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Navigating Tax Season as a Freelancer: Tips and Strategies for Billings, MT Gig Workers

As a freelancer or gig worker in Billings, MT, you enjoy the freedom and flexibility that comes with being your own boss. However, this unique work arrangement also presents distinct tax challenges and opportunities that traditional employees may not face. Effectively managing these tax responsibilities is crucial for the financial well-being and success of your freelance career. This blog post provides guidance, tips, and strategies designed to help freelancers and gig workers navigate the complexities of tax season in Billings, MT, ensuring compliance with tax laws and optimizing tax savings.

First and foremost, it’s essential to understand the unique tax obligations that gig workers face, which include self-employment taxes, income taxes, and estimated tax payments. Being well-informed about these responsibilities is vital to avoid potential penalties and interest, as well as minimize your overall tax bill.

Accurate financial record-keeping is a critical aspect of tax planning for freelancers, as it helps you track your business income, expenses, and receipts. Investing time into maintaining comprehensive records not only ensures compliance with tax laws but also empowers you to make informed decisions about your freelance business’s financial health.

Knowing the common tax deductions specific to gig workers is crucial for reducing taxable income and maximizing tax savings. Deductions such as home office expenses, business-related travel, and equipment purchases can significantly impact your bottom line, so it’s beneficial to take advantage of these opportunities.

Many gig workers are also required to make estimated tax payments throughout the year. Understanding how to calculate and timely remit estimated payments can help avoid unnecessary penalties and interest charges while also making tax season less challenging.

Exploring retirement savings plans specifically tailored to self-employed individuals is an essential component of long-term financial planning for freelancers. These plans, such as SEP-IRAs and Solo 401(k)s, not only secure your financial future but also provide valuable tax benefits.

As you endeavor to grow your freelance business in Billings, MT, it’s crucial to adopt smart tax management strategies and seek the expertise of tax professionals who understand the intricacies of gig worker tax laws. By approaching tax season with knowledge and confidence, you’ll set yourself up for lasting success in the world of freelance work.

Tax Obligations for Gig Workers

As a freelancer or gig worker in Billings, MT, it’s crucial to be aware of your specific tax obligations. These responsibilities typically include:

1. Self-Employment Taxes: Gig workers who earn more than $400 per year are subject to self-employment taxes, which consist of Social Security and Medicare taxes. As of 2021, the self-employment tax rate is 15.3%, with 12.4% allocated to Social Security and 2.9% to Medicare. To calculate your self-employment tax, complete Schedule SE (Form 1040).

2. Income Taxes: Freelancers must report all business income and expenses on Schedule C (Form 1040), which calculates the net profit or loss from the business. This net profit is subject to federal income tax and may also be subject to state income tax in Montana.

3. Estimated Tax Payments: Unlike traditional employees, gig workers are generally responsible for paying estimated taxes throughout the year to cover federal income tax and self-employment tax liabilities. These payments are typically due quarterly and can be calculated using Form 1040-ES.

Record-Keeping for Gig Workers

Maintaining accurate and organized financial records is essential for gig workers. Here are some key aspects of record-keeping to consider:

1. Track Your Income: Keep a record of all payments received from clients, including invoices and payment confirmations. If you receive a 1099-NEC, ensure that the income reported matches your records.

2. Monitor Expenses: Regularly track your business expenses, such as supplies, equipment, and travel costs. Keeping receipts and recording expenses as they occur will streamline the tax preparation process.

3. Adopt a Filing System: Organize your financial records using a physical or digital filing system, categorizing documents by income, expenses, and other relevant categories. A well-maintained filing system will make tax season less daunting.

4. Maintain Records for the Appropriate Time Frame: Generally, the IRS recommends keeping your records for at least three years from the date you file your returns. However, it’s best to retain records for seven years in case of more complex audits or tax situations.

Common Tax Deductions for Freelancers

Maximizing tax deductions can significantly reduce your taxable income, resulting in substantial tax savings. Some common deductions for freelancers include the following:

1. Home Office Deduction: If you use a dedicated area in your home exclusively and regularly for your business, you may qualify for the home office deduction. Two calculation methods can be used: the simplified method, which allows a deduction of $5 per square foot (up to 300 square feet), or the actual expense method, which involves apportioning your home expenses based on the percentage of your home used for business.

2. Business-Related Travel: Travel expenses related to your gig, such as mileage, airfare, lodging, and meals, are generally deductible. To claim the standard mileage rate, simply multiply your business miles driven by the IRS-approved rate (56 cents per mile for 2021).

