Five Big Tax Mistakes

Every year taxpayers are hit with tax surprises that could be avoided if they just knew the rules. Here are five big ones that are easy to avoid with some simple planning.

Mistake #1. Withholding too little. This results in a tax surprise when filing your income tax. Don’t be too hard on yourself if this happens to you. Social Security withholdings have changed each year and new tax laws make it very difficult to withhold the proper amount from each paycheck.

The plan: Check your withholdings after filing each year’s taxes. Make adjustments as necessary by filing a new W-4 with your employer.

Mistake #2. Inadvertently withdrawing funds from retirement plans. Amounts taken out of pre-tax retirement plans like 401(k)s and IRA’s can create taxable income. The most common inadvertent withdrawal occurs when you roll over funds from one retirement plan to another. If done incorrectly all the rollover could be deemed taxable income.

The plan: Do not touch your retirement accounts if at all possible (Exception: when you reach age 70 ½ you may be subject to Required Minimum Distribution rules). If you do withdraw funds, ensure you have the proper withholdings taken out at time of withdrawal. Direct rollovers into your new plan are always a better alternative than receiving the withdrawal from the plan administrator and then conducting the transfer yourself read more...

What our clients saying about us:

One of the best things about BAS is the "flat fee concept."Knowing the annual payroll, accounting and tax preparation fee in advance allows us to control our cash flow. BAS offers unlimited accounting and tax advice, better planning and most of all..... no surprise additional bills."

Client Name: James Woodworth & Patty Woodworth, Action Wheels Inc., Wenonah, NJ

Watch our Video : 

SCHEDULE DISCOVERY CALL

Get More Info : Business Accounting System

Thanks for reading this blog. You can subscribe for regular update about technology news and tips via RSS Feed. you can also follow us on facebook & twitter.Thanks for visiting!. 

Take an IRA Deduction Now. Pay Later.

Review our previous blog on the below mentioned topics at: https://www.bas-pc.com/blog

Here is a tax planning tip for those who file their tax returns early and wish to contribute to a tax deductibleIRA, but do not have the funds to do so. Say you want to pay into an IRA to get a tax break but you don’t have the money? Take heart, there are ways to get around this. The IRS allows you to take the deduction now and pay later when you get your refund.

How it works

• Step 1: Prepare your tax return early in the year (early February). Run the tax return considering an income reducing contribution to a tax deferred IRA. If you do not have the funds to put into the IRA, but your tax return has a refund that can fund your contribution, you are ready for step 2.

• Step 2: File your tax return with the IRA contribution noted. File the tax return as early as possible to ensure your refund gets back to you prior to April 15th. E-file the return if at all possible.

• Step 3: Fund your IRA prior to April 15th. Tell your IRA investment firm you wish your IRA contribution to be for the prior year.

That’s it. You have now effectively had the income reduction benefit of your IRA contribution help fund the account through your tax refund read more...

What our clients saying about us:

“Since 1975 BAS has been there for my family and I both in business as well as personally. I used to do the accounting myself, but we grew too big. Lee and Scott convinced me I can make more money focusing on my business than doing the books.... They were correct !!”

Client Name: John Gagliardi, Marlene's Dress Shop, Collingswood, NJ

Watch our Video

SCHEDULE DISCOVERY CALL

Get More Info : Business Accounting System

Thanks for reading this blog. You can subscribe for regular update about technology news and tips via RSS Feed. you can also follow us on facebook & twitter.Thanks for visiting!. 

A Warning to Kids Who Want to File Their Own Tax Return

If you have children younger than 19 years old (or 24 if a full-time student) coordinate the filing of their taxes with yours. How they file is a matter of tax law.

The problem

Your child is away for college. You prepare and try to file your tax return on April 14th after finally receiving all the required documentation. Unfortunately, the e-filed tax return is rejected because your college student filed their own tax return and received a nice refund. Now you have a mess on your hands. You must file an extension, file an amended tax return for your child, return a refund, and paper file your tax return.

