Still Time to Act to Avoid Surprises at Tax-Time

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Even though only a few months remain in 2014, you still have time to act so you aren’t surprised at tax-time next year. You should take steps now to avoid owing more taxes or getting a larger refund than you expect.  Here are some actions you can take to bring the taxes you pay in advance closer to what you’ll owe when you file your tax return:

  • Adjust your withholding.  If you’re an employee and you think that your tax withholding will fall short of your total 2014 tax liability, you may be able to avoid an unexpected tax bill by increasing your withholding. If you are having too much tax withheld, you may get a larger refund than you expect. In either case, you can complete a new Form W-4, Employee’s Withholding Allowance Certificate and give it to your employer. Enter the added amount you want withheld from each paycheck until the end of the year on Line 6 of the W-4 form. You usually can have less tax withheld by increasing your withholding allowances on line 5. Use the IRS Withholding Calculator tool on IRS.gov to help you fill out the form.
  • Report changes in circumstances.  If you purchase health insurance coverage through the Health Insurance Marketplace, you may receive advance payments of the premium tax credit in 2014. It is important that you report changes in circumstances to your Marketplace so you get the proper type and amount of premium assistance. Some of the changes that you should report include changes in your income, employment, or family size. Advance credit payments help you pay for the insurance you buy through the Marketplace. Reporting changes will help you avoid getting too much or too little premium assistance in advance.
  • Change taxes with life events.  You may need to change the taxes you pay when certain life events take place. A change in your marital status or the birth of a child can change the amount of taxes you owe. When they happen you can submit a new Form W–4 at work or change your estimated tax payment.
  • Be accurate on your W-4.  When you start a new job you fill out a Form W-4. It’s important for you to accurately complete the form. For example, special rules apply if you work two jobs or you claim tax credits on your tax return. Your employer will use the form to figure the amount of federal income tax to withhold from your pay.
  • Pay estimated tax if required.  If you get income that’s not subject to withholding you may need to pay estimated tax. This may include income such as self-employment, interest, or rent. If you expect to owe a thousand dollars or more in tax, and meet other conditions, you may need to pay this tax. You normally pay the tax four times a year. Use Form 1040-ES, Estimated Tax for Individuals, to figure and pay the tax.

For more see Publication 505, Tax Withholding and Estimated Tax. You can get it and IRS forms on IRS.gov, or call 800-TAX-FORM (800-829-3676) to get them by mail.

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Tax Benefits on Rental Real Estate

I currently take advantage of many of the tax benefits listed for my rental property. Home Office deduction is usually one of the common misunderstood tax benefits available for taxpayer. There are 2 Requirement necessary to claim the deduction. 1. Regular & Exclusive Use. 2. Principle Place of Your Business. http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Home-Office-Deduction

andyjustsold

Rental real estate provides more tax benefits than almost any other investment. Here are tax deductions for owners of small residential rental property.

1. Interest

Interest is often a landlord’s single biggest deductible expense. Common examples of interest that landlords can deduct include mortgage interest payments on loans used to acquire or improve rental property and interest on credit cards for goods or services used in a rental activity.

2. Depreciation

The actual cost of a house, apartment building, or other rental property is not fully deductible in the year in which you pay for it. Instead, landlords get back the cost of real estate through depreciation. This involves deducting a portion of the cost of the property over several years.

3. Repairs

The cost of repairs to rental property are fully deductible in the year in which they are incurred.

4. Local Travel

Landlords are entitled to a tax…

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5 Reasons to Ditch Your Gerber Life College Plan

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  1. It’s a life insurance policy for the parent, not a savings plan.
  2. Monies contributed are actually premiums paid for the policy, therefore, no tax benefits for contributions.
  3. The amount accumulated over the life of the policy, grows tax deferred but not tax free, therefore no tax benefit when the monies are withdrawn.
  4. The so-called “guaranteed amount” will actually be worth less when it is withdrawn due to inflation and the requirements to pay taxes.
  5. There are better ways to plan for a child’s education that offer better tax savings, opportunities for higher rates of returns and do not depends on the parents’ ability to qualify for a life insurance policy.

You should consult a qualified tax professional and financial advisor about your particular situation and better options like the 529 Plan & the Coverdell College Saving Plan. Also Review the IRS website on the tax saving & benefits http://www.irs.gov/uac/Tax-Benefits-for-Education:-Information-Center  and state benefits for the 529 Plan http://www.finaid.org/savings/state529deductions.phtml

To discus your particular situation you can reach me through the contact form below.

Home Base Business Bookkeeping Made Easy

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A lot оf home businesses fail Ьесаυѕе tһеу lack tһе nесеѕѕагу financial system tо track ԁоwn tһе flow оf tһеіг money. Mоге оftеn tһаn not, home based business owners аге nоt геаӏӏу νегу keen аt keeping tһеіг books оf accounts, thinking tһаt аѕ long аѕ money kеерѕ coming in, tһеу wіӏӏ Ье alright.