3. Equipment and Supplies: Expenses for business-related tools, equipment, and supplies are deductible. If the expenses are for items with a useful life of more than one year, you may need to depreciate the cost over several years using the IRS’s guidelines.

4. Professional Services: Fees paid for professional service providers, such as lawyers, accountants, or marketing consultants, are deductible business expenses.

Estimated Tax Payments for Gig Workers

Freelancers and gig workers are typically required to make estimated tax payments throughout the year. Here’s what you need to know:

1. Calculating Estimated Taxes: Use Form 1040-ES to estimate your annual tax liability. This form takes into account your expected income, deductions, and credits to determine your estimated tax.

2. Payment Schedule: Estimated tax payments are generally due four times a year: April 15, June 15, September 15, and January 15.

3. Payment Options: You can submit your estimated tax payments by mail, online through the Electronic Federal Tax Payment System (EFTPS), or through the IRS’s Direct Pay system.

Successfully navigating tax season as a freelancer or gig worker in Billings, MT, requires understanding your unique tax obligations and taking advantage of available deductions. By maintaining accurate financial records, making timely estimated tax payments, and exploring retirement saving options, you can optimize your tax strategy and achieve financial success as a gig worker.

Working with an experienced tax professional, like Practical Taxes in Billings, MT, can provide invaluable guidance and support. They will help you navigate the complexities of freelancer taxation, ensuring you stay compliant, optimize tax savings, and foster the success your freelance career deserves.

Are you a freelancer or gig worker in Billings, MT, looking for expert tax advice and guidance from an affordable tax accountant? Practical Taxes offers personalized tax services tailored to the unique needs of gig workers. We offer payroll, bookkeeping, tax preparation, and tax services in Billings, MT. Contact us today to schedule a consultation and simplify your tax management process.

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Small Business Tax Essentials: A Comprehensive Guide for Billings, MT, Entrepreneurs

Owning a small business in Billings, MT, brings both unique challenges and opportunities for success. One vital aspect of running a small business is understanding and managing your tax obligations, which is an often complex and evolving process.

A well-executed tax strategy can lead to significant financial savings for your business, while maintaining tax compliance ensures continuing growth and success. This comprehensive guide on small business tax essentials aims to provide entrepreneurs in Billings, MT, with the necessary tools and knowledge to navigate the complexities of small business taxation.

Effective tax management begins with understanding the various tax obligations that apply to small businesses, including federal and state income tax, employment taxes, and sales taxes. Depending on the nature of your business, these obligations may differ, making it essential to stay informed about any changes that could impact your bottom line.

Choosing the right business structure is essential, as the type of business entity you form can significantly affect your overall tax liability. To create a thriving and financially sound enterprise, you must also be aware of the available tax deductions, ensuring you capitalize on these opportunities to minimize taxable income and maximize tax savings.

In a rapidly changing tax landscape, it’s crucial for small business owners in Billings, MT, to equip themselves with the knowledge and resources needed to manage their unique tax obligations, maintain compliance, and take advantage of tax-saving opportunities. By diving into the world of small business taxation, you will set your enterprise on the path to success in Billings, MT, fostering a stable financial future and expanding your business horizons.

Essential Tax Obligations for Small Business Owners

Understanding your tax obligations as a small business owner in Billings, MT, is crucial for maintaining compliance and avoiding penalties:

1. Federal Income Tax: All businesses, except for partnerships, must file annual income tax returns with the IRS. Partnerships file an information return instead. Your business structure determines the appropriate tax form to use, such as Form 1120 for corporations or Schedule C for sole proprietors.

2. State Income Tax: Billings, MT, business owners are also subject to Montana state income tax, with varying rates depending on your business structure. Be sure to familiarize yourself with Montana’s tax regulations and file the necessary state tax returns, in addition to your federal returns.

3. Employment Taxes: If you have employees, you’re responsible for withholding Social Security and Medicare (FICA) taxes, as well as federal and state income tax from employee’s wages. You also need to pay federal and state unemployment taxes and workers’ compensation insurance.

4. Sales Tax: If you sell products or certain services in Montana, you must collect and remit sales tax to the state. Registering with the Montana Department of Revenue and obtaining a sales tax permit will enable you to meet this obligation.

