Monday, January 12, 2015

Why file for an extension

Why file for an extension

1.       Filing a tax extension (Form 4868 for individuals, or Form 7004 for businesses) is easy.
2.       Tax extensions are automatic and you don't need a reason to get one ― the IRS doesn’t ask.
3.       A tax extension gives you 6 more months to file your tax return.
4.       There's no penalty to filing a tax extension.
5.       You like having options and a tax extension means you have the option to file later. You also don't   
       necessarily have to wait until October to file your return.
6.       Tax extensions are inexpensive, especially compared to the penalties and interest incurred if you fail to 
       request an extension.
7.       You're missing an important tax form.
8.       Avoid the long, annoying lines at the Post Office every tax season.
9.       You have unresolved tax issues from previous years.
10.    Most importantly filing an extension is FREE

The only thing that you need to remember is that filing an extension is only to file your tax return not to an extension to pay your taxes. You would still have to pay your taxes before April 15 in order to avoid the penalty and interest for under payment of taxes. This is very important to remember

Compliments of VXL Services, a Business Consulting Services Company that provides Tax Planning and Tax return preparation to Individuals across US. Please contact Prakash Iyer CPA

We also provide Accounting, Tax, Payroll, Consulting and Company Incorporation Services to Start ups, Small and Medium Sized companies across US. 

If you have any questions please contact us at (732) 983 – 4150 or visit us at www.vxlservices.com


Five Good Reasons to E-file Your Tax Return

Five Good Reasons to E-file Your Tax Return
Courtesy: IRS web site
If you haven’t tried IRS e-file before, now is the time. Most taxpayers – more than 80 percent – file electronically. The IRS has processed more than 1 billion individual tax returns safely and securely since the nationwide debut of electronic filing in 1990. Fewer people file a paper tax return every year. Here are five good reasons to e-file your tax return:
1. Accurate and complete. E-file is the best way to file an accurate and complete tax return. Tax returns that are incomplete or include errors take longer to process.
2. Safe and secure. Tax preparers and software companies who e-file must meet strict guidelines and provide the best in encryption technology. You receive an acknowledgement within 48 hours that the IRS received your tax return. If the IRS does not accept your tax return, you will receive notification and can quickly correct your return and resubmit it.
3. Faster refunds. An e-filed tax return usually means a faster refund compared to a paper return. The IRS issues most refunds in less than 21 days. If you choose direct deposit, your refund goes directly into your bank account. Combining e-file with direct deposit is the fastest way to get your refund. About three out of four taxpayers who file receive a tax refund. Last year the average refund was about $2,700.
4. Payment options. If you owe tax, you can e-file early and set an automatic payment date anytime on or before the April 15 due date. You can pay by check or money order, by debit or credit card, or by transferring funds electronically from your bank account.
5. it’s easy. You can e-file on your own through IRS Free File, the free tax preparation and e-filing service available exclusively at IRS.gov. You can also use commercial tax preparation software or ask your tax preparer to e-file your return. And, if you qualify, IRS Volunteer Income Tax Assistance and Tax Counseling for the Elderly partners will e-file your return for free.
Compliments of VXL Services, a Business Consulting Services Company that provides Tax Planning and Tax return preparation to Individuals across US. Please contact Prakash Iyer CPA

We also provide Accounting, Tax, Payroll, Consulting and Company Incorporation Services to Start ups, Small and Medium Sized companies across US. If you have any questions please contact us at (732) 983 – 4150 or visit us at www.vxlservices.com for all the various Business Packages that we have to offer.

Tuesday, December 23, 2014

Year-end Tax Management

Year-end Tax Management

There is still time to take a look at your potential tax obligation and make moves to reduce your tax burden. Here is a checklist of ten things to consider:

  1.  Review investments and decide whether to sell any holdings
  2. Consider donating appreciated stock versus writing a check to your favorite charity
  3. Estimate your tax liability and make any required estimated tax payments
  4. Make any final retirement plan contributions
  5. Consider making any final gifts to meet your annual gift giving limits
  6. Review your charitable giving and make any donations of cash and non-cash items prior to year-end
  7. Make sure you have taken your minimum required retirement plan distributions
  8. Small businesses should consider final capital decisions in light of 100% bonus depreciation and Section 179 expensing options
  9. Self-employed and small businesses organized as S-Corporations and LLC/LLP's should review compensation and make any last minute adjustments
  10. Start organizing your tax records


Compliments of VXL Services, a Business Consulting Services Company that provides Tax Planning and Tax return preparation to Individuals across US. Please contact Prakash Iyer CPA

We also provide Accounting, Tax, Payroll, Consulting and Company Incorporation Services to Start ups, Small and Medium Sized companies across US. If you have any questions please contact us at (732) 983 – 4150 or visit us at www.vxlservices.com for all the various Business Packages that we have to offer.

