Tax Tips that Might Surprise You

Doing your taxes is one of the most important things that you can do in terms of finance throughout the year. AS a result, it pays to be careful when it comes to doing your filing and in terms of finding every way to reduce what you owe as possible. You may be able to find many extra tips in places like your favorite accounting blog, or with a accounting firm, but here are a few to get you started.

Pay Attention to Timing

It might seem strange, but looking carefully at the calendar will increase your chances of getting the best tax return. For example, you can pay the mortgage before the end of the year and the added interest will reduce your liability even more than what would happen otherwise. You can also schedule treatments and exams that are related to your health towards the end of the year so that you can get a much bigger deduction for medical expenses.

Check for Tax Credits

It turns out that 20 percent of eligible Americans don’t take tax credits that they could take, such as the Earned income tax credit. A lot of people might just think that they’re not eligible and disregard it. But even if you’re single and don’t have any children, as long as you worked this year you can be eligible for the credit. Your taxes go down on a straight one to one basis when it comes to credits, so this often makes them much better than deductions when it comes down to a dollar to dollar basis. As a result, you end up with a much lower amount of money that you owe.

Use Programs to Help

One great way to make sure that you don’t miss out on many possible deductions or credits is to try out a program like TurboTax. It’s usually not that expensive and it will make sure that you’re completely covered in terms of what you could possibly get off for a particular year. They will list all of the changes from year to year, and take you through each part of the filing step by step so that you don’t miss anything and so that everything is in order at the end of the day. This is a good way to be sure that you’re doing the best possible job.

The Affordable Care Act: You May Need to Work with a Rochester Accounting Firm

The Affordable Care Act has been a topic in the news for well over three years. As the law begins its implementation, there are rules and requirements that must be adhered to in order to remain in compliance with the act. While some business owners may wish to try and figure things out on their own, they likely would be making a huge mistake. Granted, the employer mandate has been recently waived buying businesses more time to learn how to comply with the law, there is only so much a novice will be able to figure out. As such, it is absolutely necessary than anyone running a small business speak with a tax professional discuss matters with an qualified Rochester accounting tax specialist who is able to offer the proper guidance and advice. Anything less runs the risk of turning into a major problem for a business owner.

Most are likely aware that the law requires businesses with 50 full-time employees to offer health coverage or pay a penalty. Those who have heard this might not have looked closer at the wording of the law or read any of its related statutes. There is likely a good reason why they would not think to do so. The owner of a business is not involved with accounting and does not follow such matters closely. Be that as it may, the law is the law and there will be requirements which must be followed.

For one, the 50 employees refers to the total amount of employees among all the businesses owned by someone. In other words, if you owned 5 businesses with 10 employees, providing healthcare is required. As skilled Rochester accounting professional will be able to advise you about matters such as these.

Also, the delineation of 50 full-time employees could mean the equivalent of the total of the hours worked by 50 full-time employees. If a host of part-time employees end up equating with the number of full-time hours, requirements to cover benefits or pay fines kicks in. Timelines also exist for a business to comply with the law. Has your business down what is required to stay on top of its timeline? If not, then there could be a number of troubles coming down the road.

Once again, since the law is new and business owners are not versed on how to deal with it, hiring a professional accountant is a much better plan than filing messed up tax returns. If you do that, the risk of an audit increases exponentially. Even if you do not get audited, the tax return will have to be changed. How could it not be? The figures on it were wrong. When a tax return has been adjusted, you will usually find a bill showing up in the mail not too long after you have filed it. Rather than deal with such unexpected and annoying financial woes, it would be much better to have a Rochester accounting tax professional handle your business' ability to implement the program the right way.

Cash versus Accrual: Let Our Rochester CPA Assist in Your Choice

The qualified Rochester CPA we will assign to your business as an independent accountant possesses the appropriate education, training and work experience in the related fields of bookkeeping, accounting and auditing. As such, he will be able to provide his professional – read: educated and informed - opinions on various matters in this regard.

One of the most important aspects of his work is providing guidance on the best accounting method to use – cash versus accrual. All other aspects of bookkeeping, accounting and auditing as well as compliance with business laws will be affected or influenced by your final decision on it. Let’s take a closer look at the pros and cons of both accounting methods, which our Rochester accounting firm can be of valuable assistance.
Basics of the Methods

Keep in mind that the Rochester CPA assigned to your business has comprehensive knowledge of both types of accounting methods. Don’t hesitate to ask questions because the more you know about the methods, the more effective you will be able to use it in your business. Let’s start with the basics.

In cash accounting, cash outflow and cash inflows are recognized as recordable transactions as soon as the money changes hands (i.e., from your business to the supplier or from the customer to your business). As such, sales made without cash payments (accounts receivables) are not considered as income in the same way that expenses made without cash payments (accounts payable) are not recorded as expenses on the books of accounts.
In accrual accounting, the transaction including receipt of income and payment of expenses are counted regardless of whether cash and other assets actually exchanged hands. Income is recognized when sales are made and expenses are recorded when these are also made. Your assigned Rochester CPA will usually recommend this method for compliance with existing laws, rules and regulations on the United States including its tax laws.

