The month of June I’ll be focusing on helpful tax tips for those in direct sales. With the economy still slowly recovering, many women and men are looking to direct selling as a source of additional income. For some, direct sales is flexible, exciting, and allows for additional income without taking a lot of additional time. You can find a company in just about every industry, from security to children’s books to cosmetics/jewelry to investments and insurance. I’ve been meeting a lot of people lately who are in these types of companies and many are confused about how to make their business work for them on the tax side of things. Next week, startup expenses when starting a direct sales business…stay tuned!
Reviewing your tax liabilities
Tax season is over so you’re all done until next year, right? Not quite. It’s time to strategize about next year’s tax bill. If you are one in the higher income bracket and you want to decrease your tax bill next year, pay more throughout this year to lessen the bill later. Check out your contributions to your retirement plan, the number of dependents you have on your paycheck, and the amount of tax that is coming out of each check. It may be a good idea to increase your charitable contributions also.
If you are not in the upper income brackets, or know that you will be entitled to certain valuable deductions and credits next tax season, you may want to keep more of your paycheck in your pocket for cash flow purposes. Increase your dependents on your W-4, start school if you are not already attending, start a business, or look into other ways to either increase your income, or lower your monthly expenses.
Contact me for a free consultation. We will discuss your individual needs and see how to strategically put you in charge of what you will owe the IRS next year, instead of vice versa.
Filed under Payroll taxes, Personal taxes, Small business
Running your own business
Tax Tips for the Self-employed
There are many benefits that come from being your own boss. If you work for yourself, as an independent contractor, or you carry on a trade or business as a sole proprietor, you are generally considered to be self-employed. Not only can it be emotionally rewarding, but there are some tax benefits as well…
Here are six key points the IRS would like you to know about self-employment and self- employment taxes:
1. Self-employment can include work in addition to your regular full-time business activities, such as part-time work you do at home or in addition to your regular job.
2. If you are self-employed you generally have to pay self-employment tax as well as income tax. Self-employment tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. You figure self-employment tax using a Form 1040 Schedule SE. Also, you can deduct half of your self-employment tax in figuring your adjusted gross income.
3. You file an IRS Schedule C, Profit or Loss from Business, or C-EZ, Net Profit from Business, with your Form 1040.
4. If you are self-employed you may have to make estimated tax payments. This applies even if you also have a full-time or part-time job and your employer withholds taxes from your wages. Estimated tax is the method used to pay tax on income that is not subject to withholding. If you fail to make quarterly payments you may be penalized for underpayment at the end of the tax year.
5. You can deduct the costs of running your business. These costs are known as business expenses. These are costs you do not have to capitalize or include in the cost of goods sold but can deduct in the current year.
6. To be deductible, a business expense must be both ordinary and necessary. An ordinary expense is one that is common and accepted in your field of business. A necessary expense is one that is helpful and appropriate for your business. An expense does not have to be indispensable to be considered necessary.
For more information on how to include your business in your tax return, call 901-679-6736 or email Stewart Tax Resources at tkstaxlady@gmail.com. Happy calculating!
Filed under Payroll taxes, Personal taxes, Small business
First day to file is closing in!
January 17th is the first day to begin e-filing your tax return for 2011. If you select direct deposit, you can receive your refund in as little as 8-10 days. Generally, the direct deposits are made each Friday after the week in which you filed, if you file by Wednesday mornings at 11 a.m. Consult your tax preparer, or call us at Stewart Tax Resources anytime if you have questions.
Filed under Payroll taxes
IRS Offers Top 10 Tax-Time Tips
Happy New Year! It’s that time again, time to get those dreaded tax returns filed. Let Stewart Tax Resources help you make sense of your money and get you ready for next tax season! Call today at 901-679-6736; email at tkstaxlady@gmail.com; follow on Twitter at @tkstaxlady; or contact me on Facebook. Remember, we are a mobile service, designed to get your taxes done without you having to drive!
The income tax filing season has begun and important tax documents should be arriving in your mailbox. Even though your return is not due until April, you can make tax time easier on yourself with an early start. Here are the Internal Revenue Service’s top 10 tips to ensure a smooth tax-filing process.
1. Gather your records Round up any documents you’ll need when filing your taxes: receipts, canceled checks and other documents that support income or deductions you’re claiming on your return.
2. Be on the lookout W-2s and 1099s will be coming soon; you’ll need these to file your tax return.
3. Have a question? Use the Interactive Tax Assistant available on the IRS website to find answers to your tax questions about credits, deductions, general filing questions and more.