A matter of law

The dependency rules and kiddie tax laws are clear and must be followed. If you have a dependent child as determined by the tax code, you will need to conduct the tax calculations to determine what is taxed at your child’s tax rate and what will be taxed at your higher rate. The same is true for which tax return receives exemptions and standard deductions. This requires coordination of your tax filings with that of your dependent children.

Suggestions

• Remind your independent minded kids to hold off filing their tax return until consulting with you.
• Claiming oneself as a dependent is not a choice, it is a matter of law. Remind your child there are rules that must be followed before making this tax decision.
• Plan for a dependency shift. Sometimes arranging for a shift in dependent from a parent to a student makes financial sense. If you think this might be true, conduct a tax planning exercise prior to making the change.

Consider using the tax filing process to introduce your young adult to the benefits of tax planning. You never know, it could save you money as well as the hassle of undoing an improperly filed tax return.

For further assistance with tax filing, schedule time with our tax professionals: https://www.bas-pc.com/appointment-center/

Website : Business Accounting System

Like On Facebook : Business Accounting System | Facebook.com

Follow on Twitter : Business Accounting System | Twitter.com

Five Great Banking Tips

Banks are a necessary tool to navigate our daily financial lives. Unfortunately, there are aggravating practices at many banks that drive us crazy or cost us money. Here are five tips to get more out of your bank and pay less.

Remove cash from the right place. Never use an ATM machine that is not in your bank’s network. In-network cash withdrawals cost nothing at most banks, but withdrawals from someone else’s machine may come with a $3 to $5 fee.

Action: Turn over your ATM or debit card and note the networks on the back of the card; or ask your bank about their network coverage. Only use ATMs within the network. Test a transaction to ensure no fee is included on your statement.

Notify your credit card issuer when traveling. Most credit card-issuing banks now automatically freeze your cards when a suspicious transaction occurs out of state. This freeze often includes foreign website transactions.

Action: Call your credit card issuer when you are going to be traveling. Also notify them if you wish to order an item from a foreign website. This can alleviate numerous headaches. While some banks may not block out-of-state transactions, you do not want to to have a transaction rejected while purchasing something on a trip.

Know your bank’s overdraft rules. Non-sufficient funds (NSF) checks are not only embarrassing, they are expensive. Banks make millions on their overdraft fees and automatic loan features when you overdraw your account. Understand your bank’s fees and how they apply your payments.

Action: Look for a bank that will allow you to link another account to your checking account without charging a fee. For instance, as a courtesy many credit unions allow you to link a savings account to your core checking account. Funds from your savings account are used should you inadvertently overdraw your checking account.

Always negotiate fees. If you are a long-standing customer with your bank or credit card company, call them to reduce or waive fees. Good examples of this are over-the-limit credit card fees or late payment fees. If you have multiple checking overdraft fees, negotiate to eliminate as many as possible.

Action: If you are late in paying your credit card or have an overdraft, fix the problem as soon as possible. Only after fixing the problem should you call to negotiate the fees. The bank customer service representative will see your quick action and be more likely to help reduce the fees.

Be willing to shop. Banks understand the power of inertia: They know it’s a pain to change banks. But if you are willing to do so, you might be surprised to find better alternatives for less.

Action: Even interest on savings accounts varies widely from bank to bank. Use the internet to quickly see who is paying what in interest. Do the same for any loans, especially car loans, which vary widely.

If you’d like more banking and financial tips, our team of accounting professionals is here to help. Schedule a free, no-obligation introductory call here: https://www.bas-pc.com/appointment-center/

For More Info : Visit Here : Tax Preparation in New Jersey

Investing Basics: Picking the Right Stocks

We have witnessed such volatile activity in the stock market in recent years that the old stock selection rules are not always applicable. Seasoned investors and new investors alike want a sure-fire way to pick the winners.

Well, no one can offer any guarantees, but smart investors do have certain characteristics they associate with a winning stock.

