Updates This Tax Season

 

 

We all know tax season is in full
swing and Certified Public Accounts (CPAs) are putting in long hours to help
clients. No one likes waiting for their tax return but this year is different. And
yes, COVID-19 has impacted the Internal Revenue Service (IRS) and the speed of
returns.

You may have already filed your tax
returns as soon as you could or you wait until closer to the April 15 deadline.
On March 17, the IRS announced it will extend the tax-filing deadline to May
17. According to IRS Commissioner Chuck Rettig said, the IRS is doing
“everything possible to help taxpayers navigate the unusual circumstances
related to the pandemic, while also working on important tax administration
responsibilities.” In the meantime have all your tax documents ready to file.
You may have more time this year, don’t wait until the last minute to file your
taxes.  

Currently, the IRS has a backlog of
nearly 7 million tax returns that have not been processed yet. The IRS is
trying to keep up with the demand of stimulus checks and filing tax returns.
Plus with recent tax code changes from the coronavirus relief packages have put
the IRS behind schedule. Be patient when you file your taxes and expect a
longer delay than usual. What can you do to make sure you do get your tax
return as soon as possible?

1.
No Typos.

Did you misspell your name or put the
wrong address? Be sure all your personal information is correct on your tax
forms. Accuracy is key.

2.
Correct Math

Tax returns are all about numbers, if
your calculations are off, chances are your whole return is wrong. Double-check
your math and make sure it’s right and everything checks out.

3.
Correct Status Filing

You can only file one status when you
file your taxes. Sorry, you cannot be a dependent and head of household. Make
sure you pick the correct status when filing your taxes.

4.
File On Time 

Some people like to jump the gun and
file as early as possible to get their return faster. The IRS won’t file your
taxes until the open date they have selected. Do not wait until the last minute
to file your taxes and rush to get it done. Rushing causes more problems and a
longer delay. 

5.
 Use A Professional 

Are you an accountant by trade?
Accounting has complex laws and regulations that many of us don’t understand.
SWVA Tax & Accounting can help you, they are familiar with current tax laws
and understand the process.

            Be patient
this tax season and give this IRS more time to file your taxes this year. When
you get your tax return use it wisely so you can benefit from it positively. If
you haven’t filed your taxes, you can schedule an appointment with
SWVA Tax & Accounting. Call at 540-250-3198 or schedule online so you can start today. SWVA is here for you and all your tax needs. SWVA
Tax & Accounting is a full-service tax firm that specializes in the needs
of small businesses.  We’ll run the
numbers, while you run the numbers.

Avoid Financial Mistakes In Business

 

You
started a business that has been a dream of yours for years. You did your
homework and what you sell is in demand. Fast forward fifteen months, things
aren’t good. You haven’t turned a profit yet since opening the business. You
can’t afford to pay taxes due. The phone never stops ringing from creditors who
want payment. Your stress and anxiety are at an all-time high. How did this
happen? First-time business owners can make devastating financial mistakes.
Here are a few things you can do to help your business.

1.     Be
Realistic About Profits 

Steady money doesn’t
happen within a short amount of time when you open a business. It takes time to
build a stable income much, less a profit. Be aware of this as you plan to pay
your bills. Conduct a break-even analysis so you will have a good idea when you will start making a
profit.

2.     Keep
Your Personal and Business Funds Separate

Don’t mix your personal
and business funds. The best practice is to keep these two funds separate for
tax purposes. Mixing the two won’t give you a real idea of how your business is
doing financially. If you seek out a business loan, it will be nearly
impossible to show what your business is doing.

3.     Not
Keeping Up With Bookkeeping

Bookkeeping isn’t fun but,
you have to do it. Make sure you carve out time each week to update your
bookkeeping. Use tools like QuickBooks to set yourself up for success. Don’t
know how to use QuickBooks? Don’t worry SWVA Tax & Accounting can help you.

4.     Plan
Your Taxes

You have to pay taxes as
a business owner there, is no escaping it. Put funds aside to pay taxes to
local, state, and federal governments. SWVA Tax & Accounting can help you develop a
plan for tax payments.

5.     Get
An Accountant

A good accountant will
save you time and money. Working with one can help with payroll, preparing
financial statements, and understanding the latest tax laws. Look no further
than SWVA Tax & Accounting for all your business tax needs!

