Although it's obviously very important to file your taxes in a timely manner and pay anything you owe, you want to optimize your return to claim all eligible credits and deductions. Since that can get quite tricky with the wide range that is available, we want to share 6 smart ways to optimize your tax return.
In most cases, pooling itemized deductions are going to have the biggest impact on your return. You can definitely lower your income tax bill by taking as many available deductions as possible over the two percent threshold for adjusted gross income.
There has been a persistent myth floating around for a number of years that taking a deduction related to a home office will trigger an audit. As long as you follow the guidelines related to exclusive business use, that's unlikely to happen. The same is true for deducting mileage. The most important thing is to be accurate with these deductions and to have supporting documentation/logs for all of them.
When people think of deducting charitable donations, they often focus solely on very large donations. However, if you look at everything you donate over the course of a year, it likely adds up to quite a bit. That's why it's important to document and track donations of all sizes. Having this information when tax time arrives will help out a lot.
Another area where you can really optimize your tax return is in regards to what you contribute to retirement. This includes accounts like a Roth IRA or Roth 401(k). Not only are you improving your overall financial health, but these accounts will grow your nest egg in a tax-free way for years to come. If you have an employer who offers any type of matching, try to take full advantage of that opportunity.
As you progress in your financial life, investing becomes more important. While it's great when stocks perform well and you're able to sell for a profit, those amounts do get taxed. One strategy for minimizing the tax implications of capital gains is to offset profits by also selling some holdings for a loss.
If you want to work with an experienced and affordable professional to get your taxes filed, we're here to help. We will ensure that your return is fully optimized and that you're able to take full advantage of all credits & deductions that you're entitled to receive.
For more information, visit us at Alpha Tax or give us a call in Anderson at (513) 832-0026 or in Georgetown at (937) 378-3111.
We're in the middle of the first quarter of the year, which means one of the things you're likely thinking about a lot is getting your taxes filed. And after you finish filing your taxes, you'll probably want to know when to expect your refund this 2018 season.
Understanding the Filing Process
To fully answer this question, let's add a little context. This year, the IRS announced that their first official acceptance date was 1/29. That date was for e-File applications. Not that long ago, the only way to file taxes was by mailing in a return. Then once the IRS received your return, a computer had to scan in all the information. Going even further back, the entry was done manually by an office worker.
Once the return was entered and confirmed, the IRS could mail a refund check back. If that sounds like a long and convoluted process, it's exactly what it was. Fortunately, e-filing has completely changed things. Not only can all tax return information be filed online, but there's now an option for a refund direct deposit.
Factors That Affect Getting Your Refund in 2018
For filers who go with the direct deposit option, it can take as little as eight days to get a refund. Just keep in mind that's if everything is exactly in line and there aren't any credits claimed that require extra time to confirm. The official estimate the IRS gives for receiving a refund is twenty-one days.
There are two main credits that require a hold by the IRS. Those are the EITC and ACTC. Anyone who claimed either credit and filed before 2/15 had their refund held until that date. Most likely, it wasn't released until 2/27.
One thing to keep in mind about filing taxes on your own with the use of the software is even though they may claim to let you submit early, your return isn't actually filed with the IRS until the first date of acceptance, which as previously mentioned was 1/29 this year.
The other issue with using software to file your own taxes is it only takes a single mistake for your return to be automatically rejected by IRS filters and sent back to you. When this happens, a filer has to dig through their return, find their mistake and submit again. That can easily delay how long it takes to get a refund.
If you want to work with an experienced and affordable professional to get your taxes filed as soon as possible, we're here to help. We provide an instant $50 check when you file with us. And we can also provide a refund advance of up to $2500. For more information, give us a call in Anderson at (513) 832-0026 or in Georgetown at (937) 378-3111. You can always visit Alpha Tax online too!
