If you haven’t filed your taxes yet, you’re quickly running out of time. Tax day — May 17 this year for individuals and small businesses — is fast approaching. The chances are good that your tax accountant is overloaded with tax returns that need to be prepared and filed for fellow procrastinators. This means you’ll have to take a number and hope your accountant works quickly through the pile and gets to yours before the deadline hits.
If you’re in this boat, it’s a good idea to do everything you can to move the process along on your side. That includes walking into the office with everything your accountant needs to get your taxes finished and filed on time.
Here are three of the basics that you should focus on for small business tax preparation. Arriving at your accountant’s office with these in hand will make his or her job much easier. While it won’t necessarily move you to the top of the stack, being prepared ahead of time will help avoid delays in the process due to missing information.
It sounds crazy, but some people arrive at their accountant’s office without their social security number or their Employer Identification Number (EIN). When you head to your accountant’s office, make sure you have all your personal information with you, including the legal name of your business if you’re an LLC.
Personal information for the 2020 tax year — and 2021 when it gets here — also includes information about Stimulus Payments you have received (or not). These amounts are claimed on the individual taxes. If you haven’t received what you were eligible for, these payments will be claimed as additional refunds.
If your accountant did your taxes last year, you’re in luck. They should have your previous year’s tax return on file. If you’re using someone new to prepare your taxes, bring a copy of your last tax return when you drop off your tax documents. Your accountant will need that information to prepare your taxes this year.
While this is represented as one item, it’s really multiple items under one heading. To accurately calculate your tax liability, your accountant needs a complete picture of the financial state of your business. You’ll need to have the following documents on hand.
You’ll also need to provide information about your assets and any loans the business has, as well as payroll data. If you’re an LLC or a sole proprietor, you’ll need to provide your personal financial information too.
While this list is by no means complete, having these items with you when you go to your accountant’s office will help move the tax prep process along more quickly. Adams Accounting Solutions has been helping small businesses in Kansas City with their taxes for over 25 years. We’ll prepare your tax return and get it filed quickly and efficiently — especially if we have the above information to start with. Contact us today to schedule an appointment. There’s only one week until tax day!
One of the top questions we hear when we work with clients at Adams Accounting Solutions is this: “Why is my tax refund taking so long?”
It’s a valid question. Once you’ve gone through the angst associated with getting your tax return finished and filed, you’re ready for some good news. And when your accountant tells you that you have a refund coming, it’s cause for celebration.
Weeks go by. No check. No direct deposit. What on earth is taking so long?
The IRS typically gets backed up during tax season as it’s bombarded with thousands of tax returns to be processed. Many of these returns don’t involve refunds, but many of them do. It takes a massive number of worker-hours—not to mention gallons of coffee—to process all the paperwork and electronic forms that come in. Add a pandemic to the mix, and even the most well-oiled machine slows to a glacial pace. That’s where we’re sitting right now.
A year ago, the IRS had to completely shut down operations to protect the health of its workers as coronavirus swept the country. When they reopened, it was in a much more limited capacity. Despite last year’s tax filing extension, the returns piled up, resulting in a considerable backlog and producing a snowball effect.
As of March 12 this year, according to an article in The Washington Post, the IRS was sitting on 6.7 million tax returns to be processed. All this as they struggle to keep up with mounting priorities that include issuing another round of stimulus checks and implementing tax code changes from coronavirus relief packages.
New issues are also popping up for the IRS to deal with. Many people who didn’t receive the right amount in their stimulus checks are now filing for the additional money. Also, some low-income tax filers are now eligible for more tax credits than usual. The IRS is having to manually review many of these tax returns for accuracy.
The good news is that the IRS is required to pay interest on refunds issued to taxpayers more than 45 days after the filing deadline. If you fall into this category, don’t despair. You’ll eventually get your refund—with interest.
If you’re due a refund this year, try to be patient. You’re not the only one in this situation, and it’ll come eventually. Try being grateful that you don’t work for the IRS. It may help change your perspective.
If you have questions in the meantime, give us a call at Adams Accounting Solutions. While it gets crazy in our office sometimes, we still provide the personalized service our clients expect from us. Call or stop in anytime!
Many business owners get so caught up in running the business that they feel they don’t have time for other things that are also important. Tax preparation often falls into that category. Sound familiar?
