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    Business Expenses | Accountant Billings MT

    Small Business Tax Write-offs… What Counts and What Doesn’t

    When you travel for work you have expenses; you have to pay for fuel, lodging, food, etc. And most of the time those expenses are, without a doubt, considered tax-deductible expenses. But then there are those trips where you travel and you mix, unavoidably, your business needs with leisure. For an example, say you travel to California for work, but when work has concluded for the day you decide to take in a Dodger’s baseball game—tickets, hotdogs, etc.—and then the next morning you go back to work. What in that scenario is considered tax deductible? Here’s a few tips…

    When you read the above scenario did you think that anything regarding the baseball game could be considered tax deductible? It’s likely given that straightforward scenario that the meal and drinks were absolutely tax deductible—you have to eat when you travel for work, and the IRS can’t determine where you can and can’t eat. Now consider the baseball game tickets. If you are at the ballgame purely for entertainment reasons then it’s likely that you would have a hard time explaining to the IRS why you are deducting those expenses from your income. But if you went to the ballgame to entertain a client then those tickets are likely to be deductible. Most of the time, when you travel for business, your tax deductible expenses are pretty straightforward, and you should never forget to document those expenses on your tax return at the end of the year.

    Did you know that there are no gross income limits to how much a small business owner can deduct? But if you are an employee, and you don’t have your expenses reimbursed by your employer (Hopefully, your expenses for work are always reimbursed by your employer when you travel for work), you should be able to deduct those expenses as itemized miscellaneous deductions.

    If you have any questions about tax write-offs, or how the tax professionals at Practical Taxes can help you and your business succeed, then call today.

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    Self-Employment/Independent Contractor

    Do the words Independent Distributer mean anything to you? Have you ever heard the phrase multilevel distribution company? Probably, and it’s likely that if you’ve heard it then either you or someone you know is directly involved. These words mean that a person works for themselves selling another company’s goods and/or services; it’s a tiered approach to business, meaning that employees are usually considered self-employed, and sometimes—but not always—are licensed independent contractors. Mary Kay, Amway, and Scentsy are popular and well-known tiered distribution companies, but there are also others—essential oils have become a very trendy and often operate using Independent Distributors. In fact, it’s become so prevalent that an estimated 16.8 million Americans participate in this type of work on at least part time basis. Here’s what it means for income tax…

    Self-Employment Tax

    There’s a self-employment tax that accompanies this kind of work. It’s a percentage that gets taxed in a similar way as Medicare and Social Security. It’s based on the total amount of taxable income—that means that in addition to Federal and State Income Tax the self-employed get hit up for more money. And that’s difficult, especially when you consider the time and effort that usually accompanies the ownership of a small business, regardless how small. So, this is where deductions become extremely important to the self-employed. Do you have expenses involved in your small business? Oftentimes there’s travel involved. There’s business-related parties to host—in the case of cosmetics, it’s often common practice to invite people to receive a spa-like facial and to try different types of makeup. And you are probably going to manage your small business from your home; usually, you will operate with a computer and other office supplies. And all of these tools and supplies are likely tax deductible.

    The one important thing to remember when you start your small business is to have a reliable and experienced accountant take a look at both your expenses—checking for potential write-offs (you may have a few write-offs that you don’t know about)—and also to help you navigate your income tax. If you have any questions or would like to schedule your first appointment then call Practical Taxes today.

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    October 15th is Almost Here! Extension Deadline is Almost Here…

    If you don’t understand the significance of the October 15th extension deadline then chances are you have already filed your 2017 income taxes. But did you know that there are over fourteen million American tax payers who have not yet filed their annual return? It’s true. And while some of those people did not file for an extension, the bulk of that group did. And that deadline will soon be here. What happens if you miss the deadline? The IRS will charge you, monthly, a five-percent penalty until you file your income taxes. The penalty will increase monthly by five-percent, and the penalty will cap out at twenty-five percent. But, if you are owed a tax return by the IRS you owe them nothing. But the later you file the later you’ll get your refund. Bummer.

    If you filed an extension, you made yourself known the IRS. All jokes aside, the IRS is not sifting through the one-hundred forty million tax payers who filed at the tax deadline. They know who you are and they are going to expect you to file your return. And if you need help filing that return—amazingly, only fifty-eight percent of people use a special tax preparer during the tax season, but over eighty-percent hire out for the professional experience of a tax preparer when they’ve requested an extension (oftentimes an extension means that there is a question or difficulty on the return)—remember that Practical Taxes is ready to help you file that return. Don’t let the IRS charge you more than they already plan to. And if you need help in paying any of the 2017 income tax there are options, and your experienced tax preparer at Practical Taxes can advise you as to the best way for you to pay.