6.     Hire
A Lawyer

A lawyer can help you get
your business registered and structured that benefits you. They can review any
contracts and other business documents you have.

7.     Have
A Business Emergency Fund

Having a liquid source of
cash can help cover business expenses for three to six months. This emergency
fund can help keep your business stay afloat during difficult times.

8.     Business
Insurance Is A Must

Business insurance helps
fill the gap of things you didn’t see as accidents or theft. This is especially
important if you are a sole prop since you will be 100% responsible for what
happened. Get it and have peace of mind.

9.     Handling
Business Debt

Business owners often go
into debt operating a business, such as credit cards or business loans. Have a
financial plan to pay debts off so you don’t drown in debt.

Mistakes
cost business owners time and money, two things there is never enough of.
Working with an accountant can make your business stronger. SWVA Tax & Accounting is a full-serve accounting firm specializing in the needs of small businesses.
Call us today at 540-250-3198 or book an appointment today. We’ll run the numbers, while you run
the business. 

Manage Your Money Better With A Budget

 

       Do you have
financial goals in life? Maybe you want to buy a house or get out of debt. If
you need to achieve any financial goals, you’ll need a budget to get you
there. 
A personal or business budget is a
way to track your expenses and income for a set period, monthly is the most
common. Don’t view budgeting as negative but as a means to achieve financial
goals. Bear in mind there are multiple ways to make and keep a budget. Here are
a few steps to get started.

Step 1.
Find and Gather all Your Financial Paperwork

You will
need:

·        
Bank
statements

·        
1099s

·        
Recent
utility bills (electricity, water, gas, etc.)

·        
Monthly
bills (mortgage, car, Netflix, student loan, etc.)

·        
Any
receipts for the last three months

·        
Paystubs 

The more
information you have the better so you know where your money is spent. This
gives you a monthly average and a starting point.

2. Add Up
Your Income

How much is
your monthly take-home pay on average? If you have income such as Social
Security, stocks, pension, etc. that’s income. The best rule to follow is to
use your net income when finding your average monthly income. You may have to
go back three months to get an average.

3. List
Your Monthly Expenses

These are
all the expenses you have each month. For example:

·        
Mortgage
or rent

·        
Savings

·        
Insurance

·        
Car
Payment

·        
Utilities

·        
Groceries

·        
Childcare

·        
Gas

·        
Credit
Card Payment

·        
Dining
Out

If you spent money, then it’s an expense. Use online banking,
bank statements, and receipts to track your spending.

4. Find Your Fixed and Variable Expenses  

These two types of expenses are easy to determine. A fixed
expense is something you pay the same amount each month. The best example is
your monthly car or rent payment. A variable expense will change monthly as
gas, groceries, eating out, utilities, etc. It’s best to find an average for
each variable cost so you can know how much to estimate for each cost.

5. Add Up Your Monthly Income and Expenses

This is usually the shocking part of making a budget for
people. Don’t be surprised if your expenses are more than your monthly income.
If your expenses are more than your income, you are likely overspending and will need
to adjust your spending habits.

6. Adjust Your Expenses

Now, you know what your average expenses are you can start
looking for areas to trim or cut out completely. You can pack your lunch
instead of eating out at work. Hit the sales rack instead of paying full price.
You will be surprised where you can trim or cut expenses. It takes discipline
and time to change how you spend money.

7. Set Up Fun Money

Give yourself a little fun money to spend without feeling
guilty about it. You could use it on dinner out or that watch you’ve been
wanting. Keep this part of your budget reasonable, don’t overspend.

8. Pay yourself First

When you get paid put money in a saving or rainy-day account.
You want to build a nest egg so you can build wealth over time.

Setting up and sticking to a budget is will
take time, effort, and energy. It could take anywhere from two to five months
to get a budget working for you. You will need to track and keep up with what
you spend your money on. A budget is a living document that will need
adjustment each month. Take the time to make your budget now so you can achieve
your financial goals. SWVA Tax & Accounting is here to help with all your
financial needs. SWVA Tax & Accounting is a full-serve accounting firm that
specializes in the needs of small businesses. Call us at 540-250-3198 or book
online
to get started today. We’ll run the
numbers, while you run the business.