Are you looking forward to your tax refund? By now you know how much you'll be getting and approximately when the cash will land in your bank account. The only question is, what's the best way to put the money to work for you?
Here are two tax-smart ideas.
If you let the new business failure rate be your guide, you might never start your own company. Only 50 percent survive the first four or five years. Many former business owners who returned to a less-than-satisfying 8 to 5 job might tell you that their business hit the rocks when it ran out of cash. Of course, many factors can contribute to business failure. But an owner's inability to manage cash effectively — whether from neglect, lack of skill or inability to restrain spending — is a sure harbinger of trouble.
But don't the income statement and balance sheet provide a complete picture of the company's financial viability? Not necessarily. For example, your company's net worth may be climbing year after year, while cash balances are being depleted. Or, your business property is appreciating in value and your accounts receivable are increasing. Both contribute to a positive net worth, yet neither bolsters your bank account directly.
From an April 10, 2017, post on Accounting Today online
The traditional family is no longer so traditional. Increasingly children are living in blended families, bringing complex tax issues to their parents’ accountants.
“According to the IRS, everybody fits in a biological family: two parents who are married, 2.3 biological children, and that’s it. They file jointly, and you sign your name,” said Jane King, who runs the firm Fairfield Financial Advisors with her daughter Caroline Hedges, in Wellesley, Mass. “Now there are so many different models, whether it’s grandparents raising children, or people who are together and have children, but are not married, or people who are divorced, and there’s joint custody, with two nights at one house and three at another. It’s confusing for accountants and for people who are in nontraditional situations or relationships to figure out what to do.”
What happens when you discover you made a mistake on your 2016 return that you just filed? Before you decide if you should file an amended tax return, there are a few do's and don'ts you should know. First, don't panic, and second, don't ignore the error.
Do file an amended return if you need to change your tax filing status or dependency exemptions, or you overlooked available deductions or credits.
After you file your tax return, the last thing you want to see is a notice from the IRS questioning your return. Some IRS notices involve very minor changes, like a correction to a Social Security number. Some are for serious changes that could involve a lot of money, such as a billing for more taxes, interest, or penalties due for an adjustment to your total tax liability.
So, what should you do if you get a letter from the IRS? Here is a list of do's and don'ts.
April 18 is both the day individual income tax returns for 2016 are due and the due date for the first estimated tax payment for 2017. So, even as you finalize, file, and pay your 2016 federal income taxes, you might need to be thinking about how much you'll owe for 2017. If you're required to make estimated payments, missing the deadline could lead to penalties – even if your return shows a refund.
So what are estimated payments? Like the withholding deducted from your wages, estimated payments are prepayments of the tax you expect to owe for the current year. The difference is that you have to calculate the amount due and make the payment yourself, typically four times a year.
CPA Compass Blog
Suppose a relative gives you an expensive painting. Several years later, your relative dies and you decide to sell...
Are you wondering if your social security retirement, survivor, and disability benefits will be subject to federal...