Philanthropy Drives The Giving Spirit

Giving to others for the greater good is the ultimate form of altruism. Doing so through philanthropy is the driving force that makes the spirit of giving a reality. Philanthropic platforms serve as a base of donor dollars that can be disseminated to help individuals, communities, causes, and charitable organizations. This spirit of giving to improve the lives of others, and sustain a community, are done not for profit, but from a selfless desire to help.

Philanthropic Foundations

The most well-known type of philanthropy is represented by philanthropic foundations. Such foundations are created to serve as a vehicle for wealthy individuals and organizations to distribute funds to charitable organizations, individuals or institutions. Most foundations serve only as a grantmaking entity to various programs, but many foundations such as the one created by former CEO of EBI Consulting, Jeffrey Previte, may also have their own charitable programs, initiatives and activities designed to give back to the community.

Philanthropic Platforms

• Charitable giving comes in many forms, and they are different types of giving that fall under the umbrella of philanthropy. A few of these include:
  • Donor-Advised Funds are created as a vehicle for foundations to serve as an adviser to donors suggesting charitable recipients that match the donors’ areas of interest and focus.
  • Corporate Philanthropy is a popular form of philanthropy used by large for-profit businesses, typically via matching gift programs whereby the corporation will match the gift their employee makes to designated charities or causes.
  • Pool Money is a relatively new form of philanthropic giving where a group of individual philanthropists come together and pool their money together and use their combined funds to support a singular project or mission.
  • Volunteerism is another form of philanthropy that is non-monetary but can be very impactful to organizations, while also creating a sense of greater sense of purpose for those who volunteer.

Philanthropic Benefits

The benefit of philanthropy is two-fold. Philanthropy supports the work of organizations, individuals, missions and causes with the ultimate goal of improving the welfare of people and their communities, whether locally or globally. It creates a positive impact for not only the recipient but also the giver. Many philanthropists report that being involved in philanthropic work gives them a better understanding of people and issues, while also improving their overall sense of self.

Philanthropy’s Impact

The history of philanthropic giving dates back centuries, and its scale and ability to positively change the world is undeniable. Philanthropy has benefited organizations and individuals in the field of science and medicine with the goal of tackling diseases and finding cures. Philanthropic efforts have been successful in helping regions rebuild after natural disasters. Philanthropists have come together to support causes and programs to defeat poverty. Foundations have been formed to combat global health issues. Philanthropic programs have worked to bring about social change, and address inequities in societies.

The positive impact of philanthropy defines altruism at its best. It also dramatically illustrates the art of helping and propels the spirit of giving to others for the greater good.

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When you handle your clients’ income tax returns, there’s a lot of responsibility on the line—including their livelihood, first and foremost. One small mistake can lead to some pretty big consequences, such as losing out on some sizeable savings or costing them an expensive audit. While it’s not your responsibility to act as their all-encompassing financial advisor, and you shouldn’t suggest which stocks to invest in, or how much to contribute to retirement savings, there’s definitely some proactive tax advice you could—and should—offer as it pertains to 2019 tax ordinances.

The Tax Cuts and Jobs Act (TCJA) of 2017 was introduced in the 2018 fiscal year, but now that December is about to come and go in the blink of an eye, more changes will continue to roll out and affect tax payers. Is this the year they should plan to take action on an energy-efficient deductible remodel? What are the top tax deductions they might be eligible for? How about fine print and interest rates?

Those will be (some) of their questions, and you’ll need to be prepared with all possible answers. Keep these pointers in mind and you’ll be poised to keep not past clients through 2019 and beyond.

Assess interest rates

If your clients are facing tax underpayments, they should know about how fluctuating the IRS interest rates of 2018 could affect them. For example, The Internal Revenue Service announced that interest rates for tax underpayments will remain at 5% for the calendar quarter beginning Oct. 1, 2018 – Dec. 31, 2018 (the rate for non-corporate tax payers is based on the federal short-term rate plus 3 percentage points).

However, these rates are determined by the IRS at a quarterly basis, so there’s no saying how it could change come 2019. While it might go down from 5%, there’s also the risk that it could increase instead—like when it jumped from 6% to 7% back in 2016, for example. The best way to minimize incurring higher interest penalties? Encouraging them to settle their tax underpayment altogether! Plus as their accountant, you should be helping your clients avoid underpayments in the first place.

