Savings Through Taxable Income: Proven Recipe of Millionaires

The tax system is complex and keeps on raising questions for many entrepreneurs. Starting with the question of which types of taxes are relevant for you and your company, through various tax obligations and deadlines that must be observed, to the question of how you, as a self-employed person, can save taxes.

More money through depreciation and lump sums

In order to properly save or reduce business expenses, it is first important to understand what it is all about. Depreciation is a decrease in value that ultimately helps you lower your tax burden. Business people show the depreciation of larger purchases; this loss lowers the company's profit and can thus lower the tax liability. The extent to which objects can be written off depends on the respective asset.

In addition to depreciation, lump sums offer you another option to reduce your taxable income regardless of the actual amount of the costs. Some of these so-called allowances or deductions are paid directly by the tax office. You have to have others in your own tax declaration specifications. In order to claim a flat rate, no evidence is usually required. Supporting documents are only used if the actual costs are higher than the flat rate. In this case you can claim these costs additionally.

Reduction of business expenses from tax

Business expenses play an important role as far as tax deductions are concerned. You are not referring to advertising in the sense of marketing but at the expense of working people in the course of their work and their profit diminish. This also includes contributions to professional associations and profession-specific insurance companies.

You can claim advertising expenses with the help of the flat rate. This is currently $ 1,000 per year. Married couples who are jointly assessed can use this even though one of the partners does not even reach the flat rate. For example, if one partner has advertising expenses of $ 800 and the other advertising expenses of $ 1,500, they can claim a total of $ 2,500, as in this case both partners are entitled to the full flat-rate advertising expenses.

The advertising costs include, among other things:

● Customer service,

● Application costs,

● Telephone costs,

● Account management fees,

● Training costs.

Deduct company cars from tax

Please note: The company car can also be tax-deductible. With a commercial use of 90 percent or more, you can save as much as possible, since all relevant expenses such as fuel and insurance for the vehicle can be deducted as advertising costs. In order to deduct travel expenses, it is mandatory to keep a logbook.

Deduct work equipment from the tax

The self-employed can also state work equipment as business expenses. It is important that at least 90 percent of these are also used commercially to be able to deduct them for tax services.

Work equipment includes:

● Office furniture,

● Mobile,

● Computers and laptops,

● Software,

● Professional support,

● Specialist literature.

Regulations for study and rent

Usually home expenses are not deductible. Under certain circumstances, however, the legislature still allows the removal of a private study. There are two prerequisites for this:

● If there is no other workplace available to you, you can deduct up to $ 1,250 per year as operating costs. This category includes, for example, people who work from home because their employer does not provide them with an individual workplace.

● If your study is the focus of your activity, the entire costs can be deducted. This is especially true for freelancers such as writers or freelance journalists.

So, you can save not only on rent, but also on energy, cleaning or renovation costs as well as the property tax with your home insurance.

Deduct company outings from the tax

On a joint excursion with the company, some costs come together: admission tickets, bills, trainers, or tickets make for extraordinary expenses. Here, you have to know that there are also tax exemptions: With up to two excursions per year, expenses of less than 110 euros per participant are tax-free. Further excursions must be taxed in full. If employees bring relatives to the company outing, the costs incurred will be charged to the respective employee.

As a result, the allowance is quickly exceeded. If the expenses exceed the amount of the exemption, they are considered a pecuniary benefit and must be taxed. Alternatively, the difference between the tax exemption and the costs actually incurred can be in the form of flat-rate wage taxis paid by the employer to the tax office. This is currently 25 percent.

Handicrafts and household services

Expenses for craftsmen, household help or gardeners do not reduce the taxable income, but can be deducted directly from the tax liability. Handicraft services related to the household, such as renovation or maintenance work, can almost always be deducted. The prerequisite is that the work is done in your own household.

In order for you to benefit from tax breaks for household-related services, it must be a marginal part of the job. It is also important that you participate in the so-called household check procedure and register your domestic help. You can only take advantage of this tax reduction if you receive an invoice or the contribution to be paid has been transferred. Cash payments are not accepted.

