Tax Trick Me Not

As a Nationwide tax company Professor Tax enjoys finding deductions we can pass onto our clients.  These days online companies like to throw around the word free to reel in new customers and the majority of tax companies are not exempt to this as almost all online tax preparation companies offer some variation of a free tax software.
The “trick” is in which can qualify for free, as with companies the answer is... not many of us.
So which of you have experience with a “free” product and how many of you were quickly up-sold to a paid version that ended up costing you as much as $69..or more. Add to that another $37 or more for your state return and your tax preparation fee quickly adds up to more than $100, when you thought you were doing your tax return for free! Now go ahead ask yourself did this free software get to know you and your business on a personal & professional level so that you were provided with all the deductions available? Did this free software ask you about your vehicles, debts, business entertainment, travel, interest on your purchases, new equipment...?
So after it's all said and done it's like your parents always told you, “If it sounds to good to be true, it probably is.” Be sure to read the fine print and check the state tax price which is where online tax companies make most of their money.

Unlike other companies Professor Tax includes real services at no extra cost including door-to-door pick up services no matter where you are in the US and we provide all our valued clients unlimited communication with our office.  We understand every business is unique so to show value that uniqueness we personalize our services to meet your needs because although taxes are just a number you are never just a number to us!
Professor Tax isn't just here to prepare your taxes we look forward to helping you minimizing your tax liability. You may need to create a new business, buy rental property, or invest in a pension plan. Whatever your situation, Professor Tax is ready to help!
We strive to fulfill our clients needs by always continuing our education and staying on top of all the latest changes so we can maximize your return - we have yet to meet a client that we could not show them their savings potential within moments of reviewing their past returns.  So just say Tax Trick Me Not and call Professor Tax so we can roll out the savings for you today!

Spring Cleaning | Organizing Your Books

Now that tax season is finally over let the Spring Cleaning begin! That’s right, now is the time to get your books organized and begin planning for next year. Maintaining good records will ultimately make filing your return next year a lot easier.  Shred what you don’t need any more and keep the records you need in case of an audit.

If you’re a business owner it is extremely important not to mix personal and business. You should keep your books and taxes separate.

Now let us help you get organized:

1)   Keep all of your tax records in a designated location. This will save you time when looking for important documents.

2)   Keep all CASH receipts.

3)   Hold onto Bank Statements

·         The IRS will want to see Check Stubs and pictures of checks that cleared

·         Sales information - deposits or sales reports (total of invoice) most are cash method and sales tax

·         Payroll Summary - QuickBooks or via a payroll company

4)   Stay on Top of Payroll

·         It is important that your payroll taxes are taken care of, so that you do not receive a penalty.

5)   If you receive your documents electronically, you can simply save them to your computer. Create a file for the current year; then create subfolders for each type of document. This will help you stay organized, while saving paper.

6)   If you are saving important documents to your computer it is important to back this information up.

·       You can save  your  information to an external hard

    drive that simply plugs into your computer

·       Or burn a CD

·       Ideally you backup your data offsite, not only with an external hard drive or CD.

    

If you own a business, below are the types of business paperwork you should keep:

Receivables: All of your gross receipts; cash register tape records, bank deposit paperwork, receipt ledgers, all your invoices, log of all credit card receipts.

Purchase: All canceled checks, credit card records and invoices

Expenses: All canceled checks, bank account statements, credit card records, invoices and all your petty cash slips

Assets: Receipts for all equipment purchases, capital investment or improvements in the business, property records for any real estate purchases.

As you can see, just because tax season has come to an end doesn’t mean you can forget about your taxes and books. “Spring Cleaning” is a great way to be prepared for next year. If you are new… let us help you get caught up on your taxes. Professor Tax USA not only takes care of your personal and business taxes, we will take care of your bookkeeping and accounting needs. Live out of state? We will come to you. We travel all around the United States.

How Long Should I Keep My Records?

How long should I keep my records? That is the question. The length of time depends upon the expense or event that the document contains.  It is important to keep your records until the period of limitations for the document expires.

What is the period of limitations? - The period of limitations is the period of time in which you can amend your tax return to claim a credit or refund, or that the IRS can assess additional tax.

Accordingto the IRS you should keep your tax records for 3 years if you do not owe additional tax and the following situations do NOT apply to you:

1)   You do not report income that you should report, and it is more than 25% of the gross income shown on your return; keep records for 6 years. 

