If you read enough about higher education, student loans, the cost of education, and personal finance, you will get a wide variety of opinions on the matter. Some will say that higher education is a joke, and you can get a great job without a college degree. Others will say that you need the education in order to truly be competitive in the market today. Some will agree that you need an education, but the costs are way too high; others will still claim it’s a great investment. Then there comes the matter of paying off your student loans and there are yet more opinions on the matter. How do you make sense of it all? Your accountant in Billings, MT explains what your options are after you have decided to get a degree, and you are now stuck paying off your loans.

 

 

The Silver Lining: Tax Deduction

If there is one good thing that comes from having large student loans is that you get to deduct the interest you pay on them from your taxes. Since the loan rates vary depending on when you received the funds, we will use an average of about 4.5% interest (you could likely be higher, or lower, than this rate). And since the amount you owe varies depending on how long you went to school and where, we will use $40,000 as the total amount owed.

Every year you will pay back some of your loans, and every year the interest you pay will get smaller and smaller. Our analysis looks at the first year on loans with a payback period of 15 years.

Using these numbers, your loan repayments will cost you $306 per month, for 180 months. You will pay a total of $55,079 and $15,079 will be interest. During your first year you pay $1,760.90 in interest, and $1,911.10 in principal.

The good news is that you can deduct this interest off your taxes, even if you don’t itemize your deductions (the standard deduction is $6,300 for a single filer in 2015). So your student loans will save you $440 (assuming a 25% tax bracket) no matter what your other deductions turn out to be. But that loan is still costing your $1,320 per year.

Paying Off Your Student Loans

Many people hate to be in debt. Even thought student loans are considered “good” debt in the sense that they help you earn more money and the interest is deductible, most want it gone. This is actually not that hard to do, but it does require some planning, discipline, and hard work.

Using a Bankrate Student Loan Calculator we can find out how much faster you will pay off your debt by figuring in additional payments. Suppose you add $100 every month to your payment, then you pay off your loan 5 years sooner and save around $5,000 in interest. Bump that repayment up by $250 and you save $9,000 by paying them off 8 years sooner.

But the bigger question is how do you come up with the money to pay off your loans faster? The answer is to start pulling some side jobs. These are any skills that you have that you can monetize. Cleaning houses, mowing lawns, fixing cars, writing for websites, or anything else can all be monetized if you market to the right person. Putting 100% of that extra income toward your loans can wipe them out incredibly fast. Want more proof? Check out Joe Mihalic’s blog about how he paid off $90,000 in student loans in just 7 months.

With a little frugality, some entrepreneurial spirit, and a whole lot of discipline, there is no reason that you shouldn’t be able to wipe out your debt in just a few short years.

Practical Taxes Can Help

If you are spending your time earning extra money in order to pay off your loans quickly, you will need all the time savers that you can get. If you are pulling a side job, then you will have tax consequences. Let us prepare your taxes for you so that you can focus on bringing in even more money. If your side business grows big enough and you need employees, let us do your payroll so you can focus on finding more jobs. We are a full service accounting firm in Billings, Montana. No matter what your accounting needs are, we can take care of them. Call us at 406-894-2050 to learn more.

The dream of many is to run their own business. They have a great idea, and to watch that grow and blossom, all while providing them an income, sounds like the most amazing thing ever. The sad truth, however, is that many of these business owners will never even take the first step. They have the idea, but it only ever remains an idea. Those who do take the first steps to starting their business will often see defeat. It is not because their idea is terrible; almost any idea CAN work. It is because they make this one mistake, and it costs them dearly. Your accountant in Billings, Montana explains how business owners set themselves up for failure.

 

The Biggest Mistake that Business Owners Make

Most businesses start out on shoestring budgets. They don’t have the resources to hire out a lot of their work, and as a result, they stretch themselves thin. They have to run their business, as well as play all the other roles out there. So where do they err? Do they neglect the business in order to be a manager? Do they neglect their payroll services in order to run the business? Do they try to market the business but forget about bookkeeping? The answer is yes; business owners’ biggest mistake is not having a team of advisors.

Consider this: when the president has to make a decision, even a small one, do you think he does an internet search and bases his decision on what other people in XYZ forum say? Of course not, he surrounds himself with people far more intelligent than he is, and takes their advice.

