As the end of the year approaches, there are many conversations centered on health insurance. With Blue Cross exiting the Healthcare Marketplace, premiums have gone through the roof for Medica, and anything NOT in the Marketplace is nearly unaffordable for most people.
If you are a small business owner, there is a regulation that may save you on your taxes. Section 105 is available to one-owner small businesses that employ their spouse. It allows for moving unreimbursed medical expenses and medical insurance premiums to the business as deductible expenses. This basically creates a small business health plan and allows for pre-tax treatment of medical expenses.
TASC is a third-party administrator that offers this subscription. I use it for my accounting business and recommend it to our clients, as appropriate, too. TASC reports that “Section 105 HRA plans save small business owners an average of $5,000 a year on their taxes!”
There is an annual cost to enroll, and online documentation that will be required before you file your taxes. If you keep track of your medical expenses throughout the year, the online input required is straightforward. You can also use annual statements from your doctors, pharmacists and others involved in your health care as support documentation.
To learn more and decide if Section 105 might apply to your business application, give us a call at (913) 888-9100.
There are about 9 weeks left in 2017. One of the biggest gifts you can give yourself this season is an early start on your 2018 tax prep! Seriously. How great will it feel when tax documents start arriving in the mail and you already have most of your documentation ready to go? This is a huge time saver and stress reliever. It’s also a way to submit your 2017 file quickly and possibly receive your refund (if you anticipate one) sooner!
We realize the next couple of months are busy with holiday activities, but this time of year can be slower around the office and some extracurricular activities ease as the holidays approach. What if you were to take these next 9 weeks and divide them into three sections? That would give you about 21 days for each to make some great headway on your taxes. If you think this plan might work for you, here’s one way to break it down:
Weeks 1-3: Focus on Health Care and Education Expenses
If you write off some or all of your medical expenses, start pulling those receipts together now. Gather what you have at home and reach out to doctors you won’t see again in 2017 for an annual statement. After the first of the year, you can then call any other doctors, pharmacies, etc. to request a complete 2017 report. This is one of the quickest and easiest ways to get your hands on medical expenses for your family!
For education expenses, it’s much the same. You likely have some documentation on hand at home. And, there will be some areas you want to wait until the year is up to complete a report. But even then, you may have enough information to make a good dent in this. If you deduct education expenses for early childhood education, you can probably send an email now to make schools or care providers aware of your documentation needs. If the timing works, they may be able to send invoices to you before holiday break – another opportunity for you to keep things moving!
Weeks 4-6: Charitable Donations and Mileage
Have you made charitable contributions in 2017? Do you volunteer regularly for a 501(3) non-profit organization? If you can document your donations or time, you may be able to claim charitable deductions or mileage related to your volunteer time.
If you tend to do your giving at the end of the year, be sure to document your contributions as you go, so you have everything you will need. We recommend our clients retain receipts and submit along with the name/address of the benefiting organization, the date of the gift and the value to provide complete documentation.
Weeks 7-9: Business Expenses and Special Deductions
Are you a business owner? Have you been keeping track of your expenses throughout the year? From marketing, to supplies to mileage, it can be a lot to manage on top of your daily work. If you have fallen behind, we can help you get things in order fast. If your work slows down in Q4, this is a great time to tackle Q1-Q3. Gathering documentation will take some extra time if you weren’t diligent throughout the year. But, spreading this one task out over three weeks is much easier than trying to search for everything you need when work demands pick up in 2018.
And if your business is still very active this time of year, let us step in and get you started. A quick meeting is all it takes for us to determine what your needs are and to help you through the document gathering that will be required. Call us anytime at (913) 888-9100.
It’s also our job to help you determine any special deduction that may apply to your circumstances. We have a quick sheet we walk through with our clients to try to find extra money for your file. There are lots of tax laws and regulations – too many for most to keep track of – but that’s our business and part of how we add value for you! Let’s talk soon.
Chances are you have made charitable donations in 2017. Whether it was to provide aid after recent natural disasters like Hurricane Harvey or wild fires, or to your favorite non-profit organization or church – there are many ways to give back, and many of your giving efforts may also be tax deductible.
