Posts Tagged ‘tax’

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Tax Season: Ways You Can Spend Your Returns

Wednesday, April 14th, 2010

For most people, tax season can be a dreadful time. The new changes in the tax code and trying to make sure you have all of the essential items such as important documents and receipts can make the tax filing process very frustrating and time consuming. Most experts say that you can make the filing process much easier if you take the time to prepare instead of waiting until the very last minute. However, there is a light at the end of the tunnel. The average tax refund that Canadians receive is approximately $1,400.

Many Canadians will use that money to go on a holiday or have a shopping spree; however, there are many other ways that you can put your tax refund to use. Your tax refund can help you get ahead with your personal finances.

Here are several, useful things you can do with your tax refund.

1. Invest it Why not put the money you just got back and invest it on your own future? Invest it into your mutual funds, or put it away into your retirement fund. Grow a nest egg that you can enjoy when you finally go into your well deserved retirement.

2. Pay Off Debts Owing money to creditors can bring a lot of unwanted stress and pressure. Use your tax refund to pay off debts and get your finances back in order. Even if the money isn’t enough to clear all your debts, the money will reduce the principal and bring you that much closer to being debt free.

3. University Fund It’s never too early to start saving for your children’s education. Put it away into an RESP. With the rising costs of tuition, this may be one of the smartest moves you’re doing to secure a bright future for them. In addition, it’s a valuable lesson for your kids to plan ahead. As a result, when they find out they have a nice fund waiting for them to complete their education; they can focus on what’s important, learning.

4. Home Improvement Have you been waiting for the right time to do that perfect renovation? Why not spend your return on improving your home? You can renovate your kitchen, change the bathroom, even change the overall theme of your house! This is a great way to breathe new life into your home, while increasing its value.

5. Save it. If all else fails, you can always first put it into a savings account, and worry about it later. At the very least, it will still earn some interest (even if it is at historical lows), and in the long run, compound interest will take its effect.

The number one reason why people file their taxes in the first place is so they can get their tax returns. Use the windfall to pay off some debt, save it for the future, or even dabble in some investing. This money is yours to spend as you will; however, using it wisely can help towards gaining greater financial stability.

Adriana Noton is a freelance writer who writes on a variety of financial topics including personal budgeting and debt consolidation. For more information about personal finance and credit help, ConsolidatedCredit.ca is a tremendous resource on the topic for Canadians.

categories: tax return,tax refund,tax,taxes,personal finance,money,debt,cash,RESP,investing,investment

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Business Owners Save Money with Medical Expense Reimbursement Plans

Saturday, April 10th, 2010

A Medical Expense Reimbursement Plan (MERP) is a great way for small business owners to save money by getting a deduction for all those medical expenses you can’t deduct on your personal tax return.

Most higher income taxpayers are unable to deduct medical expenses because they don’t spend more than 7.5% of their adjusted gross income on medical expenses.

For example, if your adjusted gross income is $100,000, you would have to spend more than $7500 on medical expenses in order to qualify. If you spent $7501, you would get a deduction of $1.

A MERP is the perfect solution. The way it works is your business reimburses your employees for uninsured medical costs. The business gets a tax deduction for the amount it reimbursed the employees and the employees do not have to claim the reimbursement as income!

Here are some of the items that qualify for medical reimbursement–all of your out-of-pocket expenses that are normally deductible as medical expenses, including health insurance, prescriptions, co-pays, exams, glasses, hearing aids, hospital costs, doctors fees, dental work, lab tests, therapy, special schools & transportation for disabled children, health care supplies, fertility treatments, and much more.

Of course the IRS has specific rules concerning who is able to use a MERP. Sole proprietors, partnerships, LLC owners, s-corporations are not eligible since they are all considered self employed. Only C corporations are able to use this strategy.

So you will need to establish a C corporation in order to use the MERP. If you have a fair amount of medical expenses, it is definately worth it.

Your strategy can be to establish a c-corporation to pay yourself and spouse benefits as employees. This new company must have a business purpose, so you should determine what portion of your income can be allocated to the new company.

You can save money on taxes by paying yourself or spouse benefits through your c-corporation because you won’t have to pay the payroll taxes associated with the benefit amounts!

