Madison Accounting Tips
I can't afford to pay my taxes now. What should I do?
If you owe money on your tax return but you can't afford to pay it, don't fail to file timely. Instead, file the return timely and enclose what you can afford. Many taxpayer's do not realize that the penalty for "Failure to File" is 10 times greater than "Failure to Pay."
When should I deduct a credit charge?
You can deduct a credit charge in the year it was charged, rather than when you pay the bill. So if you charge a deductible expense on December 20th, but don't pay the credit card bill until January 17th, you should take the deduction for the prior year.
I took some courses this year to improve my work skills. Can the cost of those be deducted?
You can deduct certain educational expenses. In general if the education is required by your employer or is to improve your skills in your existing profession you can write it off. Nowadays, with the need for higher education to secure employment, this is a deduction that can save big bucks and should not be overlooked.
I was issued a 1099. What's my best course of action?
If you have self-employed income or you were issued a form 1099, you should strongly consider making a SEP contribution rather than and IRA contribution. A SEP contribution (Simplified Employee Pension) is fully tax deductible and can usually be larger in amount than an IRA. Further, the SEP gives you other options an IRA doesn't.
What do I need to claim an exemption for my child?
If you have a child you must have his/her social security number in order to claim an exemption. This is true regardless of your child's age. You can contact Social Security at 1-800-772-1213. Make your life easy and just fill out the forms in the hospital when your child is born.
What should I do about charitable contributions?
If you make a charitable contribution of $250 or more, you should obtain written acknowledgement from the charity and keep it with that year's tax file. You do not have to enclose the receipt with your filing to the government. This is an ever changing area of the tax law.
Though we try to answer the most common accounting questions here, there are always more questions when it comes to your personal finances. Give us a call so that we can answer all your questions based on your own financial situation and your needs.
Phone: (608) 662-8262