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    tax services billings mt

    Marketing

    If you own a small business, you know just how important the standard tax write-off is. What you may not know is that marketing costs are win-win write-offs for every small business. Every small business needs to standout, meaning that every small business should be doing everything in their power to get out their name and then to keep their name in their local community (or local online community—i.e. Etsy). And the expense that comes from marketing a business is directly related to a future write-off on your taxes. Now, this isn’t to say that everything you do will lead to a write-off. The IRS believes that all tax write-offs should be reasonable in amount, and directly related to your business (How it’s related could bristle the hairs on the back of an IRS agent’s neck). Here are few ways to market your business that make for simple, straight-forward write-offs at the end of the tax season.

    A new or up-to-date website

    The rules and designs of the web change almost monthly. Google has new rules for keeping websites at the top of search engines, and customers have come to expect proficient designs that are easy to navigate. So, hiring someone (or, if you yourself have the spare time and experience) to update your website, add to its design, or shake things up. If there are any fees involved to host the website through a third party, these may also be accounted for. Also adding premium services so that your website runs smooth and efficient.

    The Google Search Words Campaign

    Many businesses spend exorbitant amounts on google ad-words, search terms. These can add up quickly. At the end of every month google should provide you with a receipt from the month’s transactions—this data is also included in your Google analytics package, however, just to be safe, don’t wait until tax season to save this data, in case anything were to happen.

    Flyers

    A marketing flyer is still be an effective marketing strategy in the digital age. Or a personalized Christmas card from your business to your customers at Christmas. Oftentimes, things like flyers, cards, and letters are easily deductible. Keep every receipt!

    If you need advice as to which potential deductions will benefit your business, Practical Taxes is here and ready to help.

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    Tax Implications of Selling Savings Bonds

    Savings-Bond-300x214Savings bonds are largely a financial tool of the past. 20 or 30 years ago well intending grandparents would purchase a bond for their new grandkids. Over the next few decades those bonds would grow and eventually mature. At that point they are cashed out and the grandchild would be able to use them for college expenses, a down payment on a house, or whatever else they thought necessary. Today, however, buying those bonds isn’t nearly as popular in part due to the low interest rates.

    Regardless of who is, or isn’t buying bonds today, there are many of them that are maturing. So what happens when your savings bond matures? What are the tax implications of cashing in a savings bond? Your accountant in Billings, Montana can help you know the options.

    What Happens When a Bond Matures?

    Savings bonds have changed some over the years. There are two basic types: those that are purchased at face value and pay interest once or twice per year, and those that are purchased at a discounted value but grow to full value when they mature. Depending on what type you have determines what happens when they mature.

    If you have an older bond you most likely are dealing with one that was purchased at a discount and matures for full value. If you have this type of bond, and it has reached its maturity date, then it doesn’t do any good to keep it around any longer. You should cash it in since it is no longer appreciating or earning interest.

    What are the Tax Implications of Selling a Savings Bond?

    Since the savings bond was purchased for less than it is worth, there will be some gains. But are these taxed? The bottom line is: maybe.

    Interest earned on savings bonds is subject to federal income tax, but it’s not subject to state tax. To complicate matters more, you may not have to pay federal income tax on your bond’s interest if you use the money for higher education purposes.

    For bonds that accumulate interest year after year, you have to report that interest when you earn it. Most often you will get a 1099-INT from the brokerage through which you made the purchase. For bonds that mature at a higher value than for which they were sold, you report that interest when you take possession of the money.

    Confused on How Savings Bonds Work?

    Savings bonds have a few moving parts, they currently pay low interest (around .1%) and don’t offer substantial tax benefits. So why do people purchase them? Really the only reason is that they are putting their faith in the US government rather than a financial institution. But that low interest rate has made them significantly less popular than other financial vehicles like CD’s, investments, money market accounts, and corporate bonds.

    If you have savings bonds, and you are confused on what to do, your accountant in Billings, Montana can help you figure everything out. Taxes are likely due on them, so make an appointment today!

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help with all of your tax preparation needs as well as online payroll services, business consultation, and much more!

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    accountant billings mt

    Payroll Services

    Did you know that it’s becoming ever-more popular to outsource payroll to an accountant service? It’s true, payroll is the number one thing businesses will outsource. There are many reasons including, cost, productivity, accountability, legality, and service.

