Commit to YOUR Future

Looking for ways to trim your costs to save more or to reduce debt faster? Ready to make commitments to yourself to reach your long term goals? If you are ready to make changes now that will benefit you in the future, follow these tips and invest in your future.

Identify Extras to Cut: Identify the extras in your expenses that are not necessities. These items are fulfilling the “wants” in your life and quickly add up to substantial amounts each month. Consider replacing these extras with free or reduced cost substitutions so you don’t feel deprived.

Shop Around:  Research costs before you make your next purchases. Know before you buy to determine if you are getting the best deal for your money. Check the reviews online and compare products. Make buying decisions based on meeting your needs rather than basing them on your wants or how much you can afford. Always get at least three quotes before you renew services such as insurance or lawn care (I know you can mow your own grass but some of us are allergic). Review options on buying products in bulk to save money. Planning before purchasing = Saving Money.

Sell Your Stuff: If you really MUST HAVE that membership or new microwave, commit to selling some of your stuff to pay for the cost. List it on Craig’s List or EBay and get it sold BEFORE you buy the new “must have”. Commit to yourself you can’t have the new item or service unless you come up with the dough to pay for it in advance.

Trade With Others: Have a barter party with neighbors and friends. Find out what each other wants and what each have to offer to barter. You might find yourself being able to use a neighbor’s workout equipment in exchange for sharing your computer. Barter babysitting services with a teen in exchange for driving lessons. Be resourceful. Think outside the box.  

Take Inventory: How many electronic devices do you own? Do you really need to be able to get email on your computer, phone and Nook? Do you really need 4 winter coats living in Georgia? Do you really need two cars and a motorcycle? How much time and money do you spend maintaining all this? Do yourself a huge favor. Take inventory and begin to simplify your life by eliminating excess and extras. Sell what you can, barter for what you need, or make a charitable donation and get a tax deduction. Base decisions on what you NEED rather than what you WANT. Get back to the basics of living and being able to enjoy what is important…the people in your life, not the things.

Take these tips all the way to the bank. Increase your savings and reduce your debt faster. Making changes now will benefit your future. Simplify your life and enjoy the rewards.

I invite you to share your ideas on how you found ways to save money and simplify your life. Everyone loves to hear new ideas to try! Post your comments to share.

This Accountant Can Count! Part 2 Update

Update: I had to take down the countdown calendars. I heard from the King of Blogs at WordPress about the counting dilemma. Their response was to change the date and it would show the count as 4 months rather than 3 months. I explained why the due date was rather important and could not be changed. They said they would take it under advisement for consideration for future updates. Or I could follow the programming instructions from the links they sent and become a programmer to use a third party widget that may or may not work with WordPress…Soooo…I took down the countdown calendars since they cannot count accurately and you guys will have to rely on ME. Stay tuned for due date postings without the cute little countdown calendars!

Original Post: In case you didn’t notice I added these cool countdown calendars in the left hand column at the bottom. They help track how many months or days until the next big tax deadlines. You will notice we have September 17th (normally the 15th but it falls on the weekend) displayed for the tax filing deadline for corporate and partnership returns that filed an extension and for the next quarterly estimated tax payment due date. Both show the proper number of months until the deadline.

The third countdown calendar is October 15th when individuals are required to file their 1040 tax return if they filed an extension. Look closely, it shows that October 15th comes in 3 months! Well, being a numbers gal, I caught this right away and checked my settings for the widgets and all looks great. I have sent a support email to WordPress (King of the blog kingdom) to ask them why the calendar countdown can’t count. They haven’t responded…rest assured I will follow up since details are my thing (next to numbers). In the mean time, I may have to take it down since it pains me when the number don’t add up! Stay tuned for more updates and don’t forget to mark your calendars for the next due dates.

What’s Red, White and Blue?

Have you heard about the new tax form printed in red, white and blue? When you filled in the white, you’re left in the red, and that makes you blue! I know…I better keep my day job!

Seriously, if you want to reduce your tax liability, you have to act now. Tax Planning provides you opportunities to potentially increase your tax deductions and reduce your tax liability. Those opportunities are lost when you wait until time to file your tax return to think about taxes.

If you are worried about the cost for tax planning, don’t be. If you have a good tax consultant, they will often be able to offer opportunities for tax savings that will well exceed the cost of the tax planning. But that is only if you act NOW…half the year is over already. Everyday you wait is another day you lost money. Just do it!

This Accountant Can Count!

In case you didn’t notice I added these cool countdown calendars in the left hand column at the bottom. They help track how many months or days until the next big tax deadlines. You will notice we have September 17th (normally the 15th but it falls on the weekend) displayed for the tax filing deadline for corporate and partnership returns that filed an extension and for the next quarterly estimated tax payment due date. Both show the proper number of months until the deadline.

The third countdown calendar is October 15th when individuals are required to file their 1040 tax return if they filed an extension. Look closely, it shows that October 15th comes in 3 months! Well, being a numbers gal, I caught this right away and checked my settings for the widgets and all looks great. I have sent a support email to WordPress (King of the blog kingdom) to ask them why the calendar countdown can’t count. They haven’t responded…rest assured I will follow up since details are my thing (next to numbers). In the mean time, I may have to take it down since it pains me when the number don’t add up! Stay tuned for more updates and don’t forget to mark your calendars for the next due dates.

