IRA-300x199When people think of retirement, they generally think of a blissful time where they have no money worries, they can travel the world, and they can enjoy their golden years. But studies have shown that not only are people ill prepared for retirement, but a full one third have not saved ANYTHING. If you would rather be one of those that are well prepared for retirement, and thus able to actually enjoy your golden years instead of scraping by on Social Security, then you need to start an IRA.

What is an IRA?

There are actually two forms of Individual Retirement Accounts. There is the traditional IRA and the Roth IRA. Both will help you store up money that can be used later in life, and both have particular tax advantages.

Both a traditional IRA and a Roth IRA are retirement accounts. These accounts are not specifically savings, CD’s, investments, REITs, or cash accounts. They are just the shells that determine how much you can put in, when you can take it out, and how the money is taxed. Just about any form of money can be stored in an IRA, and how you do that is up to you and your financial planner.

The money that is invested into an IRA, regardless of which type, can only be withdrawn after the age of 59.5 years of age (there are certain provisions, but these accounts are retirement accounts so we will ignore those provisions for now). The money will grow tax free or tax deferred, and then it can be used during retirement. If you take the money out before you hit 59.5 years old (or basically before you’re 60), then you will be assessed a 10% penalty by the IRS.

Traditional IRA vs. Roth IRA

Most people will be better of using a Roth IRA if they meet the income requirements.

A Roth IRA is funded with money that you have already paid taxes on. This means that you make $40,000 per year and you pay taxes on that full amount. Out of your take home pay you can put into your Roth IRA as much as $5,500 (for tax year 2014, this will increase in future years). Once the money is in the IRA, it grows tax free (rate of growth depends on your investment choices). After you are 60 years old, you can sell those investments and withdraw the money. Since you already paid taxes on it, any money that you take out is tax free.

A traditional IRA works a little differently. You can still only put in $5,500 this year, but the money is deducted off your income. So if you made $40,000 and you fully funded your traditional IRA, you will only pay taxes on $34,500. The caveat is, however, that you will eventually pay taxes on the money. Anything that you withdraw from your IRA is taxed at your current tax rate (that is the rate during the year which you withdraw the money). Plus, there is one more detail. Once you hit age 72, the government requires that you withdraw some of the money. These required minimum distributions are designed so that, based on your life expectancy, some money comes out each year.

IRA’s are a great way to invest in yourself. And let’s face it, the way Social Security is going, there may not be nearly enough left to cover your living expenses. So before it gets too late for you (investing early is always better than investing late), start up your IRA. Talk to a financial planner about the best option for you, and get your money into the market. Your retired self will thank you.

If you are looking for an accountant in Billings, Montana, Practical Taxes is where you should go. Practical Taxes knows taxes, business, and everything in between.

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.

Hand over keyboard of the laptop in server room

The end of the year is drawing to a close, and it’s time for many people to start thinking about their taxes. If you are in the habit of doing your taxes yourself (which is great if you have a simple tax return; if it’s more complex you would probably be better suited having an accountant in Billings, Montana look it over), then you need to know about all of the deductions that you may be eligible for. While it is easy to remember charitable giving and interest on your home mortgage, here are a few that you may overlook.

Gambling Losses – Nobody ever likes to lose money while gambling. But there is a silver lining. If you are out on the town and you stumble into a casino after a few too many beers, you can deduct the losses from your taxes (it goes both ways: if you win money you are supposed to claim it as income as well). Now there are a few provisions.

If you try to claim that you lost $10,000 gambling one night, but you have no way to prove that you lost $10,000 gambling one night, you might be in a bit of trouble. But if you bought $250 worth of scratch off lottery tickets, and you only won $50, you can deduct the $200 as a loss. As with everything tax related, keep your receipts so you can back up your claims in the event of an audit.

School Loan Interest – Not only can you get a tax credit for going back to school, you can also deduct the interest that you paid on those loans. Depending on how advanced your degree is, how expensive a school you went to, and how high your interest rate is, that interest could add up to a tidy sum.

This is one of the easiest deductions to get, since those handling your loans should be sending you a tax document in the mail every year. But if you are like most people who have recently graduated, you have probably moved around a bit. If you don’t remember getting your 1099-E then check with your loan manager to make sure they have your proper address.