Don’t be Scammed by Fake IRS Communications

Don’t be Scammed by Fake IRS Communications

Here is a TAX TIP from the IRS provided to you by VXL Services Inc. a Tax Planning and Tax Return preparation company started by CPA’s and providing services to Individuals and Businesses across USA. You can visit us as www.vxlservices.com
The IRS receives thousands of reports each year from taxpayers who receive suspicious emails, phone calls, faxes or notices claiming to be from the Internal Revenue Service. Many of these scams fraudulently use the Internal Revenue Service name or logo as a lure to make the communication more authentic and enticing. The goal of these scams – known as phishing – is to trick you into revealing personal and financial information. The scammers can then use that information – like your Social Security number, bank account or credit card numbers – to commit identity theft or steal your money.
Here are five things the IRS wants you to know about phishing scams:
1.     The IRS doesn’t ask for detailed personal and financial information like PIN numbers, passwords or similar secret access information for credit card, bank or other financial accounts.
2.     The IRS does not initiate taxpayer communications through e-mail and won’t send a message about your tax account. If you receive an e-mail from someone claiming to be the IRS or directing you to an IRS site:

• Do not reply to the message.

• Do not open any attachments. Attachments may contain malicious code that will infect your computer.

• Do not click on any links. If you clicked on links in a suspicious e-mail or phishing website and entered confidential information, visit the IRS website and enter the search term 'identity theft' for more information and resources to help.
3.     The address of the official IRS website is http://www.irs.gov. Do not be confused or misled by sites claiming to be the IRS but ending in .com, .net, .org or other designations instead of .gov. If you discover a website that claims to be the IRS but you suspect it is bogus, do not provide any personal information on the suspicious site and report it to the IRS.

4.     If you receive a phone call, fax or letter in the mail from an individual claiming to be from the IRS but you suspect they are not an IRS employee, contact the IRS at 1-800-829-1040 to determine if the IRS has a legitimate need to contact you. Report any bogus correspondence.
5.     You can help shut down these schemes and prevent others from being victimized. Details on how to report specific types of scams and what to do if you’ve been victimized are available at http://www.irs.gov, keyword “phishing.”


How to choose a tax preparer?

How to choose a tax preparer?
Deciding to choose a tax preparer can be a tricky and important decision that you will make. Here are some of the general facts that you should know about tax preparers before you decide to choose one.
·         A paid tax return preparer with primary responsibility for overall substantive accuracy of a return is required, by law, to sign the return and include a preparer tax identification number (PTIN) on the return.
·         Although the tax return preparer signs the return, you are ultimately responsible for the accuracy of every item on your return.
·         IRS does not certify tax preparers. (They do certify enrolled agents.) Anyone can do tax returns as far as the U.S. government is concerned, although some states such as California, New York etc. impose a licensing requirement.
·         Shopping around for a tax preparer by asking them to prepare a tax return and then deciding to go to them, may not be a good idea. You need to ensure that your tax preparer is competent enough to prepare your tax return. Once you do that you would need to rely on their professional experience and expertise.
·         Typically a tax preparer could be an enrolled agent, a public accountant, a certified public accountant or a lawyer.

So where should you look for a tax preparer? Your best bet is to ask your friends, family, co-workers. Friends in similar financial situations are the best source. These days you can also check the internet to find a tax preparer in your neighborhood. Read the reviews that others have written about the quality of the tax preparer’s service before your decide to engage their services.