    If you have any questions regarding your 2017 tax returns, or if you would like to speak with a tax expert about any other tax question, then make sure to call Practical Taxes today.

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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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    Dependents 101: Who Qualifies? Who Can Be Claimed?

    If you are wondering who the IRS qualifies as a dependent, then hopefully this article will clear up any ambiguity. To claim a dependent when you have one is very important, because you get an exemption for that dependent that will reduce your taxable income. And according to the IRS the two types of dependents are qualifying relatives and qualifying children.

    A Qualifying Child

    For you to claim a child as a dependent then he or she must be either: your child, stepchild, foster child, or half sibling (or the descendant of one of those). The child should have the same residence as the taxpayer; and he or she should have lived with the qualifying tax payer in his or her residence for six months or more. There are exceptions to these rules however, and the exceptions are for children whose parents have divorced, and also include kidnapped children, children who have taken temporary absences, and children who were born or who had died in that year. The child needs to be under the age of nineteen at the end of the taxable year, or, in the case that the child is a student, under the age of twenty-four.

    For a taxpayer to claim a qualifying relative, the relative in question must not also be able to be claimed by another taxpayer (cannot be anyone else’s qualifying child). The relative must be related directly to you, and you must provide fifty percent or more of the financial support for that person in that year.

    And if you have any questions whether the children or relatives who live with you, or for whom you provide significant financial support either in your residence or at theirs, qualify as dependents, then make an appointment with your accountant at Practical Taxes today. You don’t want any financial surprises come tax season, which, by the way, is only a few short months away. And having the knowledge and experience of a professional tax expert at Practical taxes guiding you, could make all the difference.

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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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    Business Expenses | Accountant Billings MT

    Taxes and Small Business: A Few Things You May Not Know…

    A small business is rewarding—especially on day one—but also it can be extremely challenging. And if you are planning to open soon a small business, then you first might want to know your particular business entity. What does this mean? This means that the Government will assess your taxes based on how your particular business chooses to operate. The most common entities recognized by the government are: Sole Proprietorship, Partnership, Corporation, and S Corporation. To break these down further, you should know that Sole Proprietorship means that you and your business are subject to an income tax that is calculated at the individual level; you alone run the business (Many small businesses are recognized by the Government as Sole Proprietorships) and you are also subject to the self-employment tax. Partnership is viewed by the Government as being similar to the Sole-Proprietorship in that the business owners are subject to the tax rate at the individual level, including the self-employment tax. Tax liability for a corporation is more difficult to calculate in that the business (corporation) is taxed at a corporate level, and also shareholders of the corporation are treated as employees, all of whom are subject to payroll tax, similar to how an employee would be taxed on their wages. The S Corporation entity is a corporation that is allowed to be taxed at an individual level, and the shareholders of that corporation are treated as employees to be subject to payroll-type taxes.

    There are obvious drawbacks and liabilities to each entity, and if you are considering the structure for a small business idea, then you may first want to assess how you view your business goals and the potential your business has for potential growth. Your tax professional at Practical Taxes is experienced in small business tax and even payroll options for when your business is ready to launch. And if you have any questions as to how Practical Taxes can help your business succeed, then call today.

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    2018 Taxes: What Do You Do with The Paperwork?

    Don’t fret about an audit, because, for most of us, an audit isn’t an overly scary thing. If you payed your taxes and had the professionals at Practical Taxes help to get your paperwork in order and helped you file that paperwork correctly, by the correct date, you’re probably fine. But still an audit can happen. And it can happen even a year or two after the tax year for which the IRS wishes to audit (Sometimes an audit can come seemingly out of nowhere, a complete surprise). And if you are going to be audited, you will want to be prepared; you will want to be able to show the IRS everything for that particular tax year.

    Keep all your receipts from the tax year with your tax paperwork. Oftentimes proof of a particular expense is all the IRS needs to happily close your case and move on. You want every receipt, every scrap of paper that was official evidence that you had an expense pertaining to your tax liability. If you wrote off gas mileage and the like, then make sure to keep that evidence handy as well. Gas logs are invaluable at times like these.

    How Long Should I Keep the Records?

    The statute of limitations (Admittedly that term sounds too officially criminal, but it just refers to the limit on the span of time for which the law can investigate and then try a person) is different in every state. For most of us it’s important to keep our tax records for five years—longer if you kept tax records for employees.