Double check deductions

If you’re good at your accounting job, it means that you work tirelessly to find the most amount of applicable write-offs and deductions possible in order to help your clients get the more money back on their tax return. However, if you’re well-seasoned in the sea of complex tax code, you’re already aware of how turbulent these tides are. There’s so many details that require fine-tooth combing: what counts, who qualifies, for up to what amount, what proof or paperwork is needed, and more… then you have to go through the hassle of learning these stipulations all over again once the next tax season comes along!

Don’t just auto-input their information from last year without reading up on how the new 2019 tax laws might change things under the TCJA. For example, last year you could deduct the measure of your unreimbursed therapeutic and restorative and dental costs that surpass 7.5% of your client’s Adjusted Gross Income (AGI), meaning those with an AGI of $50,000 could deduct medicinal costs over $3,750. In 2019, this amount increases to 10% of their AGI—so now might be the time to suggest getting that dental work your clients have been putting off for some time.

New year, new taxpayer

Your clients might have been using your accounting services for years, but if they’ve experienced any life changes in income or filing status, it can dramatically affect their tax return. If they’ve recently found a new job with a new income, obviously their tax bracket can go up or down, but if they’re just thinking about making a switch between careers, remind that they can no longer deduct job-hunting expenses such as traveling for interviews after 2018.

If you have clients whose marriage is on the brink, they should also receive a piece of advice: alimony support that was once possibly deductible vanishes for couples who separate after 2019. By no means should you act like their therapist or family counselor, but you should consider letting them know about how divorce can be one of the biggest financial mistakes they can make.

Ask all the right questions, run the right numbers, and thoroughly research the latest TCJA laws so you can offer the best 2019 tax advice and secure your clients for years to come.

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Top 15 Tax Deductions for 2018

Another new year, another new beginning! Congratulations you have made it through one of the craziest years on record I do believe.  And now it is time to pay your taxes!  This blog is all about saving money, and hence it is important to do everything you can to understand how to save money on your taxes in 2018.  So, here we bring to you a compilation of all the tax deductions you never knew existed.  My hope is that we can save you a bundle this year and for years to come.

1. Charitable Donations

Donations to a qualified charitable association are deductible (qualified associations ought to have the capacity to give you evidence of your donation). Ensure that you can supply every single vital receipt or affirmation letters to the IRS in the event you get audited. In the event that you get any merchandise or gifts in return, subtract the estimated value of the products and benefits from the donated sum.

For donations in the year 2017, you may deduct gifts worth up to half of your salary. Starting one year from now, this maximum deduction level will be raised to 60% for everyone.  We have the Tax Cuts and Jobs Act (TCJA) to thanks for this. The new law wipes out your capacity to deduct gifts made to a school in return for the privilege to purchase athletic tickets.  So, keep that in mind if you have used that trick in the past to “double dip.”

2. Therapeutic and Dental Expenses

You can deduct the measure of your unreimbursed restorative and dental costs that surpass 7.5% of your Adjusted Gross Income (AGI). For instance, if your AGI is $50,000, you may deduct the amount of your medicinal costs over $3,750. Under the TCJA, this limit will increment to 10% of your AGI in tax year 2019.

3. Performing Artist Expenses

Are you the cliché starving craftsman or artist? If so then you are in luck – at least when it comes to your taxes.  Certain unreimbursed business costs of performing craftsmen, artists, reservists, and charge premise government authorities are dealt with independently from other deductible business costs. See the guidelines for Form 2106, “Worker Business Expenses” for points of interest. This tax assessment season is the last time you will have the capacity to claim this deduction, as it has been killed totally under the TCJA.

4. Tax Preparation Fees

Generally, you can deduct expenses that are associated with your tax statement preparation.  This implies that on your 2017 return, you can deduct the expenses brought about in 2017 for setting up your 2016 return. Charges for tax software, time required to complete the tax return, and electronic recording expenses can all be included in this deduction.  Caution – the TCJA has removed this finding starting in tax year 2018.