Phone Bill – If you use your cell phone for business related purposes, you can probably write off a portion of the bill. If the phone is 100% used for business you can write off the entire thing, but if you use it to text friends and family, upload pictures of your totally sweet vacation to Facebook, or Snapchat with your best buds, then you should only take a partial deduction.

The same goes for internet and computers as well. If you have a work computer, then you can write off the purchase price. If you work from home, then your internet bill can be deducted (actually, if you have a home office, then you have a whole lot more deductions at your fingertips).

Getting the most out of your taxes is a bit tricky at times. It boils down to knowing the tax law, knowing which deductions are available to you, and being able to accurately claim them. If it all sounds like too much work, then you should probably hire an accountant in Billings, Montana to do that for you. Chances are, using the services of an accountant will actually get you a bigger refund (even after accountant expenses) than you realized you could get.

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.

Taxes-300x225I have yet to meet a single person who loves paying taxes. Sure we all love the benefits that we get out of them: emergency services, hospitals, roads without potholes, and a host of other benefits. But when it comes down to it, we all want to reduce our tax bill as much as possible. As an accountant in Billings, Montana, we want to help you keep as much money in your pocket as possible. Here are the 5 easiest ways to keep your tax bill down.

Reduce Taxes: Invest in Yourself

As long as you meet the income requirements (for 2014 you can make as much as $60,000 as a single person, or $96,000 as married filing jointly; if you don’t have access to an employer plan those limits are lifted for single and $181,000 for married filing jointly), you can contribute to a traditional IRA.

A traditional IRA helps those who want to save on their taxes now, but keep in mind that taxes will come due eventually. Suppose you put $5,500 into your IRA (the current limit for those 55 and younger; 55 and older can do $6,500) this year. You can then deduct $5,500 off of this year’s income. However, when you withdraw that money during retirement, you will owe taxes as though the money was earned the year you take it out.

To get your tax bill down for this year, put more into your IRA.

Reduce Taxes: Invest in Others

One of the easiest ways to do good with your money is to donate to charities. There are thousands of worthwhile organizations across the country, but I would suggest you donate to a local group. From churches, to homeless shelters, to community groups, there is surely a charity out there that you would like to support. The good news is that you can give away as much of your money as you would like. Even if that means you donate $100,000 to a group, you can write off the $100,000 from your current income. Be sure to check out charitynavigator.org before you send just anyone money though; you will want to make sure they are legitimate.

Reduce Taxes: Take a Stock Loss

Do you have investments that just aren’t cutting it? You can sell them and write the loss off on your taxes. As hard as it is to invest money and get less money back, it can be an effective tool to reduce your tax bill. Keep in mind though, that selling a stock to capture that loss prevents you from buying back into the same stock for 30 days. If you do, it’s a wash sale and your losses won’t help you.

Reduce Taxes: Contribute to a Health Savings Account

If you have a high deductible health insurance plan, you may be eligible to open a Health Savings Account (HSA). This unique plan allows you to pay for medical expenses with before-tax money. Unlike a flex plan offered through work, the HSA money doesn’t expire at the end of the year. Keep in mind that the money must be used for health related items, but can’t be used for OTC medications.

Reduce Taxes: Hire an Accountant

Yes, it may seem counter intuitive, but one of the best ways to save money is to spend it. An accountant, such as Mike here at A+ Accounting, can actually help you get a bigger refund on your taxes. By legally utilizing the tax laws, an accountant will find every deductible that you qualify for. Many of these you wouldn’t have known about and subsequently would have missed. Not only that, but you will save a whole lot of time by letting someone else prepare your taxes.

Reducing your tax bill is the goal of just about every American. Before 2015 rolls around, take a few minutes to see if you can take advantage of any of these tips to keep your liability as low as possible. When it comes time to file that return, an accountant in Billings, Montana will help you get the biggest refund check possible.

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.

Emergency-Fund-300x199As a financially savvy adult, you likely know about emergency funds. But if you are like most Americans, you have yet to really get started saving into your emergency fund. This little slush fund, that comes in extra handy during the leaner months, is a tool that everyone needs to utilize. In fact, even before you make the commitment to start saving in your IRA, you should be saving into your emergency fund. Any accountant in Billings, Montana, or financial planner will tell you that. So what are the benefits of an emergency fund? Here are just a few.


