Saturday, March 30, 2013

Why You Need to Avoid Last Minute Tax Preparation


Statistics show that at least 10% of taxpayers procrastinate to prepare tax returns until the last minute. There are many disadvantages of waiting until the last minute to file your returns. Some of these drawbacks are explained below:
  • Documentation - When you wait until the last minute, you can discover that you are missing a necessary tax preparation document and the process of searching or getting a replacement may get you late.

  • Professionals Less Available - Last minute filers may not be able to get a tax preparer, as most preparers are booked as the tax deadline nears. The available tax preparers may also charge a premium for taxpayers who seek their services at the last minute.

  • Easily Get Late - Taxpayers who wait until the last minute easily miss out on the deadline and end up filing last due to time constrains. Late filing attracts penalties and if you owe taxes and are late to make payment, you will also need to pay interest.

  • Manual Filing - Most late filers opt to file manually as this is usually the more familiar way of filing and last minute pressure pushes many to dash for paper filing as opposed to using electronic filing. This means that they miss out on the advantages of filing electronically. These advantages include faster refunds, less postage expenses, and if you had an annual income of less than $57,000, you can prepare your taxes free of charge on the Free File system available for electronic filers.

  • Errors - Due to the pressure of last minute filing, filers will easily make errors as they prepare the returns. This may require the taxpayer to file an amendment return to correct the error. If such errors are not amended, the taxpayer will be at risk of an audit and if the error leads to an understatement of taxes, the taxpayer may be liable to non-wilful tax fraud penalties and accumulated interest from the unpaid taxes.

  • Miss Out on Reliefs - Due to the last minute rush, a taxpayer can easily miss out on tax deductions and tax credits that he or she may qualify for. This means that he or she gets to pay more taxes than would have otherwise been due. However, if you file in good time, you can capitalize on all tax opportunities available and therefore, pay the least amount of tax.

  • Tax Bill - When you file at the last minute and discover that you owe taxes and had not planned for the same, you may end up being late to make payment. Late payment of taxes will mean paying extra for penalties and interest. However, if you prepare your taxes early, it will give you time to raise funds for any taxes that will be due for payment.

  • Choose Not to File - If you keep postponing tax preparations until the last minute, you can easily find yourself under pressure and choosing not to file at all. Not filing a tax return may have both civil and criminal consequences and it gives the IRS unlimited statute of limitations to audit your unfiled returns.


Article Source: http://EzineArticles.com/7404756

Wednesday, March 27, 2013

Last-Minute Tax Tips



Millions of people wait until the last minute to file their tax returns. If you're one of them, find out what your options are.

Sunday, March 24, 2013

How Your Taxes Will Change in 2013



The bill approved in Congress to avert the fiscal cliff would bring the first major tax increase on high earners in 20 years. Laura Saunders breaks down how new tax increases will impact across different tax brackets. Photo: AP.

