Tax Carnival ecstasy – November 13, 2012

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Welcome to the November 13, 2012 edition of Tax Carnival Ecstasy. In this edition we some really good articles including one from Bill Smith who looks at Saving Money and Time On Taxes this coming tax season. John Schmoll examines the Fiscal Cliff and whether we Should We Really be Concerned. Have you ever wondered if the S&P has a Seasonal Pattern? Alex Peters has an article covering the topic. Finally, Dave Leonard wants you to reconsider Paying your Taxes With a Credit Card. Hope you come back soon, like us on Facebook, tweet this post, bookmark and share with y our friends.

credits

Morris presents Bad Credit Personal Loans: Which Legitimate Companies Will Lend? | Fast Bad Credit Loan Blog posted at Fast Bad Credit Loan Blog, saying, “Bad credit is not something fresh and it has become bad with the worse economic times the country has suffered the past few years. Job losses, illnesses, accidents and other such things have act out a terrible toll on people’s monetary resource.”

taxes

Bill Smith presents Saving Money And Time On Taxes posted at 2010 Tax, saying, “If you are looking for 2010 tax filing with turbo tax, it is very likely that you have experienced some trouble getting your taxes submitted in the past.”

John Schmoll presents Should We Really be Concerned About the Fiscal Cliff? – Frugal Rules posted at Frugal Rules, saying, “There has been a lot in the news lately about the Fiscal Cliff. But, many don’t know what it is all about. Take the time to inform yourself for the potential rollback of tax cuts so you’re not surprised by a big tax bill.”

tips

Alex Peters presents Does the S&P Has a Seasonal Pattern? posted at TradingAcademy.com, saying, “Is there a seasonal cycle in the stock market and should you invest on those patterns?”

Bill Smith presents Yahoo CEO Marissa Mayer–First Earnings posted at FastSwings, saying, “Yahoo CEO Marissa Mayer made her first earnings report in October 2012.”

Dave Leonard presents Are You Sure You Want to Pay Taxes With a Credit Card? posted at Credit Card Chaser, saying, “Do you love getting rewards points by using your credit card? Have you ever wondered if you could pay your taxes using a credit card? This post talks about whether or not you are able to pay your taxes using a credit card and some of the hidden facts you need to know if you choose to pay this way.”

[email protected] presents How to Save on Tax? Tax-Advantaged Savings Vehicles posted at NerdWallet, saying, “Get expert opinions on popular tax-advantaged retirement savings vehicles and factors to consider.”

That concludes this edition. Submit your blog article to the next edition of tax carnival ecstasy using our carnival submission form. Past posts and future hosts can be found on our blog carnival index page.

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Self Employed? – Here’s 5 Reasons Why You Need An Accountant

For the self-employed, tax time can be an entirely different experience than for those who are either employed by another company or own their own business. Being self-employed means that you are technically both an employer and an employee, and are at times responsible for paying taxes on issues that affect both.

Taxes are already complex enough for the average individual, but that situation is exacerbated by your current status. As a result, it may be wise to talk to an accountant, as they can not only find special deductions and benefits, but save you the time and anxiety of having to figure out your tax status.

1. Special Rules

In the United States, every working individual is responsible for paying tax for Social Security and Medicare. However, the amount of tax paid is typically split between the employer and employee, whereas with a self-employed person they are responsible for both. This is just one of a number of different rules and forms that change as a result being self-employed. Having a certified accountant will help you sort through the brambles and not have to worry about an audit.

2. Loopholes and Tricks

Regardless of what type of situation you are in, it’s never a bad idea to consult an accountant as they are far more educated on how to maximize your tax return. Every year the government passes legislation or makes changes to the tax code that affects businesses of all types. Special credits and other tax friendly programs may also be introduced but not publicized to the general public.

Accountants are paid to keep abreast of such situations and how they apply to their various clients. In fact, many of the special tax benefits and tricks apply specifically to those who own a business, and having an accountant experienced with the self-employed may end up saving you far more than the cost of the hiring one.

3. Time

Even if you are willing to sift through the morass of new forms, rules and special deductions and exemptions, the one thing you will inevitably lose is time. Paying an accountant to do your taxes will save you time to concentrate on running your business. Depending on how much income you can generate with that time, it may be that it’s more cost effective to earn money to pay for an accountant than do your taxes for free.

