I sometimes feel funny when I post these blogs. By their nature, they involve me talking myself up a bit and I try to keep that to a minimum.

This one, however, is not going to look like it is anywhere near that minimum level. I swear it’s not my fault, though, for most of the words are coming from others.

I mean, first there is this recent article from al.com that speaks to how every business, no matter their size, needs to know they will need legal and accounting help. These are areas where if you go at them yourself, you may succeed and have everything go along fine, but if you make a mistake it could prove a very costly one.

Then I came across a piece from Accounting Today that goes through five of its reasons why a small business needs an accountant. These are both short pieces, but both do a good job of showing some of the potential benefits of working with an accountant.

They both are also written with an eye toward a business that could use an accountant’s services. At the risk of letting you see behind the curtain, I want to mention one more piece that is aimed more toward the accountants themselves.

That article comes from theprogressiveaccountant.com, and speaks more of how accountants can serve clients with whom they are already working. It discusses how accountants need to not just be crunching numbers, but letting clients know what those numbers mean.

This is a viewpoint I agree with, for I believe my clients are not getting enough value out of my fee if they do not understand what I am doing. I should not only be giving numbers, I want to help clients see what actions they should be taking because of those numbers.

Now let me try to synthesize these ideas a bit ….

Although that last article I spoke about was urging accountants to be a trusted advisor, I think some of the reason this relationship does not always blossom comes from the client end as well. This is not to say that clients would not like this type of service, but they often do not even know it exists.

Take a look at the other two articles, too. They speak of situations where a business owner could benefit from working together with an accountant. But would one’s first response in those situations be “Let me discuss this matter with my accountant?”

So this then is my plea for you to realize that, yes, you can AND SHOULD bring such matters to your accountant. We do want to help. I trust that if you are already one of our clients, you feel we are providing you with solid service. Do not ever think we cannot do more, though. We never have to be only bookkeeping, payroll, taxes or advisors, we can be all those things depending upon what is called for by your finances.

Think of these articles then, and then think about how your business runs and how it could run better. Then know that we would love to help you get there.

Moreover, if you know other business owners or individuals who could benefit from services, do not be afraid to point them toward professional help. One thing these articles show is that there is a need to not be afraid to accept the service and guidance of those that can provide it. So we would love to help those people get to their goals, as well.

No matter how self-serving that is. 

Last week, I wrote about some of the tax issues surrounding education. Little did I know that at the same time, taxes and education were again mixing together into the latest tax scam.

The IRS recently released a warning about telephone scammers calling and making demands for the payment of non-existent taxes, like the “Federal Student Tax.” This isn’t a new tactic, but seems to play a little stronger this time of year (and the scammers apparently know this).

I can’t believe how often I get to write about the latest potential tax scam. Because of that I don’t want to get too in depth here, but remember the biggest key in every attempted scam:

The IRS will NEVER contact you via phone first. You will first receive a notice in the mail of taxes owed before the agency chooses to contact you in another manner. If the first you hear of a tax bill owed is over the phone, hang up, it is not real.

This does give me a little chance to talk about survey results released earlier this month by the Journal of Accountancy and The Tax Adviser about tax-related identity theft.

In a potentially scary number, 59 percent of CPAs reported that they had a client who experienced tax identity theft. The more one gets into those numbers, though, the less frightening they are.

First, most respondents said that only a small amount of clients were affected. There were also a significant portion of clients who were aware of the problem before they filed, so it was not necessarily an issue with tax filing itself, but their information being obtained elsewhere and then used in a scam.

Finally, the amount of people who found it very difficult to deal with this problem through the IRS was very small. 

So let this be a warning that a bit of caution is always good when it comes to protecting your personal information. Don’t think that you can just be lazy when it comes to such measures.

Let it also be a warning about how it could pay to be vigilant about your finances. By staying on top of things, you can know when problems arise, end them quickly, and be in the group that finds it easy to move on. No one wants to be that constant when it comes to mundane tasks like bookkeeping, but there are clear benefits to it.