Section 105 of the Internal Revenue code covers the MERP. Your plan must meet two test–it has to be considered non discriminatory and be able to provide tax free fringe benefits to employees.

1. BENEFITS TEST: It is required that all benefits to highly compensated employees and their dependents must also be provided for all other employees and their dependents. The plan cannot discriminate in favor of highly compensated employees.

2. ELIGIBILITY TEST: The plan cannot discriminate in eligiblity to participate. It must pass at least one these three requirements: (a) At least 70% of all nonexcludable employees actually participate in the health plan (b) At least 70% of all nonexludable employees are eligible to participate in the plan and at least 80% of all the employees who are eligible to participate actually do; and (c) the plan must be offered to a fair cross section of employees that is found by the IRS not to discriminate in favor of highly compensated employees.

Find out more about MERPs and start saving big money on taxes. Focus on learning about other tax saving strategies in order to make sure you are saving as much money on taxes as possible! Get a totally unique version of this article from our article submission service

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Request The Environmental Benefits Of The UK Govt Reducing VAT On All Insulation To 5%

Thursday, April 8th, 2010

VAT has been reduced to five percent already in some instances; but, not others. The Government has, in fact, been gradually reducing since 1998 the VAT rate until it reached five percent for professional installation of some energy-saving materials. This reduction also encompassed the use of insulation. The Government has thus recognized VAT reductions can serve a role as an incentive. However, so far, homeowners cannot benefit from these incentives should they choose to do the installation work themselves. The environmental benefits of the UK government reducing Vat on all insullation work to five percent means the Government should reduce the rate of VAT on key energy efficient products, irrespective of how they are installed. The reduction of resource use thereby is also of economic benefit to UK, especially considering as recently announced by the report published by the Industry Taskforce For Peak Oil and Energy Security, UK faces an oil crunch within five years. The Government would make a start towards changing habit patterns that are required.

In this era of budget stress, frugal homeowners are more likely to opt for do it yourself home renovation. Tax reduction would also support investments in the existing housing stock and help to improve the sagging housing market. The Construction Products Association understands this market benefitting factor and has expressed its support for the extension of the reduced VAT rate to do it yourselfers.

One can point out the thermal insulation market has been growing due to favourable regulation and rising energy prices. In 2007, the thermal insulation market in Europe was a 30 billion Euro market. A reduced rate of VAT on thermal insulation would enhance the demand for such products. The possible impact is illustrated by the results of a temporary campaign mimicking VAT exemption, which led to an increase in sales by 120 percent. The reduced rate of VAT, could lead tonnes of CO2 reduction per year. A study commissioned by the EU commission has stated that a reduced VAT rate for thermal insulation is a potentially effective instrument.

The Construction Products Association is well aware that homeowners can install insulation without professional hires. But, the current Government tax policy seems to ignore this fact. Any further potential for reduction in greenhouse gas emissions should be entertained and supported as buildings are the largest energy-using segment in the region.

A study commissioned by EU has found that a reduced VAT rate on insulation products might not be passed through fully by installers to the consumers. Despite the rate cut for commercial installation, this is one reason it has been surmised why the uptake in the UK market has been low. This is because since the installer purchases the product on behalf of the residential customer, the reduced rate may not be clearly apparent to the end consumer. Of course, when the residential owner is the installer, this is not the case.

The experiment of the Isle of Man of a rate reduction, which led to increased revenue from taxation shows the economic gains that are a potential ignored by the UK government. The improvement in the stock of existing housing and a reduced push on development of green field location reveal the ancillary beneficial results. The UK government should learn from the example set by the Isle of Man Government. A change uncurrent Government policy would demonstrate the Government would like consumers to participate in doing what they can to aid the environment. It can also point out the economic gains to be had by taking this path to prod them in this direction. Meanwhile, the Government should keep in mind the message of that report about peak oil and how this rate reduction would encourage people towards changing their consumption habits.

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Hiring Your Own Accountant Will Make A Difference

Thursday, April 8th, 2010

Are you a small business owner? Do you have complicated financial issues that include an investment portfolio? If you do, you should hire an accountant. It is the wisest financial decision that you’ll ever make.