Special expenses: Tax deductible donations and health insurance

Special expenses include all expenses that do not fall into the category of business expenses or advertising expenses. From pension expenses to church tax, there are a number of expenses that can be deducted as special expenses. Here is an overview of possible special editions:

Deduct health insurance from tax

With the introduction of the Citizens Relief Act in 2010, the self-employed have the opportunity to deduct health and long-term care insurance contributions from tax. The contributions to statutory health insurance and long-term care insurance can be almost completely deducted. Note that there is also a maximum limit for pension expenses. If this is exceeded, only the contributions that exist within the framework of the basic benefits can be taken into account. Optional tariffs and additional services are not deductible.

For privately insured persons, somewhat different regulations apply, which are usually somewhat more complicated, as various, non-deductible additional benefits are often involved.

Donations in the tax return

Those who donate are doing good and can save taxes at the same time. As a self-employed person, you can state donations as special expenses in your income tax return. Companies consider this category under business expenses. In order for donations to be actually recognized as such, the following requirements must be met:

● They support charitable, charitable or church purposes.

● The donations do not constitute payment for something in return.

● They take place for voluntary and unselfish reasons.

● The recipient is from a tax office recognized as non-profit.

In order for the tax office to accept donations in your tax return, you must also provide evidence. For donations of up to $ 200, the deposit slip or a bank statement is sufficient. If the sum exceeds this amount, an officially recognized donation receipt must be presented.

Save on church tax

Anyone who lives in the USA and is a member of a religious community who is entitled to the collection of church tax must pay church tax. The amount depends on the respective place of residence and is divided into two percentages. For example, in some states, you pay 8 percent and 9 percent in other states. The church tax can also be indicated in the special expenses. Those who leave the church are accordingly exempt from church tax liability.

Tax deduction from private schools

The young have a right to education – and in private schools this right is expensive compared to state schools. If you send your child to a private school, you can also deduct part of the school fees for tax purposes. A maximum of 30 percent of the costs may be claimed, but may not exceed $ 5,000 per child. If the child attends a foreign school, this must be recognized by the State authorities in order to claim the costs.

Deduct maintenance from tax

Anyone who is obliged to pay maintenance can regularly deduct this from tax. The maximum amount here is $ 9,000 per calendar year. If the payments are specified as special expenses, one speaks of real splitting. This is where the tax performance principle comes into play. This means that the maintenance payments reduce the performance of the payer and increase that of the recipient. Ultimately, this leads to a reduction in your tax burden when you have to make maintenance payments. For this principle to take effect, the maintenance recipient must be on the income tax return sign.

Extraordinary burdens in the event of unexpected events

In order to avoid cases of hardship due to extraordinary burdens, these can also be claimed as special expenses. The limit up to which you can claim these expenses is determined individually by the tax office and is based on factors such as marital status and number of children.

Some examples of such extraordinary burdens are:

● Allergies: Medicines and therapies can be deducted as medical expenses. If you make permanent use of a drug, it is best to submit a permanent prescription to the tax office.

● Alternative medicine: These are costs that arise for homeopathy or herbal medicine. If a doctor has prescribed the treatments, an official medical certificate is not necessary.

● Funeral costs: If the estate is insufficient to cover the costs of a funeral, relatives can claim them for tax purposes. This includes costs for the coffin, flowers and wreaths as well as obituaries.

● Treatment costs: The health insurance does not always cover all costs incurred for a spa treatment or therapeutic treatment. Costs borne by yourself for accommodation or travel can be deducted from tax.

● Care costs: Age-related accommodation in a retirement home is not tax-deductible. However, if this occurs for reasons of illness, this is also one of the extraordinary burdens.

Punctuality and order pay off

It is helpful to deal with the unavoidable tax return not only when it is due, but for the entire financial year. Keeping your documents tidy and keeping your invoices and receipts carefully and orderly saves you a lot of work and time.

In addition, a separate business account of personal and professional income and expenses as well as the corresponding evidence to the tax office. In addition, you can easily keep an eye on your professional expenses.

ULIPs Yield Great Tax Saving Investment Options – Find Out

Several investment options in India have been affected by demonetization and our own spending habits. On the other hand, most of the fixed deposit rates have been lowered by banks post this demonetization drive. Chances are here that the FD rates might drop even further. This is a situation where in all investors are preferring life insurance over other investment options.

