Take a look at this section to view Frequently Asked Questions and Margaret's response. The questions & answers cover both personal and business tax matters.
“I haven’t filed my taxes for many years…”
If you have not filed your taxes in many years - with one phone call to IRS with your information, Margaret can obtain all of the needed documents as well as an exact idea from IRS about what needs to be done to get you into complete compliance. It is much easier than you think. So call us right away to get the ball rolling.
"I keep hearing about settling with IRS for pennies on the dollar...What is that all about?”
This is called an “Offer and Compromise” - many taxpayers may not qualify but some do. Those who qualify are the ones who find themselves owing IRS so much money that it is very unlikely they can ever afford to pay. In addition, they have little or no assets and have no likelihood of increasing their income in the future. Talk to Margaret and she can explain in greater detail how this may or may not apply to your personal situation.
“I owe IRS money and I can't afford to pay...”
We can easily help you set up a payment plan or advise you if an "Offer and Compromise" is right for you. Call Margaret with an idea of how much you can afford to pay each month as well as what due date you would like and she can call the IRS for you. If you are not able to pay at all – still give us a call, as we may be able to help, depending on your situation.
"I am thinking of taking a withdrawal from my 401k, how will that affect my taxes?"
A person under 59 ½ years of age will have to pay a 10% penalty as well as income tax on the money withdrawn. This can add up to be pretty steep in some cases, so keep in mind other options that maybe available to you. If you do have to withdraw the funds, consider spreading it over 2 years to help minimize the impact. Call Margaret for a comprehensive look at your unique situation before making this decision.
“I was thinking of setting up a new business…Where do I start?”
Call Margaret right away to discuss what kind of business you plan on starting, with some idea of your 5 year plan and together we can decide how you should set up the business from the very beginning to best utilize your personal tax situation.
“I want to set up my company on QuickBooks...”
First discuss with Margaret which program of QuickBooks would be best for your business - there are a few different types depending on what you want to use it for. We normally charge $155 to set up QuickBooks and give you a lesson on how to go about inputting your data so that it works for you. This can be done in our office or at a place that is convenient for you, such as your business or home office.
“How do I take my company QuickBooks to the next level...”
Margaret can look at a back-up of your QuickBooks and go over any questions or concerns, as well as fix problems and explain most anything that has you stumped about your Company QuickBooks file. She can provide you the steps necessary to take it to the next level. QuickBooks is best used with the "baby steps" method – learning one new step at a time. The program can do so many things. Just pick and choose over time what you want to do and then add additional steps that will help you save time and money for your business along the way.
“Everyone says I should be an LLC...”
LLC's have been around for a few years now and "everyone" tells "everyone" they should be one. LLC's protect and keep a business separate from a person's personal assets, but from that point forward it becomes more complicated - it costs money to set up an LLC and not every situation benefits. Plus it can cause tax problems if steps are not taken to tax the LLC appropriately for the specific situation of your business. Call Margaret before you make any changes in your current business style, or if you plan on starting a business. This will save you time and headache in the long run.
“What entity is the best when it comes to restructuring my business?”
Should I be an LLC, Corporation, S corporation? So many choices - This decision is based on a list of questions, there is no cookie-cutter answer for everyone.
Deciding on an entity involves looking at what kind of business you have, as well as circumstances such as:
if you will have employees
what other income you have
how much money you are making
how much money you have available at your disposal
what your 5 year and 10 year plans happen to be for your business
what you want to do with the earnings of the business (for example - buy a boat and go to Hawaii, or reinvest it back into the business and expand).
All these questions and answers work together to decide how your business should be structured. Call Margaret for a free consultation and together a plan can be developed.
"How can I restructure my business to make sure I am paying the least amount of tax?"
Call Margaret for a conversation on this subject and she can look at your situation with you by taking a look at your 5 and 10 year plan for your business to see if a change may be necessary.
“I want to audit-proof my business...”
