Best Way to File Your Taxes

Best Way to File Your Taxes

Best Way to File Your Taxes if You Are Self-Employed

If you’ve just started a new business, or are planning to open one, you will need to know the best way to file your taxes. The steps that you need to take are not complicated, but some of the detail might be. Whatever you do, don’t put off filing, or for that matter paying quarterly estimates, if required.

 The last thing you want, is to end the year with a nice profit, and have a big tax bill for income taxes and self-employment taxes. Like most new business owners, you’ve plowed all that extra cash back in the business, and have none left to pay your taxes.

This is a bad way to start, and you need to decide early on who will be preparing your taxes, and preparing estimates to cover self-employment taxes. If your business is rather simple, and by that we mean, no employees, and operating as a sole proprietorship, you should be able to show your income and expenses on a Schedule C.

To begin with, decide if you will be able to do the following. If not, it might be best, at least for the short term, to hire the services of a competent tax professional.

  • Decide who will prepare the annual tax return and e-file it with the IRS and state agency
  • Prepare an interim quarterly income statement to see if you have a profit
  • Annualize the profit amount & prepare an internal estimated tax return to see if you will have taxes due. If so, & they are over $1,000 for the IRS, you should send in ¼ th of that amount as your quarterly estimate. Pay the state also if there will be taxes due over the amount the state requires.

It really isn’t as hard as it may appear. If you have access to a simple software program, you can make the changes each quarter to make the calculations. If this isn’t something you feel you can do, then by all means, the best way to file your taxes might be contacting a tax professional.

For most individuals though, you should be able to make these calculations fairly easy. You’ll be on the right track, too, when after the end of the year you have your taxes done, you have no additional taxes due.

In general, if your new business is your only source of income, and you are operating as a sole proprietor, you won’t get a W-2 showing income and taxes paid in. That’s the purpose of paying the quarterly estimates, it covers federal income tax and Social Security and Medicare taxes all at once.

Who will prepare your annual tax return?

If you’ve been doing your own taxes, and have some basic knowledge as to how they work, you will probably decide the best way to file your taxes is online at one of the best sites for this. (LINK) When you are operating your own business, there will be deductions you can use to lower your profit.

Our online tax filing program will help you find these expense deductions that you can take during the interview session. If you hire a tax professional to prepare your annual tax return, because of the Schedule C, a self-employed business, the total fee would be $450 and up.

Gather all of your records

Before you even begin to prepare your tax return, you should gather all of the tax forms that you got in the mail. They would include W-2, 1099’s for interest and dividends, 1099’s for your business schedule 1098 for home mortgage and real estate taxes, and any other form that may pertain to your tax return.

Keep in mind, too, if you got any income from someone who didn’t send you a 1099 form, you are still required to report that income too. If you used your personal auto for your business, you need to maintain an automobile record book that shows the date, where & purpose of visit, beginning and ending mileage.

If you have a lot of use for your personal auto, there are software programs available that can be a big help in this area.

There are limits to certain expenses that you may be able to deduct, but our online filing program can help you with that. Keep in mind too, if you use the actual miles used method for your auto, you can’t deduct separate expenses like depreciation, gas, insurance, etc. You can use tolls though.

If you decide to do your own taxes, make sure you allow enough time to get it done. You don’t want to have to rush, because that’s where most errors are made. If you’re getting close to the filing date, and need more time, file for an automatic 6-month extension.

Just bear in mind, that the extension is only for additional time to finish your return, it’s not an extension of time to pay any taxes that are due. You need to have those paid by the original due date of the return.

Make plans now for next year’s taxes

All through this article, we’ve been saying to prepare for taxes due the next filing year, now. If your net income from the business is high enough. It’s better to pay all of the taxes that will be due by estimated tax payments. Federal and also your home state.

If estimated taxes should have been paid, the IRS and your state will assess penalties for not paying them. The estimated payment dates are April 15, June 15, September 15, and the last one on January 15 of the following year.

Plus, having a large tax balance due when you file your return is not the best way to file your taxes.

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6 Tips to File a Tax Return for a Decedent

6 Tips to File a Tax Return for a Decedent

File a Tax Return for a Deceased Individual – 6 Tips

We’ve all heard that saying, “the only things that are certain in life are death and taxes.” When a person dies, it doesn’t relieve them of the responsibility to pay any taxes that may be due for the time they were alive.

It may be a spouse, dependent, or a parent that had earned and/or investment income that must be reported to the IRS and the respective state taxing agency. Someone needs to file a tax return and pay any taxes that are due.