ULIPs (Unit-linked Life Insurance Policies) have gained much presence in the investment market as they’re considered to be a much safer means of creating wealth in the long run. Reasons behind the increasing popularity of these ULIPs comprise of their lucrative returns besides their tax saving and protective nature. Out of all the features of a unit-linked insurance plan or ULIP, the most important one seems to be its capacity to invest an individual’s premiums into equity funds as well as mixed debts in different proportions. It doesn’t even yield any tax liability for enacting transfers between separate funds.Besides yielding extra tax-saving advantages for the investors, ULIPs act as a financial tool that links multiple investment options.

Few of the ULIP advantages have been mentioned below:

Deductible premiums

The premiums that are paid for a coverage plan like ULIP get invested with certain financial instruments, debt, and equity. The premium that goes out towards this policy is shown as a deduction under section 80C of IT Act. ULIP premiums may be considered as a deduction from the taxable income up to a certain limit under section 80C. In addition, a ULIP enables the policyholder to pick an asset class and contribute towards his investment planning accordingly. The risk-tolerance of a young investor is much higher and it enables him to follow the more-risk more-return equity investment strategy. To lower your market risks and fetch quality returns, you may pick a mix of financial market instruments, debt, and equity.

Flexibility to change asset classes

A ULIP investor can switch over to a new asset class from the existing one or may even get the funding proportion modified for his current investment in financial instruments, debt or equity.

Non-taxable withdrawals

Apart from the benefits mentioned before, ULIPs may come with great tax saving opportunities against withdrawals. These benefits aren’t meant for the mutual fund investors. Withdrawals may occur when the policyholder needs to withdraw a portion of his investment, when the policy gets maturity or when the policyholder passes away. Death benefit offered by your ULIP isn’t taxable at all. ULIPs show a close similarity to any traditional insurance plan that yields guaranteed financial protection for the dependents of the insured.

Extended coverage

Periodic top-ups offered under ULIPs are a good investment option for individuals possessing excess cash. In a favorable situation, an investor is likely to gain certain tax saving advantages, guaranteed protection, and great returns through different modes of investment like that of mutual funds and life insurance policies. However, it’s quite tough and challenging to strike the right balance between various investment options.

That’s one reason why so many of the modern investors are opting for ULIP and similar combination products. This is certainly an effective option to get your life coverage benefits trebled. Without experiencing any complication and risk of suffering losses, you’ll now be able to enjoy these tax saving options and high ROIs.

How Does Indexation Impact Tax Charged on Gains from Debt Mutual Funds?

When you invest, you aim to maximize your returns. However, inflation eats into your actual returns. Additionally, when you exit your investments, you need to pay capital gains tax. Fortunately, the government offers a solution for this, which is known as the indexation benefit.

The basic reasoning for indexation benefit is to ensure you pay tax only on your returns after being adjusted for inflation. This allows you to pay 20% capital gains tax after taking advantage of indexation benefit.

Indexation plays a pivotal role in taxation when it comes to debt mutual fund investments. You may wonder what indexation is. In simple terms, it considers the rate of inflation when you calculate your returns on investments. Indexation results in a significant impact on your actual returns earned when you exit your investments in debt funds. Through indexation, your investment price is adjusted for inflation for the purpose of determining your tax liability when you exit. Indexation offers you several benefits because of the inflation adjustment.

Benefit of indexation

The indexed cost of your investment in debt mutual funds is based on the ratio of the inflation index at the time when you exit your investment. Therefore, a higher value means a reduction in your tax liability. During the long-term, the rising inflation adds up to the purchase cost of your debt funds. On a cumulative basis, it may result in the reduction of your taxable returns when you redeem your investment.

In case of smaller returns over a longer period, your entire returns on investments may be eaten up due to rising inflation. It is likely that in such a situation, you may not have to pay any taxes. It is beneficial because if most of your returns are erased due to inflation, paying taxes is not logical. Furthermore, the returns are only notional and not real due to the rising inflation.

Working of indexation

Indexation takes into account the date on which you invested your funds and the rate of inflation since then. When you apply the indexation benefit, your purchase cost increases. As a result, your profits at the time of exit reduce thereby reducing your tax liability.

