• 406-894-2050
    • kevin@practicaltaxes.com

    News

    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.

    Read more

    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.

     

    Read more

    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.

     

    Read more

    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.

     

    Read more

    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.

     

    Read more

    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.

     

     

     

     

    Read more

    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.

    Read more

    Time To Start Thinking About Tax Season

    Happy Holidays! And, it’s only a few weeks’ time until the New Year begins, and tax season comes into full-swing. Some of you may have undergone some changes this last year, changes that will affect how you file your 2016 taxes. For instance, did you know that if you are married on or before December 31st, 2016, you will file jointly? You will file jointly regardless if you have been single for three-hundred sixty-four days of the year. How then will filing jointly affect your taxes? What if you purchased a home, or had a child? These major events will have impacts on your taxes. Here’s what to expect from these changes during this upcoming tax season.

    Filing jointly may affect the tax bracket to which your taxable income is determined. Both you and your spouse may be bumped into a higher tax bracket with the combined income. While this can be seen as a negative, there are a few positives as well. Because you are now married, both of you will be able to now claim the other as an exemption. The deduction is double that of someone filing as single. Children are a major deduction on your taxes. Remember that if you are married, you should have these changes reflected on your W-4.

    Also, if you have bought your first home this year that will greatly affect your taxes. Conversely, if you have sold a home in the last year, this will also affect your taxes. The interest you pay on your home can be deducted at tax time.

    If you are married, it’s important to determine which deduction—standard vs. itemized—will best suit you at tax time. The standard deduction may be better for those who don’t own their own home, and have very few deductions. However, when you own your own home, deductions such as mortgage interest are valued as higher deductions than what is standard.

    We hope you had an excellent 2016, and when you are preparing your 2016 taxes, Practical Taxes will be ready to help you through them.

    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.

     

    Read more

    What if We Told You that You Can Save $1,000 Easily?

    Saving money doesn’t have to be painful. In fact, by making some very slight lifestyle tweaks you can save a significant amount of money. The key is to make the adjustments small enough so that you don’t even notice them; cut expenses on the things you hate paying for (like car insurance and cell phone bills). Then live more comfortably knowing that you’re money isn’t going to things that don’t bring you enjoyment. Here are 12 ideas from your Aurora accountant to get you started. If you then think of 3 more you will be well on your way to financial freedom.

    Skip Eating Out for Lunch

    Instead of dining out every day of the week when the noon meal rolls around, do it just once a week, then brown bag home-prepared food for the rest of your work days.

    Just Drink Water

    Aside from the fact that water is the healthy, staying away from flavored drinks and pop will help you save quite a bit of money. Drinking a pop per day can add up to over $350 per year.

    Goodbye Car Wash

    Rather than bringing your car to the car wash, why not make washing the car an additional chore? If you have kids, sign them up and make car washing a weekly family chore. If you have to, you can bring your car to the car wash just once a month, instead of once a week.

    Groom your dog.

    You love your pet, right? So show him/her by personally washing your pet instead of taking him/her to the groomer every time. If nothing else you can increase the time between grooming.

    Brew Coffee at Home

    We all know how easy and convenient it is to buy ready-made coffee from those coffee shops that are just everywhere. You can choose to continue with this coffee-buying attitude or you can try brewing your own coffee for a change, and for the better. Sure, you can treat yourself occasionally but if you’re determined to save up, you’ll be surprised at how much you can save by making your own coffee.

    Get Your News Online

    Are you still subscribed to the local newspaper? If yes, consider discontinuing your subscription and catch up on local, international and all kinds of news online instead.

    Do Your Own Nails

    Rather than paying someone else to do your nails for you every time, learn to do it yourself and save some bucks in the process.

    Exercise for Free

    Still paying for gym membership? Time to drop it and exercise on your own. There are so many articles and videos about exercise. Take some time to go over those that relate to the type of exercise you have in mind, then get work out your body based on the information you got.

    Go Generic

    When you experience some minor but common discomforts like headaches or migraines, you don’t always need to buy name brand medicine. If it’s just a simple headache, a generic aspirin can likely make the pain go away just as well as a branded aspirin. Some generic products are just as good as their brand name counterparts, but others (usually foods) aren’t quite up to snuff.

    Negotiate your Car Insurance

    Car insurance is one of those things that you have to pay for. If you want the luxury of driving a vehicle, you have to maintain insurance in case something bad happens. But how many of us have taken the time to actually go over our insurance lately? There is a good chance that you are overpaying your premiums. A 30 minute phone call with your agent could save you hundreds, maybe even thousands of dollars per year.

    Downgrade your Cell Service

    Do you really need that $90 monthly cellphone service? Are you able to use it up or is part of it always getting wasted because your phone usage doesn’t really go that high? Maybe it’s time you reviewed your phone consumption and get a lower plan — one that actually fits your cellphone habits. Most major carriers have switched to plans based on data usage. It’s as simple as a 15 minute call to save $30 per month.

    Find other ways to relax.

    Getting a massage is always a treat. But do you really have to do it every week? There are many other ways to relax. Find a relaxation technique that you can do for free. From healthy eating, to exercising at home, there are ways to relax without expense.

    Bonus: Cut the Cable

    With so many online streaming options for television, do you need to be paying $60 per month for TV that is turned off most of the day? Cut back to Netflix and Hulu and you could save $40/month. That’s an instant savings of $480 per year by getting rid of something you’re not using anyway.

    Practical Taxes is Here to Help

    We want to make sure that you are financially healthy. By offering our online tax preparation services to the Aurora, Colorado area, we are helping thousands of people to be able to afford the services of an accountant, and ultimately get a bigger refund than they would have on their own. That refund can help jump start your emergency fund, bolster your retirement savings, or let you splurge on one of the things above that we just told you to cut out.

    Read more

    Charitable Contributions

    Happy Thanksgiving! This is the time of year to be thankful, and, for some of us, this time of year has us thinking of giving back, making charitable contributions. Charitable contributions to those of your choosing are obviously very important, but it’s also important that you make those contributions in a way that also benefits your taxes. For those of you who don’t know, charitable contributions can be assessed as deductions on your tax bill! Giving is important and the government recognizes your charitable donations as a private citizen, but, it does impress upon you a few stipulations to receive the deduction on your taxes.

    First, the charitable contribution needs to be to a qualified organization. You cannot deduct donations made to individuals or to political campaigns. Also, many contributions to organizations are met with gifts from said organization: consider an outdoor organization at who’s benefit dinner you wind up winning some grand prize because of your donation: the amount you can deduct from your taxes may only be the balance between the fair market value of the gift given to you by the organization and the amount of that year’s donation. If the fair market value of the gift exceeds the donation, then you’re out of luck at tax time. Also, to deduct the contribution you made, you must keep the receipt of the payment you made. The IRS doesn’t want to see a hand written sheet from So-And-So, claiming that you paid them some money; it wants to see receipts, receipts which, if needed, can be tracked back to a source. Non-cash donations are also considered contributions which can be written off, however, in order to claim the contribution on your taxes, for a contribution totaling over five hundred dollars, you must complete a separate IRS form, IRS form 8283, and, if you have trouble understanding the form, Practical Taxes is ready to help.

    Read more