Tips for Choosing a Business Structure with Tax Considerations

Selecting the right business structure is a critical decision that impacts your tax obligations and liabilities:

1. Sole Proprietorship: As a sole proprietor, you report all business income and expenses on your personal income tax return. This structure is relatively simple and may be suitable for individuals starting a small business with limited liability concerns. However, sole proprietors are subject to self-employment tax, which covers Social Security and Medicare contributions.

2. Partnership: In a partnership, business income and losses flow through to the individual partners’ personal tax returns. Partners are responsible for self-employment taxes and must file an annual information return (Form 1065) to report partnership income, deductions, and credits.

3. Limited Liability Company (LLC): Operating as an LLC can provide personal asset protection and allows for flexible tax treatment. By default, single-member LLCs are taxed as sole proprietorships, while multi-member LLCs are taxed as partnerships. However, LLCs can also elect to be taxed as corporations by filing Form 8832 with the IRS.

4. Corporation: Corporations face double taxation; profits are taxed at the corporate level, and dividends paid to shareholders are taxed again on the shareholders’ personal income tax returns. However, corporations benefit from lower federal income tax rates and limited personal liability for shareholders.

Consult with a tax professional to determine the best structure for your specific business needs, keeping in mind potential tax liabilities and complexity of each option.

Common Tax Deductions for Small Business Owners

Maximizing tax deductions helps reduce your taxable income and overall tax bill:

1. Home Office Deduction: If you use part of your home exclusively for conducting business, you may qualify for the home office deduction. This deduction allows you to write off a percentage of your home-related expenses, including mortgage interest, utilities, and property taxes.

2. Vehicle Expenses: If you use a vehicle for business purposes, you can deduct expenses related to its use. You may choose between using the standard mileage rate or the actual expense method, which involves tracking all vehicle expenses and deducting a percentage based on business use.

3. Employee Benefits: You can generally deduct expenses related to employee benefits, such as health insurance premiums, retirement plan contributions, and educational assistance programs. These deductions not only lower your tax bill but also make your business more attractive to potential employees.

4. Advertising Costs: Advertising and marketing expenses related to promoting your business are fully deductible. This includes costs such as print and online ads, business cards, and even sponsoring local events or charities.

Understanding and Managing Sales Tax

Managing sales tax correctly and efficiently is essential for businesses operating in Billings, MT,:

1. Registering for Sales Tax: To collect sales tax in Montana, register with the Montana Department of Revenue and obtain a sales tax permit. Once registered, you’ll receive a certificate that should be displayed prominently in your place of business.

2. Collecting Sales Tax: Upon making a sale, collect the appropriate sales tax based on your customer’s location and the type of product or service you’re selling.

3. Reporting and Remitting Sales Tax: You must file regular sales tax returns, either monthly, quarterly, or annually, with the Montana Department of Revenue. To avoid potential penalties or late fees, ensure that you’re remitting the collected sales tax by the deadline specified.

Decoding Business Taxes for Entrepreneurs in Billings, MT

Successfully managing your small business in Billings, MT, involves more than just providing exceptional products and services. Ensuring compliance and optimizing your tax strategy are also key factors in building a stable and financially sound enterprise.

By understanding your tax obligations, choosing the right business structure, maximizing deductions, and managing sales tax effectively, you’ll be well-equipped to navigate the world of small business taxation and achieve financial success.

Need expert guidance to optimize your small business practical tax solutions in Billings, MT? Practical Taxes offers personalized tax advice and financial services for small businesses and entrepreneurs. Contact us today to schedule a consultation and take the first step towards simplifying your small business tax management.

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7 Tips for Successfully Hiring an Outsourced Billing Team

Many businesses are exploring innovative solutions to streamline processes and boost productivity in today’s dynamic business landscape. One such solution is the outsourcing of non-core business functions like billing.

Outsourcing your billing operations can bring many benefits, including cost savings, improved efficiency, and access to expert resources. However, hiring the right outsourced billing team is essential to maximize these benefits. Here are seven tips to help you succeed in this endeavor.

Define Your Needs

The first step towards hiring an outsourced accountant or team is clearly defining your needs. Identify the tasks you want to outsource, the level of expertise required, and your expectations regarding turnaround time and quality of work. This clarity will help you shortlist potential service providers and ensure the outsourced team understands your expectations.

Research Potential Providers

Once you’ve defined your needs, it’s time to find potential service providers. Start by researching online, asking for referrals, and checking out reviews. Look for providers with experience in your industry and the type of billing tasks you want to outsource. Don’t forget to consider their reputation, track record, and client testimonials.

