Last week I wrote a little bit about how time was running short to make moves that can affect your tax picture by the end of the year. A lot of that was aimed at the individual taxpayer, but this is also the case for small businesses.
So if you are a small business owner, you may want to look at this recent article from Forbes.com that goes a list of things you may want to consider as you look ahead to tax planning. In this spot, I want to highlight only one part of this, though, and that is to keep on top of your bookkeeping. I completely understand how this falls to the bottom when it comes to the to-do list for your business. You want to be much more involved in what you do for your clients and/or customers. You want to be doing what you started your business to do, and that wasn’t to go home at the end of the day and categorize your banking transactions. But then it becomes something that suffers from procrastination. It’s not something that HAS to be done for your business to operate. You then think you can do it at the end of the week, which becomes the end of the month, the end of the quarter, and suddenly, Eek!, it’s tax season. This snowballs into many problems. First, operating in this manner makes it impossible to really know how your business is doing. Sure, you may be doing okay enough since there is money in the bank and you are paying your bills, but you don’t have really any idea how much money you are making – and how you can make more. Second, operating in this manner is going to make the task feel unbearable when you finally come around to the bookkeeping. You will be scrambling from behind, won’t remember what every transaction was for, and will potentially be missing out on deductions. When it then comes back around to just how much money you are making, this could again mean it is not going to be as high as it could be. Lastly, this is going to result in you losing a sense of control. It can feel great when you have enough things to do while working in your business, you feel successful when your schedule is full. But it will feel awful when things catch up to you and you realize you have spent no time working on your business. Let this be a call to catch up on the things you need to catch up on. This puts you in the best position to have the most success. And remember that we are always here to help you reach that spot in any way that we can. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter
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It has been less than a week since the deadline passed for filing your taxes if you received an extension. That may seem like it must be much too early to discuss next year’s filing, but it means we are in the final quarter of 2021, and that means the time to make moves that can affect your tax picture for this year is running short.
If you are someone who just filed and were surprised at your final numbers, let that be the kick you need to seek the answers that will move things closer to where you need them to be. That kick can be more difficult if you filed six months ago, however, for the sting wears off. But let this be a call to remind you that back then you wanted to investigate what you could do to improve things and better enjoy how your tax picture looks come filing season. The trick with these situations is that there is no one-size-fits-all solution. If there was some simple action everyone could do to pay less taxes, it would be well known and you would have already done it. Instead, everyone’s personal situation is different and the answers and strategies that are best for you may not be best for your neighbor, and vice versa. We are always happy to provide this personal touch. And sure, when it comes time to file, maybe we can make you aware of some deductions that you did not know you were eligible for. But at that time, we may also see things that you could have done six months previously but is too late to do then. Time is an ally in these situations. So do not be afraid to reach out at this unorthodox time. We clearly cannot make any promises that doing so will result in future savings but can guarantee that you will have a clearer vision of your tax picture. Even if the answer isn’t the best, and even if there are no ways to make a big difference to it, you will at least be prepared and can plan for it. For again, time is your ally in these situations. For not only is time a help in this area, so is knowledge. The bad times happen when you find out something you didn’t know at a time when you can’t do anything about it. This is your chance to not end up there. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter I have recently tried to communicate just how difficult it can be to deal with the IRS. This is not a straight criticism of the agency as an institution, it simply does not have the manpower to properly address all the things it should be able to properly address.
The IRS has given indications that things will improve, but that doesn’t seem to be happening, or at least not very quickly. This recent article showcases some of the ways and some of the reasons the IRS is falling behind and how a fix doesn’t appear to be imminent. With this all happening at a time when even some who filed their taxes on the original deadline back in May are waiting for their returns to be processed, the frustration can be strong. With this growing frustration then, I thought it could be helpful to look at what rights you have as a taxpayer, a list that Is very simply labeled, the Taxpayer Bill of Rights. Of course, when you look at this, it may seem more than a little ironic that the second thing on the list is the right to quality service (where even the IRS includes the word ‘prompt’ in the definition of this type of service). Furthermore, I can completely appreciate a cynic’s view of this list. It may look like a lot of platitudes that do not do you a lot of good if you are actually facing the IRS. Add in the increased tension that can be caused by the difficulty experienced in attempting to contact the agency, and a list of rights can feel empty. You do not have to just throw up your hands, though. If you receive a letter from the IRS, it does not mean that you are automatically wrong. Sure, some people make mistakes when filing their taxes. But the IRS also makes mistakes when looking at those filed returns. And even more often lately, the agency makes mistakes when sending out notices – some of which have not been actually applicable to its recipients. And it is frightening to receive such a letter, especially since they sometimes come in the form of a large bill that you did not expect. But one of the rights on the list is ‘The Right to Challenge the IRS’s Position and Be Heard,” so if it is their mistake, you have a chance to set it right. You want to act quick (especially when receiving a response to such action can be delayed) but you can do so. And if you need assistance from those with a greater understanding of how those things work, then do not hesitate to find it. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter It seems impossible to stay away from financial and tax news this week.
First, there is the battle In congress over lifting the debt ceiling and moving along the Democrats’ hoped-for spending bill. I have previously written about some of this in this space because the spending bill is going to have to include new tax measures to pay for it. It has seemed almost inevitable since President Joe Biden took office, but now we are in October and things look less inevitable than they did at the beginning of the year, and it is difficult to say what any of this is going to look like by the time we reach the journey’s end. Second, there is the release of the Pandora Papers, which show how some vast swaths of wealth are being handled to avoid taxes and creditors. The total numbers involved in these stories tend to stretch the mind. Billions are thrown around casually, but when you stop to take a moment to think about it, it is a LOT of money. My main take on the Pandora Papers, though, is that this is not a huge expose of illegal activity. One can be upset that rules exist that allow the very wealthy to avoid paying what they ‘should,’ but they are just using the rules that exist to their advantage. If some rules changed (which would not be easy, since there are international entanglements in the story) then what they needed to pay would change. Until that happens, though, they are just using the situation to their advantage. Whether this should happen or not, however, is a debate best had in different forums. But if the rules changed, those people involved would be okay. They may be held more accountable in new ways, but they would find their spot in the novel rules without their fortune suddenly disappearing. That idea of new rules, though, goes back to the fight in Congress. Yes, there are going to be taxes raised on someone at some level to pay for what is attempting to be passed. But remember what happened when Democrats last passed tax rules? Chances are you don’t. For when these things do change, the impact is immediately seen, some feel a bit of a new pinch, then they adapt and ease into the new rules. Again, this is not the place to debate over what is the actual best and/or most equitable tax policy. But that is a debate that has be had somewhere. What this is then is a plea to accept whatever happens without rancor. If you disagree with those in power, you can show that by voting. Until then, though, you will find the way through whatever rules you must follow, and we will be there to help you travel that path in the way that most helps you. Warmly, Josh Bousquet Connect to Us ~ Facebook ~ Twitter |
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