Thursday, March 21, 2013

Tax Planning Strategies Small Business Owners Must Know


It is a fact that it takes years for most small businesses to earn the profit they need. Apart from the possible cut-throat competition in the respective industries to which they belong, they could be paying for numerous obligations. One of these is taxes. If you are an entrepreneur looking for a relief regarding this matter, the tax planning strategies contained in this article are just right for you to read.
Do A Thorough Research - Taxes payment dues imposed by the government for different reasons. Compliance to their payments must be taken seriously as grave penalties maybe charged against you for inappropriate filings or missed deadlines. In connection to this you must be well-versed about the differences between and among sales tax, payroll tax and income tax. Ignorance of how they are properly computed will not be honoured by the government.
Hire An Outside Consultant - This procedure includes a number of details which can cause headache to anyone who are not used to understanding them. In fact, misinterpretation of data and miscalculations on your part can cause you to spend more than what you ought to pay. What's worse, your business license could be cancelled if the government suspects you falsifying your records. To avoid any of these, hire a consultant who can walk you through the right path of computations. This one of the best tax planning tips you must observe.
Track Possible Deductions - Do you know other deductions which may be taken from your gross income? If not, research. Deductions in the form of automobile, entertainment, home office and travel expenses may be helpful on your part.
Know Your Business Classification - You read that right. Some entrepreneurs do not even know under which category their business should belong. If your business is classified correctly, your dues maybe reduced. Why? Tax rates vary from one business to another. Know the liabilities due your business.
Be Mindful Of Your Due Dates - Due dates are important for all tax planning strategies. Due dates are fixed. However, there are certain circumstances where extension of the due dates may be requested. Do not get your hopes too high though because extensions are not always approved. Keen about getting delays? Try purchasing real estate and pieces of equipment before the new year comes. It can give you some more time to prepare. As you do that, observe advance collection of payments and sale of assets.
Discuss Potential Monthly Payments - Sometimes paying a part of your total dues on a monthly basis helps remove the pressure off your shoulder. This is one of the tax planning strategies that most tax payers fail to give a second look. For your information, there are varied payment plans which you can tap in accordance to your needs and eligibility. On the other hand, these plans come with added interest rates. Study first whether your earnings can afford the monthly interest rates or not. You would not want to have a bigger debt right? After all, reducing your payable is what you need.


Article Source: http://EzineArticles.com/7466864

Monday, March 18, 2013

Friday, March 15, 2013

Get Organized For Tax Season


In the words of Dave Barry, "It's income tax time again, Americans: time to gather up those receipts, get out those tax forms, sharpen up that pencil, and stab yourself in the aorta."
Filing taxes = huge pain. We all know it. We all go through it once a year. And while there's no way around tax season, there is a way to make the process less stressful.
P.R.E.P.A.R.A.T.I.O.N. (I'm hearing a collective sigh from all the procrastinators out there!) A little bit of preparation can make a huge difference in your tax filing experience.
Here are 5 steps to a help you file your taxes, on-time and un-frazzled...
(Think T-A-X-E-S!)
(1) Tally: Decide how many hours you'll need for tax prep.
First, choose a final date, such as "I want to be done with my taxes by 1 April." Then work your timetable backwards from there, planning around your work schedule, family responsibilities, and extracurriculars.
Second, think about how long it's taken you in the past to file. If 6 hours of tax prep has been enough in the past, then this year will likely be no different unless you've had major changes in your life. So pencil in 2 hours on your calendar for 3 Saturdays between now and April 1st, or maybe 1 hour each Monday evening for the next 6 weeks. Etc, etc.
Looking ahead will prevent a last-minute tax crunch and all the pressure that comes with it!
(2) Assemble: Gather all tax-related documents.
Search your files, baskets, and bins. Your objective? To find any and all receipts, canceled checks, and other papers that support an item of income or deduction.
Be on the lookout for important forms like W-2s and 1099s in the mail.
And don't forget about the charitable donations you've made over the last year! .
(3) X-cessorize: Compliment your tax prep efforts.
I'm not talking shoes and purses here! It's all about storage. Now that you've got each and every one of your tax documents assembled, they must be organized in one central location, so as not to get lost.
There are lots of different tax organizers that can keep your tax papers in order. You can dress 'em up in style with something like the Buttoned Up Tax Filer. Or if you're not into fancy-schmancy, then you can dress 'em down with the oldie but goody manila envelope.
(4) Evaluate: Assess how you want to file your return.
Will you prepare your return or go to a tax preparer? Do you qualify to file at no-cost using Free File on the IRS website? Are you eligible for free help at an IRS office or volunteer site? Will you purchase tax prep software or e-file online?
There are many possibilities to consider! Weigh them all and find the option that best suits your needs. You may need to make modifications to your tally and time line, if necessary.
(5) Schedule: Make a date to file your return.
If you're doing your own taxes, make an appointment with yourself. If someone else is doing your taxes, make an appointment with him/her.
Schedule asap - before the calendar fills up! And schedule a date several weeks ahead of the April 15th tax deadline, just in case something comes up and you need a bit more time to complete filing.
And remember: It's NEVER too early to start tax prep for next year!