Luckily, the IRS provides an out in the form of a tax filing extension. But before you start your happy dance, take a look at some of the pros and cons of filing an extension. It may sound good in theory, but in practice, it might not be the best option.
It’s important to remember that a tax filing extension is just what it claims to be: an extension on filing your tax return. It is not an extension on paying your taxes. Taxes are still due on April 15 each year unless otherwise declared by the IRS. This year, the tax filing deadline has been extended to May 17, 2021. At this point in time, the deadline for filing under an extension is still October 15, 2021.
Here are a few of the benefits of filing an extension.
More time to get organized. There are times when pulling together all the paperwork to file a tax return just doesn’t get done. Businesses all over the country are in a state of upheaval this year as they try to recover from pandemic-related challenges. Just staying afloat might be more than you can handle. Likewise, other companies are in the same boat, so you could be waiting on tax-related documents from others. If this is the case, filing an extension may be a good course of action. It gives you additional time to sort things out and collect the documents you need for filing purposes.
Avoid or lessen tax filing penalties. If you aren’t ready to file a tax return yet, filing an extension may help you avoid or reduce tax filing penalties that would accrue by filing late. The IRS imposes a late penalty of 5% on taxes due each month or fraction of a month that a tax return is filed late without an extension. It also charges a late penalty of 0.05% per month, up to a maximum of 25%. However, all this can be avoided by sending in your payment when you file for an extension. A tax preparer or accountant can help you figure out your estimated taxes due when you file for an extension.
No need to explain. There’s no approval process when filing an extension. You don’t have to explain to the IRS why you’re not ready to file. As long as you file the extension form correctly—a good CPA can help here—you’re set until October 15.
Here are a couple reasons why you may not want to file an extension.
It only extends the time to file. If the reason you want an extension is so that you have additional time to come up with the money you owe, you’re out of luck. Filing an extension only applies to getting your tax return in. It does not buy you time on paying the taxes you owe. In fact, if you owe taxes, the IRS expects you to make your payment when you file for an extension. Keep that in mind if the reason for wanting an extension is financial. It won’t help.
Deadlines have a way of piling up. Businesses that make a habit of filing for an extension every year get themselves in a bind. April 15 comes quickly after October 15 of the previous year, and before you know it, it’s tax time again. Once again, you’re not ready. Try not to get into this cycle. It’s hard to get out of.
Whether you decide to file an extension or not, Adams Accounting Solutions can help. We specialize in small business tax preparation. We can help you prepare for tax season well ahead of time, so you don’t need to file an extension. And if you do, we can help there, too.
Give us a call at 913.888.9100 to schedule an appointment or to get your tax filing questions answered. We look forward to working with you!
Entrepreneurs just starting out are usually focused on the nuts and bolts of getting their fledgling company off the ground. Many decisions need to be made, including the need for office or warehouse space, inventory, sales processes, and human resources. Creating a business plan is the last thing on the business owner’s mind – but it should be one of the first.
One of the best reasons for creating a business plan has to do with obtaining funding. Start-up capital is often necessary to get a new business off the ground and keep it running until it becomes profitable – an average of two to three years for most small businesses. And new businesses aren’t the only ones that need help. Well-established companies occasionally experience unexpected downturns. A business plan is invaluable when approaching the bank for a loan. Lenders will want to see a business plan that includes forecasted revenue projections, operating expenses, cash flow, and other financial metrics that prove the loan they’re making is a good bet.
As crazy as it sounds, studies show that companies with an owner who takes the time to create a comprehensive business plan grow an average of 30% faster than companies without a business plan in place. Why is this? Experts believe that it’s due more to the time, effort, and deep dive needed to create the business plan rather than the plan itself. A business owner who takes the time to put together a good plan and then reviews it periodically, making adjustments as needed, is more likely to be fully engaged in all aspects of the operation. That level of focus is what helps the company grow faster.
Taking a deep dive into business planning is a great way to set goals for the company. To be effective, they need to be SMART: Specific, Measurable, Achievable, Relevant, and Time-based. Working on a business plan and related financial statements gives small business owners the chance to review what’s working and what isn’t and make changes accordingly. Setting goals and milestones for business success doesn’t just help keep the company on track; it also lets employees know when milestones are reached. Then it’s time to celebrate!