5. Home loan Interest, Points, and Insurance

The home loan interest that you pay on your home, and also points (a part of the loan fee you paid to lower your APR), might be deductible on the off chance that you meet the criteria recorded in IRS Publication 936, “Home Interest Mortgage Deduction.”  This applies to contract obligation of up to $1 million for home credits taken before December 15, 2017, and home loans of up to $750,000 taken after that date. Home loan protection premiums additionally qualify through tax assessment year 2017, yet they begin phasing out starting at $100,000 AGI (for married filing jointly status).

6. Home Equity Loans

Interest on home value obligation of up to $100,000 can be deducted in the tax year 2017. For tax year 2018, specialists say enthusiasm on HELOCs should increase.  The deduction given to property holders that utilize the returns of the credit to make home improvements can work on the primary home loan in addition to the HELOC if it does not surpass $750,000.

7. Betting Losses

Was it an awful year for you at the golf course yet a decent year with lottery tickets? Believe it or not, the IRS allows you to deduct betting losses with adequate documentation.  However, this only works to the degree that you counterbalance other betting wins/gains.

8. Land and Personal Property Taxes

Generally, charges that are required through the possession of a home (for example land property tax) are deductible.

9. State/Local Taxes

You can deduct your state and local tax expenses paid in the earlier year.  For the 2018 tax year, the TCJA keeps this deduction, however it confines the aggregate deductible measure of wage, local taxes, and property assessments to $10,000!  This is a big deal to many, so make sure you take this into account going forward.

10. Job Hunting Expenses

If you are searching for another job and meet other criteria in IRS Publication 529,”Various Deductions,” you may deduct certain Job hunting costs (for example, traveling to interviews – regardless of whether you land the position). For the tax year 2018, this deduction goes away thanks to the TCJA.

11. Moving Expenses

If you had success in the above quest for new employment and find you must move, then you are in luck.   If your move for new employment is more than fifty more miles from your present home, you can deduct some moving costs. See Publication 521, “Moving Expenses” for subtle elements of what you can and cannot deduct. Once again, for 2018 and beyond the Tax Cuts and Jobs Act (TCJA) gets rid of these deductions.

12. Retirement Plan Contributions

Contributions to proper retirement accounts (traditional IRA, 401(k), and the like) are generally tax deductible. Roth IRAs are not since they are financed with post-taxed dollars. This tax deduction continues going forward with the TCJA (thank goodness)!  This is one of the best ways to save for your retirement and also get a fat tax break in the process.  So, make sure you take full advantage of it!

13. Divorce settlement

Amounts that you pay to a previous life partner, not including child support, might be deductible on your taxes. See Tax Topic 452 for points of interest. The alimony support stays through 2018, yet vanishes for couples separated in 2019 or after.  Could we see increased divorce rates in 2018 just because of this rule change???

14. Health Savings Account Deductions

Your 2017 commitments to your Health Savings Account (HSA) are deductible, in spite of the fact that business commitments are definitely not. To qualify, you should be secured by a high deductible health plan (HDHP) and have no other health insurance.

15. Self-Employment Expenses

As an independently employed individual, you pay both the business and self-employment segment of income tax charges. Luckily, you get to deduct your business expenses – so why not start an online business now for cheap?  If you are self-employed, you can likewise deduct retirement contributions and medical coverage costs. Take all the deductions that apply to you. If you need assistance, our tax professionals will be glad to help.

Final Thoughts

It is important to make sure you can save as much as legally allowable on your taxes.  Just make sure you don’t go overboard and wind up getting audited!  Hopefully you found this compilation of tax deductions you never knew existed helpful!  Are there other tax deductions that are not well known but can help to save a bundle?

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For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

6 Tips From Accounting Professionals to Make Tax Time Less of a Headache

Now that tax season has officially ended, it’s time to plan ahead for next year so you aren’t scrambling to get everything done at the last minute. Even though you may be tempted to wait to start thinking about next year’s taxes, it’s best to consider this a year-round obligation. This way, you may be able to save much more money in 2017 and beyond. Here are six tax tips from the experts to help you spend less time in frustration when filing.

