4 Ways a Tax Accountant can help your Bankruptcy Filing

Bankruptcy

Bankruptcy in Chandler, AZ
Bankruptcy in Chandler, AZ can happen to anyone. It seldom has to do with financial irresponsibility. It is most often due to job loss, illness, divorce, and other serious problems. You can exercise every available option. It still may not be enough. That’s when bankruptcy can be most beneficial. It’s meant to help you restart. A certified accountant can help you with areas your attorney may know little about.

4 Benefits to Including a Tax Accountant in your Bankruptcy Filing

  1. They can determine eligibility and discharges – When it comes to a bankruptcy in Chandler, AZ, it’s important to be absolutely sure about your tax discharge eligibility. There are a number of factors your Tax Accountant is well versed in. They can determine what you are able to discharge. This knowledge is crucial to receiving the largest tax discharge possible.
  2. They know exactly when you should file – Many attorneys will tell you they understand bankruptcy tax law. Unfortunately, not all of them are telling the truth. An oversight can end up substantially costing you. Tax Accountants not only know whether or not you are eligible for a tax discharge. They know when to file. Sometimes a matter of months can make all the difference in a filing.
  3. An Enrolled Agent can represent you to the IRS – An Enrolled Agent has the same authority before the IRS as a CPA or Attorney. That means they can speak to the IRS on your behalf regarding any taxes you may be eligible to discharge. This professional representation can mean the difference between a clean slate, and continued repayment.
  4. They can perform an offer in compromise – Sometimes the IRS is willing to work with you on re-payment. If you have a Tax Accountant versed in offers in compromise, your odds of successfully reducing or structuring your payments dramatically increase.

If you are considering, or have already begun filing for bankruptcy, don’t wait to Call or Contact LBS Tax. As your tax discharge expert for bankruptcy in Chandler, AZ, LBS Tax believes you deserve a fresh start, and they can help you get one.

Taxes and the Affordable Care Act

Taxes and the ACA

Tax Problems in Chandler, AZ
With the start of 2015, it is important to know what policy changes mean and how they can affect you personally. Taxes are one area no one likes to be surprised about. When it comes to the Affordable Care Act there are some notable changes that can negatively impact you if you aren’t prepared.

The Affordable Care Act was written into law in 2010 and requires every citizen get health insurance or receive a penalty. They can do so through employment, or using the federal or state run insurance marketplace. There are some benefits to going through the marketplace though. These include tax credit eligibility, and knowledge that the plan will meet a government approved minimum standard of coverage.

The Premium Tax Credit and You

You can receive the premium tax credit, which helps pay for your insurance through the marketplace if:

    • Your insurance was purchased through the marketplace.
    • Your household income falls within the range of eligibility, for example:
      • An individual is fully covered if they make $11,670 a year or less. They can receive a credit if they make up to, but not exceeding, $46,680.
      • A family of four is fully covered if they make $23,850 a year or less. They can receive a credit if they make up to, but not exceeding, $95,400.
    • You must not be able to get affordable coverage through your employee that meets the governments minimum value.
      • Plans offered by an employer are considered affordable if the annual premium you pay for yourself does not go above 9.5 percent of your household income.
      • Plans offered by an employer meet minimum value requirements if they cover at least 60 percent of expected total allowable costs for covered services.
    • You must not be eligible for government program subsidized coverage. This includes things like Medicare, TRICARE, and Medicaid.
    • You must not file a tax return as Married Filing Separately unless certain criteria are met.
    • You cannot be claimed as a dependent on someone else’s tax return.

If you meet these requirements, as many do, you will receive the premium tax credit. Do not forget to adjust your income and eligibility requirements whenever they change. At the end of the year this can have a drastic effect on your tax return. If you make more than stated you will be required to pay back some of the tax credit (which is applied monthly to the cost of your insurance premium).

What if you don’t get Insurance?

There are yearly flat fee penalties that will be carried out on your taxes. These work on a scale and are either a flat rate, or a percentage of your income depending on which is greater. In 2014 this was $95 per adult and $47 per child up to $285 in a household, or 1% of your annual household income. In 2015 this moves up to $325 per individual and $162 per child up to a household maximum of $975, or 2% of your annual household income. This will raise again in 2016.

There are Exemptions

There are a number of exemptions that can lower or even eliminate the tax penalty entirely. These are dependent on everything from financial hardships to religious affiliations. Your local tax professional can help you determine your exemption qualifications. There is a limited time to enroll for insurance under the Affordable Care Act, so don’t wait to contact your local tax professional and find out what is best for you.

