Every year, the IRS releases a list of several scams to be extra vigilant to avoid during tax season. If you rely on a trusted bookkeeping and accounting service to take care of your taxes, you’ll have little to worry about. But if you’re handling your taxes yourself, you’ll need to watch out for some of the most common ones. The following scams top the list of recent IRS warnings.

ONE | Fake Phone Calls

This scam is the most commonly reported, in which con artists pretending to be IRS agents call and insist you haven’t properly paid your taxes and owe a large sum of delinquent monies. They then use intimidation and threats of arrest if you don’t pay up immediately.

However, the IRS will never contact you by phone and threaten to throw you in jail if you don’t pay up on the spot. They will always first contact you by mail. If they claim that there’s a discrepancy in the amount owed, they’ll allow you an opportunity to appeal.

TWO | Phishing Scams

Like the previous scam, only con artists contact you via email asking for personal information and often include links to a fake website allegedly in reference to your tax bill. These sites often contain spyware or malware and can harm your computer or harvest other information from your hard drive.

The IRS will never email you or direct you to a website without prior contact via an official letter through the USPS. Forward any suspicious communication to phishing@irs.gov.

THREE | Verifying Your Tax Information

In this scam, the con artist calls or emails the victim asking for information such as bank information, and in particular, the last 4 digits of your Social Security number, claiming that they need to verify something related to your taxes. However, you should never give out such information over the phone or internet, and as previously mentioned, the IRS will never contact you this way for personal information.

If the person on the other end claims to be from a tax preparation agency, simply hang up and call or email a tax preparation professional you know and trust to find out if the info you were asked for is truly needed.

FOUR | Preparation Fraud

Some tax preparers out there bend the rules so that you can receive the highest refund possible. But once you sign and file the return, you are the one responsible for any errors. If you decide to file your taxes yourself, be careful and do due diligence to make sure that you are not falsely claiming anything you shouldn’t or claiming larger deductions than you can justify. If you have someone else do your taxes, make sure to use a reputable firm.

When in doubt, assume it’s a scam. Anybody calling you or emailing you that claims to be from the IRS probably isn’t from the IRS! Keep up your guard so that you can save yourself a lot of trouble and money.

As the mid-April tax deadline looms, many of us panic. We wonder if we’ll get a refund, owe taxes, or get things filed accurately so we don’t get in trouble with the IRS. For most Americans, there are simply more tax questions than answers.

Thankfully, there is a way to avoid the stress associated with confusing tax code and IRS paperwork. You’ve probably heard this before, but the best way to ensure a proper filing is to hire a tax professional. But here, instead of simply giving you that recommendation, we’re going to give you the reasons why hiring a tax preparer is the way to go — even for individual returns.

7 Reasons to Hire a Tax Preparer

1. Hassle
   The reason so many of us panic during tax time is that we can’t find the time to gather documents and fill out the paperwork. Or, we simply aren’t sure of our own ability to do it right. Hiring a pro solves this problem.
2. Time
   The old adage “time is money” is spot-on when it comes to taxes. Yes, you’ll need to pay the preparer’s fee. However, it’s affordable for most people, especially if you consider it an investment in lowering your tax burden and alleviating risk. Besides — your time is worth something, isn’t it?
3. Knowledge
   Unless you’re CPA or tax pro yourself, you probably don’t spend your days keeping up on the changing tax codes. This is what tax preparers do, and you’ll never have to worry about knowing the rules if you hire a pro.
4. Mistakes
   We all make mistakes in life, but most of them won’t get us in trouble with the IRS — unless we goof on our tax return. Those mistakes are likely to cost you time, money, and maybe more.
5. Human Touch
   Sure, tax filing software is helpful for many of us. But a software program or website can’t help you during an audit, and will never have the savvy of a real-life human being who’s well-versed in tax law.
6. Peace of mind
   This certainly goes along with number 1, but it bears emphasis. When you hire a tax preparer, not only will you not have to mess with all that paperwork yourself, but you’ll have the peace of mind knowing that your return is in qualified, accurate hands.
7. Money
   Yes, this is the big one. Having your taxes professionally done will likely end up saving you money in the grand scheme of things. They know every tax credit and deduction available to get you the maximum refund. They can also make recommendations on how to lessen your tax burden in the future, which could save you thousands over multiple years.