1. Keep Everything Organized

One of the most important tips to make tax filings a breeze is to keep everything organized. If you plan to itemize your deductions, you’ll need to accurately track your spending and keep your receipts and documentation. Even if you have no interest in itemizing, it’s best to keep all of your tax forms together in one spot so you can easily find all materials once it’s time to file.

2. Review Your Withholdings

Before you get frustrated with next year’s tax forms, make sure your paycheck is properly set up for the right kind of payroll withholdings. Whenever you start a new job, it’s up to you to fill out your tax form paperwork so your employer withholds the correct amount. You can claim exemptions based on the number of dependents you have in your household. Some workers keep their withholdings the same for decades, never realizing they could get more money in their paycheck every two weeks if they adjust for their current lifestyle.

3. Use Technology

Technology is another key tool in keeping your taxes and other financial details organized. Most experts recommend that consumers invest in some sort of budgeting software to help them reach their financial goals. This way you can track your spending on things such as your home, children, food, and other expenses. Over time you can see trends and develop a better plan to save more money and spend less on taxes.

4. Get a Professional Consultation

It’s also helpful to get a professional’s advice at some point before the April 15th deadline. Many consumers only talk to their accountant or other financial professional right at tax time, but it’s a better idea to have a working relationship with someone well versed in finance or accounting throughout the year. If you’re not sure how to find someone who has the right knowledge and skills, it’s best to seek someone with top academic credentials, like an advanced degree in accounting from a program such as Maryville University for example.

5. Learn About Tax Breaks

If you want to minimize your taxes, you’ve also got to know more than the average consumer about tax breaks. There are plenty of opportunities you can take advantage of to help lower your tax bill each year and gain more income in your pocket. Some consumers are able to save on their tax bill by using products such as retirement accounts, health savings accounts, and other investments just to name a few.

6. Start Filing Early

Most of all, it’s essential to file your taxes as early as possible. Employers usually send out tax forms to their workers in January, which means you can get a head start on your tax filing around that time. Whether you file on your own with electronic software, or you get the assistance of a tax professional, it’s much less stressful to get started in January or February than to wait until the second week of April to begin. This way, if you encounter any problems, it’s much easier to get them resolved without missing the deadline.

Final Thoughts

It’s important to use whatever resources are available to help smooth the process of your taxes each year. Doing so could help make filing much easier and faster for the future and give you one less thing to worry about.

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For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

We Owed $4,300 on Our Taxes for 2015

Spring is in the air – the flowers are blooming, leaves are coming out on the trees, and there is pollen everywhere!!  One nice thing is that temperatures are increasing down here in southern Georgia, but it won’t be long until things get too hot (think over 90F).

Every year as spring comes around our way, like it or not my mind turns to incomes taxes.  I do find myself stressing about whether we will get a refund from the IRS or owe some money.  Now that tax season has come and gone, (if you have been living under a rock – your tax return was due on April 18th), I can share with you how we fared for the 2015 tax season.

I don’t really like to talk much about taxes here on the blog because I find the subject kinda boring.  But…. taxes really need to be brought up from time to time to ensure you have optimized yourself from a personal finance standpoint.  I certainly did not tax full advantage of tax deductions and various money saving strategies for 2015, and we are paying the price (literally)!

How Did We Do for 2015 Tax Year

I spoiled the surprise already in the post title, but we actually owed $4,300 to the IRS :-(!  When I found out the number, I felt pretty sick to my stomach.  How could we owe so much?  Once I calmed down a bit from the huge sticker shock, the $4,300 started to make sense when I thought more about it.  Here’s a rough breakdown of why we owed so much – I just assume a 38% tax rate to keep things simple:

• Dividends – We had ~$6,100 in dividends for 2015.  About $3,000 were qualified and $3,100 were ordinary.  This means our tax from this should be ($3,100 * 38% + $3,000*15%) = $1,628 taxes
• Small Business – MoneyAhoy.com made about $4,000 after expenses for 2015.  Our tax from this should be ($4,000 * 38%) = $1,520 taxes
• Missing Property Taxes – Our mortgage company somehow screwed up and didn’t charge us for property taxes all of 2015.  As a result, we were not able to deduct ~$2,000 for this.  Our “extra tax” from not getting the deduction here is ($2,000 * 38%) = $760 taxes
• Student Loans – We paid off my wife’s student loans in early 2015.  As such, there was no more deduction for interest on those student loans.  This accounts for ~$400 in deductions in past years.
• Childcare – Thankfully, our childcare bills were much, much lower in 2015 vs. 2014 because my wife is now working part-time and can watch the kids in the afternoon.  As a result, we save ~$17,000 a year here!  The downside is that we don’t get a nice tax bonus deduction in the category.

