Latest Posts on Diane's Blog

Five Signs Your CPA May Be Costing You An Audit

A badly prepared tax return can mean an audit. Here are five signs your CPA may be costing you an audit. #1: Dramatic reporting changes on your return. This past year, one of my clients got tagged for audit. We’ve been practicing audit defense for our clients and their returns for so many years, that I was actually a little rusty in defending a return. In this case, the year under question had not been... Read More »

Avoid These Two Extremes With Your Tax Preparer

When it comes to finding the best CPA tax preparer, there are a number of things to consider. Generally, there are two big extremes you want to avoid when it comes to finding the best CPA tax professional. You want some who:

• Helps you pay the least amount of tax legally possible, and
• Doesn’t do something stupid/illegal/risky that means you’ll get hit with an audit

Tax Court Penalizes Self-Prepared Tax Return

Tax is tricky. And it often contradicts what you think you know. There rarely is one right answer, because everybody’s circumstances are different and it’s not as simple as reading an IRS tax guidebook. In fact, you need to look at Tax Court cases, memorandums, revenue rulings, revenue proceedings and Treasury Regulations. My firm pays a lot of money every year for the tax tools we use. It’s not some off-the-shelf Turbo Tax... Read More »

Important Case Win for Real Estate Investors

Real estate tax can be complicated. Unfortunately, there are a few things about the way the IRS categorizes income and losses that don’t make logical sense. And that’s where do-it-yourself real estate investors can get in trouble if they’re also trying to DIY on their business structures and tax plans. One of the fundamental issues with real estate is that your income and losses could be considered:

• Trade or business,
• Passive Income/Loss with Active Participation,
• Passive... Read More »

• Embezzlement Stats Are Out

  January 27, 2012 | Posted in Diane's Blog, USATaxAid's Blogs | 1 Comment
  

  The 2011 embezzlement stats are out. This is a list you don’t want to be on! It means that you, your business and/or your state is more at risk for employee theft. When you consider all of the challenges with running a business today, what with state and federal tax complexities and increases, global competition and reduced demand, it is horrible to think that you could lose everything because you hired someone who stole... Read More »

• Three Sets of Financial Statements

  January 24, 2012 | Posted in Diane's Blog, USATaxAid's Blogs
  

  You may have heard about the three financial statements: Balance Sheet, Income Statement and Statement of Cash Flows. That’s not what I’m talking about here, but let’s go over this really quickly. The Balance Sheet is like a snapshot of your assets, liabilities and equity as of a certain date. Assets are things you own such as your bank account, inventory, accounts receivable and other items that have a value. Liabilities are amounts you owe.... Read More »

• Next Wave of Walk Away Real Estate Owners

  January 19, 2012 | Posted in Diane's Blog, USATaxAid's Blogs
  

  In the past week, I’ve had two different people ask me questions about walking away from their seriously underwater real estate. Real estate started its nosedive in 2007, but as long as no one lost their job, had reduced business income or had to move, the market value could seem irrelevant. As long as you could afford the payment and were prepared to stay put until the market recovered, you could just hold on. But then the... Read More »

• Four Words That Will Change Your Business Life Forever

  January 12, 2012 | Posted in Diane's Blog, USATaxAid's Blogs

  If you have a business, please attention to these next few paragraphs. Following these guidelines will make one huge difference in your business: You can run your business or it can run you. Those four words: Measure Results, Change Activities It really is that simple to have a business that works. Measure Results: You need an accurate set of financial statements within 30 days of month end. We also recommend that you have them... Read More »

• Coach, Advisor, Mentor – Who Do You Really Need On Your Team?

  January 10, 2012 | Posted in Diane's Blog, USATaxAid's Blogs
  

  These days a lot of seminar guys throw around the terms “coach” (as in I’ll coach you for thousands of dollars), “mentor” (as in I’ll mentor you for thousands of dollars) and even “mastermind partner” (as in I’ll be your mastermind partner for thousands of dollars. These terms have been used, and misused, so many times, that it’s pretty much just turned into a way for many to just take money and provide uneven... Read More »

• One Day That Cost a Business Owner $20,000 in Extra Taxes

  January 5, 2012 | Posted in Diane's Blog, USATaxAid's Blogs

  December is always my busiest month of the year. My clients are looking for final tweaks to their year-end tax planning, and prospective clients call us looking for solutions before the final bell sounds for the end of the year. At the last minute, we had someone contact us who had a Schedule C business that had had a sudden increase in income. There are four reasons why I’m not a fan... Read More »

• Is Contractor vs Employee the IRS’s Next Easy Target?

  January 3, 2012 | Posted in Diane's Blog, USATaxAid's Blogs

  Let’s be really clear here. The IRS would love for every single one of your workers to be classified as employees. That means you’d have to pay payroll taxes and it means they’ll have to pay Social Security and Medicare tax. On the other hand, if you’re an employer you can pay a lot less in taxes and benefits if you have independent contractors instead of employees. You also have more benefits that... Read More »

• Contractor vs Employee From the Employer Standpoint

  December 27, 2011 | Posted in Diane's Blog, USATaxAid's Blogs

  If you’re an employer, there are plenty of reasons to want to have independent contractors instead of employees. Here are just a few of them:

  • Easier to pay,
  • No payroll taxes,
  • No workers compensation (sometimes)
  • No unemployment insurance
  • No pension matching, and
  • No worries with controlled group status.
  For the small business owner, making the step to having to meet the payroll requirements is so daunting it actually keeps some businesses purposely small. Entrepreneurs are often so... Read More »