When it comes to charitable giving, gifts are made one of two ways, either as: (1) a monetary gift or (2) an in-kind gift. An in-kind gift could be donating new toys to an organization for children during the holiday season or food to your local food pantry. An in-kind donation is one of goods or services.
To qualify as a deduction, you first must ensure the recipient is registered as a 501(c)3 nonprofit organization. If you’re not sure, use this resource from the IRS to check. If it is, the next step is to provide adequate documentation with your file.
We recommend our clients retain receipts, along with: the name and address of the beneficiary; the date of the gift and the value for proof. Here’s a good place to start if you’re looking at simple deductions.
If you have made a gift but aren’t sure it qualifies, or are considering a gift and want to ensure it will be tax deductible, reach out to us. We can help determine the best way to make and document your gift so you can include it as a deduction on your 2017 return. Call us anytime at (913) 888-9100.
April 18 was the deadline to file an extension and to pay income taxes owed to avoid penalty and interest charges. If you filed an extension, remember your return is due October 16! Anyone can file an extension for free using one of these resources. But, don’t wait until the last minute to complete your file. If you’re finding yourself behind on tax prep, remember, we are always available to help.
As part of our tax preparation services, we work to identify potential deductions available to our clients. Tax laws and credits available can be complicated, but we have a solid understanding of these items and how they may apply to your personal situation to maximize your return or minimize your tax payment.
You can reach Adams Accounting Solutions at (913) 888-9100 for your appointment. Together we will review the items you need to gather for your return. Then, we’ll take it from there! We have the knowledge and experience to complete your file quickly and accurately. When you work with us for your tax needs, you will have peace of mind that your return was filed properly, and you’ll save the time and stress of doing it yourself.
Small business owners have a lot to keep track of as it is. But it’s important to stay on top of things that could potentially have a negative impact on your business. That’s why we’re sharing this cautionary tale, from one small business to another…
At Adams Accounting, we partner with a vendor who manages SEO for us. Recently we received an email forward from this vendor. He had received an email with my head shot, company name and address stating “We are changing our phone number” and listed a toll-free number to contact.
Lucky for us, his work involves keeping our contact information current, or this may not have been brought to our attention! He contacted me directly and separate from the information provided in the email to verify we were changing our number before he published it to our SEO search info. Well, guess what? We have no plans of changing our phone number!
People use these tactics for a variety of reasons, but the important piece to note is they look REALLY authentic. These scams are becoming prevalent in more industries where financial information is shared or large financial transactions take place. These scams could also be used to take your business leads.
As a customer, it’s a good idea to be aware of potential scams with any vendor you work with. The goal of these emails is to send messages that look real but redirect to a separate number or email address. If you ever get a message you question, call the number you know to be good and ask questions. Don’t contact an email link or phone number shared in a message that raises potential red flags for you without talking to someone you know and trust for verification first.
As a small business owner, this is one more thing to keep on your radar. As you’re able, communicate with your vendors, and customers, if appropriate, to protect your business and interests, as well as theirs.
Thanks to social media and sites like Etsy, many people have transformed one-time hobbies into profitable businesses. Maybe you have turned a baking passion, love for woodworking or knitting into a revenue stream? But how do you when you reach that point of distinction between hobby and business as it relates to your income tax reporting? To help you decide, the IRS provides tax tips to consider, along with guidance for hobby reporting.
First things first, if there is any question, taxpayers MUST report income earned from hobbies on their annual tax returns. The link above offers guidance for hobby filing. You can use this guide to help make the distinction between hobby and business activity. Here are the 9 steps the IRS asks you to consider:
Of course, no one point makes this distinction. You must look at the situation as a whole to make an accurate determination. That’s where we can help. We have the experience to accurately evaluate and make the distinction between hobby and business. From that point, we can also provide guidance on to best structure your accounting to support growth and tax filing guidance to ensure you take advantage of all deductions that may be available to you. To learn more, reach out to us at (913) 888-9100. Don’t wait until tax time. Getting the framework and structure in place ahead of time will make your filing much quicker come April!
If you earn a living as a self-employed farmer, you’re already including a Schedule F attachment with your annual tax return. However it’s important to note the IRS defines “farmer” broadly, and folks who raise produce for farmers markets, honey and timber sales or the like may also fall into this tax category.