    Cost
    Small businesses can absolutely save money by outsourcing payroll. Add up those hours spent on payroll and then calculate the costs to the company. Most times—especially for small businesses where each minute of the day could be filled with some type of progressive work—the outsourcing of payroll is considerably less than the cost of doing it internally. Oftentimes this is because accountants oftentimes use more sophisticated software than a typical small business, and accountants have the job streamlined.

    Productivity
    If you own a small business you will grow to appreciate the freedom that freeing up internal sources from the job of payroll will provide. You get to focus on the job you want to do, which is especially important for new businesses, not yet established—in today’s world the percentage of new businesses that fail is staggering.

    Accountability
    Did you know that a high percentage of small business pay a penalty to the IRS every year for improperly filed payroll taxes? Hiring an accountant at Practical Taxes makes sense, when you consider that they understand the ins and the outs of current tax policy. This also goes hand in hand with legal compliance. Because a payroll service like Practical Taxes is going to understand the continually shifting laws and obligations involving payroll.

    Service
    In today’s modern world you can find just about anything on the internet—including a payroll service! Regardless of how reputable companies are, isn’t it best to have an accounting service such as Practical Taxes with whom you can work, face to face in some cases, and trust all that important paperwork and sensitive documents to a responsible face. If you have any questions as to how Practical Taxes can help your business grow and succeed, be it with the outsourcing of payroll or the general everyday management of your business, call today.

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    Get an Accountant!

    Get an Accountant

    Did you know most, over two thirds, of all small businesses fail within the first eighteen months? Why do you suppose they failed? Were they just not good at their jobs? Did the economy take a sudden and incredible dive? Most often the answer is that the business was not managed well financially, from the start. That’s not to say it’s the same for all businesses, but that’s the most common reason.

    And, knowing that, so many small businesses still rely on internet software to manage their financials and to do their taxes. Now, it’s important to document everything, to document every penny that either comes or goes out of your business, but, it’s equally important to have guidance on how, in the scheme of things, those pennies are being spent.

    If you have a small business deductions on your taxes count. You need them. And you need to maximize every single deduction. At the end of the tax year, you don’t want any money left on the table. Equally important is the accountant, when a business gets audited. And businesses with extensive write-offs are likely targets.

    It’s not that you’ve done anything wrong, it’s that the IRS needs to make sure you’re doing everything right. And, while an accountant doesn’t “get you out of the audit”, you can be assured that he or she knows the ins and outs of your yearly finances, and can help you through the process.

    Maybe the most important reason of all to hire an accountant is that they take some of the work off your hands. If you’re running a small business, you’re going to be busy running a small business. The time they take off your hands may be equal to the cost of hiring an accountant. You, the business owner, can maintain focus and determination in your daily goals, while your accountant ensures that some of the financial details are handled appropriately and professionally.

    If you would like to speak with someone about setting yourself up with an accountant, for your small business, then call Practical Taxes today.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2090 to learn more.

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    Getting Through an Audit

    An audit can be scary, intimidating, especially for someone who’s never been involved in one. The stats say that about 1% of taxpayers get audited every year. Those audited are usually in a higher tax bracket, however not always. And many times, the audit will show up inconspicuously in the mail, a straight-forwardly-written document from the IRS that’s written with very official sounding language. And it’s that it’s so official that it sounds scary: it sounds like you’ve done something wrong, maybe something criminal.

    But an audit doesn’t mean you have done anything wrong, at all. The IRS states that tax documents are complex and that the data contained must be evaluated to determine its accuracy. Not all audits are performed because of discrepancies or unusual deductions (although these are reasons), but some audits are performed to match income documents and others decided by random sampling (Lucky You!) So, what do you do when one of these letters shows up in the mail?

    Getting Everything Together

    First, the IRS is not going to “go away” if you choose to not respond to their query, so do that first—they may also call you on the telephone, so don’t panic when/if they do (also, if it turns out you owe the IRS money, then interest on the money owed could be compounding, so get on it). And then get together all the paperwork that they are requesting, if they have.

    More than half of all audits are done through the mail. If there are simple errors like incorrect math, these errors can be easily remedied. Make sure that you have all the paperwork (it’s best to keep up to five years of tax filings somewhere safe—like a file cabinet) and if you do not have a certain document request a copy be sent.