And if it is REALLY something you can’t imagine doing, well you know who would love to help. Contact us today if there is anything we could do to help ease this burden.

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Also from the recent IRS file, comes news that user fees taxpayers must pay to enter installment agreements to pay off tax bills could be going up starting in the new year.

First, if you have an old tax bill that needs to be paid, it is ALWAYS better to get to work on paying it off than putting it off. The less penalties and interest you are charged, the less you have to pay overall and the sooner the stress of it starts to wane.

But if you do have a bill lingering over you, let this be serve as an even greater impetus to get to work on taking care of it. Nothing good comes from ignoring it and a (legitimate) bill from the IRS WILL NOT go away. 

You see it in every department store and upon the countdown calendars gracing the walls of every parent – it is back-to-school time.

From a personal standpoint, whether your kids are already back in the classroom or are dreading their return there, I hope you had a good summer and made some lasting memories with that extra time together. From a professional standpoint, there are always tax questions that arise during this time.

This is far from a complete breakdown of some of the things you may now be thinking about, but consider it a primer and a push to think about some of these issues. To get a better feel for your personal situation, though, please contact us and let this be one of the ways we can point your finances in the right direction over the last few months of the year.

But until then, some general notes:

TUITION

Many are aware that college tuition can be a deduction on your tax return. Be aware, however, that private and parochial school tuition for those not yet in college is not deductible. For those with children under 13, though, there could be some tax credit involved with private school and its child care component cost.

Also remember that deductible tuition is not only for those in their teens and early 20s. Graduate, post-graduate and other continuing education at eligible institutions could also qualify.

BEFORE- AND AFTER-SCHOOL CARE

If you have any of those under-13 children (no matter what type of school they attend) those tax credits may again be involved if the child receives this type of care on either end of the school day.

These only apply, however, if the child is there so a parent can go to work, look for work or attend school themselves.

DONATIONS

This is a tricky area, but worth keeping in mind. For example, if you make a donation to a public school, it could qualify as a charitable donation if it is the benefit of all the students; if it is only for your child, however, then it would not be.

Throughout the year, you are bound to take place in many fundraisers and raffles, too. A raffle is never tax-deductible, but a fundraister could be if you receive nothing in return. Again, please talk with us to help better determine where things lie in your personal situation.

TAX-DEFFERED ACCOUNTS

There are some accounts that are slated for educational expenses and are tax-deferred. Money in those accounts could be used for different expenses over different ages - let’s say a computer for your son in high school – and avoid extra taxes.

STUDENT LOAN INTEREST

Much of this takes place after (and sometimes MANY years after) our schooling ends, but don’t forget that the interest paid on those seemingly ubiquitous student loans is deductible.

DON’T FORGET THE TEACHERS

Going back to school doesn’t only involve students, as teachers also get back to work. For those of you who spend time at the front of the classroom, keep your receipts when you buy materials for your classroom. There is an Educator’s Expense deduction that allows a deduction of up to $250 without itemizing deductions.

Beyond that, more can be deducted with itemizations. There are also considerations to be made for charitable contribution if you purchase something for the classroom that is more than general supplies and will remain with the school into the future.

Again, we will be happy to consider anyone’s personal situation, just contact us!

I have been thinking a lot about technology lately.  We feel like we are in a world that is changing in ways one cannot possibly keep up with, and wonder if it is going to get away from us. This can feel worse in the business world, where you do not want to get left behind and find yourself sympathizing with Kodak and Blockbuster.

Perspective can help one from being too overwhelmed by these feelings, so take a quick look at this article from MacLean’s (a weekly Canadian news magazine) that mentions how writing and the printing press also represented changes that some felt challenged the world’s natural order. We should not cower from technology, but a little fear of how it will play out is natural.