Indexation and debt funds

Mutual fund investments are liable either to short-term or long-term capital gains tax. When you opt for tax-saving investments, long-term is defined as at least three years. Therefore, when you stay invested for at least three years, you will be liable to pay long-term capital gains tax. The current applicable rate is 20% post-indexation benefit.

For applicability of indexation, the formula is:

Original investment cost X Cost of Inflation Index (CII) at the time of exit/CII at the time of purchase

Let us understand this further with an example.

Assume that you invested INR 20,000 in tax-saving investments in May 2010. Further, assume that you redeemed your investment in June 2013 to earn INR 40,000. Therefore, your long-term capital gains before indexation are INR 20,000. However, your entire returns are not liable to tax because you remained invested for a period exceeding three years. You are allowed to avail of the indexation benefit, which reduces your long-term capital gains tax.

The indexed returns will be (20000*220)/167, which is equal to INR 26347 (CII was 167 in 2010-11and 220 in 2013-14).

Therefore, your taxable profits = 40000 – 26347 = INR 13653, which is a reduction of INR 6347 (20000 – 13653).

Until recently, the indexation base year was 1981, which is now modified to 2001. Therefore, if you invested before April 1, 1981, your profits may be calculated based on 1981 fair value. However, all investments after April 1 2017 will use 2001 as the base year to calculate the fair value.

In addition to earning profits, investments aim to determine how to save tax. One way is to use the indexation benefits on your long-term investments. You may also choose to pay taxes without taking the indexation benefit at a pre-specified tax rate.

You may choose from several mutual fund schemes. However, you may not have the experience or expertise to compare different schemes. In such a situation, you may consider using the ARQ investment engine, the core feature of Angel Wealth’s mobile application.

One major differentiation of ARQ from other available options is that all the recommendations originate through machines without any human bias or intervention. Based on your personal requirements and risk appetite, ARQ offers investment options that only deliver better returns but also help you know how to save tax.

Download the Angel Wealth app today and enjoy smart and quick investment tips.

3 Tips To Get Through Tax Return Season

Filing your tax return is boring, thankless task that takes up valuable time. However, it does not need to be so painful. Here are some helpful tips for getting your tax return done.

Records

You should be keeping records of everything. You need to know the exact amount of income you have had over the year as well as any business expenses. These can be stored in a spreadsheet for ease of access and backed up to prevent data loss. If you keep these records up to date throughout the year, then when it comes down to file your tax return you are prepared and know exactly what your finances have been throughout the year. You can use something like Google Sheets to automatically tall various columns and sums together so that you have even less work to do. If you look on the Internet or through Microsoft Office, then you will be able to find templates for tracking and monitoring all your incomings and outgoings. This will be helpful in your daily life and not just when filing your tax forms.

Use Automatic Generation

There are a lot of free online calculator services available on the internet which can automatically do parts of your tax return for you. If you have employees, then one example is getting your W2 forms automatically completed. This needs to be sent to your employees each year, and it breaks down their annual wages and tax payments. If you have other people’s tax to worry about, then something like this can save you a lot of time. Plenty of these kinds of sites make the W2 form 2017 printable, so you do not need to worry about making it fit to a certain page size. There are other sites that can automatically tally up your income similar to what is done through a spreadsheet as mentioned above, but they can go into more detail and provide the exact information that you need. Doing a bit of research could end up saving you a lot of time.

Start Early

There is nothing worse than having a deadline loom over you and for you to not have enough time to complete your forms. If you start early, then you will not get into a situation where you need to rush through them in the last few days. This will help to prevent any mistakes and errors when submitting your tax return and it will make the entire process far less stressful. If you start early, then you can set aside an hour a week to work through it and by the time the deadline comes around you will have finished ages ago. Taking this approach is especially effective if you often struggle with understanding and remember what needs to be done when filing your tax. This is because it allows time to seek advice and work your way through all of the requirements. Starting early can save you a headache and make the entire process far less annoying.

How to Deal with These Six Financial Emergencies

Throughout your life, there will be a whole host of financial emergencies that throw themselves before you. And the thing about most of the items on the following list is that you never know exactly when they are going to strike. All you can do is be as prepared as you can by diversifying your income stream, increasing your assets and putting money aside for any events that may befall you. It is a good idea to know what some of the most common financial emergencies are and this article will give you a fuller picture.