Check Their Experience And Expertise

When hiring an outsourced accountant or team, checking their experience and expertise is crucial. Ask potential providers about their years of experience, their team’s qualifications, and their expertise in handling similar billing tasks. Additionally, determine if they know your billing software and whether they can take industry-specific billing regulations and requirements.

Evaluate Their Processes

An effective billing team should have robust processes to ensure accuracy, efficiency, and compliance. Therefore, before hiring a team, take the time to understand their work processes. Ask about their methods for ensuring data security, quality control measures, procedures for handling discrepancies and disputes, and reporting mechanisms.

Assess Their Scalability

Your business needs may change over time, and the outsourced billing team you hire should be able to adapt to these changes. Hence, assess the scalability of potential providers. Can they handle an increased workload during peak periods? Can they provide additional services if your needs expand in the future? The ability to scale up or down as per your requirements is a critical factor to consider.

Consider Their Pricing Structure

While cost savings is one of the main reasons for outsourcing, it should not be the only factor driving your decision. Understand the pricing structure of potential providers. Do they charge a flat monthly fee, or is it based on the volume of work? Are there any hidden charges? Ensure the pricing is transparent, and compare the cost with the value they provide.

Establish Clear Communication Channels

Effective communication is necessary for the success of any outsourcing relationship. Therefore, establish clear communication channels with the billing team. Decide on the mode of communication, frequency of updates, and the point of contact. This will ensure smooth coordination, quick resolution of issues, and timely completion of tasks.

Hiring an outsourced accountant or team can be a game-changer for your business, provided you choose the right team. By defining your needs, researching potential providers, checking their experience and expertise, evaluating their processes, assessing their scalability, considering their pricing structure, and establishing clear communication channels, you can ensure that you hire a team that not only meets your billing needs but also adds value to your business. Remember, the goal is not just to outsource tasks but to build a long-term partnership that helps your business grow and thrive.

Practical Taxes is a comprehensive tax service provider based in Billings, MT. We offer extensive services tailored to individuals and businesses, including payroll management, bookkeeping, and tax preparation. For those seeking professional, efficient, and reliable Billings accountant services to navigate their tax obligations successfully, contact us at 406-894-2050.

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Efficient Bookkeeping Tips for Small Businesses in Billings, MT

Small business owners in Billings, MT, can benefit immensely from understanding the tax deductions available to them. Taking advantage of these deductions can lower your overall tax burden and help your business grow. However, navigating the ever-changing tax landscape may prove challenging.

This guide will outline the top tax deductions for small business owners in Billings, MT, ensuring you’re well-prepared when tax time rolls around.

Start-Up Costs

Launching a new business entails various up-front costs, many of which are tax-deductible:

1. Market Analysis: Fees incurred while researching your target market and competition may be eligible for a tax deduction.

2. Travel Expenses: Mileage or travel costs associated with scouting locations, meeting with potential partners, or attending industry-related events are deductible.

3. Professional Services: Consultation fees (e.g., lawyers, accountants) paid during the start-up phase can be deducted.

Operating Expenses

Running a small business typically requires ongoing costs to maintain operations. Some common deductible expenses include:

1. Rent and Utilities: Costs related to renting office or retail space, in addition to utilities like electricity, water, and gas, may qualify for deductions.

2. Office Supplies and Equipment: Tangible items such as paper, ink, and computers are considered ordinary and necessary business expenses and can be deducted.

3. Software and Subscriptions: Expenses for productivity software, cloud-based services, and industry-specific subscriptions can also be deducted.

Payroll Expenses

Managing a team can be one of the largest expenditures for small businesses. Understanding how to maximize tax deductions for payroll expenses is crucial:

1. Employee Salaries: The wages paid to your employees, including bonuses and commissions, can be deducted as long as they are reasonable and necessary.

2. Employee Benefits: Costs associated with providing healthcare, retirement plans, and other fringe benefits may also be deductible.

3. Contract Labor: Fees paid to independent contractors are deductible as long as the contractor meets IRS requirements, such as not being classified as a regular employee.

Marketing and Advertising

Developing and promoting your brand requires a strategic investment in marketing and advertising. Many of these costs can be deducted:

1. Traditional Advertising: Expenses associated with print, radio, or television ads may be considered tax-deductible.

2. Online Marketing: Costs related to website design and maintenance, search engine advertising, social media marketing, or email marketing campaigns are also deductible.

3. Networking and Sponsorships: Fees paid for memberships in local business associations or sponsoring local events can be claimed as deductions.

