact of your contributions.