Paying Taxes – As much as we hate to do it, we have to pay our taxes. And as much as most people hate to work, the fact is that one job often doesn’t meet our living expenses. So we pick up a side job, or start a little business on the side (in personal finance blogs across the internet you can see this referred to as a side hustle). While it is tempting to just take that money and not report it as income, if you are going to do the right thing you need to report it.

But adding that to your tax return may suddenly drop you from getting a tax refund, to having to pay in. This can be discouraging for anyone, but it can be even more discouraging if you don’t have a source of funds to dip into to pay those taxes. An emergency fund is designed for this exact occasion.

Unexpected Expenses – There will come a time when your car breaks down. You will get sick or injured and be hit with an unexpected doctor bill. You are going to foolishly leave the turkey in the oven too long and it will start a fire causing you to fry your oven from the inside out and then you will have to go buy a new oven. These things happen, and while we call them “unexpected” we can fairly well rely on them. They really are not that unexpected after all.

When you have an emergency fund set up and properly funded, these expected unexpected expenses are no big deal. You have the money, you saved the money for this reason, and it only takes a few clicks of the mouse to transfer the money from your savings into your checking account.

Opportunities – Many financial professionals won’t call it an emergency fund. Instead, they prefer the term opportunity fund. Because sometimes there are opportunities that come up that you just hate to pass on. But if you don’t have an emergency (opportunity) fund, then you really do have to pass. That can be a great business opportunity, a really sweet deal on a vacation, or your dream car just hit the market. If you want to be able to take advantage of the opportunities that life holds, you need to have an emergency fund.

The list of benefits of an emergency fund goes on and on, but I think you get the point. Without an emergency fund, you are putting yourself in a position that could be devastating to your financial health. Instead of taking that risk, make the commitment for 2015 to start your emergency fund. Just $25 or $50 per month will go a long way to offsetting some of those little surprises that life can throw at you.

A financial planner can help you figure out an emergency fund, and an accountant in Billings, Montana can help you make the most of your taxes so you can adequately fund your opportunity fund.

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.

Business-Consultant-300x129As an entrepreneur, you have a thousand different thoughts going through your head at any given moment. You are busy with all of the logistics of getting your idea from idea stage, to seeing the results of your labor. What you would rather not get bogged down with are the details of getting all of the business “stuff” in order. That is where an accountant in Billings, Montana, can help you. If you are trying to figure out business planning on your own, you are likely wasting your time.

What is Business Consulting?

Business consulting takes on a number of different components. Primarily, however, it entails getting your business set up with the proper structure so that you can maximize your tax liability. For instance, if you have a small business where you are the only employee, then you will likely want to set your business up as an LLC. However, if you have some partners, and you think you will be growing much bigger in the near future, you would want to look at getting set up as an S Corp. With so many different structures available, why waste your time figuring them out? Instead, A+ Accounting and Consulting can do that for you.

But even after you determine your business structure, there is much more to it. You have to file the appropriate paperwork with the city. And you have to file with the state. You then have to wait until you get your employer tax ID number. All the while you are losing precious hours that you could be pouring into your work and prepping your business to succeed. Let an accountant take care of the business planning side for you, while you focus on what you do best.

There is even more than just planning out the tax structure of your business that an accountant can help you with. When it comes to running an effective and lasting business, you need advice throughout the course of your career. You will need to understand whether it is better to write off the entire cost of a vehicle, or take the standard mileage deduction. You will need to know if spending thousands of dollars on marketing is a better use of your money than spending it on updating equipment. Your business consultant can help you figure out everything.

Besides all of that, your accountant will be able to file your taxes appropriately when the time comes.

Practical Taxes is a full service accounting firm in Billings, Montana. Everything from basic accountant services, to business consulting, to bank reconciliation; we can do it all. Get in touch today to find out more about how we can help your business grow!  Give us a call at 406-894-2090 to learn more.