If you're self-employed or a farmer, you get to enjoy some lifestyle benefits that many people wish they could have as well. However, that doesn't mean either of these careers is easy. Not only do you need the discipline to stay on top of what needs to get done every day, but you also have to be responsible for all of your finances. This can get quite stressful. For many people in this position, tax time is especially stressful. While the amount that you're expected to pay can come as a surprise, it's not all bad news. There are ways for self-employed individuals and farmers to reduce their tax burden. To ensure you're aware of all the options and deductions that are available, we want to highlight several notable tips:
1. Understand the Schedule SE
One of the reasons self-employed individuals and farmers often feel like they have to pay more in taxes than other people is because they are responsible for paying taxes that support Medicare and Social Security. While employers take care of these obligations for their employees, individuals who work for themselves make these payments in the form of self-employment taxes. When filing, anyone in this position needs to include a Schedule SE. The thing to remember is between fifty and fifty-seven percent of the payments made via a Schedule SE can be deducted on a 1040.
2. Consider Organizing As An S Corp
Many people start working for themselves as a sole proprietor. But as you start to earn more money, it can be useful to explore options like organizing as an S Corp. Even though this move can require more work than simply acting a sole proprietor, the available tax savings can make it well worth the effort.
3. Know Your Deductions
There are quite a few tax deductions available to self-employed individuals. Home office, the Internet, phone, health insurance, meals, entertainment, travel, car, interest and subscription deductions are all possibilities for self-employed individuals. Just keep in mind that the IRS does keep an eye out for abuses of these deductions, so if you have any questions about whether or not a deduction is legitimate in your specific case, it's always best to speak with a professional.
4. Be Aware of Net Profits
At the end of the day, self-employed individuals get taxed on their net profits. Being aware of this fact throughout the year and carefully documenting all expenses, as well as looking for opportunities to strategically plan expenses, can help you reduce the amount of taxable profit you have when the time comes to file.
If you're feeling overwhelmed by getting your taxes in order and want professional help, be sure to take a look at the Cincinnati tax services we provide.
By filing your taxes online instead of on paper, you can streamline this entire process and reduce the likelihood of making a mistake. While e-filing has definitely made it easier to deal with personal and business taxes, that doesn't mean it's foolproof. It's still possible to make mistakes when you file this way, and plenty of people still do. Not only can making an e-filing mistake cause a headache, but it can also cost you money. Since those are both things you'd probably prefer to avoid, we want to highlight the most common e-filing mistakes that get made every year:
Your Social Security Number
Even though it seems like an obvious thing, statistics show that plenty of people incorrectly enter one or more digits of their social security number. While this mistake is easy to avoid, entering the wrong number can cause a substantial delay with getting your refund. So let this be a reminder to double-check the SSN you enter before proceeding with your e-filing.
Use the Right Name
Whether you go by your middle name instead of your first name or recently got married, there are a number of factors that can result in you frequently using a different version of your name than the one that's legally recognized. Although there's nothing wrong with that, just be sure you use the most current version of your legal name when you e-file. If anything has happened that may have changed your name, you can use the SSA.gov website to check.
Double Check Your Bank Info
One of the advantages of choosing to e-file is you can get your tax refund in much less time than if you file by mail. However, that will only be the case if you enter the right routing and bank account number when you e-file. As with your SSN, double check before submitting. Making a mistake with a single digit can greatly increase how long it takes to get your refund.
Get All Your Ducks in a Row
While e-filing allows the Internal Revenue Service to process your return in much less time, it doesn't mean they're not paying close attention to the numbers you enter and deductions you claim. The last thing you want to do is make any mistake that triggers an IRS notice or audit, so be sure that you have all the necessary forms for filing your return and get that information entered correctly.
If you want to be sure that your return is filed correctly and you're able to maximize your refund, Alpha Tax Services can help. In addition to having over two decades of tax preparation experience, you can instantly get a $50 check when you file with us.
Since 1975, the Earned Income Tax Credit has been providing American families with a federal subsidy designed to alleviate the burden of taxation and to encourage taxpayers to remain employed throughout the year. This benefit has been expanded over the last few decades as a way to provide some level of economic relief for low-income and middle class workers. This credit is interchangeably referred to as EIC or EITC.
In essence, the EITC allows qualified taxpayers to get back a fixed percentage of their annual income. Families with more than one child stand to get higher EITC amounts. Low-income taxpayers who do not have children or dependents may also qualify for the EITC, although the amount will be considerably lower. The EITC is paid through the refund indicated on an annual tax return.
The EITC is not determined by federal poverty guidelines. Instead, it's calculated by income levels and by the size of the taxpayer's family. The minimum age is 25 and the maximum age is 65. All income earners and dependents must have valid Social Security numbers. The EITC can be taken by taxpayers filing jointly or individually. The choice of filing should be left to accountants and tax preparation professionals.
