Overpaid Taxes

A whopping 97% of business owners overpay their taxes. Most business owners do not realize there are many tax strategies that would reduce their taxes…legally! Wonder where you would be if you had all the money you paid the IRS & the state in income taxes for the last 10 years? And check this out….

The IRS says there are hundreds of millionaires who pay $0 taxes every year! If they aren’t paying taxes…why should you? What’s the difference between millionaires who pay $0 tax and you? The millionaires have a tax plan. They know exactly how to handle their finances to maximize deductions and drop their taxes to $0! It’s time to stop letting that money leak out of your pockets. Do you think tax planning means “raising red flags”? Taking advantage of “gray areas”?

Being “aggressive” and hoping not to get audited? In fact, it means nothing of the sort. True tax planning means proactively scouring your business and finances for tax-saving opportunities. Asking questions before you make financial decisions to avoid unpleasant surprises. And taking advantage of every legal deduction, credit, and loophole the law allows. Our tax-planning strategies are all court-tested and IRS-approved. You’ll find that with true tax planning on your side, you don’t need to raise red flags, shade into gray areas, or be aggressive to keep more of what you earn.

Tax Planning

The first mistake is failing to plan. Planning is the key to beating the IRS, legally. I don’t care how good your accountant is with a stack of receipts on April 15. If you didn’t know you could set up a Section 105 plan and write off your kid’s braces as a business expense, there’s nothing you can do on April 15.

You lose that deduction forever! True tax planning gives you concepts and strategies you need to minimize your taxes. In plain English, not legalese. Without intimidating spreadsheets or endless “projections” that change every time Congress decides to change the law. What should you do? When should you do it? How should you do it? And tax planning gives you two more valuable benefits. First, it’s the key to your financial defenses. As a business owner, you have two ways to put cash in your pocket.

Financial offense is making more. Financial defense is spending less. Taxes are probably your biggest single expense. So it makes sense to focus your financial defense where you spend the most. And second, tax planning guarantees results. You can spend all sorts of time, effort, and money promoting your business. But that can’t guarantee results. Or you can set up a medical expense reimbursement plan, deduct your daughter’s braces, and guarantee savings. We like to start new client relationships with a comprehensive tax plan that lets us start saving you money right away, long before we prepare your first tax return.

Mistake Business Owners Make

Not Paying Yourself is the biggest Mistake Business Owners Make.

When you run a business, you must deposit ALL business income into your business bank account. (Please don’t stuff it under your mattress!) You should use this money to pay your business expenses. You should not take money out of the business account to use it as you please. You should not pay personal expenses with your business checks, debit cards, or ATM cash withdrawals. You must use the business income for paying business expenses. Since you work in the business, your salary is a valid business expense.

You must pay yourself a salary.

This doesn’t mean just transferring money from your business account to your personal account. Nor does it mean writing a company check to yourself and putting “salary” or “payroll” on the memo line. Doing this will subject you to the same “Self Employment Tax” contractors pay. This is an additional 15.3% tax on the money you paid yourself.

Technically, you do not “own” the business, it is an entity unto itself (like an artificial person). You are an employee of the business and must be paid as such.

The business should hire a payroll service that will issue you a W-2 at the end of the year and make all the Payroll Tax deposits that are required by law.

This is the best way to make sure you are compliant with IRS guidelines.

Delayed Refund

If your federal refund doesn’t arrive in your account on the anticipated date, you will need to contact the IRS to find out what happened.

If you filed your return electronically, your should expect your refund in 10-21 days and you must wait at least

72 hours to contact the IRS for information. If you mailed your return, it takes 4 weeks to receive information about the status. There could have been a number of reasons for the IRS to delay your refund. It’s important for you to contact the IRS to find out why.

You have two options: Internet or Phone

1. Go to www.irs.gov and click on “Where’s My Refund?”
or
2. Call 1-800-829-1040, Choose Option 1

For both methods you will need to know three (3) key pieces of information.

(a) Your Social Security Number

(b) Your Filing Status (1. .single, 2. married filing joint, 3. married filing separate, 4. head of household or 5. Qualifying Widow

(c) The amount of Your Refund

If you do not get any information on the whereabouts of your refund, you will need to speak personally with an IRS Representative.

Call 1-800-829-1040 and Choose Option 2.

Creating a Mileage Log

Protecting Your Mileage Deduction

If you are going to claim a deduction for mileage, you must keep track of the number of miles you drive for business. Most people don’t do this and try to figure it out at the end of the year. This is not a good idea. It’s inaccurate and ineffective. Please keep track of your mileage on a regular basis. Daily is best, but you will probably be okay if you do it weekly.

EASIEST WAY: Get a phone app that records the miles you drive and gives you a report at the end of the year. (There are many available.)

I recommend “Track My Trip”. All you do is tap at the start of your trip & tap when you return. You will also need to type in your business purpose.

OLD FASHIONED WAY: Either use pen & paper, or an Excel spreadsheet is ideal because it will calculate your results for you.

