If you are like many people in recent years, you may have chosen to toss aside the 9-5 job and become a gig worker. Whether you are driving for Uber, writing freelance articles or performing other services as your own boss, being a gig worker offers you flexibility and personal satisfaction. Unfortunately, it can also be harder for you to obtain a mortgage. Since gig workers are not usually issued W-2 forms, you may have little idea how to organize your finances so that you gain loan approval from a lender. If so, here's what you need to know.
Qualifying Criteria
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If you own a business, you often find the summer months are the busiest. Thus, you need as many employees as possible to help shoulder the workload. If your children are looking for summer work and the chance to earn extra money, this can present a win-win situation for everyone. However, if you have never before hired your kids to work at your business, you probably have questions about taxes and other related areas. To make sure you take the right steps along the way, here's what you need to know about hiring minor children for a summer job.
Issue Your Kids a W-2 Form
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In today's world, it sometimes seems as if everyone is in debt to some degree. Between car payments, mortgage payments, credit cards, student loans, and other types of debt, it's easy to see why the average person is nearly $90,000 in debt. If you are determined to put debt behind you in 2022, the good news is that you've got plenty of viable options at your fingertips. As you begin discussions with your CPA as to the best ways to tackle your debt, keep the following tips in mind.
Pay More than the Minimum
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If there is one thing you as a business owner don't want to deal with, it is a cash flow crisis. Occurring when your business has more money going out than it does coming in, it can result in not being able to cover your company's payroll or pay for other operating expenses. In fact, over 80% of small businesses fail due to cash flow problems. If you want your business to continue thriving, speak to your CPA about implementing the following strategies to survive a cash flow crisis.
Figure Out Why it Happened
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If you've been busy rolling the dice at a crap table in Vegas, playing the lottery now and then, or betting on your favorite team to win a few games, you may have accumulated some gambling winnings. While this is certainly putting a smile on your face, realizing you may need to report your gambling income at tax time may turn your smile into a frown. Are you in or are you out? Here's what you need to know about reporting your gambling income.
All Gambling Winnings are Taxable
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While it's easy to plan out your day or week, doing your estate planning can be far more complicated. Unfortunately, many people put it off as long as possible, or even fail to create any plan whatsoever. If you are beginning your estate planning journey, it is important to avoid common mistakes along the way. Failing to do so can have tremendous consequences, especially regarding the distribution of your assets, the tax impact on your estate, and much more. To ensure everything goes smoothly when the time comes, avoid these estate planning mistakes.
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When you invest in something, be it stocks, a business, or anything else, you of course want to make money, or have a return on your investment. To know if your investment has been successful, you will need to rely on the financial metric known as ROI, or Return on Investment. Excellent to use whether you are examining the return on only one investment or multiple investments, the ROI is a ratio that compares your investment's gain or loss to the cost of the investment itself.
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Your credit score impacts everything from how much money you can borrow, to what interest rate you’ll pay, to whether or not your application for a home or apartment rental will be accepted. Without proactive steps, your credit score can easily fall into a range where it makes it hard to succeed financially. If your credit score is less than ideal, here are some ways to raise it.
Check For Misinformation
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If you feel like you’re working as hard as you can and you still aren’t saving money, it’s likely that a household budget will help. Household budgets force you to take a hard look at how much you’re bringing in each month and how much you’re spending. You can use a variety of means to create a household budget, such as budgeting software, spreadsheet software or just a reliable pen and piece of paper. In other words, there are no obstacles to creating a household budget.
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For both private individuals and small business owners, the threat of financial scams is all too real. Every year, billions of dollars are lost to criminals who have perfected various scams. In many cases, once your money is gone, recovering it is almost impossible. Along with the embarrassment that comes with being conned, you or your business may face extreme financial hardship. To avoid becoming the next victim of a financial scam, remember these important tips.
Only Give to Verifiable Charities
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When choosing a CPA, you have many choices. Ideally, you want to find a CPA with whom you can establish a long-term relationship with. This way, you both get to understand one another’s work styles and processes, the CPA will get to understand your business in depth, and you will have a trusted partner in your personal and/or business success.
Understanding the Difference Between a “Tax Preparer” and a CPA
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Before the pandemic, many workers often fantasized about what it would be like to work from their homes. When the pandemic struck, many of them got to find out. Thanks to employers shutting down offices, employees were suddenly working remotely from home. If you are included in this group of workers, you may now be concerned about how this may impact your taxes. Since numerous factors come into play on this matter, you won't be able to decipher the rules and regulations on your own, which is why you will need to rely on the advice of a CPA you know and trust.
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When you take a close look at people who are successful in their careers and other areas of life, you may think they do not seem that much different from yourself, and you would be right. In fact, what makes some people more successful than others is a very thin line. In most cases, it comes down to the mindset you have regarding situations you face on a daily basis. While there is no substitute for hard work and perseverance, knowing how to cultivate a growth mindset can help you achieve more than you ever imagined.
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As a business owner who handles many aspects of your company's finances on a regular basis, you already have a reasonable idea as to just how much your business is worth. However, there may be times when you will need to know the worth of your business down to the last penny. When you do, this means you will need what is known as a business valuation. Though there is no one standard formula used for doing business valuations, your CPA will know of numerous measures used to give you an accurate assessment of your company's worth.
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Under ordinary circumstances, you would spend several months closing down a business. Unfortunately, the COVID-19 pandemic has made sure these are not ordinary times. As a result, circumstances may have dictated you close your business much faster than normal. While many business owners have done so and let the chips fall where they may, doing so could lead to a number of unexpected financial and legal problems that could last many years, making an already bad situation that much worse.