    And, contact Practical Taxes to go over your audit before you send in all your materials (if, in fact, the IRS is saying that there is a discrepancy). If you have any questions during an audit, call. Your accountant at Practical Taxes is here to make the audit process less scary.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2090 to learn more.

     

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    Tax Day has come and gone . . .

    Now that Tax Day is over with, let’s talk about what to do with copies of your old returns. Just because you have dealt with your taxes for the year, you are not completely in the clear. Oftentimes, an audit can come seemingly out of nowhere.

    The IRS may come knocking two years away and you will want to keep your tax returns handy. Although the IRS are not a completely overt threat, it could still happen, to anyone. So, being prepared is paramount in getting through any audit successfully.

    Keep all receipts handy. If the IRS comes around and wants to check your receipts you have the evidence available. If the IRS wants to see mileage logs, etc., have it available. You will want to keep all your credit card receipts, your receipts for charitable donations, your invoices, your proof of payment for those invoices.

    If you own property and have taken out a deduction on your taxes, keep that paperwork even if you have sold the property (also, more paperwork to keep!). If you own a business that requires employees, make sure to keep all evidence, all paperwork and employment tax records, like their W-2’s.

    The IRS will not formulate an audit after the statute of limitations for reporting income has passed (the tiers for statute of limitations vary in accordance with the severity of the possible crime). But it’s good practice to keep returns for years, especially if you were responsible for keeping tax records on old employees.

    Consider keeping all this paperwork in a safe place. A filing cabinet would work well. Separate the paperwork by the years its applicable. Keep the receipts with the receipts, the mortgage paperwork with all other mortgage paperwork, etc. Basically, keep everything organized so that if the worst ever does happen, and the IRS comes a knocking, you will be able to hand them what they need when they need it, and get them out of your hair as quickly as possible.

    If you have any questions as to how to handle your tax returns, call Practical Taxes today.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2090 to learn more.

     

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    April Is Tax Month!

    On April 18th, the 2016 tax season will come to a close—it’s not necessarily over by any means, but marks the IRS’s filing deadline (yes, there are extensions and other programs that extend out the season). And for many people this time of year is crazy and hectic, and they anxiously crowd into the offices of their favorite accountant to prepare their taxes before the season closes.

    But don’t worry, take breath, there’s still a few weeks. However, while you are remaining calm, it’s important to take stock in whatever it is you plan to report on your 2016 taxes. When people rush they often forget things. It’s not good one way or the other to forget to report something on your taxes. Funny that the IRS will notice an omission benefiting them, but will never contact you on an omission benefiting you.

    So, look out for yourself, and make sure everything gets reported. You don’t want to miss any deduction on your taxes. While we make a big deal over what taxes mean, for most of us, taxes mean a refund, and getting as much money as you are entitled; conversely, for those of you that owe on your taxes, you will want to account for every deduction that could potentially get you to owe less.

    Remember all those charitable contribution, those mileage logs, all the childcare paperwork you have paid out in the last year, etc. Also, for those of you who wait, your accountant may notice your missing something from your file, and, in that event, you will request an extension until the proper paperwork can be supplied, and, for those of you relying on your 2016 tax return, forgetting important paperwork will greatly slow up the process. The IRS claims that, for most people, it takes three weeks and under to receive money via direct deposit.

    Call and make an Appointment!

    If you have yet to schedule a tax preparation appointment, call today, or as soon as possible, to have your taxes prepared by the professionals at Practical Taxes.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2090 to learn more.

     

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    Long Term Financial Planning

    Not everyone is a first-rate financial planner, and studies show that people today are working well past, what used to be, the average age of retirement—now, whether that is the cause of poor financial planning, or just the measure of our country’s current economic circumstances is debatable. But, what we do know is that almost all of us, regardless of how much we’ve saved for our financial futures, could always save more. This is especially evident for those of us running small businesses, in charge of our own retirements, and every dollar we make needs to be put to good use. So, how do we do it? How do we become better financial planners? Here are a few helpful tips.

    Know your goal and stick to it

    Even if you’re a twenty-something or thirty-something, know that your end goal is to retire as comfortably as you are able. This may mean setting up retirement accounts early, and remembering to always put money into your retirement account. When you’re young, consider short-term goals for financial independence: consider trying to pay down your mortgage loan, ridding yourself of those student loans, so that money won’t be adjusted further, with more interest added, and the amount you were using to pay down your loans can then be added to the amount you pay into your retirement fund every month.