4. Advice and Audits

Accountants can also be relied upon for advice as to how to avoid certain tax penalties or qualify for specific deductions or exemptions. For example, as you can deduct equipment purchases over a single year or over a extended period of time, you can consult them on which deduction works best for your business. If you are by chance audited, a qualified professional can assist you with the process.

5. Online Alternatives

For some self-employed individuals, it can be very difficult to pay for an accountant given their limited financial resources. Relying on an accountant, however, doesn’t necessarily mean relying on a living person. Accounting software can be just as adept at finding the best deductions provided you give it the information they require.

As a result online software is best reserved for those that have relatively simple situations, especially self-employed individuals who will likely be using the standard deduction for much of their taxes.

John Hill writes on behalf of Public Liability Insurance dot org an online resource for business insurance including childrens liability insurance.

Using Your 401k to Start a Business

Starting your own business allows you flexibility and control of your financial future.  While the thought of writing yourself a check from 401k funds to start a business may sound easy, there are several steps to consider while thoroughly reviewing the process.  There are tax penalties to understand and if your business doesn’t pan out as well as you had hoped, you could lose more than your retirement funds.

The use of additional resources such as a financial planner or a retirement plan administrator will help you review options.  You may have the option to roll over 401k funds into a corporate retirement account that allows you to invest in your business.

 

Because so many start-up businesses fail, many say it is not a wise decision to use retirement monies to fund your venture.  Evaluating your risks will help you make an informed decision on using retirement funds.

Review the amount you have in your retirement account and determine whether or not to use all funds or just a portion.  For tax purposes of for your business, it may help to have a separate account to utilize your funds once you obtain them.  This also allows you to keep track of expenses. Upon requesting your 401k funds, a portion may be set aside for tax withholding before you obtain the amount you are requesting.

Your business opportunity should be something you enjoy and have plenty of knowledge about.  Starting a business may be the best opportunity to reinvent yourself and want to make sure things are executed in the best way possible to increase chances of your business being successful.  Additional tips to keep in mind when starting your business:

  • Certain aspects of starting a business may become complicated and if it does don’t be afraid to consult a lawyer or financial specialist. They can assist you throughout your business venture by making sure tax information is correct and provide additional business advice.
  • If you start a corporation using existing 401k funds, penalties fees may be waived.
  • Understand your market by conducting plenty of research, especially during a slow economy.
  • Look into courses and classes available for entrepreneurs.  The Small Business Administration has a wide range of business resources available.
  • If other people are involved in your business that is employees, make sure they are aware of changes during the process.  Make sure you have good communication before and after the business gets up and going.

Andrew writes frequently about personal finance as well as issues effecting both consumers and small businesses, covering everything from credit cards to mortgages to tax reduction.

Dealing with Tax Debt

Handling tax debt is different from how you handle other debts, but you need not worry because for sure you will be able to work a good plan that will reduce your balances. Here are several ways that you can start drafting out a plan:

Check your tax return documents for any corrections

The first thing that you have to do is to collect all your documents of tax return and check if all the entries are correct and that you were not overcharged for something. Nevertheless, if you do not have any idea about this type of things you may opt to get debt help from a certified public accountant of financial counsellor to help you check if there is a discrepancy between the figures.

Your financial assistant will also help you in determining which plan of action you intend to do against your debts. After doing that, he or she may suggest the following tax debt reduction strategies.

Negotiate your tax debts with the Internal Revenue Service

Once you have the total amount that you need to pay, one option that you can do is to go directly to the office of the Internal Revenue Service. Personnel from them can assist you and suggest options and plans that you can do for you to be able to pay your balances. Some of the programs they have include the following:

  1. Monthly tax debt program. This is one of the most known strategies that you can do, the internal revenue service will allow you to pay for your debts on an instalment basis payable. However, the catch about this strategy is that your current tax debt amount will accumulate interest charges over the months of paying period. Apart from the penalty and interest, you will also need to shell out a user fee amounting to $105.
  2. The internal revenue service can also offer you what they call as “hardship consideration.” This is the approach wherein they will give you a few months to save up for your debts and for your financial status to work out. However, you still need to pay interest fees, penalty charges, and application fee.
  3. Another tax debt solution is filing for bankruptcy. But, if you think that you can still do something about your balances then do so. Applying for account foreclosure can directly affect your credit score and can make future transactions with the bank difficult.