What business structure is right for you.

So you want to start a business?

It is almost the start of a new year, and you are planning on finally starting that business you have always dreamed of. You know the one you told your friend in high school you were definitely going to retire off of but never got around to starting until now. Well before you move any further, you have got to decide what kind of business entity you would like to establish. This boils down to several factors, but the dominant one is whether you are going it alone, are bringing partners, or are ready for corporate hood. Whatever you decide on, an established Tax Professional in Chandler, AZ can help you navigate the deep waters of your business beginnings.

Business types

Sole ProprietorshipsTax Professional Chandler AZ

These are reserved for businesses owned by a married couple or a single person. As the most common business structure, these are a great option for those just starting out. There are a number of benefits that include total control of the business, they are inexpensive to form, and taxes are easy to manage. The major downside is that you will be personally liable for your business, this include all losses and debts you may incur because of it.

(LLC) Limited Liability Company

Limited Liability Companies are formed by 1 or more entities or individuals. The companies are called limited liability, because they have structural features of a corporation. They are taxed like and have the flexibility of a partnership though. A major thing to remember is that profits and losses the business incurs are passed to members of an LLC. That means tax preparation is especially important as members must account for these on their personal returns.

Partnerships

Partnerships come in several varieties. There are some constants though. These are common when multiple individuals share ownership of a single business. They often involve legal agreements that dictate how decisions are made. These commonly include profit sharing, dispute resolutions, ownership changes, and what to do if the company is to be dissolved. These offer a lot options and depending on the type allow for equal distribution of control and accountability or an unequal distribution depending on a number of variables.

C Corporations

Corporations are usually reserved for larger, more complex businesses. They do offer benefits not achieved by individuals however. These can include tax and certain financial benefits, but they may also have to pay certain fees other business structures do not. Corporations allow taxes to be paid from profits, and are often taxed twice; once for profits and once more on dividends to shareholders.

S Corporations

S Corporations can be elected to be formed by filling out the appropriate IRS forms. These can avoid the double taxation that occurs for C Corporations. As with a C Corporation, financial liability is limited for both owners and shareholders. Taxes from profits and loses are capable of passing to personal taxes though, allowing shareholders to be taxed even if the corporation is not.


It always pays to consult a tax professional in Chandler, AZ before beginning a business venture or switching structures. They’ll know all the ins and outs of in terms of accountability to individuals and tax hurdles your new business may face.

All about Arizona Tax Credit

It is almost tax season once again. That means it is time to call your qualified local tax professional in Chandler, AZ and find out how you can lower your taxes. One great way is with tax credits.

What is a tax credit?

Tax concept

Your tax liability is the total tax amount that you are legally required to pay because of a taxable event. Tax credits reduce these. Taxable events include things like income, and interests from dividends like stocks and bonds.

Hows is it different than a deduction?

While deductions lower the actual amount you owe, credits lower your overall taxable income. It is the difference between getting taxed on an income of 35,000 and deducting an expense of 1,000 compared to reducing the total taxable amount to 34,000.

Top tax credits you need to know

While your tax professional may be able to find you even more tax credits you didn’t know about, there are some important tax credits that everyone should be aware of.

  • Earned Income Tax Credit : This credit is available to married couples who are filing jointly. There are factors that have to be met regarding the amount of income of the couple, and whether or not they are legal guardians for children.
  • American Opportunity Tax Credit : This tax credit is geared towards students who paid their own tuition costs or family members who paid it for them. They must be pursuing a degree and it is only available for the first 4 years of schooling. If tuition was paid with grants, they are not eligible. If it was paid with loans, they are eligible. Their income must be 80,000 or less for a single individual or a 160,000 or less for a married couple filing jointly.
  • Lifetime Learning Tax Credit : This is another credit geared towards continuing education. Unlike the American Opportunity Tax Credit the individual claiming it does not have to be pursuing a degree, and it extends beyond 4 years.
  • Child and Dependent Care Tax Credit : This is geared towards those caring for children under 13 or spouses and family members who are unable to take care of themselves. It covers up to 35% of the cost of care for those who work or are actively looking.
  • Savers Tax Credit : This is great for those with little income who still want to contribute to a retirement fund. The credit allows you to take up to $1000 for single, or $2000 for joint filers off their taxable income.

