Designing the Chart of Accounts

The chart of accounts is the framework through which all accounting data of a business is accumulated, categorized, and retrieved. Nearly every accounting software program comes with a preloaded chart of accounts so the user can setup and start using the software in a short period of time. Unfortunately, too many users accept the preloaded […]

Bookkeeping Practices That Help Avoid Costly Mistakes

Every business, no matter what size, needs to have a bookkeeping system in place in order to grow and be successful. A well designed bookkeeping system allows business managers to monitor the financial health of their business and to react to market and industry conditions. Have you considered what goes into a well-designed bookkeeping system? […]

Bookkeeping for Your Small Business

No matter the size of your business, bookkeeping is essential to its growth and future success. Owner-operators of small businesses typically keep a lot of the business details in their heads. Although this approach may seem to have some advantages, those perceived advantages pale in comparison to the disadvantages. Have you setup and formalized the […]

IRS Audit Targets

The Internal Revenue Service (IRS) audits approximately 1% of tax returns each year. So which taxpayers are targeted for an audit and why? During the 2012 IRS budget year, notice how the likelihood of an audit increases with income: Audit rate of all individual returns: 1.0% Audit rate of individual returns with incomes > $200,000: […]

Overlooked Tax Deductions and Credits

Taxpayers overlook potential deductions and credits year after year; in fact, estimates suggest that millions of taxpayers overpay their taxes every year simply by failing to take advantage of legitimate deductions and credits in the tax code. Have you overpaid your taxes? The following tax deductions are consistently overlooked by taxpayers: State sales tax – […]

IRS Installment Agreements

If a taxpayer is unable to pay their federal income tax due, they can opt to enter into an installment agreement with the IRS to make monthly payments. Are you in a situation where you don’t have the funds to pay your tax bill by the April 15th filing deadline? If you need to set […]

Miscellaneous Itemized Deductions

Miscellaneous itemized deductions include all deductible items on Schedule A that are not specifically categorized as medical, taxes, interest, charitable contributions or casualty losses. Miscellaneous itemized deductions can be either fully deductible or deductible only to the extent that the total exceeds 2% of a taxpayer’s adjusted gross income. Do you have any miscellaneous itemized […]

Medical Expense Deductions

Medical expenses paid in excess of 10% of a taxpayer’s adjusted gross income are deductible as itemized deductions when filing Schedule A. Deductible medical expenses include those paid for the taxpayer as well as their spouse and dependents. In addition, certain medical expenses paid on behalf of certain non-dependents may be deductible under certain circumstances. […]

Charitable Contributions

The average charitable contributions claimed by taxpayers on Schedule A range from $2,058 to $19,651 based on the IRS data from the 2010 tax year. Average contributions increase as the taxpayer’s adjusted gross income increases. Charitable contributions can be a significant deduction for taxpayers who itemize deductions, but what can be deducted? Deductible contributions include: […]

Taxpayers to See Filing Delays

As a result of the late passage of the American Taxpayer Relief Act of 2012, the IRS delayed the opening of the tax filing system to January 30, 2013 in order to make changes to various subsidiary tax forms and to update their own return-processing system. As of January 28th the IRS announced that Form […]