Kellie is my personal CPA. I met her in a local FB moms group and immediately connected with her. She is a wonderful lady and is always very helpful answering questions! I will recommend this lady 100 times over. So now, let’s have a little tax tip time… with Kellie.
Tax Tip Time – With Kellie Vincent
What do I do with all these receipts?
Back in the day before we had innovative technology, a business owner would walk in their accountant’s office at tax time and dump a big shoebox full of receipts on their accountant’s desk and say “See ya later.” This scene is now most likely to be found in old movies rather than real life. One would say accountants got smarter in requesting information, but truth is I believe business owners realized what they were missing out on.
A receipt is more than a thin slip of paper – it’s a timestamp and a journal of your transaction. Yes, it might be for a $4.39 spool of yarn or a $29.99 package of ink toner, but it provides a record for you as a business owner. It shows what store you went to which you could then calculate the mileage from your home to the store and back, it tells the description (for the most part) of what you purchased, and the time/date it was rang up.
Financial records when put together tell a story of your business. This story can help the business owner make decisions about his/her company which results in making more profit (which is why you’re in business any way, right?).
The key of keeping up with your receipts/transactions is finding a method that works for you. Because we do live in the world of wonderful technology, we have a lot of options but keep in mind simple is better. A system is only as good as its data input. Finding the solution to your business and lifestyle is key; don’t force a round peg in a square hole.
Why should I hire a tax adviser if I can do my own taxes?
As a CPA that predominately completes tax returns I hear very often about the ease of online tax software and preparing returns on your own. I am proactive for this movement and appreciate that taxpayers are getting online and taking control of their taxes. But, and this is a big but, there comes a time when you need a professional.
The time comes when a business owner is making enough money that ensuring all deductions that can be taken are taken which is worth an additional cost. The value a tax preparer provides is ensuring the right questions are asked and reviewing the information provided by the taxpayer in relation to the business. Also, the tax preparer provides guidance to ensure the proper documentation is being retained in case of a review by the IRS.
In my practice, the approach I use is simple: Understand, Explain, and Plan. I first get to know the taxpayer in the current tax year (a lot can change in one year). I do this by reviewing the data and asking questions. I then explain in full detail the tax return from where the numbers come from to how the final numbers are calculated, leaving no question unanswered by either party. Then, we plan for the following year and I follow up throughout the tax year to see if there are any questions or if the plan needs to change. The objective is that the tax return is the final product of the planning work completed throughout the year, not just an annual report.
The deadline for 2016 tax payments this year is Tuesday, April 18, 2017. You may choose to extend the filing deadline to Monday, October 16, 2017 but any tax liability is due in April. If you have any questions please feel free to email me at [email protected]. Best of luck to you and your business!