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The Importance of Bookkeeping

Accurate bookkeeping is important to the success of any business. Any financial transaction should be officially recorded; important transactions include any receipts of purchases/expenses, tax records, financial statements and official ledgers, etc. It’s vitally important that a business keep accurate records, and a business that’s run without official documentation could fail.

One of the many reasons for accurate bookkeeping is that accuracy and diligence help to prepare/protect your business in the event of an audit. If the IRS does choose to perform an audit, then you will want all of your financial documents in one place. Sometimes, an audit happens because of something small and superfluous, and accurate bookkeeping can quickly and rather painlessly clear up any supposed discrepancy. And the quicker an audit takes place the better: an audit takes you away from the importance of your own work, and the more prolonged the audit the longer you will have to deal with anxiety and stress because of it.

Also, remember that accurate documentation helps at tax time. Every dollar counts—no pun intended—and an accurate record of every dollar spent matters. Receipts and invoices are so important, and not only so that you can track expenditures, but if the IRS ever has a question about a tax time deduction total, you’ll have the evidence to back up the expense. And when it comes to tax season, you’ll have all the required paperwork ready to show your accountant at Practical Taxes.

Your accountant at Practical Taxes can help with bookkeeping. A quality, experienced accountant can both assist you in accurate booking and provide you with quality advice going forward. So, if you would like to speak with your tax professional at Practical Taxes about bookkeeping services, or any other matter related to your business accounting needs, then call the experts at Practical Taxes today.

June 8, 2019/by admin

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Tax Season

Tax season is almost over, and if you have yet to file your income taxes, then there’s no better time than right now. And if it’s slipped your mind, then you might want to notify your tax professional at Practical Taxes to get some assistance and file an extension. If you’ve already completed your taxes under the new tax laws-guidelines, you know that there were a few changes this year. Not everyone noticed the changes, however, or for some the changes were negligible; but for many tax payers the changes were either surprisingly positive or surprisingly negative. And if you were surprised by the outcome of your 2019 tax returns, then it may be time to speak with your accountant at practical Taxes—especially if you found yourself having to unexpectedly owe a substantial amount—as to the most appropriate way to handle your income/savings/withholdings for next tax season. It’s easy to pay it this year and forget it, but a little know-how and effort this year makes sure that you don’t have another big surprise coming the next.

And that’s one of the things that a professional, experienced tax professional can do for you: show you the best, most practical way to manage your monthly income. The IRS’s tax tables are super simple to read and understand, but how those tables relate to your own personal income is much less a straightforward and simple matter. Especially if you have a fluctuating income, and it changes month-to-month. Or if you own or operate a small business, or LLC, and you have questions as to whether you should write-off each expense, or if you should take the standard deduction. An experienced accountant will be able to show you the difference.

Whatever the end result of the 2019 income tax season happened to be, choose Practical Taxes for all of your personal, business, accounting needs. It pays at the end of the year to have the knowledge and expertise of a professional accountant. Call Practical Taxes today.

April 9, 2019/3 Comments/by admin

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In the Midst of Tax Season

We’re a month or so away from the end of the tax season—yes, there are options for those who need an extension to file their 2018 income tax, and if you have any questions about how to file an extension, then call your tax professional at Practical Taxes—and this last month or so is incredibly hectic for many. Everywhere people are scrambling to gather the necessary materials: tax forms, receipts, mileage records, etc. And while it is a hectic time, try not to worry too much, just call your accountant at Practical Taxes and make an appointment to get those 2018 income tax returns filed.

Make sure to gather together everything. If the IRS notices an omission on your 2018 tax returns that benefits them, they’ll likely contact you; if the IRS finds an omission that benefits you, it’s more than likely you’ll never hear about it from them. Look out for yourself; don’t omit anything; an audit is an especially difficult and trying thing to have to go through. Equally so don’t forget that stack of receipts, don’t forget the paperwork sent to you by student loan companies, mortgage companies, etc.

Also, due to the recent tax changes, this tax year has been confusing for many. And if you are someone who has always filed his or her own income taxes, and you find yourself struggling to accurately file those 2018 taxes, then call the professionals at Practical Taxes. A qualified, experienced accountant could make all the difference for the 2018 tax season.

Remember also that your accountant can go through your taxes and determine the best course of action for the 2019 tax season. If you don’t like what you see after this tax season, then your accountant will be able to advise you on the best course of action going forward.

If you do still need to make an appointment with your tax professional at Practical Taxes to file those 2018 taxes, then make sure to call today.

March 9, 2019/6 Comments/by admin

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Options When You Can’t Pay Taxes

There are two steadfast rules to know when you are experiencing a financial hardship and are unable to pay your taxes by the deadline. The first rule is that you should get in touch with the IRS immediately; the second is that you should speak with your accountant at Practical Taxes to determine the best course of action going forward. Remember the most pressing business is to notify the IRS, because they have deadlines, and when you cannot meet those deadlines they have policies in place to charge you a penalty or, in the most serious cases, use legal power to enforce the collection of the payment. A financial hardship is nothing to be overly ashamed about; an unexpected financial difficulty can happen to anyone. Here’s a few things you should know if you do have a financial hardship this tax season…

The IRS offers ways to pay the tax debt, and the options for payment range from receiving an extension on the payment to entering into a structured payment plan. For the most serious cases, the IRS can offer a deferred payment or even a settlement of the debt, however these are special programs. Your accountant at Practical Taxes can help guide you through the repayment process; you don’t have to face the IRS alone, and your accountant may be able to determine if you qualify for a repayment program that could save you money. Before you enter into a repayment program, determine the amount you can afford to pay each month.

Of course, before you determine whether or not you’re able to afford to pay the tax owed, you need to first file your income taxes. Tax Day is quickly approaching; the deadline is only a few short months away. Remember, February and March are busy months at your accountant’s office, and it’s best to make your appointment early: if there are going to be any difficulties in the completion of your income taxes or if you are going to need to enter a repayment or similar IRS special program, then you will have the time to plan.

January 8, 2019/4 Comments/by admin

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Enhancing Your Visibility as a Business

Every 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.

October 1, 2018/4 Comments/by admin

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Becoming More Efficient in Your Business

Running 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.

August 21, 2018/1 Comment/by admin

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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.

August 5, 2018/3 Comments/by admin

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Three Ways to Run a Better Business

If 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.

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.

May 25, 2018/1 Comment/by admin

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Estate Taxes vs. Inheritance Taxes

Estate 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.

May 15, 2018/2 Comments/by admin

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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.