Why I am Not Complaining That We Owed $4,300 to the IRS

Most folks would be furious if they owed this much money to the IRS.  I was mad for about all of five minutes before I got my head on straight.  Here’s why I am not mad that we owe $4,300 to the IRS:

• We had an extra $10,000 of income in un-taxed income ($6,000 dividends + $4,000 business income).
• We did not pay property taxes on our home ($2,000) – **we will have to catch this back up, so it is more of a deferral.
• We did not have to pay for student loans ($3,000)

I will take an extra $15,000 in my pocket if I have to pay a $4,300 fee any day of the week :-)!

Because we did owe so much, I guess the IRS figures you should make quarterly payments along the way.  We did not do this, largely because I’m lazy and cannot be bother to pay attention to this (so far).  Because we did not do this, there was a small penalty of $42.  This turns about to be just about 1% of the tax owed.  A one-time charge of $42 is no big deal as far as I am concerned, but we probably need to start paying a bit extra each quarter in 2016 just to avoid this kind of fee.  I will look more into how to do this as we are already in the second quarter.  It may be easier to just adjust my W4 from my main employer so they are taking out a bit more each paycheck – I haven’t decided yet. A w4 calculator would make easy work of that.

Tax Deductions That We Missed Out On

As I mentioned, I really dislike thinking too much about taxes.  That bit us in the butt a little bit as we could have saved a couple thousand if we had followed a couple of these tips – WARNING – they are a bit on the complicated side of things:

• Capital Gains Tax Loss Harvesting – You can deduct up to $3,000 each year by selling stocks that are “down” or “losing you money”.  You can even carry forward the losses into an unlimited about of years.  This means an extra ~$1,000 in your pocket each year ($3,000 * 38% = $1,100+).
  • The only trick here is that if you sell the stock for a loss, you cannot buy it back until 31 days later – this is the wash sale rule.  That shouldn’t be a big deal if you are investing in ETFs as you could just flip over to a “similar” ETF for a month, then flip back into your normal one if you’d like.
  • I didn’t go through the trouble of doing this in 2015, and I am now kicking myself for NOT doing this.  It’s basically a free $1,000 that I missed out on :-(.
  • The thing with this is that you are just offsetting the tax you will eventually pay further and further down the road.  You would think this would eventually mean that you would pay a huge tax bill when you actually go to sell the investments (without re-buying them back) down the road.  You would likely be wrong tough! Understand that if you die, you can give the investments to an heir and the total capital gains get completely erased at the time of transfer!  It would be like the heir just bought the stocks that day at whatever price they currently trade at.  Pretty cool if you are planning on handing down those stocks!
  • Also, you get a credit in today’s dollars of 35% (or whatever your tax bracket is), then down the road you pay on the larger capital gains amount, but only at the 15% long-term capital gains rate!  Woohoo!
  • This all just basically boils down to receiving a tax free loan from the IRS that you may never need to pay back!
  • Now that I know more about how this works, I plan to get my capital gains tax loss harvesting on each and every year :-)!
• Solo 401(k) – If you own your own business (and if you don’t, why don’t you startup your own company today!) you can qualify for this cool tax deduction.  If your company does not have any employees (folks working over 1,000 a year), you can create your own self-employment 401(k) for you and your spouse.  Even if you you work full time at a “normal day job” and participate in that company’s 401(k), you can still take some of your side-business income and put it in another separate, solo 401(k).
  • If you work a full-time job for an employer, the most you can contribute to your 401(k) is $18,000.
  • If you work for yourself, the most you are able to contribute to a solo 401(k) is $53,000!  That’s a significant tax savings!!  You can put in $18,000 and then 25% of the total profit for the year up to a combined total of $53,000.
  • If your company also has your spouse working for it, you can double up here for $106,000 in total contributions to a solo-401(k)!
  • It gets a bit complicated if you are working full-time and have your own side-hustle business.  Suffice it to say, you can normally find a way to bump up the total amount of 401(k) contribution from $18,000 total to $53,000 total with a little creative work and understanding in how things work.  This all assumes your company makes a lot of money each year – I’m still working on that :-).

