by Solange Lopes | Apr 13, 2017 | Make More Money
Our Ask A CPA feature answers to questions frequently asked to CPAs. As a CPA, I love to answer these for our readers. Got a question? Email me at corporate@thecorporatesister.com!
Q: I’m a small business owner, and I’m not sure which tax forms I should be using. Can you help?
If you’re a small business owner, especially if you’re new in business, you may be wondering which tax forms to file this year. For a small business that’s not a corporation, there are three major types to consider along with their corresponding tax forms:
If your business type is not registered with the state, then a sole proprietorship is the default. This means that the sole proprietorship pays income taxes through the owner’s personal return. In this case, Schedule C (Profit or Loss for a Small Business) is used.
If your business type is a partnership, then it must consist of several partners and be registered with the state. In this case, an information tax return on Form 1065 is filed. As for individual partners, each one receives a Schedule K-1 reflecting their share of the partnership’s losses and profits.
The last business type for small business owners is a Limited Liability Company (LLC). If the LLC is made up of only one person, it’s a single-member LLC and pays income taxes as a sole proprietorship. If it’s composed of several members, it’s a multiple-member LLC which is taxed as a partnership.
Got other questions? Add them to the comments, or email me at corporate@thecorporatesister.com!
To Your Success,
The Corporate Sis.
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by Solange Lopes | Mar 31, 2017 | Make More Money
It’s tax season, and it also is a time when you may be strapped for, well… cash. Whether you’re experiencing delays in getting your tax refund, or you happen to owe back taxes, there can be a host of reasons why you may be in need of cash during tax season.
I mean, how many times have you heard people complain of the fact that they’re flat broke during tax season because they’ve been hit with some tax penalty or another? Or that they’ve been expecting their refund but haven’t gotten it yet? Or that their refund is actually less than what they were counting on?
I know as a Certified Public Accountant (CPA) who volunteers to file taxes for individuals, I’ve heard quite a few of these complaints. The tax process isn’t necessarily one that’s predictable, and I’ve seen my share of filers who were unexpectedly dealt an unfortunate hand at tax time.
That’s when Check Into Cash comes in play. A trusted, state licensed and regulated lender for over 22 years, Check Into Cash can help with a short-term cash advance. Depending on the state you live in, you may be able to get up to $1,000 in cash. In some states, you can even apply online.
Some of the pros include no application fee, and that you can get an answer in less than 30 seconds, in addition to the fact that this service is available 24 hours a day, 7 days a week. While you do need a checking account and will incur a fee, this may very well be the solution to your tax season cash crunch time!
PS: Please note that The Corporate Sister is not affiliated with Check Into Cash.The Corporate Sister may be compensated for referring you to Check into Cash.
To Your Success,
The Corporate Sister.
by Solange Lopes | Mar 28, 2017 | Make More Money
March is Credit Card Education Month, and The Corporate Sister is partnering with Fundera to provide vital information on what it takes to guarantee your credit card success as a small business owner. Fundera’s mission is to get small business owners the financing they need to grow, which also happens to be one of the biggest challenge for entrepreneurs.
As a relatively new entrepreneur, I know it can be quite challenging to fund your business, especially in the beginning. It can be tempting to get in deep credit card debt to cover your business expenses, at the risk of losing most of their assets.
To help you ensure your credit card success as you grow your empire, Fundera has put together this extremely descriptive and helpful guide to Credit Card success.
Guide to Credit Card Success – Photo credit: fundera.com
What other questions do you have when it comes to guaranteeing your credit card success?
To Your Success,
The Corporate Sister.
by Solange Lopes | Mar 22, 2017 | Make More Money
Our Ask A CPA feature answers to questions frequently asked to CPAs. As a CPA, I love to answer these for our readers. Got a question? Email me at corporate@thecorporatesister.com!
Q: I’m self-employed, and am not sure which deductions I can take on my tax return. Can you help?