Vehicle and Travel Expenses

Business owners frequently use personal or company vehicles for work-related travel. These costs can add up quickly and potentially qualify for deductions:

1. Standard Mileage Rate: The IRS allows business owners to deduct a standard mileage rate for work-related travel in personal vehicles. For 2022, the rate is 58.5 cents per mile.

2. Actual Expenses: Alternatively, you may choose to track and deduct actual expenses related to your vehicle’s business use, such as gas, maintenance, and depreciation.

3. Business Travel: When traveling for business purposes, expenses like transportation, hotel accommodations, and meals may qualify for deductions, provided they are directly related to the business trip.

Home Office Deductions

Many small business owners operate out of their homes, and the IRS allows deductions for eligible home office expenses:

1. Direct Expenses: 100% of costs directly related to the home office space are deductible, such as painting or other repairs made specifically to the area.

2. Indirect Expenses: A portion of mortgage interest, property taxes, utilities, insurance, and other general household expenses can be deducted based on the percentage of your home’s square footage used for business.

 

By taking advantage of the various tax deductions available to small business owners in Billings, MT, you can significantly lower your tax liabilities and maximize profits, allowing your business to thrive. Understanding start-up costs, operating expenses, payroll, advertising, travel, and home office deductions ensures you’re making the most of your hard work.

Maximize your small business’s tax savings in Billings, MT, with the help of Practical Taxes. Our tax advisors will work with you to identify deductions and optimize tax strategies for your unique situation. Contact us today to schedule a consultation and invest in your financial success.

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Enhancing Your Visibility as a Business

Newspaper-300x225Every business needs to get their name out there. Without visibility you don’t have clients. Without clients you don’t have an income. Without an income, well why are you even in business in the first place? The business world is constantly changing. And you need to stay on top of things or else you will be left with nothing but Yellow Pages ads in a world where Google search engine rankings are all that anyone cares about. If you want to maintain a viable player in your field, follow these tips set forth by your accountant in Billings, MT.

 

Becoming More Visible as a Business

There are a number of different ways to spread your name around. They are more than just advertising, and you can’t just pick one. You need to keep at the top of your game across multiple methods. Here are a few that have great success.

Google – There are two ways to get to the top of Google. You can pay for an AdWords campaign to put your website at the top of the list when people search for specific keywords. Most of the time people skip right by these ads. The alternative is to organically build your site to be search engine optimized. This includes a lot of content, and some other SEO techniques.

Pay Per Click – You need exposure. One way to do that is to set up a pay-per-click ad campaign targeting local site. Your local news sites will host your ad, but you only ever pay if someone actually clicks on your ad. This drives traffic to you website, and hopefully results in paying clients. You need a great website to convert those visitors to clients.

Media – Many businesses will benefit immensely from media advertising. This is printed ads in the paper, radio spots, TV commercials, and more. These ads are not for everyone, but they can benefit certain businesses immensely.

Networking – One word that many professionals hate is networking. But if you get into the right networking group, you will be rewarded greatly. For instance, Biz to Biz is a fantastic way to generate leads and pass referrals.

Partnering – Some businesses will benefit greatly by partnering with related businesses. For instance, if you are a graphic designer, you may benefit by partnering with a marketing company. You take your information to that company, and the next time they have overflow work, they push it your way. It’s a win-win for both of you.

Online Reviews –Something under-utilized, especially here in Billings, are Google reviews. Every time you have a satisfied customer, give them a card with your information and ask them to write a review for you on Google. You can offer small bribes such as a free coffee to a local kiosk to get a better response rate.

Outsourcing the Right Parts of your Business

Because you are a busy professional, you likely don’t want to take the time to make sure that your business is getting the right visibility. This is where it is important to outsource certain aspects. For instance, how many hours per month do you spend on payroll services? That is something your accountant in Billings, MT can do so you can focus on running your business. Outsourcing your marketing to the professionals is not only easier, but gets dramatically better results. A highly visible business is a profitable business. Where are you lacking?

Practical Taxes is a full service accounting firm in Billings, MT. If you need help with your bookkeeping, online payroll services, business consultation, or just simple tax preparation, we are here to help. Call us today at 406-894-2050 to learn more about how we can help you.

