Just finished my 2021 taxes.........
Had a long meeting with two accountants.........
I'm thinking that the little I paid might be the most valuable money I spent all year.?ÿ
No way I could have done it myself.?ÿ
This is one more skill business owners should work on.?ÿ The more you know on a year around basis, the less you owe.
basis
Key word.
This is one more skill business owners should work on.?ÿ The more you know on a year around basis, the less you owe.
Skill? do you mean accounting?
More at comprehending how income and spending can be adjusted to minimize dollars lost to income taxes.?ÿ Staying aware at all times of special changes implemented by Congress that can have a significant impact on the final numbers.
For example:?ÿ I was able one time to purchase a single-use ag building and receive a 20 percent tax CREDIT for the cost of that purchase.?ÿ This came as part of a land purchase that closed on December 31.?ÿ That was the last day for which the tax CREDIT was applicable.?ÿ It was not to be an option in the following year.
Another example:?ÿ Certain items may be purchased THIS year for use NEXT year.?ÿ Some items are not eligible for that tax break.?ÿ Know what they are.
Another example:?ÿ Many things in the income taxation world are strongly determined by specific dates within the year.?ÿ Official retirement date impacts certain calculations.
You don't need to know everything your account needs to know, but you need to stay current on the facets that can have significant impacts on your specific situation.
An individual can sometimes show such minimal taxable income for the year that they are eligible for the Earned Income Credit that basically pays you back for having worked (earned income) instead of not working.
Individuals who have, or will soon have, college-aged children need to be exceptionally aware of the information that is used for the FAFSA (google it) forms to maximize some scholarships and general Federal assistance.?ÿ For example,?ÿ the calendar year containing the spring semester of a student's high school sophomore year and first semester of the junior year is the tax year for information that is being assembled during the Fall of the senior year of high school to show financial need at the prime time to be making applications for scholarships where financial need can be a factor.?ÿ Thus, that is a year in which having a significantly low annual income can be a great aid.
As a further comment on this last item, a couple of days ago I saw a photo of a girl and her mother from last Spring showing the daughter graduating from college.?ÿ The mother works as a clerk in a convenience store and has not been married in over 10 years.?ÿ There are two younger siblings.?ÿ The daughter received enough scholarships and Federal assistance that she was able to afford those four years at a major university by only working during the Summer months.?ÿ She is not buried in debt.?ÿ She will be applying to Veterinary Medical School later this year.
More at comprehending how income and spending can be adjusted to minimize dollars lost to income taxes.?ÿ Staying aware at all times of special changes implemented by Congress that can have a significant impact on the final numbers.
For example:?ÿ I was able one time to purchase a single-use ag building and receive a 20 percent tax CREDIT for the cost of that purchase.?ÿ This came as part of a land purchase that closed on December 31.?ÿ That was the last day for which the tax CREDIT was applicable.?ÿ It was not to be an option in the following year.
Another example:?ÿ Certain items may be purchased THIS year for use NEXT year.?ÿ Some items are not eligible for that tax break.?ÿ Know what they are.
Another example:?ÿ Many things in the income taxation world are strongly determined by specific dates within the year.?ÿ Official retirement date impacts certain calculations.
You don't need to know everything your account needs to know, but you need to stay current on the facets that can have significant impacts on your specific situation.
An individual can sometimes show such minimal taxable income for the year that they are eligible for the Earned Income Credit that basically pays you back for having worked (earned income) instead of not working.
Individuals who have, or will soon have, college-aged children need to be exceptionally aware of the information that is used for the FAFSA (google it) forms to maximize some scholarships and general Federal assistance.?ÿ For example,?ÿ the calendar year containing the spring semester of a student's high school sophomore year and first semester of the junior year is the tax year for information that is being assembled during the Fall of the senior year of high school to show financial need at the prime time to be making applications for scholarships where financial need can be a factor.?ÿ Thus, that is a year in which having a significantly low annual income can be a great aid.
As a further comment on this last item, a couple of days ago I saw a photo of a girl and her mother from last Spring showing the daughter graduating from college.?ÿ The mother works as a clerk in a convenience store and has not been married in over 10 years.?ÿ There are two younger siblings.?ÿ The daughter received enough scholarships and Federal assistance that she was able to afford those four years at a major university by only working during the Summer months.?ÿ She is not buried in debt.?ÿ She will be applying to Veterinary Medical School later this year.
Holy, you haven't even touched remotely on any of the issues with my 2021 taxes or what to do with how messy it got this year.
I did my own for many years, but they got way to complicated, this year was the apex, it should relax going forward.
I'm out of one "businesses" (farming), I only own singly and partially 7 properties now in three states and only two of those are income producing.?ÿ
I just got out of my second accountant meeting where we went over expensing, K1s, Sub S corps, depletion, dilution, and paying income taxes in other states. Looks like I'm getting a refund totally from one state, and I'm shoving the family LLC on my brother's plate.?ÿ
The 650 I paid them is so cheap.
?ÿ
You are a smart cookie, Mighty.?ÿ Too many treat taxes like learning to speak Greek.?ÿ They will never learn anything about it and hope somebody works wonders with their grocery sack of receipts and check stubs when it comes time to file.
I've been through incoming averaging, multiple business incomes, child care credit, earned income credit,?ÿ losing so much one year that I was able to go back and get effectively everything I had paid in during recent years, learned how to hold over credit to help pay next year taxes, filing as a head of household, etc.
There is a ton of other stuff worth learning.?ÿ One of those things is to not fear the IRS.?ÿ If I get a letter from them, it is usually good news, saying I overlooked something to which I was entitled that would result in me getting more money back.
My middle daughter runs a business from her home.?ÿ Several years ago they called her in for an audit.?ÿ She took her laptop computer along plus a valise full of certain items.?ÿ No matter what they tried to question, she had the information to back it up right there with her.?ÿ The finally realized they couldn't find anything wrong and gave up.?ÿ She has never been audited again.
cheap is dangerous...
inexpensive and great value seem more appropriate.....
????
Very true, Inexpensive it is. Some years ago I would do my own taxes, plus another family member. So I would buy the turbo tax programs and I had to buy them every year. I believe I tried another vendor back then also.?ÿ
Then my taxes got too complicated and I turned it all over to the business accountant. My first invoice for my taxes was less than 1/2 of the cost of the computer programs I was buying each year to do it myself.?ÿ
The light went on then and I haven't looked back. Of course since they do the business it's easier, they issue my W2 and have all my data.?ÿ
2021 was a particularly nasty one. Sold property, bought property, created a LLC had to change a trust, created another trust, anyway I will have it easier for 2022 taxes, my goal is to be done by the end of Feb. not October.
Accountants are similar to attorneys, sometimes you really, really need one.
We use an attorney that everyone is fearful of. Those are the best.
Last week our client was denied approval of a subdivision because of a Statute passed on July 1st. It had been our contention that the new Statute didn't apply to this subdivision, that that the subdivision is grandfathered since it was in the process. The commission attorney and the reviewing engineer disagreed.
The client went to our attorney which is also theirs. He wrote a long letter explaining the statute and yesterday it was signed and recorded!!!
They had no problem dismissing our argument, but when he made his (same as ours) they listened.?ÿ