Impact on Tax Planning

Your choice between cash and accrual method of accounting will affect your declaration of taxes. Keep in mind that you want to minimize your declared income and/or maximize your declared expenses in the year when your estimates point to the highest income. The result: You will pay lower taxes without being slapped with an IRS complaint.

Tips that the Rochester CPA may provide on this matter:

• For cash accounting - Ask your customers to pay their accounts during the year when you plant to take in the highest income. Pay your bills during the year when your estimates point to the highest income, thus, allowing for higher deductible expenses and lower taxes for the year.

• For accrual accounting - Send out the bills for your customers’ account receivables before the end of the present fiscal year or after the beginning of the succeeding fiscal year; decide the year when the income should be recorded. Ask the vendors to send you their bills for your accounts payable in the year when your financial plan demands the highest expenses.

Are you confused by now? Don’t be. That’s where you can turn to our Rochester CPA in particular or our Rochester accounting firm for professional assistance. for more inquiries please click here

Your Accountant Can Do More than Taxes and Crunching Numbers

When most people walk into any Rochester accounting firm, they are only interested in having their books done. This can be just basic bookkeeping, or tracking assets for several companies. In some cases, the Rochester accountant may even be hired to do a simple audit for a company.

But there is so much more that this professional can do for you. You might not realize this, but beyond your basic finances and tax planning, this professional will be able to help you with more areas of your business.

Most professionals working in a Rochester accounting firm will have a great deal of knowledge and expertise in the world of business. Since the industry standard is a Master’s in Business Management Accounting, they are going to know more than just how to run the book. In fact, the time that they have spent in colleges learning this information usually gives them a good eye that can help you through some of the other situations your business is going through.

In fact, business plans and even a business succession plan can be handled by your Rochester accountant. They can even help you to go through the process of forming partnerships, trusts, estates and other legal elements that you might not be able to do on your own. Thanks to their understanding of business and tax law, you can have some peace of mind in knowing this is being done properly.

Even when your company is face is a bankruptcy, this team of professionals is going to be able to guide you through the steps, to ensure that your best interests are kept and that your company is left with options that could result in it eventually being saved. This comes from understanding and deciphering the details of the local and federal laws and knowing what your options are. While you could do this on your own, the accountant is going to end up being your best choice.

No matter what Rochester accounting firm you choose to handle your tax planning, audits or even business assistance, it will be important that you do ensure that they are certified to help you. An example would be a Rochester CPA, as they have the right knowledge and tools available to them, to help ensure that they are giving you the best guidance possible.

Remember, this is your business and your life that is going to be impacted. Make sure you take a moment to ensure that you are hiring the best. What you will find is that the area offers a variety of professionals who have different levels of experience you can choose from. It is important you choose the most qualified individual that you feel comfortable around as there is a good chance you will be seeing a lot of each other.

Getting the Most Out of a Trip to the CPA

No one would ever list a visit to a Rochester CPA as being the most enjoyable experience. Seriously, not all that many people will connect a visit to an accountant's office as being something that can be deemed adventurous. Then again, we can amend that statement somewhat. The excursion to a Rochester accountant can end up being really adventurous in terms of making the entire process of making sense of your tax and business information in a veritable high seas adventure loaded will all the twists and turns of an old pirate movie.

Do you really want things to turn out like that? You probably do not and for good reason. Chaos and confusion at the office of a CPA does not exactly contribute to getting the most out of the session. Instead, it lays the foundation for creating more problems for yourself. A Rochester CPA can only do so much. You have to do your part and be responsible for making the meeting with the CPA as productive as possible. Setting Up the Right Meeting The best way to get the most out of the meeting is to set the right one up and make it targeted and focused. When you set up an appointment with a Rochester accountant to file your taxes, you should remain clearly focused on the subject of taxes. You do not want to be jumping around to other areas of business unless the meeting with the account is long enough to adequately do so. Trying to cram too many matters into one single meeting is not going to be productive. As such, setting up a single session for a single topic is well advised when traveling to a Rochester accounting firm.

Being Thorough and Prepared During the Meeting, A Rochester CPA will be at a great disadvantage when the time comes to help you if you are not properly prepared for the meeting. This means you should bring all your 1099's, receipts, ledgers, and other vital documents. Your accountant will need to have all that information in front of him in order to make accurate assessments. Of course, all of these documents must be presented in an orderly way. You cannot just throw them all in a folder and hand them over hoping the accountant will make sense of it. That is not the most helpful strategy to follow. Offering thorough and well organized documents will be the only way you can be sure your CPA can do his job to the best of his ability.

Be As Honest and Forthright as Possible A common mistake clients will make with their accountants is they will not be honest in their dealings. They might not tell their CPA the full extent of their fiscal worries, problems and woes. This is not usually done for the purpose of being deceptive. Rather, it is done because there are feeling of embarrassment over having committed fiscals errors such as not filing taxes, getting heavily into debt, and so on. Such an attitude is a really bad one to have. It would be like not telling the doctor all that is wrong with you because you do not want to be diagnosed with a disease. The truth here is you still would have the disease and you are making it impossible to be treated. Similarly, when you visit a Rochester accounting firm, it you are not being forthright with your Rochester CPA, you will not be taking the necessary steps to fix your fiscal woes.