If you haven’t yet done so for your 2016 return, it’s not too late to find a tax pro. As you can see from the 7 reasons above, letting a professional handle your return can greatly reduce your stress, increase your accuracy, and help you keep more of your money.

If the only things we can be sure about are death and taxes, then the fact that the deadlines for year-end filings are coming up should be no surprise to you. One thing that may be a surprise, however, is any changes in tax code or due dates that apply to your return. There may be new forms or other unexpected developments you weren’t aware of.

Dates You Need to Know

Here are some of the important dates and tips for your 2016 small business tax return. Remember that some of these apply only to this year, because certain deadlines may fall on a weekend or holiday. Always check with your accountant for details and clarification.

Corporate Tax Returns
Any corporate returns using forms 1120, 1120A, or 1120S must be filed by March 15. You can file for an automatic extension of 6 months using form 7004, if you’re on a calendar year.

Amended Corporate Returns
You must file an amended return, using form 1120X, for as far back as 2013, and still get a refund. You have 3 years from the original date of the return to claim any refunds before they expire.

Partnerships
If you’re a business partnership using IRS form 1065, your due date is March 15. You can ask for an automatic extension of 5 months if you file form 7004.

C-Corporations
Your deadline to file year-end returns is April 17, since the usually April 15 deadline falls on a weekend. The extended deadline is October 16. For C-corps on a fiscal year, your deadline is the 15th day of the 4th month following the end of your fiscal year. However, there is an exception if your fiscal year runs from July 1 through June 30. In this case, your first deadline is September 15 with an extended deadline of February 15.

S-Corporations
Your deadline for filing 2016 tax returns is March 15, 2017 if you’re on a calendar year. If you choose to file an extension, that deadline isn’t until September 15.

Financial Institutions
The deadline to mail out form 1099-B (for sales of mutual funds, bonds, or stocks through brokerage accounts) is February 15.

Real Estate Transactions
February 15 is also the deadline for filing form 1099-S, which applies to real estate transactions.

A Few More Tips

If you’re running your business from home, don’t forget to file for your home office deduction with your tax return. If you have a space in your home that’s used exclusively for running a business, you can claim either $5 per square foot of office space with a $1,500 cap. Alternatively, you may us a more complex formula and claim that deduction on form 8829.

You may also find deductions for insurance costs, office equipment, travel and client entertainment, and more. Even the smallest deductions can add up, but to avoid sending up red flags to the IRS, always consult your CPA or business accounting professional for help.

Starting your own business can be exciting but it calls for due diligence to ensure that you meet all the requisite legal and tax obligations. Although the federal and Utah tax codes can be daunting and confusing for anyone, it is vital that you learn how to prepare, process and file your taxes accurately for the sake of your business. Filing accurate taxes can not only keep you out of trouble with the law but also lower your tax burden if you claim the right deductions.

As you make plans to start a business in Utah, keep in mind that the type of business you operate will determine what taxes you pay.

Business Tax Statuses In Utah

Other than knowing the type of tax your business is likely to incur, you also need to research the different tax statuses you can choose when filing those taxes. Five of these are highlighted below:

Limited Liability Company (LLC) – In Utah, LLCs are considered pass-through tax entities and do not pay taxes on a company level. Instead, business profits and losses are passed on to individual LLC members who then pay the required state and federal taxes based on the amount they receive.

Partnership – If you decide to operate a partnership business, then your company will not be taxed on its net income. The business will be considered a pass-through entity so any income will flow through to individual partners who will then owe tax on the share they get.

