Tax Time Is Around The Corner

Tax time, is almost around the corner. Before you know it, it will be here. All we have is Thanksgiving, and then Christmas and the New Years Eve, and then Tax Time will be here. I just wanted to write a little bit about what to do to save money and lower your tax liabilities.

1. Make sure to change back your withholding's to lower figures if you have not already. I know some people that have forgotten to change that, and then they end up paying hefty amounts in taxes, come tax filing time. So be careful with that.

2. If you can afford to, max out your 401k's, and put the maximum amount in. Also open up an IRA and max those out if you can as well. By doing this, you lower your income amounts, and shelter that income from having to pay taxes on.

3. Try to keep a little money aside, in case if you end up having to pay. Because those who end up having to pay taxes, the IRS will charge a monthly interest rate, and that can be expensive to have to pay on top of what you already owe. So be careful with that.

4. Finally, if you are in business for yourself, be sure to take advantage of legal deductions that you are entitled to, for example: Advertising Expenses, Telephone Expenses, etc. These legitimate expenses help lower your "net profit" so make sure they are allowed expenses. Make sure to ask your tax professional about them.

These are food for thought, in regards to preparing for 2012 tax filing season. Good luck, and feel free to email me with any questions that you might have. I would be happy to assist. Have a great holiday season and enjoy time with family, friends, and close ones.

Six Most Beneficial Tax Deductions for Self Employed Folks

1.      Retirement Account: Setup a SEP IRA account because the business can contribute to this account with “Pre-Tax” dollars and get a deduction for it. The max amount for 2012 is the less of 50,000 or 25% of your Salary. If you do not pay yourself W2 then it is 20% of the net self-employed income.

2.      Depreciation on Assets: Depreciation expense is amazing. Say you own several different assets, like your car, or computer, or furniture or equipment or tools. IRS allows you a legal amount to depreciate over a period of time. For example vehicles are usually 5 years.  So if your vehicle has a basis of $6000 / 5 years = a depreciation expense of $1200 amount of deduction per year.

3.      Cost of Goods or Job Materials: These are great as well because they count against all income you gross in your business. So if you are a plumber for example, and you purchase tools or job materials and such you can count those against your income. So use this as a great deduction tool against your business gross income. But it is required that they are for business purposes, do not get carried away with this one.

4.      All Business Expenses: So if you are in the business of accounting like me. All legitimate business expenses are allowed. That is related to the accounting profession. For example, office expenses, chairs, desks, paper, writing material, marketing expenses, advertising expenses, payroll expenses, etc. Anything that cost to run that business where you generate income would be allowed to deduct according to that line of profession or business market.

5.      Rent Expense: Now this is a great one, because either you rent an office for your place of business or you run your office out of your home. Where you can rent a room in your home and use that as a deduction, but then you are required to recognize the income on a Schedule E, which would not be very much. But you could also depreciate that a portion of that office if you own it of course against the rental income.

6.      Capital Gains & Capitol Losses: Now if you have investment income or invest money into another business or such, to deduct losses from that income as well in the business depending upon where you end as a Gain or Loss, these are very beneficial deductions in a business, because you carry them forward for a period of time as well as backwards for 2 years. Either way you can decide. 

Tax Tip Pointers For Small Business Owners

Attention all Small Business Owners!! Pierce & Company, LLC just put out a new video for all of your enjoyment pleasure. Please watch it and comment or pass the word a long. I would be greatly appreciated if you did so. This video will teach you about the 3 most common tax questions that I get a lot of the time. It is so important to implement these suggestions into your business but in a careful way I must recommend.

Link: https://www.youtube.com/watch?v=ZcdBS5tqLug&feature=plcp

Happy Viewing!!
Pierce & Company, LLC

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How do we keep more of our money?

Why not check out my new video on how to keep more of your own hard earned money. All we need to do is follow the steps in the video and we will be a okay. Pierce & Company, LLC promises that if you follow the steps you will never have any money problems. It is that simple. Check it out here: http://www.youtube.com/user/pierceandcompanyllc?feature=guide Happy watching folks and stay tune for more videos to come about How to setup a budget, How to get out debt, and much more.

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Be smart with your finances, and take care of your finances!

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