As an example, let's say a married couple with three children produces an annual household income that is less than $53,000. the maximum EITC amount this family could receive would be $6,629. Individual workers who earn less than $14,880 per year would receive no more than $506. It is important to note that the EITC is a benefit and not a deduction.
Self-employed professionals and income earners who do not have a 9 to 5 job may still qualify to receive the EITC. To this effect, construction workers who are independent contractors and are paid by means of 1099 forms may still be eligible.
Investment income does not automatically preclude taxpayers from getting the EITC. An office worker, for example, may receive stock options from her employer as a performance bonus. Even if she exercises those options, she may still be eligible as long as her profit was not higher than $3,400 by the time she files her tax return.
Receiving child support, Social Security or early retirement income could render taxpayers ineligible to take the EITC. The same goes for unemployment benefits since the goal of this tax credit is to reward workers. Imprisoned workers do not qualify for the EITC.
In the end, the EITC is a benefit that low-income and middle class taxpayers should explore, particularly if they have children. In terms of determining eligibility and the EITC amount that can be taken, this credit can be as difficult to calculate as itemized deductions or depreciation. For this reason, taxpayers should let a tax preparation professional handle the preparation of their annual return.
With a wide variety of software and forms available online, it seems easier than ever to prepare and file your own tax returns. However, this process can quickly get complicated, which why you may want to put your taxes in the hands of professionals. Here are five benefits of having your taxes professionally prepared and filed:
The cost of having your taxes professionally prepared is often offset by returns you didn't even know you were entitled to. Even just the time it might take you to research available deductions and find the right forms to claim those deductions may cost you more in time and effort than it would cost you to simply have Alpha Tax Services handle them.
The companies that make tax software do a great job of marketing their tools as fast and easy to use. However, most people who have spent time trying to file their taxes in this way know that the experience often takes much longer than expected. If you are looking for a truly fast and simple experience, there's no match for a knowledgeable tax professional.
A tax professional can not only help you with this year's taxes, but they can also help you plan and prepare for your future. You may have done or not done something this year that could have saved you significantly if you had just done it a bit differently. In addition, a tax professional can help you figure out how to get the best tax advantages for any future plans you may have.
Something as simple as entering a number on the wrong line or even mixing up one or two numbers can cause you to believe you owe far less than you actually do or lead to significant delays in getting your return. Hiring a professional significantly minimizes your risks of sending in a return that contains costly mistakes or errors.
If you are audited and the IRS finds any errors in your returns, you could face serious financial and legal consequences. Although hiring a professional to prepare your taxes doesn't automatically clear you from all liability, it does add a significant level of protection.
Tax time is generally a dreaded event for almost everyone. However, it doesn't have to be. Turning your taxes over to a professional can not only save you time and potentially a significant amount of money, it can also save you a great deal of stress. Rather than spending your free time laboring over a complex labyrinth of codes and forms, you could spend it doing something you genuinely enjoy!
As we covered in our previous post on some tax refunds being delayed until 2/15, a change implemented by Congress means that anyone who claims the Earned Income Tax Credit or Additional Child Tax Credit is going to have to wait longer than usual to receive their refund. This extra window of time will be used by the IRS to help combat the growing problem of fraudulent returns.
And even for filers who don't claim either of those credits, it can take a full three weeks before returns are processed and refunds issued. If you would like to receive money from your refund in much less time, an advance loan can be the perfect solution.
There are several significant benefits associated with this type of loan. The first is the fact that you don't have to wait for your refund to arrive. Even if you aren't claiming the EITC or Additional Child Tax Credit, it can still take up to three weeks to get your refund from the IRS. This type of loan means you can get going right away with the plans you have for that money.
Another benefit of this option is it's quite convenient. Unlike other loans that can require you to fill out a ton of paperwork, this one is based off your tax return, which means there's no extra work for you to do.
Finally, getting this type of advance loan is simple. As long as you work with a reputable tax preparer, you won't have to worry about figuring out any complicated tax issues on your own. Instead, the preparer will walk you through this straightforward process and get your refund money to you in the form of an advance loan.