Handling your money and financial issues can be a daunting task. It’s impossible to remember to keep every receipt, hold on to documents, track every single penny that comes in and goes out, even if you’re just an average individual without complex financial issues.

Many people think that they can simply use an excel spreadsheet to keep their numbers right. Unfortunately, the more numbers you have going on, the more likely you are to end up with human or even computer errors.

When you leave your personal finance and business concerns to the skill and experience of an accountant, you will be guaranteed accurate figures and have peace of mind that your matters are being handled by a professional. When it comes to tax time, you can rest assured your accountant will have your back with the IRS.

Rely on your accountant to take full charge of everything in your financial life when you hire him or her. They will sit down with you at your first appointment and ask you a lot of questions in an attempt to find out just what sort of assistance you need.

You will need to gather all of your financial and investment information for your accountant. They will provide you with a checklist of items that they need to see. They will also need immediate and complete access to all of your financial records and accounts.

An accountant will take over all of your financial issues. You still have the ability to spend and receive money. You will still have control over financial decisions. However, someone else is completely responsible for tracking your money.

Accountants are not only degreed professionals; they are also bonded and certified by each state. When you go to meet with a prospective accountant, make sure to ask information pertaining to their background, education and certifications with the state you are residing in.

It’s a very difficult task, keeping track of sales and losses, dollars and cents, when you own a business or have an active financial profile. Hiring an accountant will help you get every cent of your money where it belongs.

You will have someone other than yourself to hold accountable for the figures that help your business run. It’s important to do what you need to, as a business owner. Time is precious these days and as the old adage goes, time is money. Make sure you’ve got someone else looking after yours so that you can go about the important business of running your company.

With your accountant at your side, you will never make another unsound or unsure financial judgment. You can feel confident in the fact that your money is safe and being tracked.

People and companies look to their accountants for guidance, assistance, resolve. Cpas Scottsdale Well, you see, this is important for helping your business run as smoothly as it possibly can. Your time will be free to run a business, take a vacation, and just get on with your life.

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Some Things You Should Know To Save Money With Tax Free Shopping

Tuesday, April 6th, 2010

A lot of people are suffering financially right now and they are looking for ways to save money. One way to save money that you may not have considered is taking advantage of tax free shopping sales and offers.

Many countries give refunds of sales taxes paid to their international visitors. There are a variety of online websites that list those countries and information on how to get your refund. If you are using a travel agent, they may be able to give you information about tax free purchases.

There are also states in the United States that offer sales tax free shopping to international visitors. Restrictions apply so check with the state that you are going to be visiting to see if they participate and what you need to do to get a refund of taxes paid.

Inside the United States, there are some states that do not have a sales tax so you never pay it. New Hampshire and Delaware and just two states that do not have a sales tax so you can take advantage of tax free shopping anytime.

Many states hold an annual tax free holiday. These are usually held in late summer right before school starts. Not everything is tax free so you need to know what items you can buy that will qualify. Usually, you can purchase back to school supplies, clothes, computers and other items. Not all states hold these sales at the same time, so if you live near the border of another state, be sure to watch for their tax free holiday sales as well. And if the sales are held at the same time, sometimes eligible items will vary from state to state so check your neighboring states list to see if they have an item you need that your state does not.

To get the most out of your shopping trip, make a list of the items you need to buy. Be sure to check your list against your states eligible items list. Check store sale ads as many stores run sales on items that qualify as tax free purchases. Expensive items such as computers may have prices slashed to make them qualify for a tax free event. Quantities are usually limited so if you want one of those items, you need to plan to get to the store early. Make a list of the stores that you want to shop and prioritize the list so that you can be sure to pick up items that you need.

You may have to spend some time doing checking to see what items qualify and making a plan for your shopping expedition, but you may find that you can save quite a bit of money by going tax free shopping!

Discover the joy of tax free shopping and how much you will save. Get the right time frame for tax free shopping to ensure you shop at the right time. Go online now and learn more.

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Sole Proprietors Beware…The IRS Is Watching!

Monday, April 5th, 2010

If you are a sole proprietor–a person who runs a business that has not been incorporated—the IRS is targeting you.

If you start a business and do not form an LLC or incorporate, you are a sole proprietor.