Sole Proprietorship – Just like partnerships and LLCs, the income realized from a sole proprietorship business will be distributed to you as the sole owner. This will be regarded as personal income and you will have to pay and file individual state tax returns on it.

C Corporation – Starting a C corporation in Utah will have you incurring double taxation. The business will be subject to corporate income tax while shareholders will also be required to pay individual income tax on whatever revenue they receive from the company.

S Corporation – One way around the double taxation dilemma faced by a C corporation would be to establish an S corporation. The latter will be treated as a pass-through entity and your company’s shareholders will be responsible for paying and filing individual tax returns on their share of profits from the business.

Get The Right Assistance

It is advisable to engage the services of professional accountants before starting your own business. Their advice can prove invaluable in helping you to set up the right business structure as well as assisting you to get the most of your tax returns and possibly save some money in the process.

We at AA Tax & Accounting Services, LLC have vast experience in preparing, processing and filing business tax returns and we would be glad to help with yours. Contact us to learn more about this and other accounting services we offer.

Business owners often enjoy more freedom and independence than those who work for someone else. This independence is what drives many people to start their own companies. However, along with the perks of being the boss come some less-pleasant side effects. One of the issues these entrepreneurs face, for example, is an overall higher risk of loss, especially when it comes to lawsuits.

Fortunately, business owners have many legal and financial tools at their disposal to protect themselves. Two of the most popular tools are entity restructuring and asset protection. Since these methods are often confused or used interchangeably, we will discuss them both.

What is Entity Restructuring?

Entity restructuring has both legal and tax implications. It can help business owners in 3 distinct ways:

• Legally avoiding excess tax liability
• Protection of assets against legal action
• Providing proper legal and tax arrangements between owners

Proper entity restructuring is an essential tool for any business, providing owners with a level of security and legal stability. For example, the right legal structure may be instrumental in protecting your portion of a shared business or partnership. However, it isn’t something you can “set and forget.” Most businesses will eventually outgrow their original structure or evolve away from it. An experienced CPA should help you establish the right structure, then keep an eye on it to ensure it’s still a good fit. Some examples of legal structures available to your business may include:

• LLCs, both single or multi-member
• General partnerships
• Sole proprietorships
• Limited partnerships
• S-corps
• Corporations and C-corporations

While your legal structure can provide some protection against legal actions, it may not be enough to secure your business and personal assets in the event of a lawsuit. This is where asset protection comes in.

What is Asset Protection?

The term asset protection refers to specific legal actions that are taken with the sole purpose of keeping your business and personal assets safe. Sadly, everything you own, such as real estate, equipment, even family heirlooms or your personal savings could be seized to pay off creditors in the event of a successful lawsuit.

One of the most important rules of asset protection is timing. Your legal measures must be in place before a suit is filed. Asset protection should be part of your financial planning strategy, safeguarding the wealth of you and your family. Talk to a professional to identify and establish your own asset protection plan. Some of your options may include:

• Asset protection trusts
• Family limited partnerships
• Accounts-receivable financing strategies
• Homestead exemptions
• Irrevocable trusts
• Retitlement of assets

Asset protection strategies, along with plentiful insurance and the right legal structure, can provide rock-solid protection for your most valuable possessions. During a stressful legal ordeal, asset protection can keep your personal property out of creditors’ hands.

What to Do Now

Generally speaking, as your business grows, so does the potential for legal action against you. Start today by examining your legal structure with a qualified financial professional to ensure it’s the right fit. Then, plan your asset protection strategy. Go over your needs and goals, and put your structure and asset protection plans into place as soon as possible. As always, the best time to protect yourself is NOW.

They say the only sure things in this life are death and taxes. We can’t help you with the former, but when it comes to taxes, being informed is the only way to wield any sort of control. Since paying income taxes is part of life that we really can’t escape, it’s important to understand how to meet our legal obligations without overpaying.

