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Button-IDT-300x150Identity theft is becoming much more common. With the internet controlling the vast majority of our lives, it is easy for unscrupulous people to steal someone’s credit card number and rack up a bunch of charges. While that is one form of identity theft, there are actually a number of other ways that people can have their identity stolen. So who is the most at risk? Your accountant in Billings, Montana will tell you the answer to that.

 

Versions of Identity Theft

Before we address who is the most at risk of having their identity stolen, we should look at what the different versions of identity entail. They range from the simple that don’t really harm you (other than your reputation perhaps) to the more complex that can have lasting effects.

Impersonation Identity Theft– Believe it or not, using a fake name on your social media account is a form of identity theft. Now if you come up with the name Johnny McAwesomesauce, nobody is going to care. But if you use the name John Smith, and then use pictures of someone with that same name, you are committing identity theft.

Driver’s License Identity Theft – Here is one that takes a little more cunning. It’s not exactly a crime of opportunity, but something planned out well in advance. Suppose you lose your driver’s license and someone finds it. They can sell it to someone that looks enough like you to pass as you. Now if that person is pulled over, arrested, or otherwise gets in trouble, they just give the officer your name and you now have a criminal record.

Social Security Identity Theft – Too often people are careless with their Social Security Number. Once a criminal has that, they can do a lot of damage to your identity. With a Social Security Number, and just a little more information, they can take out a loan in your name, get a passport, apply for credit cards, and a lot of other things that can have long term effects.

Medical Identity Theft – Medical identity theft is the fastest growing form of identity theft, even with the Affordable Care Act in place. The criminal steals your identity, and makes claims against your medical insurance. You end up with the bill; they end up with the treatment. To make matters worse, your medical record is now all screwed up.

Juvenile Identity Theft – For the parents out there, when was the last time you checked your child’s credit score? Likely never because what child has a credit score? Those who have had their identity stolen do. If your child’s identity is stolen, the thief can apply for loans, create documents, and commit a lot of other crimes and most people won’t even catch on until their child turns 18.

So Who is at the Most Risk for Identity Theft?

Now that we have covered the basics, who is at the most risk? The answer is everyone. No matter if you live your life completely offline, you are still at risk of having your identity stolen. No matter how careful you are, you can have your identity stolen.

Do you have a social media account? Then you are likely putting yourself at risk of impersonation identity theft. If you have a driver’s license, you are at risk of driver’s license identity theft. You have a Social Security Number (if you live in the states) so you are at risk of having that stolen, and everyone has been to a hospital at some point in time. As we see above, even children aren’t safe.

But there is good news. Legal Shield will protect you from those who are looking to steal your identity. You may think you’re covered because your credit card has fraud protection, but that only makes it so you’re not liable for the monetary side of things. It doesn’t actually protect your identity.

Your accountant in Billings, Montana also represents Legal Shield. For a low monthly rate you can have 24/7 access to an attorney, and make sure your identity is protected. Call us today at 406-894-2050 to learn more.

Practical Taxes is a full service accounting firm in Billings, Montana. Right now we are in the heart of tax season so things are pretty crazy around here! But we can still handle all of your accounting needs from payroll services, to tax preparation, to Legal Shield inquiries.

Nursing-Home-300x225People are living longer than ever. That’s not to say we are any healthier than in the past, but rather modern medicine is helping to keep us alive much longer than it used to. Because of this longevity, insurance companies have started to offer an insurance that protects against the high costs of nursing home stays. Long term care insurance is a hot item for those in their 50’s who have significant assets that they want to protect against Medicaid. But there may be a silver lining to the high expenses of long term care premiums.

 

 

 

The Average Cost of Long Term Care

Long term care, most people know it as a nursing home or assisted living stay, costs a significant amount of money. How much depends greatly on not only the nursing facility, but also on where that facility is located. In Billings, Montana, a nursing home stay will cost quite a bit less than a nursing home stay in Miami, Florida.

For those who live in Billings, Montana, you can expect to pay around $200 per day for your stay in a nursing home. This comes out to about $6,000 per month, or around $72,000 per year. While that may not sound like a whole lot, keep in mind that your spouse will still have living expenses as well. And keep in mind that long term care expenses are going up at about 5% per year; significantly faster than inflation.