Job Loss

This is probably the one that you thought of first and there is no doubt that it can be an extremely stressful and difficult situation. A simple plan is to have at least three month’s salary saved so you know that you have a financial buffer in case the worst should happen. It is also a good idea to think about alternative revenue streams. This may be through freelance work (which is becoming increasingly prevalent) or making some extra cash through the sharing economy by renting out a spare room, selling you old possessions or some storage or driveway space.

Divorce 

No one wants to think about getting divorced but the people who are the least prepared for it are often the ones that are hardest hit. One course of action that more and more people are taking is forming a prenuptial agreement. And it should also be said that divorce should be seen as a last resort as it sometimes turns out to be a permanent solution to what may be only a temporary problem. 

Natural Disaster

Some areas are more likely to be hit by natural disasters than others and if your home is at risk, the first thing that you need to do is make sure you have the right insurance cover to deal with the situation. You should also think about where you would be able to stay if your permanent residence is suddenly not available. Taking preventative measures is also paramount, so you should make sure that you are well versed in fire safety to start off with.

Being Accused of a Crime

This is one that you may not have thought about before, but there is no doubt that it can end up being costly. For example, if you run a business then an unexpected lawsuit could seriously threaten your livelihood. And if you are accused of any crime, this may affect your current employment situation. It is worth knowing about an affordable criminal defense attorney as they will understand in greater detail what your next course of action should be. If you are accused of any crime, you should make sure that you act swiftly as it is a problem that won’t go away by itself and it is likely to become worse over time.

Bankruptcy

Bankruptcy isn’t just something that can affect big business owners – it is a risk that anyone who racks up debt on their credit cards takes. So, before planning for any of the other financial emergencies listed, you should first work to clear off your debts at these could end up causing the most damage. Of course, going into business is a risk, but you should make sure that you mitigate the risk by not getting in over your head.

Death of a Loved One

Of course, no one wants to think about any of the items on the list potentially happening to them but the death of a loved one is certainly the most traumatic. So, if you have people who rely on you financially, then life insurance is the first thing that you will want to look at so they are not left in an extremely difficult situation. And there are also other manners to take care of like wills, power of attorney etc. Simply making sure that all these affairs are in order can help to give you great peace of mind.

These six points represent the most common types of financial emergency that may strike you at some point during your life. Ultimately, it is all about being prepared for each individual situation so you are not left worrying after the event has already happened. Hopefully, this article has given you an overview of some of the basic steps you can take to prepare for each of these events individually, but also make sure that you have money set aside to take care of any of these things in general.

Investments: How To Work Out If They’re Right For You

When it comes to earning money, it may be tempting to think that you only have one option. Your job may be your primary source of income, but it doesn’t have to be the only one. When it comes to diversifying your income, it can often be a smart step to take. When you have money coming in from a range of different avenues, you can feel more secure. However, when you’re new to the idea of investments, you may not always know where to start. So read on for some simple tips on how to discover if an investment is right for you.

Do Some Research

The first thing that you’re going to need to do is research. Not only does this mean you may want to research the investment market and how it works in general so that you get a good feel for things, but also any specific opportunities that you’re interested in or have been offered. When you start to dig around a bit and get to know your options in a little more detail, you’ll find it easier to work out if it seems a good fit for you.

Speak To A Specialist

If you’re really unsure of where to start, what to do, or what kind of call to make on a particular investment opportunity, seek advice. If you’re able to choose a financial advisor that you can trust, it will feel all the more easier. When you’re new to investing, or if you have little time to spend on the matters, working with a financial professional can help you to make sure that any investments you make are worthwhile.

Read The Small Print

It’s also important that you read the small print that coincides with any form of investment that you’re considering making. In business, if you’re asking yourself how the dividend tax affects me, then you’re going to need to get more information before you plunge into investing in a company. With bonds, you need to make sure that you know what terms you’re agreeing to before you jump in and find yourself caught out.