Let's face it. The Government needs money and audits are a good way for them to get some! Yikes! Below I will provide some “what-if” scenarios and answers. Remember, if you ever receive notice from IRS regarding an audit, make sure to call Margaret right away. As an Enrolled Agent, she goes out on the line for you just like an attorney. All you have to do is sign a form and get the paperwork I need and I will handle it all for you.
Example 1… One thing the IRS likes to look at is labor relations. To reduce your risk of an audit, make sure if you pay any person over $600 for the year, that you send them a 1099. This form is due by January 31st of the following year. 2011 1099's will be due by January 31, 2012. Call the office if you need assistance filing this form. Also, if a laborer is actually your employee, you may need to set-up payroll for your business. IRS is really stepping up audits in this category, so if you are worried, call Margaret for a discussion about possible changes needed to protect your business.
Example 2… Auto Mileage is another thing IRS likes to examine. All business cars need to be able to prove their mileage. IRS requires that a person keep a written log. In a situation of this nature, Margaret normally recommends that if a car is used mainly for business, then keep track of just the personal use mileage (grocery store, doctor appointments etc.) Then, also keep copies of all oil changes and car repairs. Most have the odometer readings listed on them. If you change your own oil, keep a diary of the changes along with the oil receipts. Also, keep calendars and appointment books to help show to the IRS where you went and what you did for your business.
Example 3… Any person in business should keep track of all non-business and non-payroll deposits that go into any of their bank accounts. When my Father-in-Law died, we received multiple checks for differing amounts of money. Most audits occur two years later, who remembers all of these strange deposits? Keep a copy of the check you received along with any documentation, making it easy to prove what this money was.
Example 4… Cousin Allen reimbursed me for NASCAR Race tickets we purchased for him in the amount of $555. I had forgotten about this money. And if I can't prove to the IRS what the money was, it is all taxable. Birthday checks, reimbursement checks - any money in your accounts - business and personal. So always keep copies and place them in a folder labeled “Deposits.” If a time comes that you need to explain a deposit, you will have the information needed to explain NASCAR Race tickets or something else that may not have been income. It is easier to be diligent in this category, than be stuck like many clients have been in the past with unexplained deposits that they were forced to report as “unreported income.” And, with self-employment tax on top of regular tax, it can cost as much as 40% plus interest and penalties in a situation like this.
About saving receipts and other documents:
You should save all of your receipts but most importantly, receipts that are above the norm or out of the ordinary. All bank statements personal and business should also be saved. Paperless is nice, but make sure you save copies of the statements on your computer (and a back-up drive) because if they are needed, it can be very expensive to request copies from the bank or other institutions. The same applies to credit card statements, phone and utility bills. Make sure to keep copies of the all these statements to help prove business deductions. You don't have to spend a lot of time organizing your receipts - just throw them in a box and if need be, you can organize later.
“How do I get my business out there and increase my visibility to potential customers?”
Our partner Silver Media Consultants has nearly 20 years in the newspaper, internet and film industry, and the experience needed to increase your visibility to customers. Silver Media Consultants can work with you to develop a public relations and media plan that will gain results for your company. Silver Media sees each client as unique, in terms of their needs, objectives and budget. They are committed to making an impact for their clients and will strive to deliver results. (www.silvermedialv.com)
“I want to use social media for my company… What is a good plan for me?”
Our partner Silver Media Consultants works with clients to develop and maintain social media platforms that will attract and engage customers for client businesses. They create original content for use with social media that includes posts, videos, photos, small websites, microsites and more. (www.silvermedialv.com)
“I need to set-up my office network of computers or fix a computer that isn’t working right…”
For general computer set-up and repair, we use Kris Wert, who is an excellent computer and information technology specialist. Call our office and we can put you in touch with him at (702) 878-5499.
Disclaimer: All information on this website is not to be taken as personal or business tax advice nor should it be used in any actual situation without the guidance of a tax professional that is presented with all facts per the situation. Information on this website is written in good faith and believed to be correct, but should not be taken as tax advice.