When the CEO of Exxon has to make a decision for the company, do you suppose he looks over charts and says “I bet this will work”? Absolutely not. He consults his accountants, lawyers, managers, and executives, and then bases his decision off what they tell him.

So why do owners of small businesses try to do everything on their own? It is the difference between scarcity and abundance thinking. The scarcity thinker believes that by doing the work himself or herself, money will be saved. The abundant thinker knows that by enlisting the help of others, so much more money will be made that the amount spent will seem miniscule.

If you are a business owner, avoid the costliest mistake out there. Avoid trying to do everything yourself. Enlist the help of an accountant to do payroll services. Enlist the help of a marketer to design and advertise. Enlist the help of a writer to create search engine optimized web content. Enlist the help of an assistant to manage your calendar and make phone calls. This leaves you free and open to build your business and grow it to where it needs to be.

Practical Taxes Can Help Your Business Grow

Do you want your business to grow? Of course you do, why else would you be in business? Here at Practical Taxes we do just that. We provide business consultation, online payroll services, and much more in order to take you from a stagnant point, to a flourishing small business owner. Call us today at 406-894-2050 to set an appointment to learn how to grow your business.

Knowing What Are, and What Are Not, Travel Expenses

Whether you are a business owner, or an employee, you can deduct travel expenses from your taxes. The one caveat is that the expenses cannot be reimbursed. So if you drive 500 miles, but the boss buys your gas, you can’t deduct your mileage. But no matter what your industry, and no matter what your job, you can likely deduct some of your business expenses and help to lower your tax bill. Your accountant in Billings, Montana explains how this is done.

What Are Travel Expenses

Before you can start writing off business expenses, you have to be aware of what travel expenses actually are. If you are taking the family to Disney World, and you decide to pop into the manager’s office at a nearby restaurant to talk about your business, you legally should not be trying to deduct the trip. Instead, the primary purpose of the trip must be business related (but that doesn’t mean you can’t do some entertainment type stuff while there).

When you are traveling you can deduct costs for most of the following:

• – 50% of the costs of meals, or you can take the per diem rate, this is usually about $83 per day
• – Airfare and incidentals
• – Cab fare, bus fare, or other transportation
• – Hotel expenses
• – Tips
• – Other expenses if they directly relate to the business at hand

There are some other things that can be deducted, it all depends on the trip, where you will be going, and what the business activity entails. Your best bet is to just save all of your receipts while you travel for business, and then turn them in to your accountant in Billings, Montana when the time comes. You can always organize them out in a spreadsheet to make things easier.

Deducting Mileage for Travel

Sometimes you have to take a shorter trip. You plan to travel a hundred miles or so, spend the day, and travel back. There are no big expenses like hotel rooms, airfare, and often there aren’t even meals eaten. In these cases, you can still claim some deductions for business expenses.

As long as you are using your personal vehicle, not a company car, you can deduct $.575 for every mile you drove (for 2015, this is up from $.56 in tax year 2014). This means that if you drive 100 miles round trip, you can write off $57.50 from your taxes next year. Keep in mind that you can’t write off the miles that you use to commute; so from home to office is not deductible.

If you do a lot of traveling, say 500 miles per week, you would be able to write off thousands of dollars worth of miles. Keep in mind though, if you write off the miles, you can’t deduct the cost of tires, gas, oil, and other maintenance for your vehicle.

Practical Taxes Know the Rules on Travel Expenses

Knowing what you can, and cannot, deduct for business related travel can become quite confusing. Fortunately, that is why Practical Taxes is around. We know and understand taxes, and can help you wade through the conundrum. As long as you keep accurate records, we can help you to get the maximum amount of deductions possible.

We can help with tax preparation, business consultation, online payroll, and more. Call us today at 406-894-2050 to learn more!

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

 

Using Software for Your Tax Return

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

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

Using an Accountant in Billings, Montana

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

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

Make Your Appointment with an Accountant in Billings, Montana

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

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

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

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

 

 

 

Protect Your Identity

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

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

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

Pull a Credit Report

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

File Your Taxes Early

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

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

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

Don’t Be a Victim

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

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

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