4. Use Free File Let Free File do the hard work for you with brand-name tax software or online fillable forms. It’s available exclusively at www.irs.gov. Everyone can find an option to prepare their tax return and e-file it for free. If you made $57,000 or less, you qualify to use free tax software offered through a private-public partnership with manufacturers. If you made more or are comfortable preparing your own tax return, there’s Free File Fillable Forms, the electronic versions of IRS paper forms. Visit www.irs.gov/freefile to review your options.
5. Try IRS e-file IRS e-file is the safe, easy and most common way to file a tax return. Last year, 79 percent of taxpayers – 106 million people – used IRS e-file. Many tax preparers are now required to use e-file. If you owe taxes, you have payment options to file immediately and pay by the tax deadline. Best of all, the IRS issues refunds to 98 percent of electronic filers by direct deposit within 14 days, if there are no problems, and some may be issued in as few as 10 days.
6. Consider other filing options There are many options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free face-to-face help at a volunteer site. Give yourself time to weigh all the options and find the one that best suits your needs.
7. Consider direct deposit If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than a paper check in the mail.
8. Visit the official IRS website often The IRS website at www.irs.gov is a great place to find everything you need to file your tax return: forms, publications, tips, answers to frequently asked questions and updates on tax law changes.
9. Remember this number: 17 Check out IRS Publication 17, Your Federal Income Tax, on the IRS website. It’s a comprehensive resource for taxpayers, highlighting everything you’ll need to know when filing your return.
10. Review! Review! Review! Don’t rush. We all make mistakes when we rush. Mistakes slow down the processing of your return. Be sure to double check all the Social Security numbers and math calculations on your return as these are the most common errors. Don’t panic! If you run into a problem, remember the IRS is here to help. Start with www.irs.gov
Filed under Payroll taxes, Personal taxes, Small business
Children, infants, and child tax credits
Several friends of mine have recently concieved or delivered a baby recently. Oh, the excitement of bringing a new bundle of joy into the world! Besides experiencing the amazing joy of delivery (at least that’s what I think mothers feel in that delivery room 
, the new little one(s) also bring with them some great tax benefits.
- Increased personal tax exemption to $3,700 on 2011 tax returns
- Child Tax Credit is still $1,000 for a child younger than 17
- Child care expenses up to $3,000 per child, for a maximum of $6,000
Filed under Payroll taxes
Veteran benefits for small businesses
Stewart Tax Resources, Inc. salutes all veterans today! With the news that the war is technically over and the soldiers are going to begin returning home, one thing that is troubling everyone from government to the veterans’ families is “How are they going to find a job?“
Perhaps you are a small business owner or hiring manager who is asking yourself, “How am I going to lower my tax bill this tax season?“
Well, the current Administration is attempting a solution to both questions with the introduction of the Returning Heroes and Wounded Warrior Tax Credits. These tax credits, new for the 2012 tax season encourage the hiring of our U.S. Veterans by creating a tax incentive for businesses. The information below outlines some of the details of the tax credit. Look to the White House’s website for full details.
“Returning Heroes and Wounded Warrior Tax Credits
Under the Recovery Act, employers who hired certain unemployed veterans were eligible for a tax credit of up to 40 percent of the first $6,000 of wages, for a maximum credit of $2,400. This credit expired at the end of 2010.
The President will call for two new tax credits:
The Returning Heroes Tax Credit is a new hiring tax credit that will provide an incentive for firms to hire unemployed veterans.
Perhaps, you are a business owner and are wondering “how can I pay less taxes this tax season?” Well, as someone who hiring, you can help by hiring from this new supply of willing workers, and aiding in their adjustment to civilian life.
There are a couple new credits that the Obama Administration has introduced credits for those coming home.
Short-term unemployed: A new credit of 40 percent of the first $6,000 of wages (up to $2,400) for employers who hire veterans who have been unemployed at least 4 weeks.
Long-term unemployed: A new credit of 40 percent of the first $12,000 of wages (up to $4,800) for employers who hire veterans who have been unemployed longer than 6 months.
The Wounded Warrior Tax Credit will double the existing tax credit for long-term unemployed veterans with service-connected disabilities.
Maintain the existing Work Opportunity Tax Credit for veterans with service-connected disabilities (currently the maximum is $4,800).
A new credit of 40 percent of the first $24,000 of wages (up to $9,600) for firms that hire veterans with service-connected disabilities who have been unemployed longer than 6 months.
The paperwork process for claiming these credits will be simplified by streamlining the burdensome certification that firms had to undertake to claim previous credits.”
Filed under Payroll taxes, Small business