So, yes, there are changes in the business world that you cannot avoid. The advent of email, websites and cell phones are all in recent memory, but have already become indispensable to keeping just about any business current. Now the way that those new ways of communication and how we access information is still evolving at a rapid level.

Again, some perspective may help. Here is a quote from HBO executive Michael Fuchs from (all the way back in) 1982:

“We were sensitive to what was around the corner-that explosion of television channels and other forms of entertainment. We knew we would have to be unique. We wanted our programs to be different, even to look different. We wanted people to glance at our shows and say, ‘That looks like HBO.’”

Even something that now feels as normal as cable television is only a bit more than a generation removed from being new. HBO was at the head of many of those changes, and the way that they handled it is key to how to continue navigating through similar waters.

Note that the company did not find their place in that explosion and ride it out. Fuchs urged that they had to be different in that world. It is one thing to be in emerging technologies, but it is another to stand out within it.

Most good businesses should start with the conviction that you can offer something better than anyone else. After all, it is difficult to envision long-term success if you are offering something indistinguishable from your competitors. That is a setup for entering price wars where you are competing for bad clients who aren’t paying enough.

If you can be different, though, you can thrive. Think of HBO, which continues to offer a quality of programming that has a certain cachet and feels different than similar offerings. It embraced technology, then stood out within that world.

So stand by what it is you know you can do better than anyone else. Remaining true to the vision that gave you the passion to start a business is key to any endeavor and extracting happiness from it. At the same time, though, be aware that there can be new ways to do it and remain open to embracing them.

That is much of we strive for here. We believe that we offer services that will suit your needs better than our competitors, and are willing to embrace new ways to steadily improve them.  Hopefully, as our client, you share that perspective. 

Filing taxes is one of the most daunting and potentially fear-inducing tasks when it comes to handling your finances. A recent study, though, found that fear to be even stronger in the younger generation.

In a piece published by nerdwallet.com, it was found that 80 percent of millennial tax payers (people 18-34 years old) have tax concerns, be it making a mistake or not getting their full refund. That number may seem really high, but when doing such a big task with minimal experience, some trepidation and anxiety should be expected.

And let’s give the youth a break, the same study found that 60 percent of taxpayers over 55 years old have some of the same concerns. With age then comes some increased confidence, but it is far from complete.

What I found more surprising in these findings is the fact that millennials filed their taxes by mailing paper returns at a higher rate than those over 35. The more I thought about it, however, the more those two forces seemed to play together.

First, I wonder if there is something to be said for the concrete nature of a paper return. It allows you to see all the numbers at once, giving a fuller picture at a glance. This may feel more real than inputting numbers into boxes on a computer screen. If you are at an age where taxes are new and causing some extra worry, there might be some comfort (even if subliminal and unacknowledged) that comes with the paper return.

Beyond that, however, I bet that many of those numbers are explained by having a tax professional at your side. This is not something one tends to use (and it may not be needed) when you are young, making a minimal salary and do not have much happening in your financial world beyond that salary. It is easy to understand how someone in that position figures they can handle a tax filing – even if not with complete confidence.

(Hey, I will even admit to having been there at some point …. Some point longer ago than I may care to think about or admit.)

As you get older, your financial picture hopefully gets more robust, but that also means it is getting more complicated. At that point, seeking the help of a professional makes more sense, and once you use one, your confidence level should rise … and you will no longer be scratching your numbers out on a paper return.

In response to nerdwallet’s findings, CPA Practice Advisor, put together a quick three-point list to help millennials start to gain some traction and confidence when it comes to thinking about taxes. They are simple steps, but ones that do not always get passed on.

Tax awareness is something that is not commonly thought about as part of a general education, and this is unfortunate. I would lump that in with knowing just how a credit card works and how one goes about getting a mortgage as knowledge gaps that should be addressed in some way before they are encountered in real life.

So if you have a child, keep their financial education in mind, even the parts that do not yet seem very pertinent. And if you are no longer a kid and still feel the need for some guidance, we are always here to help.