The IRS has outlined some of the points that you might want to keep in mind before you decide to engage a tax preparer:
·         Check the person's qualifications. New regulations require all paid tax return preparers to have a Preparer Tax Identification Number (PTIN). In addition to making sure they have a PTIN, ask if the preparer is affiliated with a professional organization and attends continuing education classes.
·         Experience: Most preparers can do a simple 1040, but your family's trust could throw some preparers for a loop. Check out any special requirements in advance. While you're at it, make sure that the preparer's experience is current. The tax laws are changing all the time.
·         Find out about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers. Also, always make sure any refund due is sent to you or deposited into an account in your name. Under no circumstances should all or part of your refund be directly deposited into a preparer’s bank account.
·         Ask if they offer electronic filing. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return. More than 1 billion individual tax returns have been safely and securely processed since the debut of electronic filing in 1990. Make sure your preparer offers IRS e-file.
·         Make sure the tax preparer is accessible. Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.
·         Provide all records and receipts needed to prepare your return. Reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items. Do not use a preparer who is willing to electronically file your return before you receive your Form W-2 using your last pay stub. This is against IRS e-file rules.
·         Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
·         Review the entire return before signing it. Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
Finally you should stay away from a tax preparer who possess any of the following traits:
·         Guarantees you a refund upfront or charges a fee based on the size of your refund.
·         Arranges to have your refund sent to an address that's not yours.
·         Doesn't ask too many questions or doesn’t ask for supporting documents such as W-2 wage statements.
·         Offers to create documents to support false or exaggerated deductions.
·         Asks you to sign a blank form.
·         Refuses to give you a photocopy of your return.
·         Refuses to list their SSN or PTIN or refuses to sign the return, as required by law.
Compliments of VXL Services, a Business Consulting Services Company that provides Tax Planning and Tax return preparation to Individuals across US. Please contact Prakash Iyer CPA

We also provide Accounting, Tax, Payroll, Consulting and Company Incorporation Services to Start ups, Small and Medium Sized companies across US. If you have any questions please contact us at (732) 983 – 4150 or visit us at www.vxlservices.com for all the various Business Packages that we have to offer.

Do you need an accountant and how do you find one?

Do you need an accountant?
In today’s day and age, with the multitude of good accounting and tax software available, most business owners will be tempted to pass on hiring an accountant. After all what is the point in hiring a resource when the software can do all that. So is it a good idea?

It really depends on the size and complexity of your business but more often than not,, having a great accountant is one of the best investment s in your business. Business owner’s should view an accountant as more than a resource. They can become an integral part of your business.

Why? According to the SBA, one out of three businesses that go bankrupt cites failures in its financial structure for its demise. Plenty of shattered businesses have cut corners, by deciding to do away with having an accountant, only to find they were operating at a loss and not at a profit.

Accountants don’t just maintain the books and file taxes. Many are qualified to offer insight into the financial statements that a software can’t. They can so to say read between the lines and identify the dangers that are lurking in the background and help business owners prepare for such eventualities. The best ones can offer you advice about your operations and potential for growth by accurately analyzing your financial data. Their knowledge of legal tax deductions for which you are eligible often pays for itself.

So tighten your belt on other parts of the business but don’t cut corners when keeping your financial house in order.

Should you hire a bookkeeper or Accountant?

In simplest terms, a bookkeeper records financial transactions and an accountant analyzes those transactions. So the next question that you as a business owner may have is “I need both?”. Unless you are a numbers whiz or want to spend much of your time crunching your business’s numbers, it’s wise to outsource these functions.  If your business is complicated or if you have a complex business structure, chances are you may want a Certified Public Accountant. To keep businesses costs low, consider hiring a bookkeeper to do your monthly expenses and use a Certified Public Accountant for your taxes, planning and compliance with government regulations. Even better, these days there are a number of firms that can offer you the best of both. These firms offer bookkeeping and CPA services all under one roof. This helps business owners as they have to deal with only one firm or person.

Many business owners will admit that they have neither the skills, experience or time to do their own books and taxes and are happy to turn it over to the professionals. Another benefit to hiring a seasoned accountant is that he or she can represent you if you are audited. Often a CPA can resolve issues with an agent much more effectively than a business owner who is tax code savvy.

How do you find the right accountant?

Handing over the financial reins of your business to an outsider is a scary proposition. After all they would have access to all the confidential data of your business and in many cases your personal data as well. So make sure you have a foundation of trust and open communication. If you are in the market for an accountant, get referrals from other small business owners or local professional associations. Here are several ways to keep costs down:

·         Consider going with a smaller local firm or an individual which often is less expensive than a large accounting firm. Be sure to check references and know their credentials and experience, especially in your industry.