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Becoming More Efficient in Your Business

Drucker-portrait-bkt_1014Running a business is all about efficiency. Without certain systems in place, you will never be able to accomplish all that you need to get done. For example, if you simply have too much work to get done, then you will need to hire employees. Of course with those employees comes a whole host of other problems that need to be resolved such as payroll, bookkeeping, and many more. You can do all of those yourself, or you can put a system in place to accomplish those tasks for you. Your payroll services specialist in Billings, Montana explains how.

 

Becoming More Efficient

Peter Drucker, the late business consultant and educator, once said, “Nothing is less productive than to make more efficient what should not be done at all.” These words have never been truer, especially in today’s world where often business owners try to take on everything rather than delegating and simplifying.

Eliminate – There are many things that business owners simply don’t have to do. But for some reason, perhaps it’s because they want to make sure that everything gets done properly, they do them anyway. For instance, there are a lot of business owners out there that feel they need to incorporate every form of marketing available.

So they stress and worry about their radio ads, billboards, TV ads, internet marketing, and social media marketing. In today’s world, they could easily eliminate three or more of those forms of marketing, and still make just as much of an impression on the community.

Delegate – If you have employees, then you are already delegating. Whenever there is a task that can be done by someone else, you can help alleviate some of the stress by delegating that task to someone else.

Most of us delegate already. We ask our connections on Facebook for advice, we have employees help us, and we have our accountant run our payroll and our bookkeeping. Any time that you can have someone else do the work, it is usually better to have them do the work.

Simplify – Sometimes you just need to simplify your work. Instead of having an elaborately designed 10 page color catalog that nobody ever reads, have a 1 page flyer instead. But as we referred to above, if the work doesn’t need to be done, then simplifying isn’t going to make you more efficient.

That is why we always ask first, “can this be eliminated?” and then, “can this be delegated?” and finally, “can this be simplified?”

Practical Taxes Can Help

In your quest for maximum efficiency, Practical Taxes can help alleviate the burden that you feel. If you have employees, and you are still writing paychecks every two weeks, delegate that to us. If you are slogging your way through bookkeeping every months, delegate that to us.

If you are trying to file your taxes quarterly and are frustrated beyond belief, delegate that to us. As a full service accounting firm in Billings, Montana, we can take a lot of the pressure off of you so that you can better run your business.

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5 Time Saving Tricks You Aren’t Using

It happens to the best of us. There are simply not enough hours in the day to maximize our productivity. In the end we have to move a good portion of our to-do list from one week to the next; a seemingly endless battle to have everything cleared from our schedule. If you can relate, then this post is for you. You need to incorporate some of these time saving tips into your work life, and for once go home at the end of the day feeling like you have accomplished all that needs to be accomplished. Keep reading as your accountant and payroll services expert in Billings, Montana explains what you need to know.

Make a Schedule

Schedule-150x150

You might be saying that you already have a schedule, but I can assure you that not many have a schedule like the one needed to be highly productive. This schedule includes EVERYTHING. Monday to Friday your schedule dictates when you wake up, when you eat, how long you get for your shower, all the way down to bathroom breaks. A highly structured person is a highly efficient person.

The caveat here is that it is going to take you several weeks to perfect your schedule. Things will change and need tweaking, but if you have everything on your schedule, including not only when but also what you eat for breakfast, you will see productivity soar.

Learn to Say “No”

We hear this often, but we continue to ignore this advice. There comes a point in our lives, whether work or personal, that we just need to say “No.” It can be extra work, lunch with a friend or co-worker, dinner out, that ski vacation that you really don’t want to go on but you feel bad because your friend from college wants to keep in touch but you couldn’t even stand him when you were roommates so why would you want to go skiing with him and his family… you get the idea.

Practice this one. The next time another project comes across your desk, politely decline and say you already have a full plate. If your services are valuable the person will either wait, or offer to pay more.

 

Turn Off the Internet

Most of us think that the internet is required for our job. In some cases it is, but in most cases we can get by without it for an hour or two. Want to increase your productivity? Just reach over and unplug the router. This also means no checking your Facebook on your phone either. Disconnected is always disconnected.

Delegate

Passing work off to someone else is one of the greatest joys in life. You have a ton on your plate, and having someone else take part of the workload will make you feel almost guilty, as though you aren’t working hard enough. Don’t be fooled; you are.

Even if you don’t have employees you can still delegate. There are plenty of companies out there that will do one-time odd jobs for you (such as running errands that consume a ton of your time), and there are virtual assistants that will work for $8 per hour on those tasks that just eat up your time.