What You Need to Know: Withholdings

The W-4 form you filled out with your employer will determine your tax withholding. This form details your marital status, dependents, and if you have any other jobs. If you’re unsure about your eligibility for certain allowances, or whether your withholdings will match your legal obligations, the IRS provides this helpful calculator.

In addition to federal and state income taxes, the federal government will withhold other amounts from your paycheck, including Social Security and Medicare. Your employer is also responsible to pay a portion of these taxes.

If you’re self-employed or own a business, you’ll need to calculate your own taxes and set them aside. This will include both income and self-employment tax amounts for Social Security and Medicare, and you’ll be responsible for both the employee and employer portions. Since taxes aren’t automatically withheld from your paycheck, you’ll need to pay them according to quarterly deadlines. You may need help from a tax professional here.

Reducing What You Owe

If you’re well-informed, you’ll be able to find plenty of ways to reduce your tax liability. The methods available to you might include:

• Exclusions – These are pre-tax expenditures such as retirement accounts and flexible-spending for health care. Exclusions can reduce your gross income, thus reducing your tax liability.
• Deductions – You may deduct things like student loan interest, certain types of retirement account contributions, business costs, charitable donations, and even moving expenses. If you don’t have much in the way of eligible deductions, you can take the standard deduction, which will vary depending on your marital status and other factors. If you’re itemizing deductions, use Schedule A.
• Credits – The Dependent Care Credit, Earned Income Tax Credit, and Education Credit are examples of this. Unlike deductions which reduce your taxable income, tax credits simply take a certain amount off the taxes you owe. A $500 tax credit is just that — it takes that amount right off the top of your tax bill. There are business and individual credits. Find out if you’re eligible.

When You’re Ready to File

Everyone knows the April 15 deadline, but when you’re ready to file, you have several options.

1. Use an accountant – If you have several deductions, are self-employed, or are simply unsure of your ability to file accurately, your best bet is to hand your paperwork, receipt, and any other documentation over to an accountant. Especially for complicated returns, your accountant could save you money by finding more deductions.
2. File online – If you’re confident and have a simple return, you can file via the IRS website. This option is available to all taxpayers.
3. Software – There are several software options for filing your taxes. These programs can guide you through the process, but will cost you some money upfront.

No matter what your tax status, you’re bound to have questions from time to time. That’s why it’s always a good idea to consult an accountant or tax professional to ensure maximum accuracy and minimum liability.

If you’re self-employed, chances are you worry about reducing your tax burden as far as legally possible. While the attached infographic contains some helpful information about tax brackets and deductions, you are probably left with a lot of questions. In this article, we’ll go over some of the things your small business can – and can’t – deduct on your tax return.

Business & Personal Deductions

According to IRS regulations, a business may deduct “ordinary and necessary” expenses. These include the costs of running your business, the cost of any goods you sold, capital expenses, and even some work-related personal expenditures. Before claiming any of these deductions, you need to make sure that your business and personal expenses are separate. Schedule C is the form you will need to use to detail profits and losses. For personal deductions, you must use Schedule A to itemize them. However, doing this requires you to give up the standard deduction. Your accountant can help you decide which is most beneficial in your case.

Possible Deductions

This isn’t meant to be a complete list – for that you’ll need to consult your tax preparer – but here are some of the business deductions you might be able to claim:

• Travel costs / mileage
  Using your car for business travel? You may be able to deduct for each mile, or for the actual expenses incurred in business-related gas, maintenance, insurance, and depreciation. Out-of-town business trips are also deductible.
• Home office
  You could deduct for each square foot of your business-exclusive home office space, up to 300 square feet.
• Equipment and office expenses
  Computers and furniture for your office are just some of your allowed deductions.
• Food / entertainment
  Be sure to keep your receipts and record the purpose and nature of meetings where business-related expenditures occur. You can only deduct 50% of what you spend, including tax and gratuity.
• Unpaid work
  If you have delinquent invoices and don’t expect to be paid everything you are owed, you could help offset some of that by claiming the amount as bad debts. Bad debt must be included in your gross income total.
• Marketing expenses
  Much of these costs can be deducted, including things like business cards, brochures, and more.

