YOUR TAX PAPERWORK

BE PREPARED FOR A STRESS-FREE TAX SEASON

 

As you are preparing for the tax season, I wanted to go over the major aspects of taxes that can save you some money:

 

Business Clients:

  1. Jan 31:
    1. If you are issuing W-2 or 1099, remember the deadline is January 31st. Avoid penalties.
    2. You will receive all your PayPal, Amazon, Zelle, Cash App, and all third party 1099s by first week of February.
  2. February 28:
    1. Wrap up your Profit and Loss (P&L) as soon as you can so you can focus on your Balance sheet. Remember your major focus is not how to dodge taxes but to increase your assets and net worth. It may sound like an oxymoron but simply said, P&L only deal with one year of your life, but Balance Sheet helps you build your life.
    2. If the type of company you created is not doing what it is supposed to do, request changes to your entity at the same time you are preparing your taxes. For instance, you want to have a payroll for yourself and a Sole Proprietor, Partnership, or LLC cannot provide for your payroll, then change your entity type to a C Corp or S Corp. 
  3. March 15:
    1. Tax return is Due on March 15 for Pass-through entities (such as Partnership, LLCs, or S-Corps). You need to issue K-1 to all partners, members and shareholders of these entities to avoid penalties.
    2. If you think you are not going to be able to file your taxes in time, get an extension by the end of January. If you get everything ready by the due date, it’s fine, you can file it by due date.  Don’t’ wait until March 15 to file extension.

 

Individual Tax Return, Sole Proprietors, LLC Sole Member Entities:

 

  1. You should be receiving all your w-2s and 1099s by end of January.
  2. You will get your K-1(if you are in partner in an LLC, partnership or S Corp) by March 15
  3. If you sold any stocks, Bitcoins, capital assets (such as home or car), keep documents to figure your capital gain or losses.
  4. If you are self employed, collect all your expenditures in envelopes, organized by:
    1. Advertising and promotion
    2. Insurance
    3. Supplies, tools, and office expenses
    4. Rent
    5. Vehicle information such as total mileage (take a picture of your odometer), compare to your last year’s odometer or the last time you were in the mechanic so see your monthly travel miles.
      1. It’s often better to calculate your mileage because you’ll get 65.5 cents for business miles unless you had major repair that exceeds ordinary maintenance. Remember the 65.5 cents includes gas, maintenance, tire change, insurance, depreciation, etc. So if you have spent more, and you have receipts, you can use actual expenses instead of mileage rates.
      2. Keep track of all your tolls and Parking expenses
    6. For your major deductions keep 4 envelopes to show your out of pocket expenses:
      1. Envelope 1: Medica Dental and include your insurance premium deducted from your payroll
      2. Envelope 2:Home mortgage interest and taxes (IRS allows two homes, residence and vacation home)
      3. Envelope 3: Casualties and theft (need to match FEMA declaration, and police/insurance documentation.
      4. Envelope 4: Charitable Contributions to charitable organizations that have 1023 or 1024 tax exemption status.
    7. For your children and dependents, have their SS card, school records, and medical records
    8. If you had marketplace insurance, you need to send a copy of your 1095A
    9. Tax deadline is Monday, April 15th.

 

If you have already reached out for us to do your tax preparation, rest assured that I am on top of it and will reach out if I need anything additional from you. 

 

If you have not connected with me about your tax preparation, please get in touch at your earliest convenience at 954-399-8980 or email: kianhollywood@gmail.com

. The sooner we begin, the easier and less stressful the process will be for you.