2)   You file a fraudulent return; keep records indefinitely. 

3)   You file a claim for credit or refund* after you file your return; keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later. 

4)   You file a claim for a loss from worthless securities or bad debt deduction; keep records for 7 years. 

5)   Keep all employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.

So a good rule of thumb is to keep your records at least 5 years, due to the state goes back 5 years when it comes to sales tax and the IRS can audit up to 3 years. Don’t go overboard with your record keeping. Pay attention to dates and toss out what you don’t need. If you would like “The Professor” to review your tax documents with you feel free to contact us and we will set up an appointment. We are here to make taxes easier for you and to keep you informed on the ever changing law.

I Received My Tax Refund, Now What?

So you have received your tax refund? Are you trying to decide what to do with the money. Should you invest or go on a shopping spree? That is usually the struggle that many people deal with every year.

Let us help you decide what to do with your tax return.

Pay off Debts:

Ø  Credit cards

Ø  Pre-pay mortgage

Ø  Pay off student loans

Ø  Car loan

Remember to do this in baby steps. Pay off the smallest debt first, then stack that payment onto another debt and so forth. This will help you pay off debt more quickly. You’re already paying out each month, so why not get out of debt?

Savings and Investing:

Ø  IRA (Individual Retirement Account)

·       Use your refund to increase your retirement plan contribution

·       If you don’t have a retirement plan at work or if you’re contributing  the minimum, you can use your tax refund to contribute to a Roth IRA.

Ø  529 Plan or Qualified Tuition Programs (QTPs) 

·       This is an education savings plan operated by the state or educational intuition designed to help families save money for their children’s college tuition.

Emergency fund:

Ø    This fund is in case of an actual emergency, such as the loss of a job, an illness or major expense. A good rule of thumb is to have at least enough money saved in this account to cover at least 3-6 months of living expenses.

Ø    A CD fund or money market account are great options.

Save:

Ø    Of course you can save your refund to go toward purchasing a new vehicle. If possible save up enough money to buy a new vehicle with cash that way you don’t have to worry about payments.

Ø   How about saving for a family vacation. We all need to have fun and get away every once in a while!

Donate to charity:

Ø    If you have things caught up, you can always help those in need. Now more than ever, charities are in desperate need of donations.

As you can see there are many ways in which you can use your tax return. We wanted to give you some ideas of the best ways to invest, save and get out of debt. If you would like to find out more ways to use your tax return or simply would like a consultation regarding taxes, bookkeeping or accounting, contact us and we will gladly help you.

Maria Enjoys Reliable Accounting Services with Professor Tax USA, Inc.

Professor Tax continues to travel to New Mexico! We want you to meet another one of our magnificent clients, Maria Flores. Maria is the owner of I & B Transport & Storage Inc. located in Columbus, New Mexico. I & B Transport and Storage is a private company that was established and incorporated in 2005.

I & B offers two types of services:

1.   Transportation

2.   Storage

Their transportation services use big rigs (AKA 18 wheelers) to transport. One type of trailer used for transportation is a flatbed trailer for heavy equipment and other large items. The second type is a Reefer trailer for other goods, such as produce. Reefer trailers are enclosed and contain an air conditioner. This keeps produce cold when being transported to the grocery store.

I & B Transport and Storage have been clients of Professor Tax USA since 2005. They were in need of a new accountant and Henry came in at exactly the right time. Professor Tax provides a variety of services for I & B. He takes care of the taxes, bookkeeping, accounting, corporate paperwork, quarterlies and more. Henry and Daryl alternate coming out every 2 months to I & B Transport and Storage for a personal consultation and take care of any needs the business may need.

“Henry is easy to contact”, says Maria. “He’s always there when you need him and he will always help you out.” “He is very friendly!”

When asked, what is the best way to describe the services you have received from Professor Tax? Maria says, “I don’t have the words for that.” “He’s there anytime you need him if you have questions.”

Maria states, “I wish there were more reliable people like Henry.” When he goes on vacation you can leave him a voicemail and he will contact you.”

As you can see, “The Professor” will travel to you. Your business is important and Professor Tax knows this and wants you to be less concerned about taxes, bookkeeping and accounting.  Contact Professor Tax if you would like a FREE face to face consultation.