Article Source: http://EzineArticles.com/2135118

Tuesday, March 12, 2013

Meet The Angels: Deborah Wilson


Deborah Wilson, Client Relations Specialist
Deborah joined ATS in January, 2008. She earned her "ANGEL" wings by providing professional support, and outstanding service to ATS employees, clients and prospective clients. With Deborah, you are guaranteed enthusiastic support and friendly service with a smile.

Saturday, March 9, 2013

Meet The Angels: Sylvia Barata, Owner/President



Sylvia Barata, Owner/President, Enrolled Agent
Sylvia started her tax career with the Internal Revenue Service. While there she answered tax questions, instructed IRS employees, monitored the toll-free line for accuracy, supervised, and made public appearances as the Media Relations tax expert. She was recognized for her expertise with many awards, including "Federal Employee of the Year." After 10 years, she decided to open her own company, Affordable Tax Service, and in 1985 became an Enrolled Agent. For nearly 38 years Sylvia has been preparing both individual and business tax returns. With her extensive knowledge, Sylvia often assists clients with personal finance planning customized to their needs. She is also trained in the special rules for clergy, people with disabilities, foreign tax issues, and small business needs. Sylvia is dedicated to bringing her clients the best service available. She and her staff of Tax Angels work diligently to help clients reach their goals.

Wednesday, March 6, 2013

Meet The Angels: Anne Arms



Anne Arms, Enrolled Agent
Anne has been a tax preparer for over 38 years. She brought her considerable skills to the ATS team in 2001. She began her career as a tax preparer, office supervisor, and course instructor for a well-known national tax franchise, then worked as a tax preparer for a private firm before joining ATS. She is also an Enrolled Agent and is very active in the California Society of Enrolled Agents where she served two years as Secretary and four years as chair of the Education Committee. She served the North Bay Chapter of Enrolled Agents as President in 2002-2003. And she was also the Charter President of the newly formed Solano-Napa Chapter in 2006-2007. Her specialty here at ATS is preparing returns for individuals and fiduciary returns for estates and trusts.

Sunday, March 3, 2013

Why You Should Use a Tax Preparer


If you are filling out your form just now, then the most important advice one can make is to accept the advice from a professional accountant for your tax preparation concerns.
Never accept any advice from just about anyone. No one can give you all the right answers - not a broker, a banker, an insurance salesman or any of your friends and family. If a non-tax person gives you information, contact your tax professional immediately. Here are the reasons why.
An accountant guides you in checking your options. They do the math in almost everything that you encounter. For instance, you have different options on treating a specific item for your tax return. He will help you review each option along with separate calculations. He will make sure that you will always end up with the lowest tax. These kinds of nuances are what trained accountants are supposed to do.
For example, in the case of a federal return that will affect your state tax return. The tax professional will help you assess the situation so as to persuade you in choosing the option from which your combined overall federal, state and local income tax amounts will be the lowest.
Also, if you want for your documents to be organized and systematic, a tax professional can help you do that. Their job is beyond just filing your tax for you. They help in the preparation of your tax returns. And so, they do it the way they deal with their own tax preparation.
Tax Preparer vs Tax Software
There are online filling services and software packages available these days. They promise to prepare correct and accurate returns.
If you have a straight-forward lifestyle and your financial situation is steady, using tax software may be a good choice. However, when we say stable, we mean there are no big life events or changes that happened in the tax year. Some of these big changes are buying or selling real estate, getting married, starting a family, a divorce or separation, money inheritance and death of a partner.
If you don't have enough knowledge of the tax code, resist these offers. If you don't know what you're doing, the information you enter won't be accurate as well. This garbage in, garbage out methodology in software prepares amateur tax payers for trouble. They might not be properly guided about their tax returns and so any software will give inaccurate information from a tax payer who doesn't know the details of his returns.
An accountant, on the other hand, can offer you help - not only in preparation, but also in ultimately understanding the taxes you're paying for and all the things related to tax filing. An experienced tax professional is just all you need. No software package or online service can be an alternative to actual tax knowledge.


Article Source: http://EzineArticles.com/7381005