A: If you’re self-employed these days, you’re in excellent company. Roughly 55 million Americans are as well… And when it comes to tax season and making the most out of your business expenses, there are many deductions you can take advantage of:
- Your Home Office: All those equipment expenses you incur, not to mention the very space you use in your home to conduct your business operations, are all deductible. The IRS allows you to deduct part of your rent or mortgage associated with the space you use as your home office. Additionally, you’re also allowed to write off a portion of your home utilities and insurance related to your home office.
- Work Expenses: Various costs directly related to your business can also be deducted, including office equipment such as computers and printers, printing paper, business cards, and even ink and toner… Even expenses such as website hosting and domain name, or online payroll software costs, can be written off of your taxable income.
- Software and Hardware: If you bought a desktop computer, tablet, or laptop for business use, it may very well be deductible. The same goes for software purchases or updates.
- Education and Business Travel: Did you attend a conference or class during the year? Did you have to travel for it, and/or stay at a hotel or arrange an alternative accommodation? Keep in mind that business travel, as well as training and educational expenses, may be deductible. Don’t forget to include car rentals, parking costs, shuttles, and taxis to your list of deductible expenses as well…
As a self-employed individual, you should take every opportunity to leverage your expenses and revenues to grow your business. Keep abreast of updates and changes in tax rules that can benefit your business in the long run.
Got other questions? Add them to the comments, or email me at corporate@thecorporatesister.com!
To Your Success,
The Corporate Sis.
by Solange Lopes | Jan 25, 2017 | Make More Money
Question: Are there work expenses that I can deduct on my tax return?
As an employee, you incur expenses related to your job pretty much daily. From your morning joe to gas and mileage expenses, it costs to work! Even if you receive a salary, benefits and perks…But you may be surprised that some of these expenses may actually be deductible on your tax return this year.
But, there are two conditions here:
- In order to deduct work-related expenses, your total itemized deductions must be greater than the standard deduction. For reference, the 2017 standard deduction is $6,350 for single taxpayers and married couples filing separately , $12,700 for married couples filing jointly, and $9,350 for heads of household.
- You MUST also meet the “2% floor”. Which means the total of the expenses you deduct must exceed 2% of your Adjusted Gross Income (AGI), AND only the expenses over your AGI can be deducted.
Once both conditions are met, you can now get your records and receipts! Here are some of the work-related deductions you can actually enjoy this year:
Auto Expenses
You can deduct auto expenses related to traveling between one place of work to another (excluding your home office), attending business meetings, visiting clients, or driving to a temporary work location. However, this doesn’t include expenses associated with traveling to and from work – these are considered personal expenses (I know you’re rolling your left eye right about now…)
How about parking? Well, the cost of parking at your permanent workplace is NOT deductible. However, if you’re attending a meeting at an alternate location, associated expenses can be deducted. The same applies to tolls and gas expenses.
Do you use your car for business purposes? Then you may consider using the standard mileage rate OR actual car-related expenses for the year. There’s one caveat to this: if your car is leased, then whatever method you picked in the first year should be the one used for the remaining term of the lease.
Travel Expenses
Have you incurred any work-related travel expenses? These are also deductible, as long as they were incurred on work-related assignments lasting one year or less. Washing your own laundry while away? Feel free to deduct laundry-related expenses, as well as telephone, baggage, meals and tips as well..
Dues to Professional Societies
Are you part of one, or multiple, professional societies? Then you can deduct related expenses, with the exception of lobbying and political organizations.
Job Search Expenses
Did you travel out-of-town for an interview? Or had to stop by Staples to print out multiple copies of your resume? Expenses associated with looking for (and finding) a job are also deductible.
Work Clothes and Uniforms.
If your job requires you to wear a uniform not suitable for everyday use as a condition of your employment, then the associated cost is deductible. I’m thinking of you, nurses, waitresses, etc….
Union Dues
If you’re paying any union dues or union-related expenses, then those are deductible. EXCEPTION: the portion of these fees paying for sick, accident or death benefits.
