Additional menu

eFile360.com

Where e-filing information return forms comes full circle. We support 1099, 1098, W-2, and Affordable Care Act forms.

tax tips

Illegal Business Tax Practices You May Not Know About

By

When it comes to running a successful business, understanding and adhering to the rules of taxation is essential. Unfortunately, there are some illegal business tax practices that you may not be aware of. Knowing what these are can help you avoid costly mistakes or even legal prosecution. This article will provide an overview of some of the illegal business tax practices that companies must be on guard against. So read on to learn more about how to protect yourself and your company from falling victim to these violations. Illegal Business Tax Practices: Deductions There are hundreds of tax deductions available for individuals and businesses to take every year. Some require that the taxpayer itemize their tax return, while others can just be subtracted from the amount a taxpayer owes the IRS or the state and local governing bodies. But there are also lots of instances where someone thinks something should be deductible but it isn’t. Nearly all personal bills and living expenses are not deductible save a few choice areas that pertain to things like children, home businesses, and the like. Business News Daily even shared some off-the-wall deductions their readers shared, like the guy who hoped to deduct the price of the motorcycle he recently bought because it’s his stress reliever and it helps him perform better in his professional role. Or the client who wanted to claim a dog as the company mascot and provide it with the same medical coverage employees are entitled to. While these are extreme (and funny) examples, there are many things that seem like they should be deductible but aren’t. Let’s go through a few of them. The first one we want to talk about is business-related entertainment. We’ve seen the movie scenes where everything from dinner and drinks to all-inclusive resorts are just put on the “company card.” And while certain businesses may be willing to incur such expenses to win over clients and grow their business, you can’t deduct 100% of those …

Continue Reading about Illegal Business Tax Practices You May Not Know About →

Best Practices to Make Your Business Payroll and Taxes Easier

By

Running a business is a complicated process, and the payroll and tax compliance tasks associated with it can be especially challenging. Fortunately, there are several best practices that business owners can use to make the payroll and tax processes easier and more efficient. With some planning and preparation, managing these tasks can be much simpler. In this article, we will discuss some of the best practices to make your business payroll and taxes easier while staying compliant with regulations. Payroll and Taxes: Key Components to Your Business Operations Aside from payroll as a necessity for your business continuity, there are several compliance and legal reasons to keep your payroll and taxes in order. And because your payroll affects your employee payroll tax as well as employer payroll tax and returns, you want to have things in order every time you run payroll, not just during tax prep season. This also helps keep you from missing quarterly tax payments for wages and other business items. There are several different types of payroll and payroll-related taxes, and we wanted to go through those here as we kick off this list of best practices. First and foremost, your business is responsible for preparing and filing Form W-2 for any and all wages, tips, and other compensation you’ve paid your employees in the last tax year. You’ll also need to withhold social security and Medicare taxes (including the 0.9% Additional Medicare Tax for wages and compensation that exceeds $200,000 in a calendar year) from those wages. It’s important to note that any freelancers or independent contractors you work with will not have these things withheld from the payments you send them – they are responsible for that withholding as they are self-employed. However, you will have to send them the correct 1099 forms (most often a 1099-NEC) so that any income you pay them totaling more than $600 can be reported. Then each contractor will pay the self-employment tax on …

Continue Reading about Best Practices to Make Your Business Payroll and Taxes Easier →

How to Protect Your Taxes from Identity Theft

By

Tax season can be a stressful time, but it’s also an opportunity to maximize your financial security in order to protect your taxes from identity theft. Tax identity theft is a growing concern in the United States, and as technology advances so do the potential for criminals to access your personal information. Fortunately, there are ways to safeguard your taxes from identity theft and secure peace of mind throughout tax season. Understanding the risks and taking proactive steps to protect yourself is key in preventing any potential data breaches. True IRS Communication about Tax Information is Always Via USPS The first tip to protect your taxes from identity theft is to remember that any true IRS communication is going to come through the United States Postal Service. You will never get texts, emails, social media communication, or automated or representative calls. Watch Your Credit Get a credit monitoring service and check it faithfully. Often, the first signs of identity theft, tax-based or otherwise, will pop up on those frequent credit reports. When you see those changes, you can then take immediate action to lock down your accounts and safeguard other sensitive information that may not have been stolen yet. Keep Personal Information Private Numbers and account information for key business, personal, and financial information should always be kept private whenever possible. Your Social Security number (SSN), Tax Identification Number (TIN), and other sensitive information can easily be stolen if you are carrying it around with you, either in a physical card or as a digital copy on your smartphone, tablet, or another electronic device. Most often, this type of information is stolen when you choose to share it with someone you trust. Your spouse should not be keeping a digital record of your SSN, for example, without having that information password protected. Even writing the information down for a friend (in an emergency or some unexpected …