    Try and find ways to manage your expenses, and know where you’re spending your hard-earned money. Obviously if you discover an abundance of overspending in a certain area, curtail the spending and stay on track with your financial goals. Create a budget, something to be stuck to weekly, maybe monthly. A budget is a constant reminder of how to best keep responsible for our money.

    Lastly, although there are so many ways in which you can focus your energies for retirements, these were just a few important tips, consider speaking with your accountant as to your spending, how you’re affected by retirement plans and the amounts you are paying into your retirements. If you own a small business, an accountant can be one of your most important assets.

    If you have any questions, call Practical Taxes today, and remember that it’s tax season, with just a little over a month left to file those income taxes.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2090 to learn more.

     

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    Earned Income Tax Credit

    The federal government has tax plans in place to assist those members of our society who earn moderate-to-low incomes. It’s given out in the form of a tax credit called the earned income tax credit, and it’s available to both working families with children, and for those without children, although the amounts at which it’s offered differ between the two. The original purposes of the tax credit were to benefit those with children, and to offset the costs of caring for children—daily needs, day care, etc.—while balancing out an obvious income discrepancy. The tax credit is often bundled with the political talk of a change to the minimum wage.

    Earned Income Tax Credit

    For those who qualify for the credit, the amount will be calculated depending upon a person’s income and the number of children they have. To qualify a person needs to be earning an income from working—income derived from other outside sources—trust, etc.—does not apply. Also, you must have a social security number, and that number should be issued before the date of your tax return. For those wanting to qualify for the earned income tax credit, who do not have children, you must have worked for someone in that tax year, or you could have run a farm or business, and earned less than a predetermined amount.

    Filing Status

    If you are intending to file for the earned income tax credit, you must file your tax return in one of the following ways. If you are married, then you must file your return as married filing jointly—you cannot claim the earned income tax credit if you file married, but filing separately (this is to prevent people from receiving the benefit, when they have other means of a joint income).  The 2016 income requirements can be found here: https://www.irs.gov/credits-deductions/individuals/earned-income-tax-credit.

    If you have any questions as to whether you, or you and your family, qualify for the tax credit call Practical Taxes today. Also, having a quality accountant to prepare your taxes may prove invaluable, if indeed, you qualify for that credit, or others like it.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2090 to learn more.

     

     

     

     

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    Tax Season Is Upon Us

    2016 is officially over, and that means it’s time to prepare for another tax season! Like it or not there’s only a few months left until the April the 18th deadline, and for most of you there’s so much to prepare.

    Prepare

    For those of you who have a lot of write-offs, those of you with small businesses, etc., January is the time to start getting all of your receipts in order. Make sure that everything is accounted for. If you are missing something, and need to have the filed-proof of something (say an invoice for something work related, etc.) ensure now that you either have appropriately filed away a copy, or, if you have unfortunately lost your copy, you have the time now to find it. This is the time of year to have your vehicle mileage documented orderly if you have yet to do so.

    Forms

    January the 31st marks the last day at which you should mail your employees W-2 forms. Obviously you will want to mail out any forms on time, because your employees are counting on you for this, but there could also be a penalty charged to your company by the IRS if you do fail to mail out your forms on the 31st of January. Remember, the W-2 form only needs to be postmarked by this date, your employees may not receive it in the mail until a few days after, so, if you are planning to mail the forms at the last minute, it may be wise to explain this to your employees who may be expecting to receive it sooner.

    Make a date with you tax preparer

    Regardless of how difficult your taxes, your accountant is ready to help you through the process. Try and plan an hour or two for one day in the future (or on several days in some cases) to visit your accountant’s office to prepare your taxes. To ensure that you receive the undivided attention of the accountant you want to see, make a reservation. If you are seeing an accountant for the first time, Practical Taxes is here and ready to help you through the process of your 2016 tax returns.

    Practical Taxes

    Practical Taxes is a full service accounting firm in Billings, Montana. We can help you get the most from your taxes, and make sure that you will get the maximum refund every year. But we don’t just do taxes! We can help with your bookkeeping, payroll, bank reconciliation, budgeting, and more. Give us a call at 406-894-2090 to learn more.

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