To protect against this loss of wealth in our golden years, insurance companies offer long term care insurance. The protection levels vary, and there are different coverages that offer inflation protection or the right to buy more insurance later in life. For good coverage, an individual in his or her 50’s can expect to pay around $2,500 – $5,000 per year for this insurance. But there is good news.

Can You Deduct Long Term Care Insurance Premiums?

The answer to whether or not you can deduct your long term care insurance premiums from your taxes is: maybe. It all depends on your income.

LTCi premiums are considered a medical expense. Medical expenses are deductible from your insurance if those expenses exceed 10% of your income (7.5% if you are age 65 or older). So in order to deduct your LTCi premiums, they need to push you over that 10% threshold. Every situation is different, so you should talk with your accountant in Billings, Montana.

Practical Taxes Has Answers

If you are unsure of your tax situation, if you are unsure if it is deductible, if you are unsure if you want to tackle your taxes again this year, then you need to hire an accountant in Billings, Montana. The good news is that Practical Taxes, a full service accounting firm in Billings, Montana, has one of the most affordable accountants around. You will get professional service, and still pay less than the firms that are only here for a few months out of the year.

Practical Taxes does more than just tax returns. We can help with business consulting, payroll services, and more.

Paycheck-300x224If you are a business owner, you know the hassle of dealing with employees. You know that you have to worry about hours, worry about people showing up, worry about them doing their job so they’re not costing you a lot of money. And you know about the hassle of doing payroll. This is probably why you hire out your payroll services.

The problem with hiring many payroll services is that the cost is extremely high. This means you have to pay your employees, and then you have to pay an accountant to do the payroll. This cuts into your bottom line even further. Instead of paying for high cost payroll services, try using online payroll services through an accountant in Billings, Montana.

 

What Are Online Payroll Services?

Payroll services are often done with the help of an accountant. You sit down with your accountant and they charge you for every minute that you are in their office. In the end, you are still left doing a lot of work, just to have someone write your employee’s paychecks.

However, there is a better way to do payroll. Online payroll services are all done over the internet. It can all be set up through a phone call, and in the end you don’t ever even have to leave your office.

How Do Online Payroll Services Work?

After you set up the payroll services we are accountants in Billings, Montana, all you have to do is have your employees send in their hours. If they fill out timesheets, you can scan and email them, snap a picture and text them, or any way that you choose, you get the hours to us.

That’s all there is to it. Paychecks will be cut, taxes will be done, and all you are liable for is the low cost service provided by an accountant in Billings, Montana.

How much do Online Payroll Services Cost?

The cost will vary greatly depending on how many employees you have, how much money is flowing through your company, and a variety of other factors. However, we can offer this: using an accountant in Billings, Montana will almost certainly cost less than using a higher profile accountant in a big city. So if you are in Portland, Oregon; Denver, Colorado; Chicago, Illinois; or any other city across the country, you can utilize online payroll services and help reduce your costs immensely.

Practical Taxes Does Online Payroll Services

As a full service accounting firm in Billings, Montana, Practical Taxes does online payroll services. During tax season, such as right now, we are focusing on getting as many low cost tax returns done as possible. But that does not mean we can’t help you set up your online payroll services. If you are interested in learning more, or interested in getting things for your payroll setup, give us a call at 406-894-2050.

Business-Consultant-300x129Every year millions of people throughout the country prepare their tax return. They are looking to get the largest return possible, or in the event they have to pay into their taxes, they want to make sure they are paying the least amount possible. Using an accountant in Billings, Montana is the best way for you to maximize your tax return. Keep reading for more details on how it all works out.

 

Using Software for Your Tax Return

There are a lot of people who think that using software is the cheapest way to get their taxes done. And this is true if they meet a strict set of criteria and have a very simple return. However, most people won’t meet those criteria. Instead they spend hours upon hours doing their taxes, wondering if they got them done right, and then fretting that they might be audited.

In the end, if they add up the number of hours they spent on their taxes, and assigned a time value to it, they end up spending even more than if they had hired an accountant in Billings, Montana. Combine that with the fact that they likely didn’t get as large of a deduction as possible because they weren’t aware of the deductions available, and that they have to worry about being audited, it all means they spent more than necessary.

Using an Accountant in Billings, Montana

Filing your tax return with an accountant in Billings, Montana is easier than anything. You gather together all of your supporting documents, and then you make an appointment with Practical Taxes by calling 406-894-2050. Your appointment shouldn’t take very long, We are professional and courteous, and in the end you get a much larger refund than you could have received if you did your taxes on your own.