Continue Reading about How to Protect Your Taxes from Identity Theft →

Get Ready Early for the 2023 Tax Season

By

The 2023 tax season is already upon us. With the help of this article, we’ll talk you through some best practices to get ready for your 2022 federal tax return.  The 2023 Tax Season is Upon Us The time has come to start preparing for your 2022 federal tax return. Filing taxes can be a daunting task, but with the right knowledge and preparation, it doesn't have to be an overwhelming experience. It is important to understand the process and all the necessary steps involved so you can feel in control of your finances and avoid any potential problems or delays, especially as we approach the upcoming tax filing season. Preparing for the 2022 federal tax return is an important part of managing your finances. It's important to understand the process and be aware of any changes to the tax code that might affect you. Let’s discuss helpful tips on organizing your documents, understanding deductions and credits, filing deadlines, and more. Check Your Bookkeeping Just like packing for an extended vacation, you can’t successfully prepare for tax season in one day. You’ll forget things or leave out important assets, and it’s much more annoying to make changes to your taxes when they’re being prepared and processed. The best practice for your 2022 federal tax return (and every tax return in the future) is to make sure you are tracking and recording your transactions and important paperwork as it is created, not after the year is over. You also want to ensure that your bookkeeping is consistent – monthly expenses for a renovation or new product or service venture should be consistent in their classification. For example, if you have a web developer creating and updating an app for your business, you can’t record those expenses as “investments” one month and “marketing expenses” the next. Consistency is key. Reconcile Your Bank Accounts for the 2023 Tax Season Reconciling your bank accounts just means making sure your books (whether you do them by hand or use a …

Continue Reading about Get Ready Early for the 2023 Tax Season →

Preparing for 2023 Tax Brackets with Inflation Adjustments

By

As of late 2022, annual inflation was over 8%, and consumer prices are up more than 9%. Let’s break down how inflation adjustments will affect our 2023 tax brackets. Inflation on the Rise – IRS Response We previously talked about the effects of inflation on business and tax trends earlier this year. And now the IRS is addressing these issues in an adjustment plan that affects more than 60 tax provisions. They recently shared a 28-page document outlining all of the provisions and changes, but we wanted to share some of the highlights with you here as well. The procedures in this provision went into effect on October 18, 2022, and will likely affect many taxpayers’ filings in the 2023 tax season. If you or your employees have salaries that did not keep up with the crazy inflation hikes this year, tax savings could be in your future for the 2022 tax year when it comes time to file your returns. The inflation adjustments are coming from the fact that prices haven’t increased this drastically for more than 40 years! With the price of everything – gas, groceries, homes, and everything in between – going up so quickly, the IRS has made inflation adjustments to the 2023 tax brackets. But what does that mean for you, the taxpayer? Let’s talk about it. 2023 Tax Brackets with New Inflation Adjustments The IRS makes inflation adjustments every year, but this year the adjustments were much more substantial. Some increases range from $400 to $1,000 depending on how the taxpayer files (married jointly, head of household, etc.). And tax year 2023 withholding rates have also been adjusted, which means employees will see slightly larger paychecks even without having received a raise for the year. For the tax year 2023, the standard deduction for those who file as married, filing jointly will increase to $27,700. This is a $1,800 increase from the previous year. For those filing single or married filing separately, the standard deduction will be $13,850 (a $900 …

Continue Reading about Preparing for 2023 Tax Brackets with Inflation Adjustments →

Taxpayers Can Now Amend Taxes Electronically

By

The Internal Revenue Service (IRS) recently announced a change in the process for amending forms and corrections filing. Here’s the latest on this change and the changes related to it. You Can Now Amend Taxes Electronically Recently, the IRS announced that you can amend taxes electronically for Forms 1040 and 1040-SR for the tax years 2019, 2020, and 2021, as well as Forms 1040-NR and 1040-PR for the tax year 2021. The IRS also shared information that a new checkbox was added to the forms listed above in order for taxpayers to indicate that a superseding return is being filed electronically. Form 1040-X is the one that allows you to amend taxes should you have a need, and you are still able to file a paper copy if you’d like. The IRS just expanded the ability to amend taxes to include electronically, too. When You Should Amend Taxes There are several instances where you should amend taxes. The following situations are all worthy of an effort to amend taxes: You noticed you’ve missed an opportunity to claim a tax deduction or credit – whether the amended refund you get will be substantially or even slightly larger is of no consequence. If the deduction or tax credit is worth it to you, you should do it – and it’s even easier now because you can amend taxes electronically. You chose the wrong tax filing status by mistake. You don’t have to keep the same status year after year, and it’s easy to get into a routine and forget to double-check this information. You have added or removed dependents in your living situation but haven’t reported that change on your tax return. You forgot to claim taxable income on your tax return. It’s easy to forget and lots of people have side hustles. Make sure yours are included, even if they aren’t a huge or majority percentage of your overall yearly earned or passive income. You mistakenly claimed an expense, deduction, or credit that you aren’t actually eligible for at this time. Math or clerical …

Continue Reading about Taxpayers Can Now Amend Taxes Electronically →