·         Ask about their pricing structure. Many accountants charge on an hourly basis. This is good if your books are in good shape. Otherwise a monthly retainer model may be more beneficial for you.

·         Use your accountant wisely and leverage their experience and expertise. Get advice on your business’ financial or operational performance. A good accountant should also be looped in prior to you making a big business decision. Their advice can help you avoid costly financial mistakes.

Compliments of VXL Services, a Business Consulting Services Company that provide Accounting, Tax, Payroll, Consulting and Company Incorporation Services to Start ups, Small and Medium Sized companies across US. If you have any questions please contact Prakash Iyer, CPA  at (732) 983 – 4150 or visit us at www.vxlservices.com for all the various Business Packages that we have to offer.

Easing Accounting — The Top Apps to Automate your Number Crunching

Easing Accounting — The Top Apps to Automate your Number Crunching
Accounting and Bookkeeping is crucial to managing day-to-day business finances, developing and generating executive reports, and creating projections for strategic decisions. Though it is central to keeping the business afloat and portraying a realistic picture of the business, manually maintaining accounting is a big challenge to all businessmen.
Given that most accounting software is designed with larger organizations in mind, purchasing them may not be cost-effective or feasible for most small business.  Hence, the reliance of businesses on cloud based accounting apps.
Here is a list of our top apps to completely automate your business accounting and bookkeeping system, as well as bring it on the cloud.

WaveApp

Wave Apps is the most robust and FREE (and forever so) accounting software for small businesses on the planet. With a simple signup you can gain access to a diverse range of features targeted at freelancers, entrepreneurs, small businesses, and consultants. WaveApps removes the need for manual entry with its secure integration options.
Featured in The New York Times, Forbes, CNBC, and others, WaveApps offer seamless integration of your PayPal and bank account, as well as other data sources. Hence, all your transactions appear on a single dashboard immediately, allowing generation of extensive reports including sales tax, balance sheets, A/P and A/R, and others. It also allows a seamless invoicing and an affordable payroll system — charged only when you need it.

Zoho Books

Zoho Books is a simple and easy to use accounting software allowing small businesses to easily organize their transactions in one place, in real-time. Primary features include:
·         Mobility — access customer data and create transactions on the go
·         Automated banking — Get real time cash flow updates, and monitor transactions by connecting your bank account to the app
·         Powerful Reporting Features — Allows creation of reports such as P&L, Statement of Cash Flow, and Balance Sheets.

Xero

Xero is an award-winning software renowned for its jargon free, and simple approach to accounting. It offers a simple and intuitive dashboard with real-time display of cash-flow. The software can also generate sophisticated statistics and reports related to your accounts, and recommend decisions relevant to them.

Sellsy Invoicing

Sellsy Invoicing offers a simple yet robust mobile solution for tracking, monitoring, and creating invoices on the go. If you want to keep all your business invoicing at your fingertips, then Sellsy Invoicing is your mobile app. The app also allows you to payment reminders, track expenses, manage inventory, take payments, send/receive invoices, as well as estimating tools as part of its easy feature set.

Financial Force Accounting

Financial Force’s Accounting App is considered as an accounting engine, offering a robust range of accounting features. Features include:
·   A Flexible General Ledger — Capable of handling multiple currencies and business, and  various accounting charts. Perform accruals, as well as automate calculations, and more
·   Real Time Reporting — Robust real-time reporting and management of accounting tasks, including generation of P&Ls, book closing, etc.
·         Cash Management — Remain abreast of changes to your bank account, maintain records of transactions,  reconcile statements, and more
·        Streamline A/P and A/R —Drastically reduce keystrokes through use of standardized templates, automatic calculations, prevention of invoice duplications, etc.

In Conclusion — Automate Today!

Your business cannot do away with accounting “chores”, but you can dramatically reduce the work hours needed to complete the job. Choose the right apps for your needs, and get started today!


Compliments of VXL Services, a Business Consulting Services Company that provides Accounting, Tax, Payroll, Consulting and Company Incorporation Services to Start ups, Small and Medium Sized companies across US. If you have any questions please contact Prakash Iyer, CPA  at (732) 983 – 4150 or visit us at www.vxlservices.com for all the various Business Packages that we have to offer.