We Owed $4,300 on Our Taxes for 2015 and I’m Not Mad – Final Thoughts

Although we had to pay the IRS a lot of “extra” this year, it’s all for good reason.  We made a lot of extra money in 2015, and we are both really thankful for that.  We could have done more with our tax deductions, but that’s something we will plan on getting right in 2016 and beyond.  How do you fare this tax year?

The post We Owed $4,300 on Our Taxes for 2015 and I’m Not Mad appeared first on MoneyAhoy.

For more saving money, making money, and investment ideas go to www.MoneyAhoy.com

How to Discuss Finances With Aging Parents

Discussing finances with your aging parents may be difficult. In fact, there is data to indicate that many people think it is. Seventy percent of people report that they have difficulty discussing with their family who will handle finances if older parents lose their ability to manage finances.

The issue is widespread. Sometimes, older parents are reluctant to discuss their finances because they see it as an intrusion or a possible loss of independence. They may even see it as a burden on their children.

However, conditions like Alzheimer’s or dementia can cause senior citizens to lose the ability to take care of their finances, as can sudden events such as a stroke or a car accident. If these happen, your older parent needs to know that their finances will be taken care of — and so do their families. Insurance premiums, mortgage payments and even nursing care all require consistent management of existing financial arrangements and of the finances themselves.

Becoming involved with your parents’ finances can also help stop the financial abuse that many senior citizens experience. People take advantage of senior citizens by scamming them for a total cost of more than $2 billion annually in the U.S. alone. More than half of these abusers are strangers, while the rest are typically neighbors, family or friends. These abusers might ask to be wired money for illegitimate reasons or prey on kindness by taking out a loan with no intention of paying your parents back.

Having a handle on your parents’ finances will let you see if there are any red flags like recurring charges that aren’t for legitimate reasons. Seeing how much money is going in and going out can also ensure that scammers aren’t able to take advantage of your parents. Here’s how to help.

How to Discuss Finances With Aging Parents – How to Bring Up the Subject

Given the importance of consistent financial management to the well-being of your aging parents, what’s the best way to bring it up? First, plan to discuss it before there is a need — that way, their affairs can be managed in a comfortable way for all concerned.

There are five good times to broach the subject:

1) Link it to your own financial planning. You should be making financial plans relating to aging, just like your parents. All adults should have a will, for example, whether they have dependents or not. Every adult should have a medical directive. It’s a good idea for adults over 50 with dependents to keep a list of their financial obligations (assets like mutual funds and debits like mortgages, say) with their children or other trusted family member. The list ensures that the disposition of assets and meeting of obligations goes smoothly if something happens to an individual.

Therefore, you can broach the subject of financial management to your parents at a point where you’ve done this. If you’ve just made a will, for example, mention it to your parents and ask if they have one.

This method also enables you to approach the subject as a peer. This may make your parents more comfortable when discussing their financial future with you.

2) Link it to a recent event. Unfortunately, events like strokes or dementia do happen to older people. It may even have happened to another family member, a neighbor or friend. If your parents know someone whose sudden stroke made them unable to speak or remember, for example, and they had no will or no family member who could step in and make sure the mortgage was paid on time, the issue may loom large for your parents.

Use the incident as a way to gently bring up the need for information and for your parents’ participation in a plan for financial management of their affairs should they become incapacitated.

3) Link it to a family event. Having a discussion on a family event that recurs yearly is also a good idea. It could be a Fourth of July picnic or someone’s birthday. Because it’s a time that comes around annually, it may provide a comfortable setting to discuss the future.

4) Give them space when asking. Some parents simply don’t want to talk about finances even if they’re in good enough health to do so. Whether their decision is out of stubbornness, impatience or stress, you’ll need to find a way to address financial discussions indirectly.

Instead of keeping close tabs on parents’ finances, let them handle some aspects of it on their own. Gently ask them to fill out their financial information on their own time so they don’t feel pressured. This might take longer than you’d like, but with patience you’ll get the information you need.

