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8 Simple Ways To Protect Yourself 

Author: Keith Huggett 

During the height of tax season we always hear about identity theft and the hundreds of ways people are being scammed out of their hard earned money. Well, tax season is over now but identity theft is still a problem that needs to be discussed. Your tax preparer can either be part of the problem; someone who is helping the theives, or a part of the solution. Here are some simple ways that you and your tax preparer can help protect your identity.

1. Never sign a blank tax return.
2. Place your tax documents in a secure location, such as a safe, or locking file cabinet.
3. Use a password on your cell-phone, tablet, & laptop computer.
4. Remember that when you receive communications from the IRS, they only use the U.S. postal service. If you receive an email from someone claiming to be the IRS, report it to phishing@irs.gov.
5. Ask your tax preparer about their security. Is it up-to-date? Do they have back up systems?
6. Monitor your credit reports regularly. It's a handy practice to keep up to date on your credit report. With a watchful eye, you will notice any changes much faster than your credit card company will.
7. Change your passwords on your computers regularly. Make them complex, with numbers, capital letters, and symbols, in order to make it more difficult for hackers to figure them out. Using birthdays, anniversaries, or pet names are very common and easy to figure out.
8. If you upgrade your computer system, and decide to recycle your old one, be certain to wipe the hard drive first. PCWorld provides a helpful article on How to Securely Erase Your Hard Drive. 

One last thing to remember in order to protect your identity. When you are on social media sites, be careful not to answer those harmless looking (and sounding) quizes about your first pet, or your mother's name, where you grew up and games about how well you know your best friend. You could accidently give out information about yourself & your best friend.

If you have any questions about identity theft, personal information, or tax information, the specialists at The Tax Office, Inc. are ready to help. If you suspect that you have become a victim of identity theft, you should act immediately to correct your records. Make copies of all email and letters, and keep detailed notes of phone calls.  Your tax returns are only a portion of what will need to be corrected. Contact us today for your tax return needs.

The Cutting Edge Security of Cloud Servers

Author: Paul Cantelli

Have you hesitated to switch to cloud-based bookkeeping because you're concerned about data security? While you are right to be concerned about the safety of your financial data, cloud-based bookkeeping may actually be more secure than your current methods. What if the computer with your QuickBooks file crashes, or your office servers get destroyed in a fire?

Switching to any new system can be scary, especially when your company's financial data is concerned. However, consider these four security benefits of the cloud as you weigh the pros and cons:

1. Cloud servers are more physically protected than yours. If you host your data on an on-site or local server, it is nowhere near as safe as it would be in the cloud. Cloud servers have world-class security systems that no small business can match.
2. Cloud servers are more virtually protected than yours. You have antivirus software, firewalls and scanning programs, but cloud-based data centers have cutting-edge security that can fend off even the most savvy hackers.
3. Cloud-based security is more cost effective. Even if you can't match the security measures that the cloud provides, you can implement very effective systems for your business. However, the more robust the security system is, the more expensive it is. Using cloud-based systems allows you to get the benefit of their world-class security built into the price of your subscription.
4. Working in the cloud is more efficient. Switching to cloud-based bookkeeping frees up more time for you to focus on your business not only because you have more flexibility, but also because you don't have to spend the time implementing and maintaining your own security measures. You also don't have to worry about installing software and upgrading to new versions because it is all done automatically in the cloud.

The Supreme Court Brings Tax Equality to Same Sex Families

Author: Keith Huggett 

With a vote of of 5-4 the Supreme Court leveled the tax field for same sex couples. No longer are same sex married couples forced to file separate tax returns. They now have the option to file jointly as a married couple just as heterosexual married couples do. They can file taxes, claim inheritances, and handle other tax and benefit issues in the same way as other married couples. Insurance benefits will no longer be considered taxable income.

Due to being unable to file jointly as a married couple there are a couple of tax issues that same sex couples will have to deal with.  Filing separately will have caused an overpayment in taxes, for which, they will now be able to file an amended joint return in an attempt to get a refund for the last three years. For years beyond that, legal aid will be necessary.

In order to file any tax return at all as a "legally married couple" will depend on where a couple lives. The Internal Revenue Service and the Social Security Administration  both define a marriage as "legal" depending on where you live. If the state you live in does not recognize your marriage as being legal, you cannot benefit from federal spousal benefits. In order for a same sex couple to benefit from the federal spousal benefits they must live in 1 of the 13 states that recognize same sex marriage.  These states are:

• California
• Connecticut
• Delaware
• District of Columbia
• Iowa
• Massachusetts
• Maine
• Maryland
• New Hampshire
• New York
• Rhode Island
• Vermont
• Washington

Because of the changes to DOMA, it's effects are going to ripple through the tax code and cause many changes to the lives and family members of same sex couples.  People have been working hard to effect this change for so long, now that it is here, there are still many difficult challenges and complications to work out.

