File Taxes On Time This Year

It’s tax filing time. April 15th is the due date. Taxes are due one month from now. My friend Rachel wrote this piece for Real Simple. She talked to Raphael Tulino from the IRS and he gave the following advice.

“Filing and paying as soon as possible will keep interest and penalties to a minimum.”

Tulino emphasizes why it’s advantageous to file your taxes even if you don’t have the full amount available to pay when you file. “If you have a requirement to file and you have a balance due, and you don’t file that return and leave that balance due, that penalty is much greater than filing a tax return and not full paying,” says Tulino. He says being proactive “is always a good thing” when it comes to your taxes.

Charging For Free Tax Filing

The FTC is investigating Intuit, the maker of TurboTax. One focus of the investigation is whether TurboTax marketing misdirected customers who were eligible to file their taxes for free into paid products. This investigation follows ProPublica’s reporting.

Top 10 home office tax deductions: What you can and can’t deduct | cleveland.com

However, many self-employment deductions remain in place.Assuming you reviewed IRS Publication 587, “Business Use of Your Home,” and determined that you qualify, what are the home office expenses you can write off? They are covered in IRS Form 8829, “Expenses for Business Use of Your Home”, and the corresponding instructions. You will need to file Form 8829 with your taxes to claim your deduction.Expenses can be divided into two categories: direct and indirect expenses.

Source: Top 10 home office tax deductions: What you can and can’t deduct | cleveland.com

Nine Crucial Income Tax Deductions – via AOL Finance

For the 2018 tax year, fewer of us will itemize, and those who do may find fewer deductions available due to the Tax Cuts and Jobs Act of 2017 (TCJA). However, do not rush through your return so quickly that you simply take the standard deduction and ignore deductions that can bring you a healthy refund. Consider these commonly overlooked tax deductions.

Charitable Contributions, Retirement Plan Contributions,  State and Local Taxes, Mortgage Interest, Points, and Insurance,  and more.

Source: 9 crucial tax deductions – AOL Finance

San Francisco’s Expensify to make big ad debut in Super Bowl –

HOW META!

It’s one heck of an expense to track. At an estimated cost of $5.25 million just to air its 30-second ad, Expensify, a San Francisco company whose software tracks expenses, will debut its first-ever national advertising campaign this weekend during the Super Bowl. The commercial — a music video about making a music video — features rapper 2 Chainz filming a music video with “Parks and Recreation” actor Adam Scott playing the head of finance for a record label asking the rapper to file receipts for all of the costs of filming. Expensify isn’t new to advertising.

Source: San Francisco’s Expensify to make big ad debut in Super Bowl – SFChronicle.com

Tax Brackets for 2018

Got W-2s and 1099s? Now it is time to start getting taxes ready.  Check out this article about the new tax brackets for 2018.

How to Pay Estimated Taxes as a Single-Member LLC

When I taught a class about bookkeeping for creative entrepreneurs, my first rule was this-> -> Keep Them Separated.  Keep your business income and expenses separate from your personal income/expenses.  If you do this, filing taxes will be less of a headache.

Your business’s income is your income. This is completely counter-intuitive because when you start filing all of your LLC paperwork and setting up your business bank accounts and all of that, everyone will tell you to keep your business income/expenses separate from your personal income/expenses. Don’t let clients deposit paychecks into your personal bank account. Don’t put business expenses on your personal credit card; if you need to fund your business with personal income (and many new businesses do), transfer the money to your business bank account and record it as a capital contribution.

Source: How to Pay Estimated Taxes as a Single-Member LLC – The Billfold

Delay in Income Tax Refunds This Year

Nearly 40 million low-income families will have their tax refunds delayed this year as a result of the International Revenue Service’s effort to combat fraud and identity theft. Families who have claimed child tax credits and income tax credits will be affected by the measure. The tax filing season kicks off on January 23, however, individuals who are filing for those specific claims will have to wait until February 15 for their returns to be processed. The delay is being put into place so that the IRS has more time to vet the returns for fraudulent activity. According to the IRS, in 2014, nearly $3.1 billion in fraudulent tax refunds was distributed to identity thieves. “For most of these people it’s the biggest check they are going to get all year,” IRS Commissioner John Koskinen told the Associated Press. Read More

Tax Break Tips: Make An Extra Mortgage Payment

1. Make an Extra Mortgage Payment

One of the most valuable tax breaks that homeowners can claim is the mortgage interest deduction. Deductions reduce your taxable income, which can come in handy if you’re trying to work your way down to a lower tax bracket.

Year End Tax Planning

From Lawyers.com

 However, there may still be time to take action to reduce small business tax liabilities. For example, buying necessary equipment for your business by December 31st may allow you to take a big deduction in your 2016 taxes.

Under Section 179, businesses can deduct the full purchase price of qualifying equipment or software purchased during the tax year. This deduction is intended to encourage businesses to buy the necessary equipment to benefit the company. Instead of getting a deduction as equipment depreciates over time, businesses can deduct the full purchase price in 2016 for qualifying equipment purchased before the end of the year.

Qualifying Section 179 purchases include office equipment, computers, computer software, office furniture, and business vehicles with a gross vehicle weight over 6,000 pounds, such as vans, large SUVs, or trucks. There is a limit of $2 million for qualifying deduction purchases. Check with your tax professional to make sure you are eligible.

If your business uses cash-method accounting, you may be able to defer some of your taxable income until next year. By sending payments or charging expenses before the end of the year, you may be able to deduct those expenses this year even if the charge is paid or the check is cashed in the beginning of next year.