Start Small

One way to find out how an investment is going to pan out is to start off with something small where you can. If you’re new to investing altogether, then you may want to go with a small investment first, such as a no-risk bond, then work your way up. If you are investing in stocks, you may want to test the water first by buying a small amount, and then going for more if you feel like your investment is going to pay off.

Go With Your Gut

Above all else, you need to go with your gut instinct. A lot of the time, we can feel in ourselves if something is right or if it seems completely wrong for us. If your mind or body is telling you no, then don’t do it. If ever you’re worried that it's too much of a risk, don’t take it.

Where There's A Bill, There's A Way! Completing Your Tax Return

It’s one of the most stressful things you can do in your life, your tax return, it’s a mountain of paperwork and complicated figures, and once you have done it, you feel better than having conquered Everest without any oxygen, exhausted, great, and slightly out of breath! But what happens when you finish the return, and you discover, much to your horror, that you owe tax to the IRS, and not just that, but it’s tax you can't afford to pay? It can be somewhat stressful, especially if you're concerned about getting a criminal record! However, there are ways around the issue, which mainly consists of staying on the good side of the IRS!

Double Check Your Tax Return

This should be your first port of call because you could have added the same income twice by accident, or you forgot to make a deduction. Because, if you thought that you had qualified for a deduction, you need to be sure that you had answered the questions correctly. And if your tax return details are exactly the same as the previous tax year, it could be an issue with the IRS, and not you! In which case, call them to get some clarity on what the problem might be.

Reducing The Amount Of Penalties And Interest

If you owe a huge amount, penalties and interest can bump up that final cost even more! If you hire the help of a tax attorney who has experience with the IRS, it will make the process much less stressful! At least when you’ve got someone on your side who has years of experience in these issues, the problem can get resolved quickly and with few casualties. You can also aim to reduce your penalties by any of these:

Exceptions to underpayment – so, if you underpaid this year, but you owed less money last tax year, you don’t have to pay any penalty.

Ask them for an abatement - write a letter to the IRS. Make sure to explain your financial situation in depth and make the most what might have caused an issue in the past, such as a mitigating circumstance like a long illness, and specifically ask for “an abatement.” If your case is strong enough, they may waive the penalties. 

Pay the outstanding tax soon as possible- either filing early or being able to pay as much as possible shows that you are keen to get this issue sorted.

Ask To Pay The Balance In Installments

You can set up a payment plan through Filing Form 9465, known as the Installment Agreement Request. Setting up a payment plan will allow you some time, and if you can show you're unable to pay the full amount, the IRS must let you make the payments in three years or under, but this is if you owe $25,000 or less. Follow these ideas, and you will be sure to stay on the right side of the IRS! It can be stressful, but where there’s a bill, there’s a way!

Fight For Your Income Rights!

You always work hard to earn money and provide for your family. So, you should never let anyone rip you off and leave you broke. Fighting for your income rights is essential if you want to live a long and happy life. At some point, it is guaranteed that something bad will happen and you’ll get a raw deal. With that in mind, we wanted to draw your attention towards some of the most common problems. Hopefully, you can use the information in this article to ensure you never lose out. You just need to make sure you take the right steps, and you can get things back on track.

Taking your employer to a tribunal for an unfair dismissal

Employers have obligations to follow a standard disciplinary procedure before they fire workers. They are not allowed to sack you without taking certain steps first. If you feel you were dismissed unfairly, you can take the company to an employment tribunal. That is where you will present your evidence to a panel, and they will award compensation. In some instances, the business will have to pay you thousands of dollars. In other situations, they might have to offer you job back. Either way, you get your income back to normal and continue with your life. You’ll just have to contact an experienced lawyer to ensure you present your case properly.

Making a claim when an injury affects your earning capacity

There is no way of knowing when you will suffer an injury that limits your ability to earn income. If that happens and it was someone else’s fault, you can make a claim. Any good personal injury lawyer will assist you in simplifying the process and getting the best results. So, you just need to read reviews and find a reputable professional. It might take between six and twenty-four months to get your compensation. For that reason, it’s always sensible to keep some spare cash in your accounts. That way, you can continue to pay your bills while the case goes to court. In some instances, the guilty party will offer a settlement ahead of time. You just need to consult your lawyer and ask for their opinion before you accept.