IRS form Schedule C is used by sole proprietors to deduct business expenses against business income. The two biggest problems for the IRS are fears that income will be under reported and personal expenses will be written off as business deductions.

In addition, the IRS has found that many schedule C businesses are fictional and reported only to reduce the taxpayers tax liability and/or make the taxpayer eligible for the earned income credit (which translates to FREE MONEY!)

This is why schedule C is the IRS’ most audited form. If you have a schedule C in your return, you are subject to more IRS scrutiny.

That’s reason enough not to have a schedule C in your tax return.

Service businesses, such as hair salons, and repair services along with professionals like doctors, lawyers and insurance agents are IRS targets.

Changing the method used to report business activity is the answer for service businesses and professionals.

In other words, AVOID SCHEDULE C!

Forming an LLC or incorporating your business are both great alternatives.

An S-corporation is an excellent alternative to the taboo schedule C. There are many benefits to forming an S-Corp, mainly the fact that S-Corporations don’t pay self employment tax—the additional 15.3% tax due on the profit from a sole proprietorship or partnership.

If you form an LLC to get away from schedule C, you must have other members (partners) in the organization. A single member LLC must file a schedule C, so you would be back in the same boat. Or you could elect to file as an S-corporation, or a partnership by filing a form 8832 (Entity Classification Election) to be classified as another entity.

Consulting a tax professional before making this decision about your entity is a wise course of action. Since each person’s situation is different, many factors need to be considered in making the decision.

Learn more about Sole Proprietors. Stop by Larisa Humphrey’s site where you can find out all about small business taxes and how to save big money.

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Do You Own A Small Business? Three Ways To Improve Your Cash Flow Today!

Saturday, April 3rd, 2010

Low cash funds are the top killer of small and medium companies and the phrase “turnover is vanity, profit is sanity, but cash is reality,” has never been more true than it is today. That’s because in a tough economy, debtors will pay you more slowly while creditors will want you to pay quicker than ever.

These guidelines have really assisted our clients and has seen them achieve hugely improved cash flow in just a few months. By following these steps, your business will be able to cope with the tough economic times and you’ll have all the processes in place to be one step ahead of your competitors when the economy starts to improve.

1. Run a credit check on any new client. It’s too easy to do some work for a new customer, only to find out too late that they can’t actually afford to pay you. Make as many checks up front as you can and ask for a deposit if you are in any doubt.

2. Be really ruthless about credit control – Too many companies find out too late that a client can’t or won’t pay. Be proactive and check with the client that the have received the invoice and they have no issues. Then chase a week before the due date to confirm when payment will be received. Make it easier for them to pay by offering a BACS service.

3. Keep your cash flow forecast up to date – Whether you manage it daily, weekly or monthly (depending upon your billing cycle), make sure that you keep your cashflow forecast right up to date. Keep the forecast on a simple spreadsheet, listing expected cash in and then all the outgoings that you’ll need to make over the next 12 months.

Our clients have definitely found this advice invaluable, and I believe you will too.

Looking to find the best accountants in Leeds and the best accountants in Halifax? Visit Accountancy Extra today.

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Historical Facts Of The Introduction Of Window Tax In England And Scotland

Friday, April 2nd, 2010

This article presents the historical facts about an old taxation system on windows in the United Kingdom. The window tax was introduced into Great Britain in 1696 by King William the third. In those days, the idea of civil liberty was different to that which exists today. In the prevailing climate, people felt that telling the king about their income was an unacceptable intrusion into their private business.

To find a way to tax them based on some sort of wealth measure, the King decided to tax his subjects depending on the size of house they inhabited. Each householder was to pay a flat rate of 2 shillings. Then in addition to this, each person with more than 10 windows in their dwelling would pay extra tax.

If the house had between ten and twenty windows, then this extra tax was 4 shillings and anything over twenty windows had to pay eight shillings. Later, as the king wanted to increase the tax, he reduced the minimum number of windows to be taxed from ten to seven. This was further changed in 1825 to eight windows.

This tax was quite unpopular among the people even though it was possible to claim an exemption. If the occupants were poor, they could apply for an exemption.

