5 Tax Deductions That Are Typically Overlooked

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There are literally hundreds of ways you can use tax deductions to decrease your overall tax burden. Unfortunately, many people don't even know these deductions exist, missing out on thousands of dollars in potential savings each year.

First, it's important to actually remember to file your tax return-- you have until April 15 to do so, or you'll face a late filingpenalty. You may also miss out on the opportunity to receive a refund. In 2009, the IRS got to keep more than $917 million in refunds, since nearly 1 million taxpayers didn't file their tax returns.

Tax deductions go much further than charitable donations and mortgage interest. Here are five things that you probably didn't know were tax deductible.

1. Fees and costs to actually do your taxesThe IRS allows you to deduct the cost of preparing your taxes as a miscellaneous itemized deduction, on the return for the year in which you pay them. For example, if this year you spend $300 to prepare your tax return for 2013, you would be able to deduct $300 for your 2014 return.

This includes the cost of tax preparation software programs, such as H&R Block or TurboTax, any fee you pay for the electronic filing of your return, tax planning advice, the cost of tax-related books or materials, legal advice, fees for a tax audit, and more.

2. Losses from Ponzi-type investment schemesThe phrase "Ponzi scheme" has unfortunately become well known to the public following the Bernard Madoff scandal in 2008, as thousands of taxpayers were affected.

Thankfully, the IRS does offer some relief to the victims of Ponzi schemes.

Added in 2009, the IRS says you can claim a "theft loss due to a Ponzi-type investment scheme" on Form 4684. Taxpayers claiming a loss should mark "Revenue Procedure 2009-20" at the top of the form.

read the rest at http://www.fool.com/personal-finance/taxes/2014/03/30/5-tax-deductions-that-are-typically-overlooked.aspx

How to Plan for your Tax Appointment

You may be hesitant to hire a professional tax service, because you "can't afford it."  But luckily for you, tax accounting services are now perfectly affordable.  When it comes to the money you invest, you should take great care of it.  That is why my firm that offers Hamilton bookkeeping and accounting services, recently blogged about what documents to bring to a tax appointment.  Letting a professional do your taxes means less stress on you, and you won't waster your time trying to figure out complicated tax language.  The most important thing to remember is that by hiring a tax accountant you guarantee that no mistakes will be made on your taxes.  

If you have already hired a tax accountant, or I just convinced you to do so, you most likely already have an appointment or will book one soon.  To make sure you don't waster your own time, and that of the accountant, is is important to come fully prepared.  

To read the full version of this blog post and to learn which documents you need at your tax appointment click here: 

http://profitfinancialservices.com/documents-bring-tax-planning-appointment/

or click here to visit my website.

9 tax tips that will save you money

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Offering tax tips is a bit of a growth industry these days, and we here at CBCNews.ca aren't about to fight the trend. So, we've gathered a few general tax-wise suggestions and sprinkled in some specific tips to produce the following list of actionable ideas that could pay big dividends.      

1. Consider making a $2,000 over-contribution to your RRSP.

Tax rules allow you to contribute up to $2,000 more than what you're eligible to contribute to your RRSP without attracting the usual excess contribution penalty, which is one per cent of the excess amount for every month of the contribution year that it stays in the RRSP .

Why might you want to do this?

Even though you can't deduct the $2,000 over-contribution, it could be residing inside your RRSP for many years, continuing to grow on a tax-deferred basis as long as it's in the plan. That $2,000 excess contribution can be deducted in a future year when your actual RRSP contribution is less than the maximum you're allowed to put in.

"Consider using your $2,000 over-contribution when you quit working," accounting firm Grant Thornton suggests in its tax planning guide. "The earned income you have in your final year of employment will entitle you to an RRSP deduction in the following year." 

2. Proceed cautiously if a CRA auditor asks you to sign a waiver. 

Under normal circumstances — in other words, no suggestion of outright fraud — the tax department has three years to carry out a reassessment of your tax return. 

Sometimes, if the clock is ticking down on that 36-month deadline, a CRA auditor will ask you to sign a waiver to allow the agency to conduct its reassessment after the three years are up.

KPMG advises you to consider the request "carefully" and get professional advice. "You are under no obligation to file a waiver simply to make the auditor's life easier," it points out in its 2014 tax planning guide. "If the three-year reassessment period is about to expire, and the auditor does not have enough information to justify a reassessment, it may be to your advantage not to sign a waiver." 

And if a waiver is signed? KPMG says a revocation (which would cancel the waiver in six months' time) should be filed at the same time the waiver is signed.   

http://www.cbc.ca/news/business/taxes/9-tax-tips-that-will-save-you-money-1.1285452

How to Save Money When Filing Taxes

All Canadians want to save money when filing their taxes.  After all, who wants to pay more than they have to?  Taxes are a great way to generate revenue for the government, but nobody wants to pay extra money.  Luckily, a hamilton bookkeeping firm recently explained 4 simple tips to use when filing taxes.  These will help save you money and ensure that you don't pay extra to the government.  

Read more about this on the link below.

http://profitfinancialservices.com/company-offering-bookkeeping-services-gives-tax-filing-tips-will-save-money/

Uganda: Ailments That Hurt Business - Poor Bookkeeping

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The brain is said to be the best storage facility one can have; you won't need to learn new software, there is no danger of a system crash to cause the loss of all your data, but you can forget the simplest of things. This may prove a costly mistake for a business if you do not record every penny your business spends. Ben Kuboi, the managing director of MZF Investments Ltd, has an interesting experience about this.

"I hired an auditor recently. He said I had made Shs 1.8 million in losses in the last six months in one of my businesses. But how did this come about? Money got lost in the books," he says. Kuboi says he did not realize or suspect that the business was making losses that could amount to over Shs 1m because he disregarded the effect of small unaccounted expenses.