An accountant, especially one that is available all year round, is an important asset to have. You can ask questions even outside of tax season, your accountant in Billings, Montana will be taking classes and training to stay up-to-date on the tax laws, and you can come back for any other accounting services that may pop up throughout the year.

Make Your Appointment with an Accountant in Billings, Montana

Tax season is busy for an accountant in Billings, Montana. So you should make your appointment as soon as you can. You don’t want to wait until the last minute to file; otherwise you will have to file an extension and may be subject to penalties.

Call 406-894-2050 as soon as you have all of your tax documents in order to make your appointment with an accountant in Billings, Montana.

Practical Taxes is a full service accounting firm. We are here all year long and do more than just tax preparation including online payroll services, business consulting, and more!

business concepts paper work in action accounting

business concepts paper work in action accounting

Tax season can be daunting. In fact millions of people dread this time of year because they don’t want to gather all of their documents together, and then sit down for hours trying to figure out how to do their taxes. The problem is that they are trying to go with the absolute cheapest method of preparing their taxes in Billings, Montana. When choosing a method of preparing taxes, many people fail to take into account the value of their time.

 

 

 

 

Low Cost Tax Preparation in Billings, Montana Method 1

The cheapest way to do your taxes is to do them yourself. You can fill out the form by hand, use a program like TurboTax online, or buy the software. These programs are easy to use, and help to ensure that you complete an accurate tax return. The trade-off, however, is that you sit in front of your computer for quite a while. If you don’t have a value on your time, then doing your taxes on your own is the cheapest tax preparation service in Billings, Montana. However, if you do value your time, then things add up quickly.

Most people will spend about 4 hours (or more) doing their taxes. This means for someone who values his, or her, time at $25 per hour, you are spending at least $100, plus the cost of the software, on your taxes. When all is said and done, you are looking at a minimum of $150.

Low Cost Tax Preparation in Billings, Montana Method 2

The alternative is to hire Practical Taxes. As an accountant in Billings, Montana, Mike knows the tax laws and understands what it takes to prepare your taxes efficiently and effectively. Chances are we will be able to find you even more deductions and boost your return higher than you would have been able to on your own.

By using us you will cut your time spent down considerably. In the end you save a lot of time on your taxes, you increase the amount you get back, and you hardly pay anything more than if you did your taxes yourself. So if you’re looking for low cost tax preparation in Billings, Montana, using Practical Taxes is the way to go.

Set Up an Appointment with Practical Taxes

Your first step to discovering low cost tax preparation in Billings, Montana is to set up an appointment with Practical Taxes. Simply call 406-894-2050 to set up your appointment. You will be so happy with the speed, accuracy, and affordability that you will never want to go anywhere else again!

Practical Taxes is not a seasonal tax preparation company. We are a full service accounting firm and we provide services like online payroll, business consulting, as well as many others all throughout the year.

Taxes3-300x224When it comes time to do your taxes, you have a lot of different choices. Some will choose to do their taxes on their own, others will go to a seasonal tax preparer, and still others will seek out an accountant in Billings, Montana. If you have not completed your taxes yet, here are the pros and cons of each method of tax preparation.

 

 

 

 

Choosing an Accountant in Billings, Montana

An accountant in Billings, Montana is always going to be your best bet for the most accurate information. We are on the job all year round. They are constantly learning about the latest tax laws, reading the latest tax books, and taking classes and attending seminars. Your accountant in Billings, Montana will be there for you not matter what time of year it is.

The pitfall of many accountants is that during tax season they are extremely busy. Because they are so busy, there are a number of them that raise their rates to make it more worth their time. This means that often an accountant in Billings, Montana will be more expensive than choosing one of the other methods. However, at Practical Taxes we don’t want to use you. We keep our rates low; in fact often lower than most of the seasonal preparers.

Choosing a Seasonal Tax Preparer in Billings, Montana

The biggest perk of using a seasonal tax preparer in Billings, Montana is there are a lot of them. They can file hundreds of returns every day because they have so many people working for them. Often you get in and out quickly, and they are generally cheaper than most of the accountants in Billings, Montana (see the caveat above).