However, in the 17th and 18th centuries, many larger houses could be seen with bricked up windows. This is an obvious attempt to avoid this window tax. In Scotland, after William Pitt the Younger introduced this tax in the 1780s, the windows were painted black with white frames. This was also done in order to avoid paying the tax. These popularly became known as Pitt’s pictures. Examples of these windows can still be seen in Charlotte Square in Edinburgh.

It may be possible that in contrast to this, many of the richer families actually had extra windows designed into their houses. They commissioned properties with as many windows as possible. Even blank walls had window facades to create the look of more windows.

Get more information about the advantages of employing a reputable window cleaning company today! When you are looking for window cleaning services in West London, you will find it fast and easy!

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Everything About Finding Work As A Window Cleaner In North London During The Recession

Wednesday, March 31st, 2010

Finding work as a window cleaner in north London during the recession is not as easy as once before. At one time, this was accomplished quite easily, however there are many who are feeling the impact of the recession. There are certain things that you can do in order to higher your chances of being hired and if that is something you are looking to do then you will find that information here.

Finding a job now a days, regardless of the industry can be one of the hardest things that you find yourself doing. Today, the employment market is no longer the employees market, but rather the employers. This in turn limits the amount of options that are available for people, in addition to raising the amount of people that are competing for the same jobs that they are applying for.

With these types of jobs, you are going to get hired primarily off of the kind of work that you do. Some may lead to permanent work, while others may not. In any case it is a good way to get a reference from someone, as well as some experience while you are making some cash. In any case, you are going to want to ensure that you make a good impression while you do any type of temporary work.

This applies especially since many of the companies now are marketing themselves now through free window cleanings. This means they are going to have higher demand and more of a need for workers to do the cleanings for them. Most of the time, if someone is impressed they are going to call back, therefore meaning more chance for making cash.

Dressing in nice manner is one of the best ways to snag a job. This means making sure that you are well groomed and your clothes are ironed. Anytime that you go for an interview, you want to give the impression that you care and this way you increase the likeliness of getting the job you want.

Finding work as a window cleaner in north London during the recession does not have to become a task. It is just something that will take time and commitment. If you are someone committed to getting the job, then you are sure to.

If you reside in North London, then we recommend you look choose the window cleaners service. They will leave your windows very spotless.

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Creative Minds Today

Sunday, March 28th, 2010

With creatives it is pretty important for us all to attain beneficial organization expertise. Any very good organization system is crucial for all of us, as it can over time be crucial in supporting all of us to acquire the time to commit with some of our family members and friends. The work you might be is definitely unimportant, since time administration is actually something we are able to just about all make use of.

This is a really demanding issue for the majority of us to be ready to manage time efficiently. This is also true if you are a creative or self employed person in any kind of market. In a very traditional working environment it appears much easier to manage your time mainly because you’ve got a superior providing you orders.

It’s a wonderful feeling to always be in control of your current future and still have no-one but yourself to boss you around, but being self-disciplined this would be the step to achievement. Most people may not appreciate carrying out the actual paperwork, responding to the phones and also coping with tricky clients, however this is one thing most of us experience as creative s.

If we all set and sustain objectives everyday, it might allow our working day a lot easier. It is usually excellent to write these down, often in writing or perhaps online. There are goal setting courses to work with to assist you during this process of success.

Another thing that a number of us are guilty of is committing to a lot of our time to check out things which are not be linked to our targets or perhaps daily objectives. We often think that the solution is to find more hours to sort things out, but in reality we all may possibly probably achieve a lot in the time period we currently have. It merely depends on exactly how we all share our responsibilities.

A good way to keep an eye on your own data is to set up some form of CRM system. This should help you to store your acquaintances, emails, assignments, projects as well as sales info when you’ve got a busy workflow. If you are put off by professional software program, you can find a few cost-free packages such as Sugar or Vtiger.

Should you be self employed and also think its imperative that you conserve every cent, then why not maintain all of your data on your hard-drive or perhaps on the web, as opposed to reproducing it and also keeping hard duplicates, which costs money. With USB hard drives as well as 200gb devices at such low prices, why not preserve this valuable info in a very small memory space,which will give you much more space to get creative in other places in your workplace.

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