Some final returns are very simple like when a deceased person may have worked one job, and had only 1 W-2 form. Many other returns can get complicated very quickly, and we always recommend that you get help from an experienced View full post…

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Best Online Tax Filing – $25 Flat Rate Fee

Best Online Tax Filing – $25 Flat Rate Fee

Looking for the Best Online Tax Filing? We Have It

Have you tried to prepare your tax returns yourself and struggled with all the paperwork? Or perhaps you went to your local CPA or one of the tax franchise operators? Has the sticker shock worn off yet or did their very high fees leave you confused? Not the best online tax filing by any means.

Why spend your hard earned money on an expensive tax preparer? Or become frustrated trying to understand a convoluted tax code that even confuses some accountants? We have a simple and low cost solution. A flat rate of $25.00 and that includes a state return too. Plus View full post…

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Is Unemployment Money Taxable?

Is Unemployment Money Taxable?

Do I have to Report Unemployment Money on my Tax Return?

Short answer…yes, it’s taxable on your Federal return and on most of the states too. We know next year’s taxes are the least of your worries right now when you lose your job. But, if you’ve gotten any unemployment money this year, it’s a good idea to look at this now, and understand just how they’re taxed. You’ll avoid bad surprises that way.

Hang on. I need to Report It and Pay Taxes?

Unfortunately, yes. We know it seems like the government is kicking you in the gut when you’re down and out. It gets worse…that extra $600 a week a lot of people got through the Cares Act is also taxable.

We hate to be the bearer of more bad news, but View full post…

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Speedy Online Tax Services

Speedy Online Tax Services

Online Tax Services Help to Avoid These 7 Tax Return Blunders

If there’s one thing that we can count on, it’s that tax laws are constantly changing. To help us to cope, the better online tax services, such as ours at HBS Financial Group, Ltd., offer assistance to avoid the seven most common tax blunders.

These mistakes are not only made by first time tax filers with a very simple return, but also by those who file more complex tax returns. It is our hope that listing these seven types of errors will help you to avoid them.

Failure to report all taxable income

This is probably the area that so many taxpayers fail View full post…

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Filing My Tax Return Online

Filing My Tax Return Online

Filing My Tax Return Online or Use a Tax Preparation Service?

I’ve asked this question a few times, and depending on the individual, I’ve received a different answer. Those who knew more about taxes said filing my tax return online is the way to go. A few others who may not have known much about taxes, but were turned off by high tax preparer fees, agreed with them.

Others who doubted their ability to file taxes online said they would use a professional tax preparer. Some others said that a family member would prepare their taxes for them. They didn’t want the hassle and possible liability of an incorrect return.

Most all agreed and said that filing my tax return online made more sense. This method of filing your taxes has become View full post…

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10 Personal Money Management Concepts

10 Personal Money Management Concepts

10 Personal Money Management Concepts High Schools Should Teach

Personal money management topics are highly neglected in the school system and I believe this is something we all should be very concerned about. Our children grow up with virtually no concept of personal money management, the importance of money, or what to do with it when they have it.

It’s a mistake to rely only on parents to teach their children these things because many parents don’t practice good personal money management themselves. It’s a vicious cycle and it needs to be broken.

We all benefit from learning about the basic concepts of personal money management from an early age. Of course, it’s never too late, but money education should begin in the early grades and progress throughout high school. It’s the only way to prepare these kids for college and the real world.

Here are the 10 core personal money management concepts high schools should be teaching:

  1. Budgeting

Every graduating high school student should understand budgeting and know how to apply it effectively to their personal finances. Sure, they don’t have many resources to manage at this stage in their lives, but they still need to be able to budget. They will need it sooner rather than later, so it’s important to introduce them not only to the concept, but also to the available budgeting tools.

  1. Loans & Borrowing

Loans and borrowing are another important core concept that students need to understand. After all, they’ll be exposed to student loans very soon and they need to understand interest rates as well as the repercussions of not paying their loans on time. Providing the knowledge of loans and borrowing now will allow them to make good choices in the future. Applying for a mortgage when buying their first home can really be a big eye-opener.

  1. Use of Credit Cards

Most adults don’t understand how to properly use credit cards, so why do high schools assume that it’s not essential to teach children about it? Buying things now and paying for them later may seem simple enough, but when you max out your card and you don’t have the money to pay, you get yourself into a vicious cycle. This can be avoided if kids are taught proper credit card use from an early age!

  1. Good Credit Score

This is another very important personal money management concept everyone should learn from an early age. Having a good credit score and maintaining it throughout your life will have a positive effect on many aspects. It determines the credit cards and loans you’ll be able to obtain, your interest rate, and it will even improve your chances of getting a job.