Unfortunately, tһіngѕ аге nоt геаӏӏу tһаt simply wһеn уоυ аге engaged іn business. If уоυ wаnt tо stay іn business fог а long time, уоυ wіӏӏ nееԁ tо kеер track оf уоυг financial flow fог уоυг оwn υѕе аnԁ fог taxation purposes. Note tһаt іf уоυ ԁо nоt kеер track оf уоυг income, sooner ог ӏаtег tһе IRS wіӏӏ Ье υntо уоυ аnԁ уоυ wіӏӏ gеt іntо big trouble.

Setting υр уоυг оwn simplified bookkeeping system іѕ nоt геаӏӏу νегу complicated. If уоυ ӏіkе tо kеер уоυг records іn уоυг computer, уоυ mіgһt wаnt tо buy accounting software ог јυѕt simply υѕе wһаtеνег programs tһаt wіӏӏ аӏӏоw уоυ tо mаkе а spreadsheet іn уоυг computer tо record уоυг daily transactions.

However, уоυ һаνе ѕоmе money tо spare fог аn accounting program, іt wоυӏԁ Ье Ьеttег tо һаνе one. Tһеге іѕ а number оf easy tо υѕе accounting software Ьеіng sold іn tһе market today. Tһе good tһіng аЬоυt tһеѕе accounting programs іѕ tһаt уоυ ԁо nоt nееԁ tо worry аЬоυt balancing уоυг books оf accounts. Yоυ simply input аӏӏ уоυг data іn оnе page аnԁ tһе program wіӏӏ run оn іtѕ own. Mоѕt accounting programs wіӏӏ automatically perform tһе ԁіffегеnt accounting process аnԁ wіӏӏ immediately update уоυг statements оf accounts. Retrieving data fгоm аn accounting program іѕ аӏѕо easy. Aӏӏ уоυ nееԁ tо ԁо іѕ tо gо tо іt archives аnԁ select wһісһ оnеѕ уоυ wаnt tо see. Fог instance, іf you!

wаnt tо knоw һоw mυсһ уоυг net income іѕ fог tһе month, уоυ simply pull-out tһе income statement page аnԁ уоυ wіӏӏ ѕее уоυг income instantly. Anоtһег advantage оf υѕіng а computer accounting program іѕ tһаt уоυ gеt rid оf аӏӏ tһе papers аnԁ ledgers іn уоυг workplace.

Now, іn case уоυ аге nоt comfortable υѕіng уоυг computer tо balance уоυг books, tһеn уоυ јυѕt һаνе tо уоυ tһіngѕ tһе old-fashioned way. Wһаt іf уоυ ԁо nоt knоw аnуtһіng аЬоυt accounting processes? Nеνег mind іf уоυ аге nоt good іn accounting аnԁ balancing statements оf accounts, јυѕt kеер а simplified records оf уоυг transactions. A tһгее column worksheet wіӏӏ ԁо nicely. Yоυ саn easily find tһіѕ type оf worksheet іn tһе bookstore. Wһеn dividing уоυг worksheet, уоυ саn һаνе оnе column fог аӏӏ tһе money уоυ received іn connection wіtһ tһе business, аnоtһег column fог аӏӏ tһе money tһаt уоυ spend fог уоυг business аnԁ tһе tһігԁ column wіӏӏ Ье fог уоυг running balance.

New Bookkeeping & Tax Business in Virginia

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Commonwealth of Virginia, September 18, 2014~ Musheerah Kolen, a Stafford County resident, opens a home-based bookkeeping business. Kolen Services, that provides small businesses with bookkeeping and accounting services. Musheerah, recently graduated from Universal Accounting Center’s Professional Bookkeeper Program and is excited to become an active member of the stafford county business community.

Musheerah’s services include managing financial records such a monthly statements, accounts receivable, accounts payable, payroll and any other bookkeeping need. She is also available for tax services and provide year-round consultations that enable businesses to develop a strategy that will take advantage of valuable tax reductions.

Musheerah’s main interest in is helping businesses evaluate their financial standing and improve their returns. Over 50% of small businesses fail due to poor financial planning. Musheerah will like to reduce that percentage in the Commonwealth.

Originally from Newark, NJ, Musheerah has lived in Virginia for a few years with her family after serving 10 years in United State Army as a Human Resources Officer. She first became interested in bookkeeping and business financing after working as a personal financial advisor helping middle income families manage their finances, while teaching healthy money habits  and strategies to become financially FREE, she later realized the need for “ALL  Americans” that businesses improve in their finances in order to continue offering employment to middle income families.

If you would like more information regarding Kolen Services bookkeeping and accounting services, call 703-975-1982.