Claiming tax back from the government

Lots of people end up paying too much tax to the government at the end of each financial year. There are methods you can use to claim that money back in most instances. You just need to read as much information as possible and make the right moves. However, the best way to keep your cash is to ensure you complete your return correctly. Perform a lot of research ahead of time and always list your expenses. There are professionals out there who can help you with the process. With that in mind, it could make sense to use a specialist accountant in the future. That way, you shouldn’t end up giving the IRS too much capital in the first place.

If you manage to navigate those situations successfully, you should keep your finances in order. As we mentioned only a moment ago, sometimes it makes sense to take action ahead of time. So, use an accountant, and educate yourself about employment law. It might take a few weeks to get things sorted, but at least you’ll have the right information and support. Good luck!

Get The Help You Need With Your Tax Return

Getting ready to prepare your tax return? We’ve gone back to basics to help you file on time for 2017. Put together everything you need for your return. And get extra assistance if you’re struggling with a looming tax deadline.

Save the date

It’s an obvious one, but many people don’t know the date they have to file their tax return, or more importantly, prepare for it. So it’s a good idea to look at Income Tax Deadlines for 2017.

Know your tax credits

The government offers credits and deductions for individual and business taxpayers. Such as the Earned Income Tax Credit and the Child and Dependent Care Credit which helps millions of families each year. There are also credits for small and large businesses that you should know about.

Common deductions include home mortgage interest, state and local tax, and charitable contributions. So, before you file, make sure you know your tax credits.

Get organized, early

Make sure you know which tax bracket your income puts you in. This makes it much easier to ask for larger deductions. Also, it’s important to keep up with any income you take on the side, noting down any resources which can be deducted. If the IRS audits you randomly, your deductions will hold more weight if they’re written down.

File online for free

As Time confirms, “According to the Internal Revenue Service, 70% of taxpayers are eligible for the IRS’s Free File program, which gives you free access to brand-name tax preparation software as long as your income is $62,000 or less.” More than two-thirds of Americans can use online tax-prep software for free.

That includes enlisted military members – and their families – who can access free income tax filing help through the Volunteer Income Tax Assistance program.

If you earn $54,000 or less, have a disability, are elderly, or have limited English-speaking, you’re entitled to free help from IRS-certified volunteers via the VITA program.

Also, all taxpayers over the age of 60 can get free tax help through the IRS’s Tax Counseling for the Elderly program. It specializes in pension and retirement-related issues. Find out if you’re entitled to free help with your tax return.

Hire some help

If the answer is ‘no,’ and things get out of control, it could be time to hire a tax professional who can look after your books and help with unfiled tax returns.

Remember, these professionals earn their keep by assisting you. If you’re not careful, they won’t care about your issues either. Here a guide to help you find the right tax pro.

Stay in the know

Every year, there are new tax deductions you can take advantage of. So, don’t doddle and keep up to date with tax news, such as the IRS Announcement of 2017 Tax Rates, Standard Deductions, Exemption Amounts.

Whether you’re dealing with your personal or business return, tax is, well, taxing. Follow the tips above to stay ahead, and you’ll discover that tax returns become a little less painful every year.

Alternatives to Traditional Business Loans

Money and time are typical challenges for different companies. Business loans are effective solutions to shortages of time or cash and have direct and indirect benefits for your bottom line. A food business can buy equipment to produce better quality dishes at a lower cost. New machines also have depreciation expense that is a write off to lower your taxable income.

Sounds great, but getting approved for financing can be difficult. Here are some of the common hurdles that entrepreneurs face:

● Lack of Personal or Business Credit: Established companies and startups alike have poor or limited credit histories. Some business owners use their personal credit to finance business matters, which exposes them to more risks in case of default. Sole props must rely on strong personal credit.

● Income: Two years of business tax returns with a positive trend are required by most lenders.

● Collateral: Many startups tend to be in fields with limited or unfavorable collateral, such as technology firms or restaurants. Lenders prefer to collateralize a loan with equipment, real estate and cash rather than tables,chairs or food.

● Industry: Banks view restaurants, construction, bars and medical offices as high risk loans. These industries may seasonal cash flow, high A/R or greater liability. .

Has your business loan been declined for any or all of these reasons? You have several alternatives that require little or no credit.