Deductions That Don’t Work

Claiming any of these deductions — and others — when you aren’t really eligible could result in complicated audits and painful penalties. That’s why it’s important to work with a tax professional who can help you decide what you can and cannot claim. However, here are a few of the things you simply aren’t allowed to deduct for:

• Commuting
  While business mileage is deductible, the commute from your home to your office is not.
• Toys and gadgets
  
  This is pretty simple; if the phone, tablet or laptop you’re itching for isn’t required for running your business, you can’t claim it.
• Clothing
  If you’re required to purchase a uniform or protective clothing for work, you might be able to deduct that. However, you aren’t allowed to claim other business attire, such as suits, slacks, and shoes.
• Lunches and coffee
  
  You can only deduct for food and entertainment only if you’re also meeting with a client.

The Bottom Line

When considering deductions, it’s always best to consult a CPA or other tax professional. They can help you get the most out of your yearly tax return and avoid sending up an red flags that could cause you a lot of trouble. The IRS actually allows for many deductions to reduce your tax burden. If you know how to recognize them, you can save significant money.

For any business large to small, payroll is a big deal. It’s not only one of your biggest expenses, it’s one of your most important financial tasks. Payroll processing can take a lot of time, but getting it right is extremely important. Many business owners face questions and confusion when it comes to payroll, and all of us would love to find ways to make the process faster and simpler. Fortunately, there are ways to do this without sacrificing accuracy. Here are 5 ways to make processing your payroll easier.

1. Use direct deposit and electronic stubs
   Depending on how many employees you have, your business could save significant money using direct deposit pay them. It’s true that you might have employees that aren’t keen on this idea or don’t have bank accounts. In these cases, pay cards might present a good option. In any case, handing out or mailing paper pay stubs can be both expensive and time consuming, so you might consider electronic stubs sent via email.
2. Use technology
   Aside from electronic or non-paper payment methods, there is plenty of technology available that can make processing payroll less painful. A carefully-chosen payroll system can add automation and efficiency that you could never achieve on your own. For the best results, look at systems that integrate payroll with human resources (HRIS).
3. Involve managers and employees
   Some payroll systems include a level of self-service. This means that managers and employees must log their hours, authorize time off, verify expenses, etc. A lot of could-based payroll systems include this feature, which can go a long way to streamlining the payroll process.
4. Clarify policies and procedures
   When you set up your business and started hiring people, you created policies for PTO, expense reimbursement, commissions, and more. The more clear and widely applicable those policies are, the less confusion there will be at payroll time. If procedures vary for different levels or groups of employees, this will create more work for you. Keep that in mind when deciding how to apply policies and procedures across your organization.
5. Consider outsourcing
   There is good reason why the vast majority of small businesses end up outsourcing their payroll. Letting an accountant or third-party specialist handle it can take a huge weight from your shoulders, as well as ensure everything is processed the right way. Outsourcing your payroll typically means more than just writing paychecks. It can also help you mange tax liabilities, government compliance, commission structure, and much more. For most business owners, outsourcing payroll just makes sense.

Accurate, efficient payroll processing is vital to the health and growth of your business. The process can be tricky, but that doesn’t mean it has to be a stumbling block for you. With these 5 strategies, processing payroll can be faster, easier, and less stressful than ever.

When you’re running a business, you might enjoy a little more freedom in your own schedule, but you still have a lot on your plate. For example, part of being the boss is paying taxes, and they must be paid according to certain deadlines.

However, life happens and sometimes things slip through the cracks. You might not be able to make every single deadline, or you could have filings rejected and have to send them in a second time. When these problems arise, the IRS allows you to apply for extensions and take advantage of grace periods when you have things to correct.