Now that you know what credits to ask about, call your local tax professional in Chandler, AZ and find out what other credits you may qualify for.

Filing Taxes With Freelance Income

Being self-employed is one of the greatest feelings in the world. You get to set your own hours, be your own boss, work on the projects you want to work on and decide where you work. It takes a great deal of discipline and dedication to be a successful freelance professional, and a great deal of knowledge when it comes to filing your taxes as a freelance professional. Filing your taxes can be almost as demanding as finding clients and projects to keep money rolling in. Give yourself every advantage by reading up on just what it means to be a tax paying freelance professional.

Pay it Back to Pay it Forward

The first thing you’ll want to do when you start freelancing is set back money for your taxes. Since you’re your own boss, you have to do your own deductions, otherwise you’ll find yourself scrambling for money when tax day rolls around. You might want to open up a separate bank account just for your taxes and keep it separate from your savings and checking account. Alternatively, you can set yourself up on a quarterly payment plan where you estimate how much money you’ll owe at the end of the year and make payments four times a year. If you over estimate, you’ll get money back and if you under estimate you’ll have to pay the difference.

Deductions

There are a number of deductions freelancers qualify for, including home office deductions, mileage, work supplies, insurance, advertising and paying rent on buildings you use for your business. Do your research to see what deductions you qualify for and be sure to keep perfect records so that you’ll be prepared in case you’re ever audited. You should know that the IRS keeps an especially close eye on freelance professionals. Keep a record of all of your business-related expenses and update them as much as you have to. This might be time consuming and tedious, but it could save you a lot of time, money and frustration if you’re ever are audited by the IRS.

Hire a Professional

No matter how good your records and your knowledge of taxes is, you should still let an accountant or another tax preparer look over your tax returns and records. The reason for this is that they have knowledge and experience that you don’t. They’ll know what new deductions you might qualify for and what new changes are taking place with taxes that might affect you. Hiring a professional might cost you more money than you’d like to pay, but doing so could save you more money than you realize.

Know what all you’ll be getting into as a freelance professional before you decide to quit your regular job. Ease into the shift and educate yourself before you make the plunge into the freelance pool.

How A Professional Can Help With Your Business Tax Return

Tax returns and tax laws are a constantly evolving and changing business. If you have a business, it can sometimes be confusing for you if you wish to prepare your own taxes. That is why you should hire a professional tax advisor to help you with your business tax return. A professional tax advisor will work directly with you and help you with the entire process to make sure you always file your taxes properly every year. There are many steps to the business tax return process, and a tax professional can make sure you complete every one without any confusion or stress.

Financial Reports

Your business should have daily, weekly, monthly, and yearly financial reports that log all of the necessary data you need. A tax advisor can help you record all of the proper information to make sure you have everything you need for the tax return filing process. They can even perform the bookkeeping and accounting services themselves so you won’t have to worry about any financial miscues when it comes time to file your business tax return. A tax advisor will make sure all of your financial reports check out completely.

Deductions

While running your business, you are sure to have some deductions that you can report on your business tax return. A professional tax advisor can help you understand which items are able to be deducted and then can help you apply those deductions to your business tax return. Your business could show a loss in a specific area, could have made a generous donation to a charity of some sort, or made a large purchase for new business equipment. You can even claim mileage and car expenses if you use your vehicle for business purposes. A tax professional can help you out a lot if you are a new business, as the entire process can be very confusing if you are new to the business tax return field.

Paperwork

Filling out the paperwork for your business tax return can take a lot of time. This time can be better spent by you in the daily operations of your business. Once a tax advisor has all of the information he or she needs to file the business tax return, you can focus on other things while the paperwork is filled out for you. Once the paperwork is complete, you can submit the tax return and go about running your business once again.

Reasons Payroll And Small Business Accountants Support Can Save Your Clients Money

It is no secret that starting a small business is not cheap. Often, a new entrepreneur will be presented with so many large bills and business loans before the business goes live that he or she may be reluctant to spend extra money on almost anything. However, without a solid financial plan and the assistance of an accounting professional, any small business owner might overlook the most important part of their business—they need to make a profit. And, they need to ensure that they do not run out of cash.

Problems With Figuring Out Finances Spontaneously

Whenever a business owner does not have a detailed financial plan, small expenses can start creeping up. Granted that no one can predict the future, no business owner wants to run out of cash. Even if a business is set to make millions in five years, employees tend to quit pretty quickly after they do not receive paychecks as promised. Needless to say, effective and accurate payroll is paramount to success. It is also difficult to pay for necessary materials (e.g. shipping supplies) with IOUs. The bottom line is that failure to anticipate expenses and track finances often results in a failed business.