Here’s a look at the 2016 Instructions for Schedule F. This is a good resource to guide you through reporting farm income and expenses. Your farming activity may subject you to state and local taxes and other requirements such as business licenses and fees. The IRS recommends checking with state and local governments for details.
As you go through the instructions, you can quickly identify points that might be applicable to your situation – like mileage – and other forms that may pertain to your situation, like Form 3800 to claim any general business credits. You can also learn the specifics on the options available to report your income or expenses.
Like most things tax-related, this reporting is detailed and varies on a case-by-case basis. If you’re thinking you should be considering Schedule F for your 2017 tax prep, you can give us a call anytime at (913) 888-9100. We’re always available to learn about your circumstances and provide you with tax recommendations based on our years of experience.
Augmenting your income with a side business is a great way to make progress toward your financial goals. It’s also a great way to explore a future business venture based on passion or talent. But one thing is common, no matter the goal behind your side hustle. When it comes to the IRS, income is income, plain and simple.
One way to protect yourself from possible pitfalls is to interview and partner with an accounting professional to support the financial structure of your work. A professional is dedicated to knowing the ins and outs of accounting, tax laws and items of significance to your business. We not only help ensure your taxes are filed properly, we can also identify potential deductions that you may be eligible for!
This recent Forbes article does a nice job highlighting some key points to keep in mind. One that stands out to us is documentation. When you’re working for yourself, it’s important to keep receipts and records (think work-related expenses, mileage and the like). You will have to have these items come tax time if you intend to claim a deduction. And, depending on the format of your business, you might even be eligible to take deductions on a home office. With this deduction, you will not only need receipts, but they will need to be pro-rated as well. We can help with all of this!
If you have been doing work on the side, or if it’s something you’re kicking around, give us a call at (913) 888-9100. We’re available to work alongside you to make your business a success!
You can rarely go a day without hearing about some new scam on TV or online. These schemes cross all industries and times of the year, so it’s always smart to be cautious when you receive a suspicious call or email. Just last week the Internal Revenue Systems issued a warning for tax-related scams across the nation. While you might not expect these nearly three months past the tax deadline, tax system schemes continue to claim victims.
“We continue to urge people to watch out for new and evolving schemes this summer,” said IRS Commissioner John Koskinen. “Many of these are variations of a theme, involving fictitious tax bills and demands to pay by purchasing and transferring information involving a gift card or iTunes card. Taxpayers can avoid these and other tricky financial scams by taking a few minutes to review the tell-tale signs of these schemes.”
Signs to look for include: a demand of payment with a specific payment method; a threat to bring in law enforcement; a demand for payment without an opportunity to ask questions; and a request for debit or credit card information over the phone. Whether it’s a call or email, stop and verify before taking any action. Don’t click links and don’t give out personal information – financial or otherwise. Contact the IRS directly for information. If deemed a scam, you can also report it here.
We believe in educating our clients to protect your best interests. If you have concerns or believe you have been a target of a scam, you can always contact us, too. We can help connect you with appropriate professionals to resolve a potential concern. Call anytime at (913) 888-9100.
It’s easy to get excited about a new business idea and put the cart before the horse, so to speak. Enthusiasm and passion for your business venture is vital to its success, but so is the backbone of the business to support a solid business model and growth. At Adam’s Accounting Solutions, we have a long history in small business development. We can partner with you to determine the best accounting structure for your business needs and manage much of the process for you!
As you know, starting your own business takes a lot of time and energy. Anything you can delegate to trusted resources will be of great value. Ideally, we would meet early in the process to help you have an accounting structure in place before you start your business. This makes sense for so many reasons – from ease of reporting to filing your taxes in April. But, if you have found yourself behind the eight ball, don’t be discouraged. We have the resources and experience to get your accounting in order and running quickly.
Call us at 913.888.9100 for an appointment this week. Let us take some of the financial burden of a new business off your plate so you can put your focus and attention where it’s needed – promoting and marketing your idea!
Richard Adams is a graduate of Benedictine College in Atchison, Kansas, with dual majors in Accounting and Business Administration. He is also a graduate of Wentworth Military Academy in Lexington, Missouri.