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    Tax Season Is Upon Us

    2016 is officially over, and that means it’s time to prepare for another tax season! Like it or not there’s only a few months left until the April the 18th deadline, and for most of you there’s so much to prepare.

    Prepare

    For those of you who have a lot of write-offs, those of you with small businesses, etc., January is the time to start getting all of your receipts in order. Make sure that everything is accounted for. If you are missing something, and need to have the filed-proof of something (say an invoice for something work related, etc.) ensure now that you either have appropriately filed away a copy, or, if you have unfortunately lost your copy, you have the time now to find it. This is the time of year to have your vehicle mileage documented orderly if you have yet to do so.

    Forms

    January the 31st marks the last day at which you should mail your employees W-2 forms. Obviously you will want to mail out any forms on time, because your employees are counting on you for this, but there could also be a penalty charged to your company by the IRS if you do fail to mail out your forms on the 31st of January. Remember, the W-2 form only needs to be postmarked by this date, your employees may not receive it in the mail until a few days after, so, if you are planning to mail the forms at the last minute, it may be wise to explain this to your employees who may be expecting to receive it sooner.

    Make a date with you tax preparer

    Regardless of how difficult your taxes, your accountant is ready to help you through the process. Try and plan an hour or two for one day in the future (or on several days in some cases) to visit your accountant’s office to prepare your taxes. To ensure that you receive the undivided attention of the accountant you want to see, make a reservation. If you are seeing an accountant for the first time, Practical Taxes is here and ready to help you through the process of your 2016 tax returns.

    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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    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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    Charitable Contributions

    Happy Thanksgiving! This is the time of year to be thankful, and, for some of us, this time of year has us thinking of giving back, making charitable contributions. Charitable contributions to those of your choosing are obviously very important, but it’s also important that you make those contributions in a way that also benefits your taxes. For those of you who don’t know, charitable contributions can be assessed as deductions on your tax bill! Giving is important and the government recognizes your charitable donations as a private citizen, but, it does impress upon you a few stipulations to receive the deduction on your taxes.

    First, the charitable contribution needs to be to a qualified organization. You cannot deduct donations made to individuals or to political campaigns. Also, many contributions to organizations are met with gifts from said organization: consider an outdoor organization at who’s benefit dinner you wind up winning some grand prize because of your donation: the amount you can deduct from your taxes may only be the balance between the fair market value of the gift given to you by the organization and the amount of that year’s donation. If the fair market value of the gift exceeds the donation, then you’re out of luck at tax time. Also, to deduct the contribution you made, you must keep the receipt of the payment you made. The IRS doesn’t want to see a hand written sheet from So-And-So, claiming that you paid them some money; it wants to see receipts, receipts which, if needed, can be tracked back to a source. Non-cash donations are also considered contributions which can be written off, however, in order to claim the contribution on your taxes, for a contribution totaling over five hundred dollars, you must complete a separate IRS form, IRS form 8283, and, if you have trouble understanding the form, Practical Taxes is ready to help.

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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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    Time to Start Getting Your Taxes For 2017 In Order

    It’s only September, but it’s never too early to start considering getting everything for your taxes in order.  It’s not the time to rush, you have time, but to have everything in order come tax season can make things easier on you, and make for a quicker appointment with your accountant.

    Tax Forms

    First, obviously, when you go see your accountant this tax season you’ll need to bring in your tax forms, forms for most of you that you wont have until January, and your employer has the entire month before they’re legally bound to have sent this out, so this one part you wont have to worry about until then.

    Medical Expenses

    This is the time of year to gather all of the paid forms for medical expenses, childcare expenses, student loan payments, etc.  At the end of the year you will most likely receive certain tax documents from some of these institutions, and it’s important that you can quickly double check the tax form against the receipts of payment for what you paid out monthly.

    There can be discrepancies at the end of the year, which could end up costing you, if you’re not prepared.  Also, this is the time of year to collect each and every receipt.  Oftentimes people will absently store paper receipts, future write-offs—we’re looking at you small business owner—in a wallet or a purse, only to later be discarded as trash by accident.

    Receipts

    Every single applicable receipt for your business counts.  Document the receipts, as well as keep the original copies, to ensure that come tax season you’re not missing out on one, single write off.

    Mileage

    Also, for those of you who write off your vehicle mileage, it can be easy to forget to do this each and every day if you’re not in the habit.  Each and every mile could count for a certain amount in taxable deductions, so know what those miles are.  Have this information documented, so come tax time, there’s no question as to how many you need to report.

    Obviously September is not a major tax month for most of us, but everyone should always be reminded to be prepared for the tax season.

    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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