The downsides, however, are big. These are usually not tax professionals. They have some basic finance training, but they have not devoted their career and life to learning about taxes. They are on the job for a few months out of the year, so if questions arise later, you have trouble getting in touch with them. Your visit with a seasonal tax preparer can end up taking longer than expected because they are not well versed in tax laws and filing requirements.

Choosing to Do Your Taxes Yourself

One method that has become much more popular over the years is doing your taxes on your own. With the fancy software advancements, programs like TurboTax have snatched up a huge market share. With good reason, they are incredibly cheap. The software is easy to use and cheap to buy (in fact if you have a basic return you don’t even have to pay for it).

The downside to doing your taxes yourself is that you have to go through every single step to make sure nothing is missed. That means several hours of your time is spent plugging in numbers, checking, double checking, and then wondering if you did everything right.

Choosing an Accountant in Billings, Montana

There are three basic methods to completing your taxes. If you have a simple return, then using a program and doing your taxes yourself is a great method to save some money. However, if you want to make sure that your deductions are maximized, then using an accountant in Billings, Montana is your best bet. If you are already taking the time to use a seasonal tax preparer, then you might as well choose Practical Taxes. You will be surprised at how affordable we are, and you will be in and out faster than if you choose a seasonal preparer.

Here at Practical Taxes we do more than just prepare taxes. We can help with all of your accounting, payroll, and business planning needs.

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Most people think that they will never become disabled. However, statistics show that one out of every four twenty year olds will become disabled before they retire. That means 25% of people will have a sickness or injury that is so severe that they won’t be able to work. Social Security may provide some disability benefits, but most people will have to rely on a personal or work provided disability policy in order to make ends meet. Your accountant in Billings, Montana can help you determine if those benefits are taxable.

 

 

 

What Type of Disability Insurance do You Have?

Not all disability insurance policies are created equal. Therefore, they are not all taxed the same either. There are three basic types of disability policies out there.

Social Security – The same program that will (hopefully) help provide retirement benefits also provides benefits to those who become disabled before they retire. The application process is cumbersome, and proving disability can be a chore.

Employer Benefit – Many jobs have disability insurance as an employer benefit. Part of your paycheck is the fact that if you are disabled, then you can file a disability claim through whomever the employer has purchased their group plan. These policies generally only cover about 60% of wages.

Personal Benefit – A personal disability insurance policy can be added to the employer policy to bring a person up to nearly 100% of pre-disability wages. For example, a person makes $1,000 per month. The employer plan covers $600 of that wage. The individual can buy an additional policy to cover the other $400 (or more than likely it would be about $350 in benefit).

How are Disability Benefits Taxed?

The different disability policies will be taxed differently. It all depends on how the policy is provided.

Social Security benefits may be taxed depending on what your income is. If you are married and filing jointly, your benefits and your spouse’s income can total no more than $32,000 per year. If it goes over that amount, then your benefits, or some of your benefits, are subject to tax.

Employer sponsored benefits are almost always taxed. So if you have a group disability plan, you likely only have 60% of your wages covered. Take away another 20% in taxes, and you are left with less than half of what you were making before disability.

Individual disability benefits are almost never taxed. This is why it is important to bulk up your coverage instead of just relying on employer sponsored benefits. Think of it this way: you paid for your individual policy with money that you already paid tax on. The benefit is therefore not taxed. You received the group policy and did not pay tax on the money used to buy that policy. The benefit is therefore taxed.

Speak with Your Accountant in Billings, Montana

If you are collecting disability benefits, whether from Social Security, a group policy, an individual policy, or a combination of any of those, you should have an accountant in Billings, Montana do your taxes. Disability benefits can become tricky and confusing. Instead of trying to navigate them yourself, leave it up to the professionals.

Here at Practical Taxes we know and understand taxes. We also do everything else that a full service accounting firm does from online payroll services to business consultation to everything in between. Call 406-894-2050 to set up your appointment today!

Accountant-Billings-Montana-300x224Tax scams and tax fraud are huge drains on the US economy. They happen every year, and every year there are more and more scams that bilk people out of their hard earned money. Fortunately, there are methods that you can employ to help prevent tax fraud and prevent yourself from becoming a victim of tax scams. Awareness of the problem is the first step, here is more that you can do.