There are several other good reasons for creating a business plan. Enlisting the advice of a CPA is invaluable when working through this process. Adams Accounting Solutions specializes in all aspects of small business accounting, including business tax preparation, payroll taxes, and internal control evaluation. We can also help with operations consulting and software support.
If you need assistance putting together a business plan, contact Adams Accounting Solutions to get the small business expertise you need. We’ll help you create a business plan that leads to success!
Small business owners trying to keep up with all the rules and regulations involved in the administration of the Payment Protection Program have once again been thrown for a loop. In an about-face on December 21, 2020, Congress passed the Consolidated Appropriations Act, 2021. This Act was signed into law on December 27. It granted small businesses full deductibility of ordinary and necessary business expenses that were paid with a forgivable or forgiven PPP loan. This reverses the earlier mandate that stated that business expenses other than payroll expenses that were paid with PPP funds were not deductible.
So why the change of direction and the delay in making this information widely known? We have no idea. It hasn’t been publicized by the major news outlets, nor have we seen anything about it in financial blogs. We dug this information up through the SBA Office of Advocacy. It’s part of our job to make sure you’re informed about everything that may impact your tax situation. Imagine our delight when we came across this information! It means our clients benefit.
In spite of the delay in getting a hold of this information, it’s good news for businesses. Any business owner knows that keeping a business running – especially through an unprecedented pandemic situation – involves more than just keeping people employed. There are lots of other expenses incurred in daily operations.
Many companies suffered higher expenses than usual last year because of the pandemic. Mandated state and municipal cleaning procedures and social distancing measures resulted in increased costs for many organizations. Taking a deduction on these expenses in a year when revenues are down for nearly everyone is a huge boon, especially for smaller businesses.
If you’re a small business owner who’s on top of your taxes, having them already prepared and filed, it’s not too late to take advantage of this new perk. Talk to your accountant and have him or her file an amended tax return. This is a year that everyone should be taking full advantage of the benefits of business expense deductions when eligible.
Here at Adams Accounting Solutions, we’ve been busy helping small business clients prepare and file their taxes. We help individual tax filers, too. We’re here if you have questions or need help sorting through the tax implications of PPP funding and the forgiveness process. Give us a call at 913-888-9100 to schedule a consultation for more information.
At Adams Accounting Solutions, we believe part of our job involves keeping our clients aware of current tax scams. When we prepare taxes for our clients, whether they’re small businesses or individuals, we take great care to make sure everything is accurate and accounted for. It’s our job to help clients maximize their earnings whenever possible and avoid situations that may hurt their financial well-being.
That’s why it concerns us when we see the IRS’ list of “Dirty Dozen” tax scams. This annual list is a run-down of the scams most frequently targeting tax-paying citizens. The IRS publishes this list to bring greater awareness to the issue and encourage people to remain vigilant. Unfortunately, the COVID pandemic has created an even bigger arena for scammers to operate in, and fraud is on the rise.
These fraudsters are not solely focused on tax fraud; they’ll take any information they can get from you and use it to take your money if they can. It’s up to each individual to be on guard against this.
This year’s list isn’t out yet, but here are a few examples from last year’s list. It’s safe to say that these scams haven’t gone away in the ensuing months. To see the full 2020 list of the IRS’ Dirty Dozen tax scams, click here.
Phishing: A phishing scam is when someone posing as the IRS contacts you through fake emails or websites to get personal information. The IRS has seen a considerable increase in phishing schemes. Many of these schemes use words like coronavirus, COVID-19, and stimulus. Be wary of anything that looks suspicious. The IRS never initiates contact via email about a tax bill, refund, or Economic Impact Payment. Don’t respond or click on any links in these communications, and don’t give away any of your personal information, such as your social security number, bank account numbers, or your birthdate.
If in doubt about a communication, proactively call the IRS and ask about it. If it’s fraudulent, they’ll let you know. And they’ll want to know about it. The IRS is aggressively pursuing phishing criminals.
Threatening phone calls: Another tactic used by scammers is the threatening phone call. In this scenario, the criminal poses as an IRS employee and uses an ominous or urgent tone to instill fear in the victim. They may demand immediate payment of a bogus tax bill if the victim doesn’t respond immediately. Don’t provide any information. The IRS never demands immediate payment, threatens, asks for financial information over the phone, or calls about an unexpected refund or Economic Impact Payment.