5) Stress the benefits. It might help if you explain that sharing their financial information can help them obtain useful government benefits. Inputting their financial information on your state’s benefits websites will let you know what benefits they qualify for.

Most qualified people don’t take advantage of a number of programs out there. Only a third of people that qualify for benefits actually receive any, so having your parents’ information is important.

How to Discuss Finances With Aging Parents – Family Dynamics

Be aware of your family dynamics as you bring up the subject. Your parents have to be comfortable discussing their finances and other arrangements with you and with the other people around.

If you have brothers and sisters, decide who among your siblings might be the best person to bring it up. Perhaps one sibling is an accountant, and your parents have always been proud of her money-managing acumen. If that’s so, perhaps they would be happy to plan that she would manage their finances in case they were no longer able to do so.

How to Discuss Finances With Aging Parents –What You Need to Know

Once you’ve broached the subject, know what you need to know. Wills and health directives are primary. You also should know who your parents’ lawyer and financial advisers are. It’s a good idea to have a list of their obligations and assets. You should know their tax situation: Plan to see the lists and tax returns when they are still hale and hearty.

How to Discuss Finances With Aging Parents – Final Thoughts

Although thinking about discussing their financial situation with your aging parents can be difficult, it’s necessary for the family to do. Think about the best way to broach the discussion, treat your parents as peers and make a plan for what you need to know.

Anum Yoon is a personal finance blogger and writer. She created and maintains her personal finance blog Current on Currency. You can subscribe to her blog newsletter right here for her weekly updates.

The post How to Discuss Finances With Aging Parents appeared first on MoneyAhoy.

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What You Need to Know Before Starting a Small Business

The road to entrepreneurial success is anything but simple. If you’re pursuing your American Dream with the conception of a small business, there are a variety of facets to consider before jumping in. From finding capital to tax issues, location concerns to competitors, it’s essential you read these guidelines before dipping your toe into the entrepreneurial pool.

Look at Similar Businesses

You’re creating a business to fill a need, so make sure you understand the way it’s already being filled. Looking at competitors can give you an insight into what will work for your company, and will give you explicit examples of the mistakes you should seek to avoid. It’s also a good idea to search out a mentor who has been through the process before.

Consider Your Financing Options

If you don’t have all the capital on hand personally, you’ll need to reach out to investors or locate some other form of lending to help you get your business off the ground. The majority of small business are undercapitalized from the start, so do what you can to secure the finances you need before taking the plunge. There are a variety of options to consider. Small business grants are difficult to secure but definitely the route to go if you qualify. Loans from banks are harder to come by these days, but community banks can be a valuable asset to look at, as well as government initiatives that may help you get your business in the works. If none of these options prove fruitful, consider peer-to-peer lending on a site like Prosper.com that will see you secure the money you need, but with the caveat of high interest rates.

Craft a Business Plan

This might seem common sense, but many choose to forgo a business plan, particularly if they’re not seeking outside funding. Make it a priority to make an airtight business plan that will serve as a roadmap for upcoming months and years. This will help you plan more than just financials, as your marketing efforts can easily be drawn out through this process, as well as your audience focus, along with a host of other essential business facets. Don’t forget to consider the end, even at the beginning of your business launch. Will you plan to sell your company when retirement age arrives? Will the business be handed down to family members? These questions will help you determine legal issues that accompany a business from the start. While an airtight business plan doesn’t guarantee success, it definitely improves your chances of making your idea take flight—and stay up in the air for longer than a week.

Be Aware of Liability

Starting a business means opening yourself up to a cache of vulnerabilities. From your responsibilities as an employer to disgruntled customers causing a stink, damage to your company to conflicts over goods purchased from suppliers can have devastating consequences on your business aims. Be sure you speak with a lawyer about liability issues and determine whether you want to invest in an asset protection service to keep your personal property safe.

Don’t Mix Business with Pleasure

You might be tempted to hire family or friends to work with you on your new business, but you could be setting yourself up for disaster. Even our loved ones can let us down, and mixing a fledgling business with personal connections can be a recipe for failure. Keep your business strictly separate from personal connections unless it’s immediate family members.