 

 

 

Protect Your Identity

This may seem like a no-brainer, but many people are casual with their identity. Whenever you get a credit card application in the mail, and let’s face it, we get these at least once per week; do you throw it away, or shred it? If you just toss it in the trash, you are subjecting yourself to fraud. Someone can dig through your trash easily, and steal your ID.

Most online transactions are secure, but there are still some nefarious sites out there. Even if you don’t enter your information, malware can start tracking your movements. The next time you key in your social security number it can be stolen.

Be careful with your ID, and run a malware blocker at least once per week. I prefer Malwarebytes because it’s free and easy to use.

Pull a Credit Report

If you have never pulled your credit report, do it now. Actually, run a malware screen first, and then do it. Head over to annualcreditreport.com (the only government approved credit report site), and pull one of the three reports. You can pull a report from each of the agencies once per year without damage to your credit score and without charge. So pull one every 4 months and you can stay up-to-date on what’s going on. Any suspicious activity requires further investigation.

File Your Taxes Early

The earlier you can file your taxes, the less likely someone will use your Social Security Number to file and steal your return. It’s sneaky, and hard to get away with unless you know what you’re doing, but people do it.

First they get all of your info. Name, address, SSN, etc. Then they simply fill out a bogus tax return. They make up any information they need to and steal your thousands of dollars. Since many software programs allow for direct deposit or for money to be loaded onto a prepaid Visa, these scam artists get your money, load it to a card, and move on before you file your taxes.

What happens to you is that when you go to file, you get a letter from the IRS stating that you have already done your taxes. Chances are that the return was done so poorly that you end up being audited for “your” bogus tax return. By the time you know what’s going on, the scammer has had your money for months and is long gone.

Don’t Be a Victim

There are many different methods that you can take to prevent fraud. The first is to be very careful with your personal information. Only give it out when absolutely necessary. You can also sign up for Legal Shield, where for just a few bucks per month you can get identity theft protection.

If you need your taxes done sooner rather than later, hire an accountant in Billings, Montana. With quick turnaround, we can get your taxes done accurately, help you get the largest refund possible, and make sure that you avoid being scammed by eliminating your SSN from the list of those who haven’t filed yet.

Practical Taxes is a full service accounting firm in Billings, Montana. We can do basic tax preparation, but also specialize in online payroll services, business consulting, and a lot more.

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!

Annuity-300x225Currently, because the federal funds interest rate is rather low, annuities are not very popular investment options. They have their time and place, and there are still a lot of people that like to use them. But it is important to know how they will be taxed before you jump right in and start to accumulate money with an annuity. Your accountant in Billings, Montana will certainly help you with these taxes, but this way you can be prepared before you enter his office.

 

 

 

Phases of an Annuity

Before talking about the taxes, we need to understand the different phases of the annuity. Since this is a complex financial product, it has a lot of different working parts. There are essentially two phases to an annuity.

The accumulation phase is when you are still contributing money into the account. This can be done by moving over a few hundred dollars per month, or in larger sums at the end of every year, or even in lump sums. In fact, many people opt for a very short accumulation phase, and they move their entire pension or 401(k) into an annuity when they retire.

The annuitization phase, more commonly called the payout phase, is after you are done putting money into the account, and now you are pulling it out. Based on your age and life expectancy (and a variety of other factors) the annuity company will pay you a set amount every month for the rest of your life (or until the specified period has ended). This is where taxes can be a little tricky.

Taxation of an Annuity

Annuities can be held within an IRA, or they can be considered non-qualified accounts. To make matters simpler, we will assume we are dealing with a non-qualified annuity.

Over your working career, you put money into this annuity. That money will have already been taxed. However, there will be growth in the annuity that is not taxed until you pull the money out. But there is no way to designate which money is going in, and which is coming out, so some special accounting needs to be done.

Let’s suppose that you put in $150,000 into your annuity, and when you annuitize it, the value is $200,000. That means 75% of the money has already been subjected to tax. So when the money comes out of the annuity, only 25% is subject to further taxation.

The concept is pretty simple, but it can get even more complicated when it comes time. Instead of worrying about what will be taxed and what will not be taxed, talk with Mike, an accountant in Billings, Montana. He has the knowledge needed to prepare your taxes no matter where the income comes from.

Practical Taxes is a full service accounting firm in Billings, Montana. We specialize in nationwide online payroll, tax preparation, business consulting and more. If you have an accounting need, we can handle that need!