Payroll and HR scams: Employers should be on guard against scams that attempt to steal Form W-2s or other employee information. One of the most common is the direct deposit scam. This occurs when a compromised email account is used to request that the employer change the direct deposit information for an employee’s payroll check to an institution controlled by the scammer. IT departments should monitor for this type of activity and report it to the FBI Internet Crime Complaint Center.
For the full list of trending scams, click here.
Selecting the right person to do your taxes is paramount to your financial well-being. Your accountant is entrusted with sensitive personal information that should be closely guarded. Unfortunately, dishonest tax preparers appear every season, attempting to commit fraud by coercing taxpayers into doing things they shouldn’t do. By the time the IRS gets involved, it’s too late.
You won’t have that problem at Adams Accounting Solutions. We adhere to the rules and ethical standards set out by state and national regulatory institutions for our industry. Our reputation depends on the trust of our clients. If you need help with tax preparation this season, give us a call at 913-888-9100. We’re here to help!
The coronavirus pandemic has caused a lot of businesses to rethink the ways in which they conduct business. Personal meetings are discouraged, handshakes are taboo, and one must think more carefully about going out in public. This trepidation has decreased foot traffic for many small businesses, including offices and restaurants.
To meet this challenge, many companies have come up with creative new ways to make their products or services available to customers while keeping both their employees and customers safe. Daily transactions are often made now through drive-through windows, walk-up windows, electronic transfers of information, and online video calls.
Adams Accounting Solutions has also risen to meet this challenge. We know our customers may not always feel comfortable coming into our office these days to drop off or pick up tax documents. That’s why we offer an electronic document transfer service through a secure web portal. It’s the perfect solution for hands-free tax preparation!
At Adams Accounting Solutions, we value our customers and their safety. Our secure web portal allows customers to submit tax documents and other types of documents and forms over a secure server where they can be accessed by our office personnel. We also use this portal to deliver your completed tax forms to you once they’re ready. No in-person visit is necessary. This online service protects our customers from any threat of exposure to the COVID-19 virus – or any other bug that’s going around.
Accessing our online portal is quick and easy. First, give us a call or send us an email letting us know you’d like to use this method to send documents to us. Once we get your request, we’ll open your account and send you an email notifying you of your user name. The email will also include a link to the secure web portal. Click the link to get started. You’ll be asked to set up a password and then log in. It’s that easy! There’s no need to worry about security. The portal is hosted by one of our most trusted partners. All data is encrypted for your protection.
Some clients may fear that submitting documents remotely through an electronic portal will take away some of the personal touch they’ve grown accustomed to. But rest assured that you’ll still get the individualized attention and exceptional customer service you’ve come to expect from Adams Accounting Solutions.
If you want to use our touch-free accounting services this year, give us a call or drop us an email letting us know. We’ll get you set up in no time. Or, if you have questions that need answers before you start, give us a call. We’re in our brand new office every day, and we’re always happy to talk with our customers. Call us today at 913-888-9100!
If you’re watching the news lately, you know things are changing fast in many areas. Business owners are hard-pressed to keep up with the changes in PPP loans, forgiveness, tax changes, stimulus checks, etc.
Adams Accounting Solutions has compiled a list of updates that you need to know about. We’re always here to answer questions about anything related to running your business or preparing for tax season. Which, by the way, won’t officially open for another two weeks…
Read on for more information.
The Internal Revenue Service announced on January 15 that the 2020 tax filing season wouldn’t officially begin until February 12, 2021. That’s the earliest that the IRS will start accepting and processing tax returns for 2020.
According to the IRS, the delay is due to additional programming and testing needed as a result of the December 27, 2020, tax law changes that provide a second round of Economic Stimulus Payments and other benefits.
Although the IRS won’t accept tax returns until February 12, the IRS urges people to file electronically as early as possible. Those who file through tax software companies, including IRS Free File partners, may file now; however, returns won’t be transmitted to the IRS until February 12.
Another note on the 2021 tax filing season: The IRS does not plan to extend the filing deadline this year. Income tax returns for 2020 are due on April 15, 2021. Plan accordingly.
The SBA reopened the PPP for a second round of loans on January 11, 2021, and began accepting applications on January 13. This second round of funding allows for eligible borrowers who previously received a PPP loan to apply for a second loan to maintain business operations for up to an additional 24 weeks.