Side-Job-300x225There are thousands of people who would like to make more money or save more money. It would allow them to afford the lifestyle that they truly want. But they run into problems, such as they are at the top of where they can get to at work, or they have scrimped and saved and really cannot cut costs anywhere else. They wonder where they should turn. In today’s society, packed with internet bills, cell phone bills, high utility fees, and many other things that cost a lot of money, many people need to pick up some sort of side income. Depending on how you earn the money, there could be tax consequences that you want to address (also where an accountant in Billings, Montana could help you out).

Getting a Second Job

To bring in extra cash, most people will get a second job. This could be serving at a bar or a restaurant in the evenings, or working part-time as a cashier at a retail store. There are the goods and the bads that come with this choice.

The benefits of a second job are that you will have regular hours. That means a steady second paycheck. Also, you will get another paycheck where taxes have been taken out; there will be less to worry about come tax season (on top of that, the employer will pay half of your FICA taxes).

The downsides, however, are that you are stuck working for someone else. You have to follow their hours, their guidelines, and you are likely to be stuck making close to minimum wage (being a server, however, you could make substantially more because of tips).

Working on the Side

Because of the lack of flexibility and the low pay of working a side job, many people choose to follow their passions, and monetize their hobbies or interests. This method takes a little more planning, but the benefits in the long run are a lot better.

The best part about starting your own side business is that you get to set your hours. You work when you want to, and as much as you want to. So if you only have a few hours per week, you don’t have to rearrange your entire schedule just to bring in some extra money. Another positive aspect is that you get to set your own rates. With proper marketing, and if you have the skills, you can make substantially more than minimum wage.

The biggest drawback of earning income on the side like this is that you will have to pay all of the taxes. Next tax season you will have a bigger tax bill that may drop your tax refund into the negatives. This is especially true because you will be paying ALL of the 15.3% into your FICA taxes (working for someone else, half of this is covered). Combine that with the fact that you have to find all of your own clients, and many people are deterred from this option (even though you can make a lot more, it is quite a bit harder).

Using an Accountant in Billings, Montana

If you hire an accountant in Billings, Montana, you will be able to take a lot of the worry away from your side business. Here at A+ Accounting & Consulting, we know the tax laws, and if you are starting your own side business we can work with you to get the most deductions possible (and help to offset those taxes that you have to pay).

If you are interested in making more money on the side, consider starting a little side business (often called a side hustle). You will be happy that you did, and the extra income can go a long ways.

We are accountants in Billings, Montana. We know all the current tax laws and can help you with your business needs including business planning, accounting, tax preparation, and more.

If you don’t want to waste hours of your time on your taxes, hiring an accountant is the way to go. Likewise, if you have a complicated tax return, you will want to hire an accountant. If you have tax questions that you need answered, or if you want to get a larger refund than you could get on your own, then using a professional is the way to go.

Tax season is here, and the April 15th deadline is quickly approaching. And, with all of the services out there for tax help, and the few Do-it-yourselfers, tax time can be confusing. For some, taxes are easy: there’s one source of income; there are no significant gains from other businesses; it’s not a small business—the person is under the umbrella of someone else’s business, and they just have one W-2 to record for the year. For others, taxes cause stress and anxiety, and for those that suffer from the tax-season-blues it may be time to find yourself a qualified, experienced accountant, if you don’t already have one.


The reasons to have an accountant are numerous. Let’s consider first the small business, and we’ll be looking at one of the major reasons hiring an accountant is helpful: exemptions and deductions. As you negotiate your business throughout the year, you’ll have plenty of expenses that you will decrease your taxable income. And, for new clients, an experienced accountant could also help the business owner to effectively plan future expenses, resulting in a beneficial relationship between the business owner and their accountant.

Also, those of you that have undergone a major life-change in the last year, it may be time to visit an accountant. Consider a marriage, or the addition of a child, or, you bought your first home sometime in the previous year and you’re unsure how all of these things will reflect on your taxes. An experienced accountant is ready for any questions you may have.

No one wants to pay more then they should on tax day. While it’s important to pay our taxes, for the average American, every single dime saved from hours of hard work is important. So, understanding that an accountant does cost money, an accountant will also help you to save money by reflecting your possible reductions that decrease the amount you pay in taxes. And, an accountant’s fees are also tax deductible, so it’s a win, win, regardless of how you look at it. This tax season consider hiring an experienced accountant to help you through this chaotic time, it may help you to save more money then you thought possible.

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.