The Importance of Tax Planning

A recent study showed that almost a quarter of American taxpayers do not have a financial plan. Financial planning can be hard. It involves so much time and information. Then, once you get that information what does it all mean, or how are you supposed to use it. A recent study shows that 55% of American taxpayers have gotten valuable financial information from their tax return, but only half of that number actually assess their tax returns annually.

Examining your tax return can tell you so much valuable information. It allows you to look at trends from year to year. You can assess income to see if it is non-recurring or reoccurring. You can look at deductions to identify your major expenses. With assessing both of these you can get a good idea of how much money you have left after all of your expenses are covered.

Then from here you can ask more specific questions. For example, how would it affect me if I took more money out of my retirement account, or how would buying this house affect me. You can even assess how having a kid would affect your tax return and financial wellbeing. There is so much you can learn and plan from taxes. Most people think having your taxes done is a once-a-year thing. Tax planning can be super beneficial and not only when it comes to tax time.

So, if it is this beneficial and great why isn’t everyone doing it? Well, that is a simple answer. Tax returns can be very hard to understand. There are so many schedules, depreciation sheets, and just forms in general to look through. That is why talking to a tax professional and tax planning can be so beneficial. Talking to an expert can allow you to benefit from tax breaks and to be able to better plan for the future. Here at SWVA tax and accounting we pride ourselves on our tax planning and want to help every client achieve financial success and peace of mind. Give SWVA Tax & Accounting a call today at (540)-250-3198. We’ll run the numbers, while you run the business.

 

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.

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Changes in the PPP

    There have been recent changes to the Paycheck Protection Program Loan (PPP) by the Small Business Administration (SBA). The PPP was part of the federal relief program under the CARES Act to give small business loans during the pandemic. The federal government has amended the PPP to assist rural, urban, and underserved areas. Do you still need a PPP Loan to help with your small business? The PPP Loan application deadline is March 31, 2021. Here are some of the changes you need to know about the PPP Loan.  
As mentioned, the PPP Loan was changed to better serve small businesses in rural, urban, and underserved areas. When first rolled out the PPP Loan was criticized for not considering the smallest small business. Now, the PPP Loan calculation has been revised to include independent contractors, sole proprietors, and self-employed individuals for support. If your business falls under one of these three types of business, apply for the PPP Loan. 
    Previously, if you had been arrested or convicted for a felony related to financial assistance fraud five years ago or had any felony within the previous year, you were ineligible for the PPP Loan. Now, you can apply as long as you are not incarcerated at the time of applying for the PPP Loan. Also, business owners who have been delinquent on student loans now apply for a PPP Loan. Last, small business owners who are legal residents and Green Card holders with visas are eligible to apply. If you are an independent contractor or sole proprietor who already received a PPP loan before March 3, 2021, you cannot amend your loan. However, if a sole proprietor or independent contractor has a 25% cut in revenue for any quarter in 2020, compared to the same quarter in 2019, they can get a Second Draw PPP Loan. For more details about the amended PPP Loan please visit whitehouse.gov or sba.gov  to apply for a PPP Loan. The sooner you apply, since the window of opportunity will be closing on March 31. 
    We want to mention that during these challenging times some small businesses, unfortunately, laid people off. With the recent passing of the American Rescue Plan (aka the stimulus bill), part of the deal struck was a $10,200 tax waiver for those who received unemployment benefits in 2020. Taxpayers who had support in 2020 will not have to pay the first $10,200 of unemployment benefits they received. This tax waiver is only for 2020, not for 2021. 
    Do you still have questions about the PPP Loan?  The great news is SWVA Tax & Accounting can help you navigate the complexity of the PPP Loan. SWVA Tax & Accounting is a full-service accounting firm that specializes in the needs of small businesses. Please reach out and contact us at 540-250-3198 or schedule an appointment today. We’ll run the numbers, while you run the business.