You may qualify for a second PPP loan if you meet the following criteria:
If you’re interested in applying for a second round of PPP funding, you have until March 31, 2021, to get your application filled out and submitted. Talk to your banker for more information.
First check: By now, all eligible parties should have received the first stimulus payment. If you haven’t received your check and feel that you should have qualified for one, you may be eligible to claim a Recovery Rebate Credit on your 2020 income tax return.
Second check: On December 29, 2020, the IRS and the Treasury Department began delivering a second round of stimulus checks to the same parties who received the first round of payments in 2020. Similar to that process, checks are being deposited electronically into taxpayers’ bank accounts when possible. Paper checks began going out in the mail on December 30.
No action is required on your part to receive your second stimulus check. If you haven’t received your payment and want an update on the status, look for it using the Get My Payment tool. Similar to the first check, if you have not received the second check by the time you file your 2020 taxes, you may be able to claim it as a Recovery Rebate.
At Adams Accounting Solutions, we know you have your hands full running your business. That’s why we keep up with breaking news that may impact you, whether it has to do with income or other taxes, stimulus checks, PPP loans, or other accounting and tax issues. If you have questions about any of the latest updates, give us a call at 913-888-9100. We’re here to help!
Happy New Year!
Adams Accounting Solutions is excited to welcome you to our new office in Overland Park, Kansas. After many years in Olathe, we’ve decided to move to a more convenient location for the majority of our customers. You’ll now find us at:
8249 W. 95th Street, Suite 100
Overland Park, KS 66212
Nothing else has changed at Adams Accounting Solutions. We still offer all the accounting, tax preparation, and financial planning services we’ve always provided our customers. We stay up-to-date on all the latest tax laws, regulations, and changes – including stimulus checks, PPP loans, and other COVID-19 related topics. We’re always around to answer your questions and consider every question of equal importance.
In addition to handling individual income tax needs, Adams Accounting specializes in helping small businesses find their way through the maze of paperwork associated with running a business. We offer business consultation services for those who need help determining the next best step for their business. We also help with tax filing deadlines for the following:
Adams Accounting Solutions wants to partner with you to help make your business as successful as possible. Our certified CPAs also help with the following tasks:
Our address has changed, but our phone number has not. Give us a call at 913-888-9100 to schedule an appointment or get answers to your accounting or tax-related questions. We look forward to seeing you in our new office soon!
Tax season is right around the corner, which means it’s about time to start thinking about 2020 income tax preparation. In fact, your accountant might say it’s past time to start thinking about tax prep. Hopefully, you’ve kept good records, made quarterly estimated tax payments if needed, and stayed on top of the health of your business this year.
We’re assuming you also put your stimulus check to good use.
As tax time nears, many individuals and businesses feel a little uncomfortable about the effect the stimulus payment may have on their federal income tax returns for 2020. The good news is that there’s not much to worry about.
Here’s a quick rundown of what you need to know about your stimulus check as it relates to your 2020 income taxes. If you have questions about your particular situation, we recommend calling a professional accountant or CPA for help.
If your stimulus payment was less than the amount shown on Notice 1444, you are actually eligible for more stimulus money. Rather than sending you another check, however, the IRS requires that this shortfall be reflected as a recovery rebate credit on your 2020 federal income tax return. Include Notice 1444 with your other tax records.
Likewise, if you are eligible for a stimulus check but have not claimed or received it yet, all is not lost. You can claim your stimulus payment by filing a 2020 federal income tax return. As in the above scenario, your rebate will take the form of a recovery rebate credit.
Company employees who have been working from home this year may also receive additional relief from their employers. Small businesses can pay their employees an Emergency Pandemic Relief payment designed to help defray some of the expenses incurred in setting up a home office for work conducted on behalf of the company. This relief payment is not taxable for the employee, but businesses can deduct these payments on their 2020 taxes.
The Emergency Pandemic Relief payment applies only to W2 employees; contractors and freelance workers are not eligible. Speak with your employer or HR department to determine whether your employer is participating in this program.
Income tax preparation can be complicated, and this has been an unusual year for many. Adams Accounting Solutions will help you get your tax paperwork in order so that you get your taxes filed on time in 2021. Give us a call at 913-888-9100 for more information or to schedule an appointment.
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.