Kuboi's main challenge is poor book keeping, which entails recording revenues, expenditures, inventory, invoice dates, numbers, amounts, terms, dates and amounts paid or due, balances, and client information.

If you do not know how much money is going out, where it's going, and what money is coming in, you may end up in Kuboi's situation. Book keeping also helps to keep track of debts you owe and what others owe you. It not only makes managing the business easier, but also promotes transparency, which makes the tax authorities and other relevant regulators trust your operations and performance results.

You can keep these 'books' as paper records or as computer spreadsheets using simple bookkeeping software to keep track of income and expenditure.

Key Lesson: hire an accountant or do it yourself at your own peril. Kuboi says there is a temptation for some business people and accountants often take book keeping as a punishment. "But I cannot risk again because all along I thought the business was growing, the records showed there was stock, and losses were marginal but the auditor was able to identify weakness in my records,' he says.

http://allafrica.com/stories/201401060231.html

Inaccurate Bookkeeping

Bad bookkeeping can turn away potential customers, suppliers and creditors.  In some cases, inaccurate bookkeeping may even cause stake holders to take legal action against you.

Here are few scenarios of bad bookkeeping failures:

• A bank or financial institution may refuse to lend you money.
• Potential investors may not want to invest in your company because they do not find your financial reporting reliable.
• You may not be settling your financial obligations on time since your “Accounts Payable” books  show otherwise.

Read more from this bookkeeping services company in Hamilton's blog:

http://profitfinancialservices.com/one-best-accounting-firms-discusses-inaccurate-bookkeeping-will-destroy-business/

Legislation to protect businesses from payroll services fraud sent to Obama

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The U.S. Senate has passed legislation to give more protections to businesses victimized by payroll services companies that failed to pay their clients' federal and state taxes or committed other fraudulent acts.

The legislation, championed by Maryland Sen. Barbara A. Mikulski, comes in the wake of accusations last year against Bel Air-based payroll services firm AccuPay Inc. for failing to pay state and federal tax employee withholding taxes for as many as 600 clients.

According to Mikulski's office, provisions in Omnibus Appropriation Act of 2013 approved by the Senate last week will provide protections to small businesses by requiring the IRS to send dual notification to a business when its address has been changed by a third party.

The legislation will also provide for assistance to defrauded businesses that need relief from tax liability by requiring the IRS to give greater consideration to what are known as Executive Tax Administration Offers of Compromise.

In April 2013, Mikulski held a roundtable with Bel Air's DuClaw Brewery, which had filed a claim of tax fraud against AccuPay, and other local small businesses to discuss the impact of payroll services tax fraud.

Following the meeting, Mikulski introduced legislation, The Small Business Tax Fraud Prevention Act, to protect small businesses from becoming victims of payroll services provider fraud.

Read more: http://www.baltimoresun.com/news/maryland/harford/belair/ph-ag-payroll-services-providers-regulation-0122-20140121,0,1048503.story#ixzz2rFuZW2nu

5 Tips for Preparing for 2014 Taxes

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Tax planning very rarely makes it on people’s new year’s resolution lists. But perhaps 2014 should be the year you vow to achieve a greater level of understanding about your taxes and to properly organize and plan for your liability.

Not only would this pledge make your life easier come tax season, it could also end up keeping more money in your bank account.

Here are some tips to get rolling on fulfilling this resolution:

Set up your 2014 tax file. This could be an electronic file in which you scan documents and transactions throughout the year that will affect your tax return, or a folder or bin that holds the information.

The beauty of an electronic file is that at tax time you can simply e-mail it to your tax professional, who will likely also maintain the file in the event of an audit. Just make sure you have adequate back up of your data in case something goes wrong. Adding notes on the tax documents to aid your tax pro in understanding the transaction can help the filing process.

Examples of documents to store for tax purposes include: W2s, 1099s, K-1s, escrow papers for purchase, sale of refinance of properties, receipts for property tax and vehicle registration fees, receipts for other tax deductible items, and acknowledgement letters from donations made to qualified nonprofit organizations.

Schedule a mid-year tax planning appointment if your financial situation will change this year from last year. If you plan to get married or divorced, buy or sell  a home, start a family, or experience any other financially-altering  event in 2014, it’s a good idea to meet with a professional to do some tax planning. However, I advise against scheduling a planning session at the height of tax season--your tax pro will likely get hysterical.

Make plans to fund your retirement plan. If you have a retirement plan at work, check to see if you qualify to contribute more to the plan and to make sure you are taking advantage of an employer match.

If you have no retirement plan in place, open an IRA, ROTH IRA or other such plan. Your bank or investment house will be able to help you decide between various instruments to find one that best fits your financial situation. A tax professional can also weigh in on which type of savings vehicle would work best for a particular situation. This will not only reduce your current year tax liability, but it will help provide for your future. With so much uncertainty surrounding the viability of Social Security and Medicare (which experienced cuts this past year), it is important to look out for yourself.

http://www.foxbusiness.com/personal-finance/2014/01/09/5-tips-for-preparing-for-2014-taxes/

The Biggest Mistake in Tax Planning for Business Owners

Did you know that it is extremely beneficial to tax plan year round?  Well, it is.  Many business owners don't take full advantage of tax planning and lose money when filing taxes in April.  It is not wise to wait until the last minute to prepare your taxes because thats how mistakes are made.   Make sure to consult with a company offering income tax preparation in Hamilton, like Profit Financial, well before the beginning of the year to minimize tax expenses.  Read the full version of this blog post here:

http://profitfinancialservices.com/company-offering-tax-services-exposes-biggest-mistake-business-owners-make-tax-planning/