Wednesday, January 28, 2009

Give Away Your Tax Refund

As tax season really gets geared up, many taxpayers are in a panic to get their returns done as soon as possible to receive their refunds. A great deal of tax preparation shops will prepare a taxpayer’s return based on the information from their last pay stub (as I am sure many have seen in the commercials) and they also offer to get your money back to you in as little as 24-48 hrs. Let’s look a bit deeper into how this process works and see if it is really a good deal.

So it is now the end of January, and due to the state of the economy now you want your money back from taxes fast. Most taxpayers do not realize that getting a refund back should not be the goal of their tax strategy. What a refund means is that you paid too much into the tax system and the government is giving you YOUR money back. That means that you loaned the government your money for a year and did not earn any interest on it.

You then proceed to the nearest tax preparation shop and have your taxes prepared where you are then offered to receive you tax return in as little as 2 days via a Refund Anticipation Loan (RAL). This offer may sound good, but don’t forget nothing is done for free. There are additional fees (including the tax preparation fee) that are included in this offer, which can include:

• Refund Account Fees to the Bank making the loan
• Document Preparation Fee to the Tax Preparation Firm
• Finance Charges

In the end, the money you loaned the government with no interest is cut down by additional fees leaving the taxpayer with less money in an economy that is taking a toll on everyone. The tax payer also pays finance charges that have an annual percentage rate of over 100%. A typical $1300 tax refund will be slashed to around $900 when all the fees are deducted. Something to think about as cash strapped taxpayers in this economy.

Keep Your Home Finances N Synergy

Saturday, January 24, 2009

Free Productivity Keeps You N Synergy

The list is finally out by of the Best Free Software. Be sure to check it out for there are some handy little jewels out there that will help anyone increase their productivity, save time, and money whether you are running PC, Mac, Windows or any other operating system. With over 170 different kinds of software that is categorized to your needs, there is surely something out there for everyone. Our firms uses a great deal of them in our daily activities. Check them out so they can increase your productivity at work and home.

Stay N Synergy

Wednesday, January 21, 2009

Tax Season Tips – Selecting a Tax Preparer

My previous post gave taxpayers a bit of information regarding FREE tax filing services for individuals, but what if you have a complicated tax matter, or need a corporate tax return prepared? Odds are the taxpayer is going to have to seek out the assistance of a professional tax preparer. Selecting a tax preparer can become a tricky undertaking for many. As I browsed the postings in the financial section of craigslist, I came across a great deal of “ads” offering taxpayers money for referrals, and some even offering gifts for tax preparation services. Although a majority of these ads stated that they were licensed professionals, their code of ethics seems to fall by the way side. Some ads would guarantee refunds and their payment would be a percentage of the said refund. This is a major no-no from the IRS. Other things taxpayers should avoid are:

• Avoid preparers who base their fee on a percentage of the amount of your refund or who claim they can obtain larger refunds than other preparers.
• Avoid tax preparers that ask you to sign a blank tax form.
• Check to see if the preparer has any questionable history with the Better Business Bureau
• Find out if the preparer belongs to a professional organization that requires its members to pursue continuing education and also holds them accountable to a code of ethics.

These are just a few tips to keep a taxpayer in voluntary compliance and avoid penalties and interest in the long run.

Keeping Your Business N Synergy

Saturday, January 17, 2009

Free is not always better

The IRS launched their free online filing system for taxpayers on Friday, and I have come across quite a few taxpayers that are thinking about using this service instead of a tax professional. While this is a viable option for cash strapped taxpayers in this economy, there are a few things that tax payers should know about the system. A recent report from the Treasury Inspector General for Tax Administration revealed that the IRS did not resolve some of the security issues before launching the system last week. The security issues are related to system access, monitoring of system activities, disaster recovery and the protection of sensitive data and these vulnerabilities can put many taxpayers information at risk.

Almost 5 million returns were filed with the IRS Free File last year as many taxpayers view e-filing as a better alternative to paper filing. This tax season be sure to keep your personal information secure for a free e-file process may come back to cost you in the long run.

Keeping Your Business N Synergy

Wednesday, January 14, 2009

Auditing on the Front End

Taxpayers thinking of trying to put one past on the IRS think twice this tax filing season. In a recent report by the GAO (Government Accountability Office), they recommend that the IRS begin their enforcement efforts during the returns processing stage of the process as opposed to after the return is filed. In the past a return would be filed, only for a few years to go by before the IRS sent the taxpayer the dreaded “nasty gram”. Well those days are a thing of the past.

There are two major areas recommended in the report where the IRS could audit returns while processing, one are is the eligibility of the child and dependent care tax credit for married filing separately taxpayers. The other area is verifying the EIC (earned income credit) claims by non-custodial parents. These are the two major areas where tax return claims could not be verified.

So taxpayers that think that can get one by on the IRS beware, for you will be caught. If you look at the situation another way the IRS is doing you a favor, instead of catching you later and interest and penalties adding up; you will be caught early and won’t owe as much. Either way it is not a good idea.

Keeping Your Business N Synergy

Tuesday, January 13, 2009

Tax Deal of the Day

Here is a great deal for those small business owners out there that are confident enough to prepare their own small business tax returns. Get Turbo Tax from Intuit for FREE and you can prepare your own tax return at the same time saving you some money. Fees will apply for the state return, but the savings is well over $100 for the federal return and it comes with federal e-file. Those small business owners that have pretty straightforward tax returns, this deal is right up your alley. If you’re small business finances are a little more complicated and/or you simply do not want to attempt to prepare your own small business return, be sure to seek out the help of a professional tax advisor. The software also does not take the place of efficient tax planning so be sure to take your completed return to your advisor so the both of you can sit down and map out a strategy for 2009 and beyond.

Keeping Your Business N Synergy

Saturday, January 10, 2009

Big Brother watching your Small Business

While working as a manager for a previous employer, there were many times when our employees’ productivity would fall due to the many “tech” distractions in the office. The main tech distraction culprit was (and probably still is) the internet. Employees surfing the internet when work needs to be done is a major factor in loss productivity, your data being compromised, and possibly your business losing its competitive edge. The first line of defense in most small businesses is to have employees sign an internet usage policy, but how does a small business owner enforce the policy?

Here is a little software gem that I can across earlier this week that is sure to help small business owners monitor virtually everything that their employees do on their work computers. Spector 360 will track every key stroke, website, IM conversation and more. The cost is only $75 per employee which is a pretty good deal when you think about the savings down the line.

Employees beware; your Big Brother small business owner may be tracking you so stay on task.

Keeping Your Business N Synergy

Wednesday, January 07, 2009

Get Organized in 2009

Happy New Year to everyone out there in Blogger land. With the beginning of 2009 here, many are professing those usual New Year’s resolutions that are usually broken by the end of this week. One important resolution that everyone should make if they are not already is to be more organized this year. Being more organized can make your life less stressful and in the long run can save you money. Take this example:

Taxpayers that are organized have a better chance of getting all their tax deductions at tax time because they have all the necessary paperwork all in one place. Scrambling at the last minute to find paperwork can cause many taxpayers to be ineligible for some tax credits and deductions if they are not found in time for filing. Organization can also save you money on tax preparation because your tax advisor will spend less time preparing your return if everything is in one place.

Some ideas to help organize your life in 2009 can include using a debit card for purchases instead of checks, consider checking your statements from your bank and credit cards companies online, keeping a mileage log, and using an online calendar to track appointments and tasks. Make 2009 your year to get organized.

Keeping Your Business N Synergy