Tax Filing Extensions for Your Small Business

When you fear you aren’t going to be able to file your taxes by the deadline, you can’t just file late without facing potential penalties. Even if you don’t owe any taxes, you still have to file for an extension on or before the due date. But beware: you only get one 6-month extension. If you miss that deadline, you can’t extend it again.

Fortunately, you don’t need to prove you have a good reason for needing an IRS extension…you simply apply for it. You can count on being approved unless you make an error in the paperwork or the information you supply doesn’t match IRS records. If you’re using an accountant to file the extension, the likelihood of such errors is pretty remote. For corporate tax filings, you’ll need to file form 7004 by the due date. The process is actually pretty painless. It doesn’t take long, and you can even do it online. However, there are several things you’ll need to be aware of before you file, so be sure to ask an expert for help.

This information all applies to IRS extensions. If you need a state extension, you’ll need to check your local tax authorities to understand the process.

What About Grace Periods?

When your e-filed return or extension is rejected, you might wonder if you’ll be in trouble because of the delay. You’ll be glad to know, however, that there are some standard grace periods already in place, giving you time to correct any errors and re-submit. As long as you do so within the grace period (also called the “perfection period), your filing will be considered on time. Generally speaking, the grace periods are 5-10 calendar days for e-filed returns, and 5 calendar days for extensions. Your specific grace period depends on which form you are filing.

While dealing with the IRS isn’t anyone’s favorite part of owning a business, they do try to make filing on time as simple as reasonably possible. Of course, with the help of an accountant or CPA, meeting federal and local deadlines will be easier, hopefully making extensions and grace periods unnecessary.

It’s getting late in the year. For you and your business, that means a couple of things. First, the holidays will be here before you know it. Second, tax time is fast approaching. Both of these things require a lot of preparation, but only one could get you in legal trouble if you procrastinate.

Now that we’re in the 4th quarter of the year, you need to make sure you’ll be ready for tax season. Sure, it’s still a way off, but if you’re running a business of any size, your preparations can be a little more complicated. The last thing you need is to be rushing around in April, gathering documents and updating your records. After all, you will have had months past the new year to be ready.

Proper accounting and tax reporting is a big part of keeping your business running smoothly – and legally. To help you get organized and feel ready for the deadline, we’ve put together a list of some of the things you’ll want to think about right now.

• Are your records updated?
  You probably know what it’s like to let your record-keeping slide for a while, only to spend many frustrating hours getting things back on track. It’s a pain, and you always ask yourself why you didn’t just keep things current in the first place. If you’ve gotten behind, it’s time to catch up. If not, great! Just make sure to keep up the good work.
• Do you know where everything is?
  Hopefully you have a designated place (something more secure than on your desk) for your tax-related documents. If not, you’d be wise to prepare one now. Make sure you’ve gathered all your bank statements and other applicable documents, and put them in a safe and organized location. If you don’t have everything together, start doing it now.
• Have you tracked your deductibles?
  When you spend money to equip your business or give to charity, you probably look forward to claiming those expenditures as tax deductibles. But are you keeping track? It’s easy to forget or overlook some of those items at tax time, so it’s important to put them down as they happen. If you haven’t been, you still have time to look through your records – and your memory – to make sure you catch them all.
• Do you have backups?
  Regular backups of your data are essential. Now is a good time to conduct those backups if you haven’t done it recently. Technological or human error can be disastrous for your data, and if the unexpected happens, you could find yourself in big trouble. Be sure you also keep your older backups in case the IRS surprises you later.

Those are just a few of the things you need to be thinking about as tax time approaches, but it’s certainly not a complete list. Generally speaking, if you’re well organized and updating your records frequently, you should be in good shape as far as filing deadlines go.

Of course, if you’re using an accountant, you’ll have a lot less to do. As long as you’re providing them the information, your accountant should be keeping your records updated and have everything ready to go at tax time. They can also answer your questions about business structure, tax forms, and other deadlines you might not be aware of. If you’re feeling overwhelmed or confused about how to file, save yourself some trouble and reach out for qualified help.