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articles5 Secrets Tax Pros Won't ShareSubmitted by taxman on August 24, 2006 - 2:01pm.
My name is Barry S. Thompson and I am a CPA. My office is in Cullman, AL but I have clients as far away as Carson City, Nevada. I have clients that I have never met face to face. How is this possible? First and foremost my relationship with these "long distance" clients started because they found me on this web site. Most asked questions which I promptly answered and they developed trust in me. They requested that I prepare their income tax return and I agreed to perform the service. I directed them to the "Tax Return Check List" which they print and use to organize and collect the data needed to prepare their return. They mailed me their information and I prepared the return. These clients often write that this is much simpler for them and less time consuming than dealing with a local person where they have to visit the office multiple times. That is my shameless plug now on to the "5 Secrets Professionals Usually Don't Share With Their Clients". ( categories: helpful info )
Not Everbody is a Tax Cheat!Submitted by taxman on August 21, 2006 - 12:44pm.
I often here the phrase "everybody cheats on their taxes". Well I have never believed this to be true and often debate such statements. I see way too many people that are scared to take advantge of deductions that they have the legal right to take and should be taking. Still others are not getting the dedcutions they deserve becasue they are getting their return done on the "cheap" or they do them themselves and don't have the knowledge needed to take advantage of all legally allowed deductions. Now I have the GAO to back me up. The GAO estimates that 2.2 million lazy people took the standard deduction when itemizing would have saved them an estimated $473 million in taxes.
( categories: helpful info )
Outsource Your Tax Preparation - NOT USSubmitted by taxman on August 21, 2006 - 11:37am.
We are in a global economy and it has come to my attention that many tax preparation firms outsource their tax preparation function these days. They are outsourcing much of the work to India. (exhibit one) Moreover, legal research is being outsourced as well. Check out this article. Honest CPAs, tax preparers, and lawyers are openly disclosing this fact and I have no problem with that. However, evidence suggest that many firms and preparers are outsourcing their work but not disclosing this fact. WE DO NOT OUTSOURCE our tax preparation nor our tax research. I feel that these functions are too improtant to my clients to rely on a third party. We have also just redesigned our internal training for tax preparers and formalized the training program to a level it is actually now a tax school. If you have any concerns about outsourcing please do not hestitate to contact us. ( categories: services )
Fruad PreventionSubmitted by taxman on August 21, 2006 - 11:23am.
Fraud is something that almost every business owner will encounter. It may be a simple skimming scheme or an elaborate check cashing scheme. There are some important steps that one can take to help prevent fraud.
If you are not engaged in fraud prevention then you are asking your employee to steal and they will. Here are 10 Steps to help prevent fraud. I am a Quickbooks Advisor and the 10 steps below are written from that prospective. They are pertinent even if you are not a Quickbooks user. ( categories: helpful info )
ATTENTION: A QUICK LOOK at "Tax Increase Prevention Act"Submitted by taxman on August 21, 2006 - 10:06am.
Congress has just enacted a new tax law called the Tax Increase Prevention and Reconciliation Act. The centerpiece of the new law is the extension of several expired or soon-to-expire tax cuts.
The current low tax rates on capital gains and dividends, previously set to expire at the end of 2008, are extended through 2010. The higher exemption amount for the individual alternative minimum tax, which expired at the end of 2005, is extended through 2006 and increased a little. This means fewer taxpayers will be hit with the alternative minimum tax. The current “Section 179” deduction for business machinery and equipment was scheduled to be reduced in 2008. The new law extends the higher deduction through 2009. ( categories: tax code )
Sole Proprietor Tax LoopholeSubmitted by taxman on July 21, 2006 - 9:56am.
I am going to get straight to the point on this one. Use your kids in your business and SAVE TAXES. You can employ your child in your business and if they are under the age of 18, or a full time student under 21, they are not subject to FICA or FUTA. Three test have to be met to take advantage of this tax break.
This applies to sole proprietors and partnerships and their children. If the earnings are capped at the proper level then the child will not be required to file a federal return and pay taxes but the parent still gets to deduct the expense. Note that the maximum payment may be different at the state level of taxation. ( categories: helpful info )
About DepreciationSubmitted by taxman on July 20, 2006 - 2:52pm.
This is a very light discussion about depreciation. For a technical reference click here. Depreciation is the periodic expensing of assets over their useful life. The theory is that some assets (referred to as fixed assets) benefit a business over a greater period of time than just the year that the asset is purchased and placed in service. GAAP (generally accepted accounting principals) requires depreciation of fixed assets. More importantly to most people, the IRS requires depreciation too. The goal is to match the using up of an asset with the associated revenue generated from that useage. Some examples of depreciable assets are furniture, desks, trucks, planes, barns, fencing, computers, tractors, trailers, and buildings. ( categories: tax code )
TAX BREAKS FOR GULF AREA STORM VICTIMSSubmitted by taxman on July 20, 2006 - 2:32pm.
There are various tax breaks available for victims of multiple hurricanes that occured in the Gulf Coast Area. Three different storms hit the area and the relief that is available depends on the region where one lives. The following are highlights for the GO Zone legislation passed in 2005.
THE TAX LOOP HOLE FOR THE AVERAGE AMERICANSubmitted by taxman on July 17, 2006 - 3:16pm.
The Federal and Alabama governments once taxed all gains on the sale of a primary residence. When that was true, they deferred the taxes when the total proceeds from the sale of a home was rolled into the purchase of a new home within 24 months from the date of the sale. The burden of proof that this requirement was met rested with the taxpayer. As of May 6, 1997 you may exclude up to $250,000 of gain on a primary residence provided that you live in the house at least 2 of the previous 5 years. That applies to each person. So, a married couple can exclude up to $500,000 if they meet the primary residence test. This change in tax code eliminates the old deferral method of tax savings. Your tax basis in your current home is not changed by the new law. It is widely known that many people have a much lower tax basis in their residence than what it is currently worth. This tax loop hole can be used every two years. This is the most widely misunderstood tax break I know of. It could be utilized a number of ways to put cash in your bank account.
( categories: tax code )
WHAT IS BUSINESS MANAGEMENT?Submitted by taxman on July 13, 2006 - 3:55pm.
This may seem like a dumb question but I will go on record here and say that 90% of the people that I come into contact with on a daily basis never really understand what business management really is. The typical entrepreneur has this idea that management is making it happen. How he makes it happen has more to do with his personality and willingness to work until the job is done than management skill. I will repeat that. The typical business owner makes his business successful due to his commitment to work until he completes his task, no matter what. That attitude has nothing to do with good business management. ( categories: business )
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