  1. Interest Rates

Interest is discussed very vaguely in most math courses, but it’s never explained in a way that’s applicable to real life. Students need to be taught how interest rates can affect them and how to navigate them. Especially when it comes to loans and borrowing, because interest rates will determine if they’re getting a good deal or not.

  1. Debt

No one wants to be in debt, which is why it’s so important our children are taught how to avoid it, if possible. College tuition is high and student loans are increasing, so it’s very easy for students to accumulate high debt that will take them many years, or even a lifetime, to pay up. Having a better understanding of debt will allow students to avoid the most common traps and steer away from it or at least handle it intelligently.

  1. Insurance

Insurance is rarely discussed in high school and never expanded upon, but it’s a very important concept because we absolutely need it. Most students are vaguely aware they need auto insurance for their car, but they may not understand what it covers, what the benefits are, and why all states require it. Most adults don’t fully understand the concept of insurance either, so it’s important for students to be exposed to the subject. Understanding the types of insurance policies available, why they’re necessary, and how they work is key to purchasing the right ones and staying safe.

  1. Saving for Retirement

Young people don’t think seriously about retirement simply because it’s too far away. But that doesn’t take away from the fact that saving for retirement is an important concept to understand as soon as possible. Setting aside a small amount of money every month for retirement will allow young people to create a sizable net to fall on when the time comes. The sooner you start, the earlier you’ll be able to retire. Imagine that!

  1. Stocks, Bonds and Investment

Saving money and managing it is important, but so is investing it intelligently and securely. That’s why it’s so important children understand stocks, bonds and investment from an early age. The topic of investment is covered to some degree in school, but I believe it should be an important part of the curriculum. Learning how to make money grow through investment is not simple; the more resources our children have, the better decisions they’ll be able to make in the future.

  1. Taxes

Last but certainly not least, is the concept of taxes, which has a huge impact on our lives. Children hear about taxes from adults, but not enough to fully understand why they exist, how they should be assessed or how to use them. It’s when they get their first paycheck and see social security, Medicare, federal, state, and local taxes deducted from their earnings, does it hit them. That’s wrong! They should know much sooner. Understanding taxes allows us to manage and budget our money more effectively, which is why it’s so important we give our children this knowledge.

I don’t deny the fact that some states have introduced courses about personal money management to some degree. What I believe is, there’s a greater effort that needs to be made. Every state should be required to introduce courses about these core concepts we’ve discussed today and have it be a part of the curriculum. Learning about personal money management truly makes a difference, so why not give our children the best possible chance for a sound and secure future?

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Online Tax Preparation Made Easy

Online Tax Preparation Made Easy

Finally a Solution to Online Tax Preparation That Makes Sense

Now that you’ve decided to take advantage of the online tax preparation method of filing your income tax return, you need to select one of the tax vendors from the many listed in the search results.

You really need to select the one that will best supply your needs, and this will involve some research on your part. This guide may be of help to you as well. We’re assuming that you haven’t filed a tax return online before, so you may not be 100% certain on the services that you may need.

There are various factors to consider, as well as tax documents you need to have in hand before you start to look for an online tax filing service. Get all of your tax documents together such as W-2’s, 1099’s, and any other information that was sent to you.

If you’re not buying a home and don’t View full post…

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5 Free Tax Return Filing Tips

5 Free Tax Return Filing Tips

5 Free Tax Return Filing Tips to Simplify Filing Your Taxes

It’s a known and unfortunate fact that most individuals aren’t too efficient when it relates to tax return filing. We offer these free online tax preparation tips to help those who are disorganized and/or unprepared. Many are stressed out because they are not organized and it doesn’t have to be that way.

  • A checklist can be a big help in getting organized.

Making use of a good checklist will guide you in organizing all of the correct documents that you need. This one free tax return filing tip alone can make sure that you don’t miss any required details. Did we mention less stress? Getting your required documentation organized will allow you to View full post…

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How to File Your Taxes Online

How to File Your Taxes Online

How to File Your Taxes Online Faster with These Tips

There are many reasons to look for tax filing help, especially if you’re not sure how to file your taxes online. Many individuals feel that the tax laws are very complicated, and they’re simply not comfortable in filing their own tax returns.

For these individuals, tax filing help can come from a couple of sources. One option is going to a tax preparer and having him/her prepare your tax return. This may appear to be the easiest way out of your dilemma; however, the taxpayer is ultimately responsible for the return. Plus, the high fees can be a turn-off.

If the tax preparer isn’t competent, or makes an error or View full post…

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