Take More Breaks

It may seem counter-intuitive, but taking breaks will actually increase your productivity and save time. Think of it like this: you get your mind working on a project and keep the train of thought until that task is done. Switching over to a new train of thought takes time, and if you don’t do something to take your mind off the previous task, you have trouble getting started on the next one. These breaks should be scheduled into your day, and they should be 5-10 minutes to get a cup of coffee and stare out the window. Maybe click “LIKE” on the funny picture your cousin just posted.

Practical Taxes Can Help

About those tasks that you just need to delegate out; that is where we come in. You can do your taxes on your own, or do your own payroll, and do all your own bookkeeping. But why would you? Instead let a full service accounting firm in Billings, Montana do the hard stuff for you. This time saving tip alone will clear you up to focus on what you do best: run your business.

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Three Ways to Run a Better Business

run a better businessIf you are a business owner then you are always on the lookout for how to run a better business. You want to have a clean and fluid business that can operate without you. You want to be able to take a vacation and know that when you return, there won’t be a pile of work for you to get done. But you wonder how can that can even happen? You’re scraping by now and can only dream of those days.

It all starts with taking small steps. Let your accountant in Billings, MT explain the three steps it takes to run a better business.

Invest in Your Presence

There are two different types of marketing out there: branding and marketing. Branding is letting people know who you are; marketing is letting people know what you sell. Many businesses skip the first step, and jump right into the second step.

Before you can sell a product to your customer, your customer needs to be familiar with your face. Let’s look at it this way. You need life insurance and the only two companies that you can find are MET Life and XYZ Financial. You have seen the Snoopy commercials, you know “Get MET, it Pays”, and you’re familiar with the brand. XYZ Financial says they offer a premium product for 20% less than MET Life offers. Who do you choose? Most people will go with MET because they trust the brand (although they know nothing about the brand other than they have heard the name often).

As a business owner, you want your name to become a household name (Coca-Cola, Kleenex, Apple, Toyota, etc.). When people already know your name, then they will be more likely to buy your product.

Sell to Your Customer; Not to You

A good sales person knows this rule of sales: make it all about the customer. Don’t tell them what you have to offer, tell them how you can solve their problem.

accountant and payroll services expert in Billingsaccountant and payroll services expert in Billings

Often we hear sales pitches that go like this: “We have the best product on the market. Through years of research and development, we have developed a product that blows away the competition. Our product is ranked better than 98% of all others out there, and our sales show that we are the best!”

Nobody cares. The customer wants to hear a pitch like this: “Are you tired of [xyz]? 98% of our customers report that [product name] has helped them. Don’t suffer any more, try us today. If it doesn’t work out, we have a money back guarantee.”

See the difference? The first pitch is all about how great the product is. The second is all about how the product helps the customer.

Meet the customer’s needs, and the sale will make itself.

Get Organized

One of the biggest business killers is lack of organization. If you want to run a better business, you have to invest time (every single day) into staying organized. Doing so will help ensure that you will remember to reply to all of those emails, return phone calls, and get everything done.

Look at it like this. Suppose you remain unorganized. Every morning, before you get any work done, you have to spend an hour remembering where you left off the day before, figuring out what project you are working on, and de-cluttering your desk. Now let’s suppose you spend 15 minutes at the end of every day organizing for the following day. Now you have that entire hour at the beginning of the day (when you are fresh and thinking clearly), to get as much accomplished as possible. You can run a better business with ease because you gave yourself a boost.

Let Practical Taxes help you Run a Better Business

As a business owner, you have a lot on your plate. You have work to do, prospects to follow up with, and phone calls to return. The last thing that you want to do is worry about your taxes and payroll. Don’t muddle through doing your own taxes, leave them to us!

We offer affordable tax preparation services here in Billings, MT. We spend our time on your taxes, so you can spend your time learning how to run a better business.

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Estate Taxes vs. Inheritance Taxes

castle-780982_1920-300x225Estate taxes are often referred to as death taxes. It seems that no matter what is going on, the government wants to get a piece of the pie. So when you pass away, if you have a large enough estate, there may be taxes that are owed. On top of that, there are inheritance taxes to be worried about. So how do you know the difference, how much you will owe, and what to plan for? Keep reading as Practical Taxes, your accountant in Billings, explains the difference between estate taxes, inheritance taxes, and who needs to worry about them.

 

Federal Estate Taxes

A few years ago, understanding estate taxes was a pain. There was a set amount that would be excluded, and that number stayed the same for a decade. After 10 years it needed to be adjusted for inflation, but congress was trying to decide what to do. There was a fear that it would reset, and anyone that died during the reset period would be subject to massive taxes.