Spending Money Upfront on Accounting Can Boost Profitability and Viability

As the saying goes, you often have to spend money to earn money. If your clients hire an experienced accounting professional in the beginning, they can boost profits and save money on accounting in the long-run. It is smarter and cheaper to hire an accountant to assist in launching an in-house accounting system and assist in financial planning in the beginning for two reasons. First, a small business owner will know how much he or she will spend on accounting. More important, the business owner will not have to hire an accountant when in crisis. Having a disorganized accounting system which needs to be revamped along with missing documentation can turn into a nightmare. Worse, it will cost much more to hire a quality accountant to get a mess 18 months in the making straightened out by the end of the week. Plus, after that ordeal a business owner will still lack a sufficient accounting system. You can save money by doing things right the first time.

Why All New Business Owners Should Consult An Accountant

Almost all new business owners have one thing in common, they want their businesses to succeed. Whereas some people will obsess over office décor, all people need to find a quality accountant to have a more viable business and avoid a tax season or an empty bank account nightmare.

Tax Deductible Travel Benefits For the Corporate Owner

As an Owner of a Corporation there are ways to take tax deductible travel benefits. Remember you are an employee of the corporation and it is a separate legal entity from you its owner.
Here are two possible scenarios –

If you pay for the travel expenses personally you should submit an expense report and be reimbursed by the business. This added documentation assists in proving that this keeps the separation of the business and the owner.

If you do not get reimbursed by the business and want to take a tax deduction for the travel you are required to file form 2106 which limits the amount you can claim as a deduction.

The final option is to have the business pay for all the travel expenses on a corporate credit card or debit. I prefer this method of cash as cash is harder to document during an audit with the IRS.

The Business Travel Documentation –
Business travel needs to answer the following questions to be substantiated:
1 Where – Your travel destination city.
2 Date – Your dates of departure, return and days on business.
3 Amount- The amount of each expenditure for travel by category.
4 Business purpose – The business purpose or the benefit (expected) derived.
We have available on our forms page a business travel worksheet.

Business Consultation Service

Recently Married? Congratulations, now it is time to file taxes together or not

There are choices you need to make about filing this year. We normally recommend that you file as Married Filing Jointly. This is often the best option in either getting the largest refund or the small tax due. But we recommend that you look at it both ways to see married filing separately is the best for you.

Be aware that if you file as Married Filing Separately there are credits and deductions that effect how you both file. There are limits on the credits as a way to control possible abuse of the credits. Also, if one of you itemizes the other one may have to even if it is not in your favor.

We recommend that you always consult with a Enrolled or Licensed Tax Professional as tax law changes regularly.

Facts About Arizona’s Transaction Privilege Tax

Sales and Use tax laws are complex in the state of Arizona. They are very different from other states and do not affect every business in the same way. Residents starting new businesses and those new to Chandler often have problems navigating local tax laws. If you have found it difficult to understand the Transaction Privilege Tax (TPT), you are not alone. Many business owners have found themselves with a tax problem in Chandler, AZ due to the TPT. Here are a few important facts about the TPT that can help you get a basic understanding of the law.

What is the TPT?

The Arizona Transaction Privilege Tax is often called a sales tax, but technically it is not determined by sales. This can be confusing for people interested in starting a business or business owners who are moving to the area. The tax is usually passed on to the consumers who purchase goods and service of a business, which is why it is commonly confused for a sales tax. However, it is the responsibility of the company to pay the tax, whether they pass it on to the consumer or not.

Important Facts About the TPT

There are some important things business owners need to understand about the TPT when applying for a tax license in Arizona. Here is a quick look at the TPT:

NOT a sales tax, instead it is classified as a tax for the privilege of doing business in Arizona
Affects businesses with retail sales at the state and possibly county and city level
Counties and cities that collect the tax independently are called “non-program cities”
The state and non-program cities differ in the types of businesses affected by the TPT
The last point often causes issues for businesses in Chandler. Even established residents need help understanding the TPT differences between the state and local municipality.

Most business owners find a knowledgeable tax service company that can navigate Arizona tax laws. Your business can get back on track by understanding a few basic facts about the TPT and getting expert help with tax resolution in Chandler, AZ.