What Will You Need?

Consider all the necessities before you fully commit to your business. From business bank accounts to trademarking issues, a company website to equipment for production, there’s a host of essentials you need to understand before throwing your money into an idea. You may need to purchase or rent property for your business aims, and understanding the effects location will have on your business aims is important.

Another question to ask yourself is do you have the right knowledge and skills to successfully kick-off and run a new business.  If you think you need to improve in either of those areas, why not consider a new degree?  There are so many online options such as a Master of Logistics Online just to name one!

Understand the Tax Issues

Getting involved in a new business venture means complicating your tax process, on both the state and federal levels. If you’re not already knowledgeable in the terms of business taxes, you may want to consider hiring a financial advisor or tax professional from a company like www.communitytax.com. Seasoned professionals with history in business finances can keep you from finding yourself in hot water with the IRS and help you navigate the various expenses that come along with owning your business.

What You Need to Know Before Starting a Small Business – Final Thoughts

If you’re looking to start your own business, consider these caveats before committing to your ideas.  Understanding these items could help save you time, money, and headache down the road when starting a small business.

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When Do You Really Need a Tax Attorney?

The tax clock is clicking. By now, most workers have received their income statements from their employers. That is a subtle nudge to get going on pulling your tax return together before the dreaded April 15th deadline, and the majority of taxpayers file on time with little complications.

However, there are those incidents when filing a tax return can be a bigger challenge. It’s at that point calling a tax attorney may be helpful.

If you’re wondering if your circumstances warrant the assistance of a tax attorney, consider these potential factors:

You Are Being Audited

A notice from the IRS saying you’re being audited can certainly strike a chord of fear. This is a review process that is quite common. It is also a good reason to bring in a tax attorney.

If need be, that attorney can negotiate a settlement on your behalf. That settlement can take many forms such as an installment payment plan, an offer of compromise or a penalty abatement. You can familiarize yourself with those concepts, but a tax attorney will be in a stronger position to fully understand them and provide advice on the best path forward.

You Get a CP Notice

An IRS CP 501 notice is also referred to as a “reminder notice.” This is to inform you of an outstanding balance you owe the IRS, whether it’s from the current year or from a previous year’s filing. Your experienced tax attorney can help breakdown what the CP notice means and how you should respond.

You Have a Tax Dispute

Just because the IRS says you owe them money doesn’t make them 100% infallible. Yes, they have a decent track record when it comes to “keeping the books.” However, there are plenty of instances where they could get the numbers wrong.

With a tax code that is several thousand pages thick, mistakes can happen on both sides. You are well within your rights to dispute any claim presented by the IRS. Of course, you would be better served to have a tax attorney by your side. This is a person who understands the system and has worked through many disputes.

You Need Someone to Talk to the IRS

Navigating through the bureaucratic maze of the IRS can be equal parts intimidating and stressful. You can avoid that red tape by enlisting the services of a tax attorney who knows the system. By assigning that lawyer power of attorney for this matter, you are giving them permission to handle all your dealings with the IRS. They’ll make the calls, send out the letters and then report back to you. Instant stress reduction.  

You Are Facing Criminal Charges

This is the worst-case scenario with regard to the IRS. It usually happens when a problem is ignored for a long period of time. The mere mention of “charges” should have your racing to a qualified tax attorney. The issue of income tax evasion is taken very seriously by the IRS.

You might think that many corporations and other wealthy CEOs get away with the tax loopholes. That might be true — but a defense of, “They did it, so I can, too” just won’t cut it.

When Do You Really Need a Tax Attorney? – Final Thoughts

Tax problems are not going to go away. The IRS has a thorough system worked out that allows for plenty of time for a response on any issue. It’s not as if you’re going to get notice saying you owe money that has to be paid back by the next day. That window of review will provide you with an opportunity to contact a tax attorney and put together a strategy to address the issue. You’ll feel a lot better once you can put the IRS to rest.

Anum Yoon is a personal finance blogger and writer. She created and maintains her personal finance blog Current on Currency. You can subscribe to her blog newsletter right here for her weekly updates.

The post When Do You Really Need a Tax Attorney? appeared first on MoneyAhoy.

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