Equipment financing makes it easy to determine collateral, which also eases some concerns about credit. Your industry is also not a factor and lenders focus on your ability to repay the equipment loan alone. Unlike a general purpose loan or line of credit, a bank can lend money on a pizza oven and feel more secure knowing how the money is spent and that there is collateral coverage.

Specialty companies and banks each offer equipment loans. The loan officers work closely with manufacturers and can often speed up approval or push through a borderline application in some cases. Make sure to ask about trade in options to keep pace with changes in technology.

You should work with a CPA to manage capital equipment from a tax standpoint as well. In accounting terms, old machines that have been paid off no longer have a ‘useful life’. This equipment may not be productive and has no write off for depreciation expense. Conversely, new equipment can improve and have tax benefits. Companies should consider these factors to maximize the ROI of equipment loans.

Receivables affect your cash flow and make it difficult to meet payroll, surprise expenses or other overhead. As a solution, you can sell your A/R to a factoring company for quick cash. The factor buys your receivables for a discount percentage, which will vary based on who the A/R is from and how long the receivable is outstanding. A/R from larger corporate that is 30 days out will fetch a higher % than individual accounts in the 60 day bucket.

Companies can also use A/R financing as leverage to expand. A medical office can pounce on discounts for new billing software or technology by selling pending payments from insurance companies to a factor.

Focus on selling A/R with higher profit margins. In basic terms, selling invoices with a 20% margin at 85 cents of the dollar still results in a 5% net.

A company can also get short-term capital by borrowing against future credit card sales. Your credit is not an issue, as the history of credit card receipts is what determines the decision. You will repay the loan plus a premium as a % of daily credit card sales over 6 months to 1 years. Confirm there are no prepayment penalties before signing.

As an example of merchants loans in practice; restaurants could use the money to prepare for catering or special events. The cash buys decorations and hires entertainment before you realize revenues. Merchant loans can also supplement lines of credit or business credit cards to cover shortfalls.

Business owners can use equipment loans, A/R financing and merchant loans in several ways. Each of these business loan alternatives has value at many stages of a company’s growth.

The best education tax credits

These days, many people across the country are on the lookout for the ways in which they can save some money on their 2014 income tax filings, and that means keeping an eye out for the kinds of education tax credits that can most specifically and significantly benefit them. While they may think it's easier said than done, the fact of the matter is that in many cases, there may be a few that are right under their noses, and for which they qualify.

Perhaps the best known education deduction is the American Opportunity Tax Credit, which is worth as much as $2,500 per student deemed eligible, according to the IRS. To qualify, the student in question must be pursuing an undergraduate degree, and it can be used to cover costs for tuition and other expenses related to course materials that consumers might have had to pay for over the course of a school year. Qualifying Americans must have a modified adjusted gross income of $80,000 or less, or $160,000 for married couples filing jointly.

However, another tax break for which many Americans may qualify is known as the Lifetime Learning Credit, which allows certain taxpayers to write off up to another $4,000, the report said. This can be used to cover costs for obtaining not only undergraduate degrees, but also for graduate or professional degrees, no matter how many years they have been pursuing them. In general, most people will qualify for savings of as much as $2,000, but those living in Midwestern disaster areas can claim double that amount.

What else can they take advantage of? 

There are also the less-known deductions that allow consumers to write off qualified college tuition and other fees, the report said. For instance, students or their parents can deduct as much as $4,000 in this regard, through the eponymous Tuition and Fees Deduction, but these actually qualify as adjustments to income, meaning that it's not a tax credit per se. For instance, if a family makes $60,000 per year and claims all $4,000 in this regard, their taxable income will actually be considered by the IRS to be $56,000, and could be beneficial even if families or students themselves do not qualify for the above-mentioned credits.

In addition, it should be noted that consumers claiming one of the above credits or deductions cannot claim another in the same year, so it might take a little bit of work for taxpayers to figure out which is going to suit them best. They must also keep in mind that these can only be claimed if their spending on post-secondary education was for themselves, their spouses, or dependents. Americans who take the time to seek out income tax help from a professional and discuss exactly which of these benefits will help them to save the most money will typically avoid any snags and ensure the promptest and most significant refunds available to them.