Tax Deduction for Home Office

You can deduct home office expenses as a legitimate business expense. As with any tax deduction, there are rules to meet to qualify for the deduction. “Home” is defined as a house, apartment, condominium, mobile home, boat or similar property which provides basic living accommodations. It also includes structures on the property, such as an unattached garage, studio, barn or greenhouse. The picture shown here is actually a shed that was converted to a home office.

Let’s look at some of the basic rules to meet. To qualify for the deduction of the business use of your home, you must use part of your home:

  • Exclusively and regularly as your principal place of business. (Exceptions to exclusive use for daycare facilities and areas for storage of inventory or product samples)
  • Exclusively and regularly as a place where you meet or deal with patients, clients or customers in the normal course of your trade or business.

You can have more than one business location, including your home, for a single business and still qualify for the home office deduction. If your home office is considered your principal place of business, you qualify. To be considered as a principal place of business, your home office must be:

  • Used exclusively and regularly for administrative or management activities of your business.
  • You have no other location where you conduct substantial administrative or management activities for your business.

TIP: If your home office qualifies as your principal place of business, you can deduct your daily transportation costs between your home and another work location in the same trade or business.

To determine the business percentage for the home office deduction, divide the area (length multiplied by the width) used for business by the total area of your home. Example:

Your office is 240 square feet (12 feet wide x 20 feet long) and your home is 2,000 total square feet

Your office is 12% (240 divided by 2,000) of the total area of your home so your business use percentage is 12%

Tip: Don’t forget to count closets in square footage if used for business.

Typical expenses for a business home office deduction at the business use percentage are:

  • Real Estate Taxes
  • Deductible Mortgage Interest (subject to mortgage interest deduction rules)
  • Homeowners Insurance
  • Repairs (that benefit your entire home such as a furnace repair)
  • Security System
  • Utilities and Services (electricity, gas, trash removal and cleaning services)
  • Rent paid for use of the property you do not own
  • Depreciation (if you own your home; does not consider value of land; special rules apply when you sell your home if you claimed a depreciation deduction)

For all tax deductions, documentation and proper records are necessary. Your receipts for home office deductions should include all the monthly itemized invoices or statements for all expenses claimed. Cancelled checks provide proof of payment but are not sufficient in most cases to substantiate deductibility of a business expense. An IRS auditor wants to look at the invoice or statement to see the details of exactly what was purchased.

TIP: Take a photograph of your home office that will reflect exclusive use. Years after your tax return is filed, you may no longer have a home office but you will still need to furnish documentation to substantiate the deduction taken in an earlier year if  audited. Include pictures of clients that visit your home office.

There are extensive rules for claiming a home office deduction. Daycare facilities are treated differently in determining deductions for use of your home for business purposes. This article gives you an overview to educate yourself on some of the basics of taking a home office deduction. If you think you qualify for a home office deduction, I encourage you to research this further. For more details on claiming a home office deduction see Publication 587  at irs.gov or consult an Enrolled Agent who specializes in taxation. You can find an Enrolled Agent at the National Association of Enrolled Agents at www.naea.org. Don’t be afraid to take a legitimate tax deduction if you qualify and can substantiate your claim.

Estimated Taxes Due for Second Quarter

Estimated Taxes Due for Second Quarter

Tax Payments Due June 15, 2012

Take Action Now – Your Disaster Plan

With the early start of this year’s hurricane season, the Internal Revenue Service encourages individuals and businesses to safeguard themselves against natural disasters by taking a few simple steps.

Create a Backup Set of Records Electronically

Taxpayers should keep a set of backup records in a safe place. The backup should be stored away from the original set.

Keeping a backup set of records –– including, for example, bank statements, tax returns, insurance policies, etc. –– is easier now that many financial institutions provide statements and documents electronically, and much financial information is available on the Internet. Even if the original records are provided only on paper, they can be scanned into an electronic format. With documents in electronic form, taxpayers can download them to a backup storage device, like an external hard drive, or burn them to a CD or DVD.

Document Valuables

Another step a taxpayer can take to prepare for disaster is to photograph or videotape the contents of his or her home, especially items of higher value. The IRS has a disaster loss workbook, Publication 584, which can help taxpayers compile a room-by-room list of belongings.

A photographic record can help an individual prove the market value of items for insurance and casualty loss claims. Photos should be stored with a friend or family member who lives outside the area.

Update Emergency Plans

Emergency plans should be reviewed annually. Personal and business situations change over time as do preparedness needs. When employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

Check on Fiduciary Bonds

Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

IRS Ready to Help

If disaster strikes, an affected taxpayer can call 1-866-562-5227 to speak with an IRS specialist trained to handle disaster-related issues.

Back copies of previously-filed tax returns and all attachments, including Forms W-2, can be requested by filing Form 4506, Request for Copy of Tax Return.

Alternatively, transcripts showing most line items on these returns can be ordered on-line, by calling 1-800-908-9946 or by using Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Tax Return.
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