Proud Members of Northwest Florida’s Better Business Bureau - Professor Tax USA

Did you know Professor Tax USA has an A+ rating with the Better Business Bureau? They have been BBB Accredited since February 14, 2001.

The BBB rates your business on a scale of A+ to F. There are 16 Rating factors that determine your BBB rating.  Several factors that raised Professor Tax USA’s rating are:

§  Length of time business has been operating.  Over 30 years of experience.
    

§  No complaints filed with the Better Business Bureau.

§  BBB has sufficient background information on this business.

BBB Accreditation Standards

§       In order to be accredited by BBB a business or organization confirms that it meets and will abide by the following standards:

§        Build Trust
Establish and maintain a positive track record in the marketplace.

§        Advertise Honestly
Adhere to established standards of advertising and selling.

§       Tell the Truth
Honestly represent products and services, including clear and adequate disclosures of all material terms.

§        Be Transparent
Openly identify the nature, location, and ownership of the business, and clearly disclose all policies, guarantees and procedures that bear on a customer’s decision to buy.

§        Honor Promises
Abide by all written agreements and verbal representations.

§        Be Responsive Address marketplace disputes quickly, professionally, and in good faith.

§        Safeguard Privacy
Protect any data collected against mishandling and fraud, collect personal information only as needed, and respect the preferences of consumers regarding the use of their information.

§        Approach all business dealings, marketplace transactions and commitments with integrity.

As you can see Professor Tax USA is highly accredited. If you need bookkeeping or tax advice or services for your business be sure you contact Professor Tax USA! Can't get out of the office, your in luck, "The Professor" will travel to you!

One Report Every Business Owner Should Know – The Profit and Loss Statement

A profit loss statement (P & L) shows a business’s profit or loss for a specific period of time.

Profit Loss is also referred to as an income statement or an income and expense statement.  

Below you will find how to calculate your profit loss statement.

Cost of Goods Sold (COGS) is basically what you’re spending on what you sell. 

Operating Expenses are just that, what it takes to operate your business. 

Some examples of Operating Expenses include:

·         Employee salary

·         Benefits

·         Rent

·         Power

·         Insurance

·         Internet

Income from Operations would be the profit your business has made from selling a product. For example, the profit Applebee’s makes on a meal after purchasing all of their supplies in order to prepare the meal.

Finally, your Net Income is the actual income you make "at the end of the day."

As you can see your Profit Loss Statement is important to show what your business is bringing in and what you may be losing. Here at Professor Tax USA we want you to be informed and help you be prepared so that you will be less likely to lose any income. We want your business to thrive! If you would like The Professor to review your Profit and Loss Statement with you complimentary or have any further questions regarding the Profit Loss Statement, contact us.

How to Avoid an IRS Audit

Do you ever worry about being audited by the IRS? There is no for sure way to avoid an audit, but there are many ways to reduce the risk. If you are selected for an audit, it does not mean that you have a mistake in your taxes. According to the IRS those that are audited are randomly chosen, forms may not match the information reported, or the returns selected for the audit involve another taxpayer.

Let us help you avoid an IRS audit.

1.   Don’t rush when filing your taxes. If there are many mistakes on your return, then it sticks out to the IRS. One of the biggest mistakes is people forget to sign their return or include their social security number.  

2.   It is important that you report all of your income. Report all bank interest, child support, gambling’s, etc. Remember, just because you didn’t get a copy of a report that it didn’t get turned in by someone else. 

3.   Make sure you don’t claim false dependents. For example, if you’re divorced make sure the other parent is not claiming the child before you do. If both parents claim the child/children on their return this may flag an audit. 

4.   Be careful when claiming charitable deductions. You don’t want them to be larger than your gross income. This will definitely be a red flag to the IRS.

5.   If your income is more than $200,000, your odds of being audited increase by 3%. If your making more than $1 million your odds increase to more than 8%. 

6.   If you find a mistake after you have filed your return, you can fill out a 1040X within 3 years of the initially filed return and correct the error.  

7.   Don’t forget to file your tax return. Just because you didn’t file doesn’t mean you can’t be audited. The IRS can file on your behalf and then your deductions are kept at a minimum. Subsequently, they can then in return audit your return.  

8.    Avoid rounding your numbers on your return. This most likely will trigger a review of your tax return. 

As you can see, there are many important steps to help prevent an audit; however this does not guarantee you will not be audited. Remember, audits are often random even if there is nothing wrong with your return. It is important to remember that if you make a mistake and you were not trying to actually “cheat” the government, the IRS can be lenient.