A crucial key is that the stock should meet certain criteria. There are good stocks that don’t fit the mold, but historically, the stocks with the biggest gains shared most, if not all, of these features:

• Strong balance sheet Look for companies with a low debt-to-equity ratio. In recessionary times, debt-laden companies may not stay afloat.

• Low price-to-earnings ratio P/E ratios are usually industry-driven, so make sure you compare similar companies. Low P/E ratio may mean an increased rate of return on your investment.

• Good management A strong management team and a leadership position in their industry are earmarks of a good company. Look for a history of steady growth to assess staying power.

• Book value A stock priced lower than its book value provides extra assurance that your investment will not go sour.

• Good dividends A strong dividend history with regular increases adds to a stock’s desirability. A healthy income stream can make the wait for growth returns more pleasant, and it helps prop up a stock’s price in a falling market.

• Undervalued assets Company assets such as real estate and mineral holdings may be worth dramatically more than the balance sheet and stock price indicate. Companies with undervalued assets may be tempting to conglomerates in these days of merger mania.

• Broad ownership base A stock that is held by relatively few investors is much more likely to be subjected to dramatic drops if a major holder decides to bail out.

• Basic industries Shy away from faddish industries, notorious for meteoric rise and fall. When timing is the most crucial element in an investment’s return, it becomes more akin to gambling than investing.

• Strong cash flow Healthy cash flow will help a company weather economic downturns. It might also make the company a takeover target since takeover debt can be paid off with the surplus dollars.

• Unusually low price A low price when compared to the stock’s average historical price could indicate a bargain if the drop is due to market forces rather than changes in the company.

Though there is no magic way to select winners, the hallmarks of a good stock value are somewhat ascertainable. Good investing requires legwork and attention to detail, but that’s a small price to pay for a healthy portfolio. For assistance, don’t hesitate to reach out to our team of professionals: https://www.bas-pc.com/appointment-center/

For More Info : Visit Here : Payroll services New Jersey

Accounting Firms in New Jersey | Business Accounting System

Accounting Firms in New Jersey | Business Accounting System: BAS is the trusted accounting firms in New Jersey that has been providing excellence in servicing accounting, payroll, and tax needs of small businesses.

Before Consolidating Debt, Ask These 4 Questions

You’re starting to feel overwhelmed with debt and you’re not sure how to make even the minimum payments on all those accounts. That’s when you realize that credit card companies are eager to come to your aid. They offer balance transfers to help you consolidate high interest accounts. They provide “one low monthly payment” to simplify your finances. With their assistance, you’ll be debt-free in no time. At least that’s what the advertisements say.

But before consolidating your debt on a new credit card, ask the following questions:

• What fees can I expect? You may be charged for transferring balances. The new company may assess a monthly or annual fee, regardless of whether or not you use the card for additional purchases. If you make even one late payment, that low interest rate may skyrocket and you’ll likely be charged a late fee. If you’re late more than once, both the late fee and interest rate may jump. All such terms will be laid out in your new credit card agreement. Read it before signing.

• Would a personal loan be a better option? In some cases, a credit union or bank may help you consolidate debt by offering a single loan with a fixed interest rate and term. If your credit is decent, this may be a better option than switching to a new card. Knowing that you’re required to make a fixed payment each month and that your debt will be paid off in, say, three to five years can help you from falling into the minimum payment rut.

• Should I ask family and friends for help? If someone offers to lend money, your credit score may actually improve because balances on existing debt will be paid off. However,
  be sure to put the agreement in writing and treat the loan like any other obligation. Borrow from friends and family at your own risk.

• Am I willing to modify my spending habits? This, perhaps, is the most important question you can ask. If you can’t find the discipline to spend less than you make, you’ll likely end up with debt troubles again.

If you’d like help reviewing your debt consolidation options, don’t hesitate to reach out. Our team of finance professionals is here to help. Access our appointment center here to schedule time: https://www.bas-pc.com/appointment-center/

For More Info : Visit Here : Tax Consultant in New jersey