    If you have any questions about dealing with an IRS audit, or if you need accounting help in the coming year—Practical Taxes can help with payroll services, and full service, year-round accounting services—then make sure to call the tax experts at Practical Taxes. Remember, most times an IRS audit is nothing to be worried about, but you can have even more confidence when Practical Taxes guides you through.

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    Tax Bill

    Unless you have been hiding under a rock, or you pay as little attention to the news as possible, you would have heard that our Government—in particular the Republican Party in the Senate—is attempting a massive tax reform. It’s interesting and a little unsettling—the bill passed in the Senate, late at night, just hours after the almost 500-page document—parts of which were edited in pen and scribbled on the margins (taxes are a hotly contested and divisive topic right now!)—was given out to members of the Senate But this is the politics of tax reform. And what does the tax bill, at least at it stands today, mean for the rest of us?

    Ok, let’s only scrape the surface of this, focusing only on how a possible tax reform could affect the average person’s taxes. Regardless of the politics behind tax legislation—these days politics are a very, very divisive topic—remember that these numbers will likely—most definitely—change, at least somewhat, and nothing here is completely definitive (nor is it a sure thing) as this bill has only been voted on, and passed, in the Senate; but, the statistics, at least so far, are interesting to dissect. First, earners from across the board, including people who make only ten-thousand dollars every year on up to people making over a million dollars a year could see a possible tax cut in the first year that this bill gets enacted—2019. A good percentage of the people who make over forty-thousand dollars annually on up to over a million will see a tax cut—not everyone, but a good percentage. But—and here is where the legislation gets tricky—by the year 2027, those tax cuts, especially for the people earning under one-hundred-thousand dollars every year, don’t exist, and these people will be required to pay in on their taxes.

    No, the current discussion of tax reform will not affect this year’s taxes, which are coming up fast. Make sure to make your appointment with Practical Taxes and forego the anxieties involved with the tax season.

     

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    Marketing

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

    A new or up-to-date website

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

    The Google Search Words Campaign

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

    Flyers

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

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

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    Time To Start Thinking About Tax Season

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

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

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

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

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

    Practical Taxes

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

     

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

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

    Skip Eating Out for Lunch

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

    Just Drink Water

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

    Goodbye Car Wash

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

    Groom your dog.

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

    Brew Coffee at Home

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

    Get Your News Online

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

    Do Your Own Nails

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

    Exercise for Free

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

    Go Generic

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

    Negotiate your Car Insurance

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

    Downgrade your Cell Service

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

    Find other ways to relax.

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

    Bonus: Cut the Cable

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

    Practical Taxes is Here to Help

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

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    Property Taxes

    Property Tax

    Property taxes are beneficial because they support many of our community’s public services. Property taxes can support schools, police and fire, parks services, and street maintenance.  But, because most people pay different, varying sums in property tax, it can be confusing to know if you are paying your fair share, or too much.  The following is the how/why of property taxes.

    Tax Assessments

    Tax assessments are the basis for all property tax. These assessments are based on how much a home is worth. Usually, the higher a home’s value, the higher it’s property taxes. This is something to consider if you are planning to trade-up for a new home, know your property taxes will likely be assessed at a higher rate, because the new home possesses a greater value. This could also be true of the neighborhood, if the other houses in the neighborhood are considered to have considerable value. That value will likely be figured into the assessment of your new home (even in the case of buying a less expensive home in a neighborhood). The reasons for this is that a tax assessment is conducted by an assessor who groups together comparable homes, comparing all the home’s in the value range, and comes up with a tax figure that they determine to best assesses the home’s value. It’s a process akin to a home appraisal, however everything, including neighborhood, etc. is put into consideration.

    Appeal your Property Tax Rate

    It’s not unheard of to appeal your property tax rate. There’s formal processes for those folks thinking that the assessor may have missed something in determining a home’s value. Reasons for appeal are varied, but the most common could include: incorrect assessments of the home’s square footage, missing something like an addition, or possibly even incorrectly determining the number of bedrooms within the home. It’s times like these your accountant is ready to help you get through the appeal process. You can hire also a home appraiser, who may come in, and do a private assessment as to a home’s value.

    If you find yourself struggling with property taxes, or just have tax questions in general, give us a call today.

    Practical Taxes

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

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    How Saving Energy can save you on your Taxes

    In the current wake of drought, the dire predictions of global warming, and the ever-expanding population, the talk of energy efficiency is becoming more prevalent.  There are no immediate answers yet, however what we do know is that many of our appliances, our vehicles, etc. directly contribute to green house gas emissions.  Newer appliances, however, are being built to perform to higher standards of energy efficiency.

