How will the new tax plan affect you? Pull out your 2016 copy to see. If you need to prepare 2016 tax returns email Stephanie at stephanie@paulinestaxservices.com

The estimated date for the new tax plan, should the proposed bill be voted a law, should be around November 23, 2017 before thanksgiving.  I am excited, how about you?  Well,  you may or may not be thrilled depending on how it might impact you personally.  Pull out last years copy for revie, if you have no idea where it is now is a good time to look for it or request a new copy from your tax preparer.  I’ll lay down some basics and suggest the new numbers that you can insert into your own situation. It is some work, and yes, you have a tax professional but understanding how tax planning measures your life is priceless.  

 

  • Tax is calculated on income that has been adjusted for the inclusion of other items. (Taxable income, adjusted adjusted gross income).
  • Tax lingo is specific, so think, logical. Taxes are about reading. Lots of reading. which is why most folks pass the baton to the professional but think about it this way.  The tax professional reads all of the publications and instructions and updates.  The taxpayer (you) reads the 1040. It’s 2 pages.
  • Taxes are about math, lots of calculations.  Example: The tax professional (me) reads each publication for the equation, calculates based on data given, and then inserts answer onto appropriate forms.  The taxpayer (you) must keep a running tally of items you can deduct or need throughout the year and then pass that data on to the professional at the end of the year (tax season).  It’s different math, and different responsibilities but they work in conjunction.1040 EX of new tax plan.jpg

 

One major change I’ve noticed in the  proposed tax plan is the statuses have narrowed to Single or Married Filing Joint. No more Head of household, etc.  I read that there may be a new tax credit of $500 for taxpayers with non child dependents.

The current standard deductions given are shown on the left of the 1040 example in orange highlighter and the new numbers proposed are written in on the right.  Your itemized deductions on the Schedule A must be more than $12,000 (standard deduction) for a single person and more than $24,000 (standard deduction) for married people.

Currently every person listed on a return (including dependents) “gets” $4,050 “exemption” to deduct, but that may be eliminated.   Good news for some folks, though, the Alternative Minimum tax may be eliminated, too.  The Child Tax Credit might be increased.

– So far, known proposed items eliminated are the home office deduction as well as the deduction of prior years’ state and local taxes.

 

Proposed Tax Brackets 2018

Single                                                                                                     Married

$0 – 37,500 ish                                            12%                                  $0 – 75,000

$37,500  – 112,500 ish                               25%                                  $75,000 – 231,500 ish

$112,500 – $415,050 and up                    35%                                 $235,000 – 466,000 and up ish

 

That’s all for now but Ill try to keep you updated as November 23 approaches and then afterwards to prepare for the upcoming due date for tax returns.

 

 

“Tax time” is creepin. If you stay ready, you don’t have to get ready. Pauline’s Tax Service will be making some changes going forward for next year – Stay informed.

As the next couple of months cruise by there will be more information inserted on to my website to help prepare you for the upcoming tax due date of  April <15-18>, 2018

*There are going to be many changes this year, it seems, due to a new tax plan, although its not confirmed.  I’ll try to keep you updated with that too.

 

Pauline’s Tax Service, Ltd – By Stephanie

 

Over the last 2 or 3 years I have worked tirelessly to ensure the best possible service for this type of duty and for my clients, many of whom I inherited more than 11 years ago from my grandma, Pauline Parris.   This work was important to her, and it is to me too.  With that being said, there will most likely be many changes over the next 2 years as I’m trying to reconstruct and reorganize my business plan. Expansion is in our future.

In-office appointments are going to be limited.  The office address is going to remain the same for mail in’s, drop off’s, pick up’s and meeting’s.  The conference room will be available for those tough situations, but this means that some additional time & planning might be in order.  Documents can be submitted via mail, drop off, e-mail, fax, or uploaded to the client portal.  Limited in-office appointments will be available for 2018. Thanks in advance for any inconvenience. 

 

*Before you would like your returns started – make sure you have all of your documents AND other information included before you send it to Pauline’s Tax Service for preparation.  Some returns that include the earned income credit or 

 

Address:  12365 Huron St., Suite 1800 Westminster Co 80234

Phone:     720-893-3712 ext.105

Fax:          303-252-4664

Email for Stephanie

Secure Client Portal

 

 

Almost the worst customer service ever – Shopify! Fail.

As a small business owner I often find myself in a position to expand business services while at the same time maximizing dollars to put towards expenses.  This fine afternoon I had the bright idea to “just add an online store” to my website to make it more convenient for my clients to make payments against their accounts. Godaddy hosts my site but it didn’t even occur to me to check with their affiliates.  I got on trusty Google and went on a tangent.

Before I knew it I was signed up for Shopify and my current website was redirected to shopify’s password or something site. Either way it wasn’t what I was looking for. I was looking for a software, like paypal, that was embedded on my page for clients to click to pay their invoices (but be able to adjust their payments due). When I realized shopify/amazon pay or whatever the heck i signed up for wasn’t what I was looking for I tried reversing everything I remembered doing initially but still my website was redirected somewhere else.

 

So I called shopify, although not an easy task. I was on hold for a solid 20 minutes when I was greeted by a not so knowledgeable JoeShmo.  He wasn’t privy to my issue and instead of letting me be on my marry way to figure it out myself he preceded to tell me its on Godaddy’s side and to change my DNS settings.  Hey guy, you’re a loser.