Here at Professor Tax USA we will represent you or your business if you are ever audited by the IRS. For our clients, we not only prepare your company's taxes, BUT we file your personal taxes FREE of charge. If you have any questions, or want to find out more you can call or email “The Professor” anytime.

Meet Erik and Rhonda!

Professor Tax USA travels all around the United States and has met some amazing people! One of our wonderful clients and friends is Eric and Rhonda Vandrew. The Vandrew’s own and operate Route 11 Glass Plus Inc. in Chambersburg, PA. They have been in business for 11 years. It is a one stop shop for quality work. 

Several Services Offered:

§  All automobile window replacements

§  Excavating and construction equipment

§  Motor homes

§  Big rigs

§  Install Vanity mirrors

§  Double pane home windows

§  Custom cutting for HOTRODS

§  Offer plexi-glass and polycarbonate

Route 11 Glass Plus has been working with Professor Tax since 2003. Henry came to them and he charges a monthly fee. A real plus is “He doesn’t charge extra if you have a question”. What really made Rhonda and Eric choose Professor Tax is “They would represent you if there was ever an IRS audit.” Professor Tax takes care of the taxes for Route 11 Glass Plus and is always available to answer questions.

Henry and Daryl travel to Pennsylvania every other month. During the months that they do not travel they send a postage paid envelope so Route 11 Glass can send anything they need Henry to look at or work on.

Henry is easy to contact. He provided Route 11 Glass Plus with his home, cell and office number. “He always get back to you quickly,” says Mrs. Vandrew. When asked what the most important benefit they have received from Professor Tax Mrs. Vandrew says, “I enjoy his company, him and Daryl both. He is very concerned about his clients. If you have a question he is very informative.” Mrs. Vandrew describes the services received from Professor Tax as, “Kind, fast and courteous.”

“If someone is looking for and accountant, they should meet Henry. He knows the in’s and out’s,” says Mrs. Vandrew. “I’m very pleased.”

When Mr. and Mrs. Vandrew came to visit Florida, Henry took them around the beaches. They ate at the Treasure Ship prior to it burning down. He also took them out on his boat.

  

As a business owner you know the importance of taxes and bookkeeping. Let the “Professor” take care of the accounting, while you focus on your business. If you have any questions or want a free consultation contact, Professor Tax. You will be pleased.

Tax Scams – How to Protect Yourself and Your Identity

Are you worried about tax scams? According to the IRS, impersonation schemes are more wide spread during tax season. They can be in the form of e-mails, phone websites, even tweets. Scammers may also use a phone or fax to reach their victims.

Professor Tax wants to help you stay safe during tax season. That’s why we are providing you with Tips on how to Protect Yourself and Your Identity.

How to Avoid Tax Scams and Identity Theft:

Ø    If it’s too good to be true, it most likely is.

Ø   The IRS never asks for detailed personal and financial information like    PINs, passwords or private credit card information, bank or other financial accounts.

Ø   The IRS will NOT contact taxpayers by email to request personal or financial information.

Ø   If you do get a phone call or email asking for any of the above personal information, you are talking to a crook.

Ø   If you receive a paper letter or notice via mail claiming to be the IRS but you suspect it is a scam, contact the IRS at http://www.irs.gov/contact/index.html to determine if it is a legitimate IRS notice or letter.

  

Ø   Do not routinely carry your Social Security card or other documents that display your Social Security number in case your purse or wallet is stolen.

Ø   Create Strong Passwords; this will keep others from easily accessing your information.

Ø   Make sure you have a password on your cell phone. This will help ensure your information is secure here also.

Ø   Shred your mail. If someone wants to steal your identity they will look through your trash. 

Ø   Make sure the internet you are using is secure. It is important to have a password on your wireless network that way hackers cannot access your personal information.

 

 

The IRS wants to know about all tax scams out there. The agency has investigators to track down these crooks. If you receive a scam e-mail claiming to be from the IRS or discover a website that claims to be the IRS but does not begin with http://www.irs.gov/, forward it to the IRS at phishing@irs.gov.

Professor Tax is here to answer any questions you may have. If you are having trouble with your taxes or simply want a free consultation, call or come on it and we will gladly assist you.

To find out more about how to report tax scams visit the IRS.gov.