Record the following information about each of your trips:

1. Date
2. Where You Went
3. Who You met With, If anyone or business purpose of the trip
4. Number of miles traveled

Using Your Business Bank Account

The following information is based on IRS guidelines.

Your business must have its own bank account.

The IRS requires proof of payment so Pay All Business Expenses using Business Accounts (Check, Credit or Debit card, Bill pay, Auto Draft, ACH)

Don’t Pay for business expenses with cash, cashier’s checks or money orders (These are almost impossible trace!)

Do not use the business account for personal expenses (This is co-mingling funds!)

Do not use your personal account for business expenses (This is co-mingling funds!)

Do not Co-Mingle funds….If you mix your business & personal expenses, the IRS will consider all of your expenses personal and make you pay taxes on all of your income!

Businesses

Abundant Returns cares about finding every deduction legally possible to save you big money on taxes! We work closely with you to make sure we adhere to tax laws and find all the ways to Keep More MONEY in Your Pocket! In addition, we offer consultations on every financial aspect of your business, and we work with clients nationwide, not just in Georgia!

Call us today at (470) 226-1442 so you can join the Tax Savings Revolution!!!

INDIVIDUALS – RETIREMENT

Contribution Limits

The elective deferral (contribution) limit for employees who participate in 401(k), 403(b), most 457 plans, and the federal government’s Thrift Savings Plan is increased from $17,000 to $17,500. Contribution limits for SIMPLE plans increase from $11,500 to $12,000. The maximum compensation used to determine contributions increases to $255,000 (up $5,000 from 2012 levels).

Income Phase-out Ranges

The deduction for taxpayers making contributions to a traditional IRA is phased out for singles and heads of household who are covered by an employer-sponsored retirement plan and have modified adjusted gross income (AGI) between $59,000 and $69,000, up from $58,000 and $68,000 in 2012.

For married couples filing jointly, in which the spouse who makes the IRA contribution is covered by an employer-sponsored retirement plan, the phase-out range is $95,000 to $115,000, up from $92,000 to $112,000. For an IRA contributor who is not covered by an employer-sponsored retirement plan and is married to someone who is covered, the deduction is phased out if the couple’s modified AGI is between $178,000 and $188,000, up from $173,000 and $183,000.

The modified AGI phase-out range for taxpayers making contributions to a Roth IRA is $178,000 to $188,000 for married couples filing jointly, up from $173,000 to $183,000 in 2012. For singles and heads of household, the income phase-out range is $112,000 to $127,000, up from $110,000 to $125,000. For a married individual filing a separate return who is covered by a retirement plan, the phase-out range remains $0 to $10,000.

Saver’s Credit

The AGI limit for the saver’s credit (also known as the retirement savings contribution credit) for low and moderate income workers is $59,000 for married couples filing jointly, up from $57,500 in 2012; $44,250 for heads of household, up from $43,125; and $29,500 for married individuals filing separately and for singles, up from $28,750.

Overpaying Taxes

A whopping 97% of business owners overpay their taxes. Most business owners do not realize there are many tax strategies that would reduce their taxes…legally! Wonder where you would be if you had all the money you paid the IRS & the state in income taxes for the last 10 years? And check this out….

The IRS says there are hundreds of millionaires who pay $0 taxes every year! If they aren’t paying taxes…why should you? What’s the difference between millionaires who pay $0 tax and you? The millionaires have a tax plan. They know exactly how to handle their finances to maximize deductions and drop their taxes to $0! It’s time to stop letting that money leak out of your pockets. Do you think tax planning means “raising red flags”? Taking advantage of “gray areas”?

Being “aggressive” and hoping not to get audited? In fact, it means nothing of the sort. True tax planning means proactively scouring your business and finances for tax-saving opportunities. Asking questions before you make financial decisions to avoid unpleasant surprises. And taking advantage of every legal deduction, credit, and loophole the law allows. Our tax-planning strategies are all court-tested and IRS-approved. You’ll find that with true tax planning on your side, you don’t need to raise red flags, shade into gray areas, or be aggressive to keep more of what you earn.

Failing To Plan

The first mistake is failing to plan. Planning is the key to beating the IRS, legally. I don’t care how good your accountant is with a stack of receipts on April 15. If you didn’t know you could set up a Section 105 plan and write off your kid’s braces as a business expense, there’s nothing you can do on April 15.

You lose that deduction forever! True tax planning gives you concepts and strategies you need to minimize your taxes. In plain English, not legalese. Without intimidating spreadsheets or endless “projections” that change every time Congress decides to change the law. What should you do? When should you do it? How should you do it? And tax planning gives you two more valuable benefits. First, it’s the key to your financial defenses. As a business owner, you have two ways to put cash in your pocket.

Financial offense is making more. Financial defense is spending less. Taxes are probably your biggest single expense. So it makes sense to focus your financial defense where you spend the most. And second, tax planning guarantees results. You can spend all sorts of time, effort, and money promoting your business. But that can’t guarantee results. Or you can set up a medical expense reimbursement plan, deduct your daughter’s braces, and guarantee savings. We like to start new client relationships with a comprehensive tax plan that lets us start saving you money right away, long before we prepare your first tax return.