With over two decades of industry experience and relationships, we understand how hard people in Cincinnati work for their money. That's one of the reasons Alpha Tax is committed to making taxes as easy as possible on our clients.
In addition to the quality of our tax preparation service, one of the ways we help to make things easy is by offering advance loans. if you sign up to do your return with us, you'll receive $50 immediately. We can also provide up to a $1200 refund advance in as little as one hour once your return is filed. The IRS starts accepting returns on 1/23/17, so don't miss out on your chance to get ahead of the curve. If you have any questions about our tax preparation service or advance loans, don't hesitate to give us a call at 513-528-9100.
According to the commissioner of the IRS, stolen identity refund fraud is a growing problem for the organization. Based on this issue, Congress approved a change that's designed to combat this type of fraud. However, fraudsters aren't the only ones who may be affected by the measure instituted by Congress. The significant change that this measure implements is requiring the IRS to hold refunds until February 15th for anyone who claims the Additional Child Tax Credit or Earned Income Tax Credit. As a result, people who are used to filing early and then getting their refund early may not have that experience in 2017.
While the IRS has acknowledged the impact this change will have on millions of legitimate taxpayers and has taken measures to help spread the word, the new policy has still caused plenty of frustration.
The Earned Income Tax Credit is designed to help families with low to moderate incomes. A single head of household with two children can qualify for this credit if they earned less than $44,648 in 2016 (the limit is $50,198 for a married couple filing jointly with the same number of children).
According to IRS statistics, more than twenty-six million filers have received the EITC. And in 2014, over twenty million filers claimed the Additional Child Tax Credit. As always, the IRS will accept and process federal tax returns for 2016 as soon as filing season begins. If someone files early and doesn't claim either of the credits discussed above, they can expect to receive their refund in less than twenty-one days after submitting their return.
But if a filer claims either of those credits, refunds will be held until February 15th. The purpose of this holding period is to give the IRS additional time to check for signs of fraudulent returns. Based on data from 2013, just under $15 billion of EITC payments were done in mistake. This accounts for nearly a fourth of all payments for this credit. Estimates from 2013 for the Additional Child Tax Credit peg the improper payment rate at over thirty percent.
If you want to avoid feeling stressed out this tax season and have the peace of mind that goes along with knowing that everything on your return was done correctly, be sure to take a look at how our tax preparation service can help.
The best way to ensure that you stay on the right financial path is to have a professional handle your tax planning and preparation. By working with a tax preparation service in Cincinnati, OH, you can get the expert tax support you need throughout the year. Whether you need help with personal tax preparation, business tax planning or both, our experienced team will provide the assistance you need. Not only can you count on us to help assist with any tax tasks that need to get done, but we will always do so in a way that focuses on strengthening your financial position.
The Importance of Tax Planning
Many people only think of tax preparation in Cincinnati, OH when they receive their W-2. While thatâ€™s fine for individuals who only have basic tax preparation needs, plenty of other people have financial situations that are much more complicated. Whether someone is a business owner, has investments or owns multiple pieces of real estate, there are a lot of tax considerations that need to be taken into account. By staying on top of these issues through the use of tax planning services, individuals can actually save themselves a considerable amount of money.
Advantages of Year-Round Service
There are several reasons that it may be in your best interest to work with a tax professional throughout the course of the year. As mentioned above, the first reason is that year-round attention to tax issues makes it possible to take advantage of strategic opportunities that can help to reduce your tax burden.
The second benefit of working with a tax professional in Cincinnati throughout the course of the year is it will provide you with peace of mind. Instead of worrying that some significant issue will come up out of the blue and cause problems for you, this type of service allows you to stay ahead of the curve.
Another advantage of working with a tax planner prior to when the time arrives for you to file your taxes is you can get expert guidance from an experienced professional. This can be especially helpful whenever you're going through a major transition in your life. And if you're thinking about any significant milestones that are on the horizon, a Cincinnati tax planning professional will be able to help you prepare for them.
Call Alpha Tax Services for Tax Planning and Preparation Help: 513-528-9100
At Alpha Tax Services, weâ€™re committed to helping our clients with all their tax needs. From tax planning to tax preparation in Cincinnati, Ohio, we can customize our services to fit exactly what you need. So if you have a question or would like to discuss how we can make dealing with your taxes a less stressful ordeal, please give us a call at 513-528-9100.