Legal Fees
If you incurred any legal fees associated with keeping or doing your job, like lawsuits or legal counsel, these can also be part of your deductions.
Home Office Costs
If you’re working from home for the convenience of your employer (not your own), and your home office is your principal place of business, then associated expenses can be deducted.
Questions? Comments? Please share in the Comments section below.
To Your Success,
The Corporate Sis.
by Solange Lopes | Nov 23, 2016 | Make More Money
The holidays are known for being a time of big spending. Between hosting family and friends gatherings, buying gifts, and shopping for this, that and the other, it’s easy to blow your budget way more than you’d have initially expected.
Yes, it’s hard, and somewhat unrealistic, to avoid all the expenses that come with having loved ones and obligations of all kinds during the holidays. However, there are a few things you can do to save money while still enjoying this time of year:
Forget Budgeting, Make A Plan Instead.
To many, the word “budgeting” sounds just like “dieting”, and has the exact same effect. The minute you think of dieting, you start seeing bread and cheese everywhere. And the minute you start thinking about budgets and spreadsheets with dollar signs everywhere, you start seeing “Buy” signs everywhere…
So if budgeting is not for you, and leaves you going over your budget every single time, make a simple plan instead. I pick what I call the “magic number”, which is the maximum amount of money I can spend during the holidays. Then I take all my credit cards out of my wallet, and freeze them. Yes, as in putting them in the freezer and watching them be covered in ice! This way, any expense outside of the plan and over the “magic number” will force me to wait and think twice about it…
Start a holiday Fund.
It could be as simple as setting aside an extra $50 from every paycheck. To make this easier, call your Payroll department and ask to have a certain amount of money automatically set aside every pay period and deposited into a separate account. You’ll be surprised how much money you’ll be able to save in a short amount of time!
Time to Cut Back!
List all your regular expenses and look them over to see which ones you can cut back on. Can you eat out once a week instead of twice or three times a week? How about bringing your lunch to work instead of spending daily on food? Or making coffee at home, and saving on your morning Starbucks latte?
Pinpoint the expenses you can cut back on, and start saving. Any money you save can go to your holiday fund, so you can spend more where you need to.
Make a Priority List.
When it comes to gifting your loved ones, it can be tempting to spoil everyone around you! But it’s also the best way to go over your magical spending number. List everyone you’re planning to get a gift for, and rank them by order of priority.
Your spouse, children and close family members come first. For those who come lower (no offense) on your list, use creative ideas to come up with thoughtful, yet inexpensive gift ideas. How about writing a thank-you card to your office buddies instead of buying them all a gift? Or making homemade cookies wrapped in a holiday-themed plastic bag for the neighbors? Get your creative smarts working, or just log into Pinterest and borrow some great, inexpensive gift ideas!
Make It A Potluck!
Hosting a family gathering can be extremely expensive. From the decoration to the cost of food, the spending can easily get out of control. But instead of taking it all on your frail shoulders, why not share the wealth, and turn holiday events into fun potlucks instead?
Everyone could bring a dish and make it easier and less expensive for you to host. It’s also a great way to have your family members show off their culinary skills while being more engaged in the process as a whole.
There’s An App for That.
Don’t discount the power of technology and powerful apps to help you save a buck or two over the holidays! One of my favorite money-saving apps during the holidays (and really all year-round) is Mint, which is a comprehensive finance tool that lets you see the status of all your bank accounts and spending, while helping you create budgets and achieve saving goals.
Ebates is also a great app to save money with coupons and online deals, and get cash back for shopping too! The Ibotta app also functions on the same principle as well. Another one of my absolute faves is the Red Laser app, which lets you scan any product with your smartphone’s camera, while it checks thousands of retailers to find you the best price.
What other tips can you recommend to save money during the holidays?
Happy Holidays!
The Corporate Sis.
by Solange Lopes | Oct 24, 2016 | Make More Money
Our “Ask A CPA ” feature answers everyday (and not so everyday) questions you may have around personal finance and accounting topics, from a Certified Public Accountant (moi!). Please note that you should always seek professional advice for more personalized advice. Got something on your mind? Email us at corporate@thecorporatesister.com!