Meanwhile, still thinking logically to myself. “you signed up for this shit, you must cancel” -smacks self in head- because I was just on the phone with that guy who should have “cancelled” me right up…

I’ll cut right to the chase.  In shopify – settings, close store.  Website restored.

Getting smart with: Taxes. Why though? Here’s 5 reasons.

Taxes are intimidating.  When tax time rolls around,

stressed lady

stress levels increase and people get hyped.  No one knows what to do and they are definitely not prepared.  Well, that’s not true. Some people out there actually have a clue, but the majority do not.  The more prepared we are at the end of the year, the lower the tax bill.

Why should the average Sally Sue have a basic understanding of income taxes?

  1. Most economic transactions have an income tax effect.  The most common example is the purchase of a home.  Mortgage interest will be deductible on the itemized deductions worksheet.  Another example is withdrawing money from a 401-k retirement account.  The tax burden in doing so could be steep.  Both of these items, for the most part, happen in life prior to discussing it with your tax adviser.  Therefor, you should have a clue whats best for you.  Then, at the end of the year your tax preparer can draft your forms for you easy peasy, because you will be in tune with your transactions for the year and come prepared to your appointment.  Back to the 401K example, if you take money out you will receive an annual tax form with the information. Don’t forget to take it to your appointment.  Along with your W2 and mortgage interest statement.

 

2.  The income tax law influences personal decisions of individuals.  Pretty self-explanatory. 

 

3.  A knowledge of the income tax law enables taxpayers to make decisions that  can reduce other costs. By having a clue one can enter into various transactions that can minimize income tax burden.  Likewise, one can avoid a transaction or defer until a time more beneficial in the future.

 

4.  Protects against an audit.  The IRS isn’t always right and sometimes you will have to state your case or your interpretation of things to justify items on your return if they question you.  It doesn’t mean your wrong it just means you have to be able to explain your rightful position.

 

5.  YOU know your financial affairs better than anyone.  Tax planning and forecasting starts with you, not your accountant, although, you should have a conversation with them for sure and keep them included.  It’s important that you are both on the same page.  Use the tax system to your advantage…free-money-clipart

 

5 Tax Tips To Starting a Business

Source: IRS Summertime Tax Tip 2017-18: Starting a Business This Summer? Here’s Five Tax Tips

 

Starting a Business?  Here’s Five Tax Tips

If you are interested in starting a business, be sure to visit IRS.gov. The IRS website has answers to questions on payroll and income taxes, credits and deductions plus more.

New business owners may find the following five IRS tax tips helpful:

  1. Business Structure.  An early choice to make is to decide on the type of structure for the business. The most common types are sole proprietor, partnership and corporation. The type of business chosen will determine which tax forms to file.
  2. Business Taxes. There are four general types of business taxes. They are income tax, self-employment tax, employment tax and excise tax. In most cases, the types of tax a business pays depends on the type of business structure set up. Taxpayers may need to make estimated tax payments. If so, use IRS Direct Pay to make them. It’s the fast, easy and secure way to pay from a checking or savings account.
  3. Employer Identification Number (EIN).  Generally, businesses may need to get an EIN for federal tax purposes. Search “EIN” on IRS.gov to find out if the number is necessary. If needed, it’s easy to apply for it online.
  4. Accounting Method. An accounting method is a set of rules used to determine when to report income and expenses. Taxpayers must use a consistent method. The two most common are the cash and accrual methods:
  5. Under the cash method, taxpayers normally report income and deduct expenses in the year that they receive or pay them.
  6. Under the accrual method, taxpayers generally report income and deduct expenses in the year that they earn or incur them. This is true even if they get the income or pay the expense in a later year.

Get all the basics of starting a business on IRS.gov at the Small Business and Self-Employed Tax Center

2017 Tax Rate Schedules: Have you adjusted your withholding’s? Calculate your estimated taxable income, and find your tax.

2017 Tax Rate Schedule

Around the middle of the year it is a good idea to ensure that by the end of the year you will have withheld your tax liability due. No more, no less.  It’s common to adjust your withholding’s during the year to reflect life events or just to put more money in your pocket at that time.  Time and time again it’s also common that you forget to adjust the withholding’s back to cover your tax liabilities.  Knowing what your tax due will be is half the battle, but equal parts importance to earning your wage and paying your bills. It should be part o2017 Tax Rate Schedulef your monthly budgeting.

 

There’s more to it obviously, but the Individual income tax formula  is as follows and can be used to estimate your taxable income to give you an idea what your up against and  give you time to gather your options to lower your taxable income in an effort to conserve AFTER TAX WEALTH.

 

Individual Income Tax Formula:

Income (broadly conceived) Add income together if you file married filing joint. Don’t forget distributions from 401k’s, retirement or taxable social security, investment income, and  net self-employment income or loss.

Less: Exclusions   Ill go into the list of exclusions later

= Gross Income

Less deductions

= Adjusted Gross Income

Less: [Itemized or standard deduction] and [exemptions] for every person on the tax form

= Taxable Income

 

To find the estimated tax for your bracket add

the tax + [the % over the amount]= Tax