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When you are facing various types of financial difficulties or are in the midst of undergoing a major financial change in your life, consulting with a CPA you know and trust can make any situation easier. Whether you are facing an IRS audit, have questions regarding your business or investments, or are dealing with the death of a loved one, it is vital you get expert financial advice as quickly as possible. To make sure all goes well, here are 10 reasons to contact your CPA immediately.
Tax Law Changes
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As the COVID-19 pandemic stretches into 2022, companies and employees are facing unprecedented challenges. While some workers, especially those in health care and education, have expressed concerns and filed complaints or lawsuits pertaining to mask and vaccine mandates and other measures, the fact is most employers are trying to put measures in place to keep employees safe. As to how this can be accomplished, here are some methods that have proven to be effective.
Offer Working from Home
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As you look ahead to retirement, one of the most important things is making the maximum contributions to your various retirement plans. In 2022, cost-of-living adjustments have resulted in many popular plans now allowing for increased contributions. To make sure you contribute as much as possible toward your retirement, here are some of the 2022 retirement contribution limits that may apply to your situation.
SIMPLE Retirement Accounts
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Whether you are an individual or perhaps a business owner who used a credit card to get your business up and running, you know how convenient it is to have a card available for making purchases. Unfortunately, that convenience often leads to using the card more than you should, which in turn results in more debt than you can afford. To take full advantage of your credit card while at the same time keeping the debt at manageable levels, here are some tips you can use to control your credit card debt.
Pay Your Credit Card Bill On Time
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As prices on various products and services have risen to levels not been in nearly 40 years, consumers and business owners alike are starting to wonder if inflation will be here to stay. While you can get a different answer to this question from almost any economist, the fact is the current business environment is one that will be difficult for small business owners in many ways.
Purchasing Supplies
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As you know by now, the COVID-19 pandemic has resulted in the world's supply chain going haywire. Along with this, it has altered the ability of manufacturers to produce the all-important computer chips that are used in so many things in today's world. While most of the focus regarding the chip shortage has been primarily on automakers and other large corporations, small business owners have felt the impact in many ways. If you're curious about the impacts to small businesses and what lies ahead, here are some important facts to keep in mind.
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Did you know that you can make charitable contributions as a business as well as donating as an individual? If not, you’ve been missing out on a great opportunity to get a tax deduction. Of course, if you use a professional CPA you’ve likely already been advised about the benefit of donating. But the tax break is only one aspect of donating. The better part of the deal is the feeling of giving to an organization that is dedicated to helping the less fortunate. Unfortunately, not all charitable causes are worthy. Here’s a guide to choosing worthy charitable causes in 2022.
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The current labor shortage is a strange phenomenon. According to the experts, there are millions of jobs available, but not enough workers to fill them. Now, along with supply chain disruptions and chip shortages, businesses of all sizes must deal with an absence of workers to keep their businesses running smoothly. It’s particularly worrisome for smaller businesses, since they typically lack the financial resources to compete with large corporations for salaries.
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In what feels like the blink of an eye, we are now at the end of 2021. As a business owner, that means you've got plenty of work ahead of you to get your financial records ready for tax time. However, with the holiday rush and the headaches that have come along courtesy of the pandemic, you may be wondering how you will ever get your books in order. To help with this, here are some tips you can use to get your business and its books organized.
Create a Year-End Checklist
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Though you may be known as a "baby boomer," you and 10,000 others like you are turning 65 each and every day, meaning retirement benefits like Social Security are becoming an important part of your life. Since it's likely Social Security benefits will play a crucial role in your financial future upon retiring, it's vital you stay aware of any changes and how they may impact you moving forward. To help you do this, here are some changes you can expect with Social Security benefits in 2022.
The Social Security Trust Fund is Eroding
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When it comes to your taxes, you want to save as much as possible. As December 31 gets closer, it's important to turn your attention to maximizing your ability to take advantage of tax breaks. Whether you had a great year financially or found it to be a struggle, here are some great tax strategies you should implement before year's end.
Defer Your Income
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Electric vehicles appear to be here to stay as they continue to grow in popularity with more and more drivers on the road today. And, as more auto manufacturers commit to producing electric vehicles, buyers are still looking for ways to offset the cost of their purchase. Thanks to Congress, one of the best ways to do so is by taking advantage of the Plug-In Electric Drive Motor Vehicle Credit, more simply known as the electric vehicle tax credit. If you're wondering what's the deal with this credit and if it’s something you should check into, here's all you need to know.
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In 2021, more people than ever are considering converting their traditional IRA into a Roth IRA. However, though eager to do so, many hesitate because they are confused about what is known as the "five-year rule." If you are one of the many who needs answers to your five-year rule questions, here is the Roth IRA five-year rule explained in easy to understand terms.
Future Distributions
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While your CPA may seem as if they are a superhero at tax time, that doesn't mean they look forward to having to wade through a complex mess of receipts and other documents. Remember, the harder you make the job of your CPA, the less efficient the entire process will be. To keep things running smoothly, here are some ways you can make your CPA's job easier.
Be Honest
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When you go to your mailbox and find you have received an IRS letter or notice, you may be stricken with panic and fear. However, the IRS sends out millions of letters and notices to taxpayers annually due to various reasons and situations. While it's possible you could be facing a serious financial situation, most letters and notices can be handled without you ever having to visit an IRS office in person. Should you receive an IRS notification letter, here's what you need to know.
Why You Might Receive a Notification Letter
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