    How Saving Energy can save you on your Taxes

    Everything from washers and dryers, water heaters, kitchen appliances, etc. each year seem to supersede the appliances that came before.  To install new appliances throughout the home, however, is expensive, although it will help to lower the cost of a homeowner’s energy bills.  The government offers the Residential Energy Efficient Property Tax Credit, and the Nonbusiness Energy Property Tax Credit.

    How Saving Energy can save you on your Taxes

    Residential Energy Efficient Tax Credit

    The Residential Energy Efficient Property Tax Credit involves modifications to one’s home that are considered energy efficient.  These updates include the use of solar, wind, geothermal, and, in some cases, fuel-cell technology.  To qualify for the upgrades, upgrades need to be in direct use with the home. The electricity generated from solar power should be responsible for powering the home.  The credit to be issued at tax time is the equivalent of 30% of the cost of the improvement—this includes the cost of installation, which for items like solar panels can be quite costly.

    Nonbusiness Energy Property Tax Credit

    This is where some of your appliance purchases, etc. can qualify for tax credits.  This could include everything from new home insulation to a new electric water heater.  However, there are qualification requirements for the appliances. While these are not often advertised by companies, you may call the companies themselves and ask if they are participating, and, if so, with which models.  The recouped costs of the tax credit is 10%, or, if you have already participated in this tax credit, $500 for all the years combined.

    Practical Taxes

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

     

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    accountant billings mt

    Reasons Why Small Business Owners Need to Keep Meticulous Records

    Being a small business owner, I get it, there is so much to do and keeping track of records just isn’t at the top of the list. But it should be. Keeping things organized and tracing records can help you in the long run.

    Tax Season Billings MT
    If you keep track of your records and receipts, when it comes to tax season, it will be much easier for you to locate your receipts. It will also help you to get all of the deductions that you are entitled to. The IRS does not accept bank statements. They want the actual receipts to validate your expenses.

    Payroll Management Billings MT
    Keeping your payroll records organized can assist you with tracking your employees. It makes it much easier when it comes to paying your employees. If you aren’t comfortable doing payroll or just don’t have time, Practical Taxes can manage your payroll for you.

    Invoicing Billings MT
    When it comes to invoicing your clients, keeping track of your records will help you to know who has paid and who has not. It can also help you to keep track of projects and to know what money is coming in.

    Trust me when I tell you that spending a few minutes each day on your records will pay off in the long run.  Keeping track of your records will make tax season much easier as well.

    Practical Taxes

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

     

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    Business Expenses | Accountant Billings MT

    Business Expenses

    It’s difficult to run a business, let alone a small business.  For most small businesses every dollar saved counts.  It’s important that a small business owner understands that there are expenses that they can write off at tax time (a write off simply being a deduction to your taxable income).

    For something to be deductible, according to the IRS, it must be both ordinary and necessary to the business.  They define an ordinary expense as one that is common for the business, and a necessary expense as one that is both helpful and appropriate to the business.  However, there is some leniency when considering an expense to be necessary.

    Necessary means that the expense was helpful to a business; the expense does not have to be considered indispensable to the business to be considered necessary.    These expenses should be documented with a receipt of payment. In the case of vehicle mileage, a documented travel log for all miles traveled while on business.

    Business Expenses

    There are many different types of business expenses, however, the following are the most common expenses that are linked to most any business.  To use your home as a place of business allows you—in most circumstances—to deduct expenses for the business use of it.  These expenses could include the home’s mortgage interest, home owner’s insurance, utilities, and depreciation.

    Also, your car, whether it was purchased to be intended for business use or not, if it is being used for business, you can deduct certain expenses from your use of it.  If the car is used for both personal uses as well as business, then you will be able to deduct the mileage of the car while it was in use for business purposes.  Any other business expense such as insurance, retirement, rent or lease payments, interest accrued from the amounts you’ve borrowed on the business and the taxes on the business.

    If you are a small business owner, consider hiring an accountant to advise you on your business expenses.  Also, remember to document every expense, because, when it comes time to pay your taxes, each deduction might mean more money in your pocket.

    Practical Taxes

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

     

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    Tax Preparation Billings MT

    Increase Your Income by Earning More on the Side

    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 Practical Taxes, 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.

    Practical Taxes knows all the current tax laws and can help you with your business needs including business planning, accounting, tax preparation, and more.

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