Fortunately that has been figured out, and the estate tax exclusion now adjusts annually. For tax year 2015, your assets can total $5.43 million before you owe taxes. That means if your assets total $5.45 million, you only owe federal estate taxes on $20,000. Current estate tax rates are between 35% and 45% depending on your situation.

If you are fortunate to have an estate larger than the exclusion, and thus you will have to worry about the taxes, pay attention to the name of the tax. Estate taxes are paid by the estate before money is distributed to the heirs. The government doesn’t care if those assets are tied up in real estate either. The estate will have to raise the money any way possible to pay the tax.

State Inheritance Taxes

Fortunately there are only 15 states (and D.C.) that have an inheritance tax. Montana is not one of them. But in case you have two residences, pay attention.

State inheritance tax varies by state. There are different exclusions, different tax rates, and different provisions. Since Montana isn’t included, we won’t go into any details; but we can discuss it with you if your situation calls for it.

Just as estate taxes are paid by the estate, inheritance taxes are paid by the heir.

How to Avoid Estate Taxes

There are a couple of ways to avoid estate taxes. One involves reducing the size of your estate, the other actually involves increasing the size.

Reducing the size of your estate – The only true way to completely avoid estate taxes is to have an estate smaller than the exclusion of $5.43 million. However, rapidly reducing your estate is tough since you can only give away a certain amount every year. You can give $14,000 each year to anyone and avoid gift taxes. So if you have 10 grandkids, you can move $140,000 out to UGMA or UTMA accounts. You can move money out by donating to charity, or setting up an ILIT.

Increasing the size of your estate – Moving money into an ILIT will actually increase the size of your estate. Let’s suppose your estate is worth $6 million. You start an ILIT (the trust owns the insurance, the estate is the beneficiary) and give the trust $14,000 per year to pay the premiums. Suppose the death benefit is $4 million, your estate (at the time of your death) will be worth $10 million. The benefit here is that even though you owe taxes on the additional value; it is all paid with liquid money that comes from the life insurance.

Let Practical Taxes Help with Your Estate Planning

If you have estate planning needs, Practical Taxes can help. We can work closely with your attorney, your financial advisor, and you to draw up these plans. We will help you plan for your estate taxes, or help you avoid them if we can legally make it happen.

If you don’t have estate tax issues, we offer affordable tax preparation services in Billings. Give us a call at 406-894-2050 to learn more and to schedule your appointment.

 

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Bookkeeping

Bookkeeping is vital to any business. Everything a business does financially should be recorded for official record. Tax records, financial statements, receipts of purchase, and ledgers should be organized and stored. Record keeping is vital to business success, and here are a few reasons why.

Audit

No one likes an audit. But the more prepared you are for an audit the better. If you have all of your financial documents in one place, an audit goes quick and easy. Oftentimes, what gets audited are small discrepancies that diligent bookkeeping can, hopefully, clear up easily. An audit takes your attention away from your business, and causes unneeded anxieties and stress. If you do get audited, the IRS will request all of your applicable records, so make sure that you have everything ready to show them.

Deductions

Tax deductions are important. At tax time, it’s important that every dollar your business spends, gets noted at the end of the year. Each and every dollar counts. This applies to businesses as much as it does to individuals. Keep track of every receipt! If the IRS ever questions an expense, you will have the evidence to back it up!

Tax Time!

At tax time, you will have all the required paperwork ready. If your books are well kept, up to date, then everything at tax time should go quick and easy. You don’t want to have to scramble at the end of the year for all of you tax documents.

If you have any questions as to how to keep diligent books, or would like the assistance of a qualified accounting and tax professional, then Practical Taxes is here to help. At the end of the day, wouldn’t it be nice to have someone qualified have your back? Wouldn’t it be beneficial at the end of the year to have your business in the hands of the reliable services of a tax professional who understands your business’s needs? Practical Taxes is ready to help, and can customize accounting services to fit all your needs. Call today to schedule an appointment.

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Practical Taxes Heights Location

895 Main St. Unit #5
Billings, MT 59105
Telephone: 406-969-2760
Monday – Friday: 9 AM – 4 PM

Practical Taxes Westend Location

2201 Grand Avenue
Billings, MT 59102
Telephone: 406-894-2050
Monday – Thursday: 9 AM – 6 PM
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Sunday: By Appointment Only

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