We’re a few months away from the dreaded tax season. And while you may be busy wrapping up the year at work and getting ready for the holidays, the Phantom of the Opera Tax Season may be hanging out in the back of your busy mind. So, is there anything you can start (or stop) doing now to prepare for tax season?
My $0.05:
You know what they say, there are two things you can’t escape, death and taxes (plus those pesky extra pounds on your thighs after the holidays, but I digress…)So, like with all things you can’t pray, eat or bribe away, you should take every opportunity to prepare ahead of time. As in, don’t wait until April 14th to start looking for your tax documents…
Here are a few quick tips even the busiest corporate and business sister (or dude) can start applying today to get a head start:
Get Organized!
Have you been postponing going through your files and paperwork? Well, it may be time to put all that filing and paperwork organizing back on your schedule. Just grab a pint of sea salt caramel ice cream (you know, with the big spoon), put your curls in a pineapple, and get to sorting, digging and filling.
- Keep proofs of expenses and profits: As much as possible, try and retrieve as much proof of the expenses you’ve incurred and the profits you’ve been making. It will come in handy in case you get audited. If anything, it’ll make you sleep easier at night knowing that you have proof for what you’re claiming on your return.
- Create your own filing system: All the electronic records and paperwork can get pretty overwhelming. The best way to tackle your tax and financial information is to devise your own filing system. Only you know what works best for you, so pick a system that’s easier for you to remember and deal with. I’m a bit old school, so I like my good ol’ color-coded folders and labeled files. Whatever works…
- Save hard copies: Ok, I know y’all trust in the cloud and the almighty wifi. But as far as I’m concerned, there’s nothing better than having a hard copy in case you’re stuck in no wifi zone or your brain bails out on you when trying to remember your 125th password…Just sayin’…
Check Out Your Investments!
If you have any investments, it’s always a good idea to check them out frequently to strategically prepare for tax season. Look into reorganizing your investments into tax-favored accounts like 401K and IRAs, because this way, you can postpone taxes until you actually get the money distributed to you (which is until you’re 591/2, unless you decide to get an earlier distribution, in which case you will incur both taxes and a penalty).
If you have more complex investments, you should seek professional advice. In general, be sure to keep good records of your investments. This is especially important in case you make some reinvestments, so that you don’t pay too much tax on funds you were already taxed on when you received them.
Repeat after me: How Can I Reduce My Taxable Income?
Remember you’re always taxed on your income, so the more income you have, the more taxes you pay! The easiest and most straightforward way to bring your taxable income (and your taxes) down, is to invest in your 401K or other workplace retirement plan, allowing you to deduct contributions. This way, you can postpone paying taxes on your contributions, as well as on the earnings. In other words, you’re basically putting away money that compounds tax-free until you retire!
Very Important: If your employer matches your contribution, try to contribute enough to get the maximum matching contribution.
If you invest in an IRA and qualify for this deduction, you may also be able to deduct an IRA contribution (up to $5,000, or $6,500 for those 50 and older).
If you’re enrolled in a high-deductible health plan, consider setting up a Health Savings Account (HSA). Contributions to an HSA are deductible as well.
If you pay for health care or the care of dependents (daycare costs for example), check if your employer offers a flexible spending account. This will help you get a tax break too.
Be Charitable!
Giving isn’t just good for the soul, it’s great for your taxes too! Make donations until the very last day of the year to save on your taxes. So go ahead and make those donations!
If you want an extra benefit, give appreciated assets such as stocks or funds. For example, if you’ve owned appreciated securities for more than a year, you may be able to deduct the full market value of the securities and avoid paying tax on the appreciation since you acquired it.
What do you do to prepare for tax season?
PS: Got something on your mind? Email us at corporate@thecorporatesister.com!
To Your Success,
The Corporate Sis.