With California coming on board as the 13th state to legalize same sex marriage, couples living here are going to be facing many tax ramifications.  At the Tax Office, Inc. Our tax specializations suggest that speaking with a tax professional might be in your best insterest before making any changes to your tax plan.  If you have any questions regarding how the defeat of DOMA and the legalization of same sex marriage may or may not affect your tax situation, please feel free to contact us for no cost, no obligation conversation. Our tax professionals are here to answer any questions you may have. 

 3 Things to Consider About Cloud Based Accounting

Author: Paul Cantelli

Accounting in the cloud is an excellent solution for many small and medium businesses. However, there are some factors to consider before you take the plunge. While accounting in the cloud provides better efficiency, more flexibility and several other benefits, you must remember that you are dealing with sensitive financial information that should not be handled lightly.

Think about these three issues before you make the switch to accounting in the cloud:

1. Vendors: A basic search for any type of cloud-based accounting solution will quickly show you that you have a lot of choices. In fact, you have so many choices that it can be overwhelming to compare the various features, functions and pricing. You also need to consider how reliable a provider is, what level of customer service they offer, and how long they will stay in business.
2. Legal issues: If your business is subject to certain data handling requirements, either from an external body or from your own internal policies, it is important to work with a provider who can meet these requirements. Find out how the vendor protects your data and what their confidentiality and privacy policies are.
3. Data backup: Data in the cloud is generally safe, especially if your providers use multiple servers at multiple locations. However, because this data is so important, you may want to consider having your own backup. Some providers allow you to automatically keep a backup on your local server, while others may require you to manually export data and back it up. Make sure that your provider can accommodate your preferences and make it easy to back up your data if you want to. 

Build Up That Work Ethic Early In Life

Author: Jenny Shilling 

Does your teenager need a job? Would you like to cut your business tax liability and get  some additional help? Then hire your child; it's an excellent way to accomplish these goals.

The IRS lets you hire your children without paying any payroll taxes as long as you own a sole proprietorship or LLC. If you pay your child $9 an hour to work for you, all it will cost you is $9 an hour. You will not have to pay traditional payroll taxes for FICA contributions, nor will you have to pay into your worker's compensation insurance fund. 

Of course, the IRS has a few rules you will have to follow when you hire your teen. The first is that they will have to work for your business. Simply paying them through your business for doing household chores will not withstand an audit. You will also have to pay them reasonable wages. Paying your teenager $100 a hour to answer the phone will be another red flag for the IRS.

Hiring your kids does more than just save you money on your payroll taxes; it can also cut your income tax liability. In the 2013 tax year, your child's first $6100 in income is tax-free since it gets covered by the standard deduction. Paying him this amount means that you take the income out of your taxable pool and put it onto his return as nontaxable income. If you put two children to work, you could shelter up to $12,200 in income a year from taxes.

With this in mind, it might make sense to fire your kids from household chores, have them work in your business and hire a maid to help with the house.

But remember, it's a wise idea to have an accountant help you plan this strategy. Contact The Tax Office, Inc. to get started on building your kids' work ethic and reducing your taxes.

The Basics, And How It Will Impact Your Finances

Author: Paul Cantelli

Cloud computing might sound mysterious -- and even a little too vague -- to be trusted with your company’s critical financial information. The term evokes images of some remote, intangible, impersonal mass where your data is bound to get lost.

It's an apt description, since it refers to something far away. But don't let its negative connotations dissuade you from exploring cloud-based bookkeeping for your business accounting needs, as it can have significant impact on your efficiency and bottom line.

The basics

Cloud-based systems simply utilize the Internet to provide access to your data on remote servers, as opposed to using your own hardware. In this virtual accounting setup, business software is accessed via a web browser rather than residing on your desktop or laptop. All upgrades, maintenance and storage tasks are handled by the hosting firm, the service provider.

The benefits

Some of the most significant benefits of cloud computing are:

• Access to your data from anywhere in the world, 24/7. You'll never lose touch with your financial records, and employees can work remotely.
• Cost savings
• Greater efficiency in sharing information with stakeholders
• Regular off-site data backups
• Secure data encryption

The financial impact

Trusting your data to the cloud can save your business money in the long run. Software is maintained by the hosting company, reducing the expense of licensing new applications and using IT staff to install them. You'll eliminate the downtime caused by local upgrades and the inevitable fixes. Hardware costs can be dramatically lowered, as all you need is a web browser and an Internet connection to work within the cloud. Although not as easy to quantify, savings might also be expected from an increase in both staff and financial reporting efficiency.

Cloud-based accounting can greatly reduce your workload and expenses if correctly matched to your company's needs. At The Tax Office, we can explain how our cloud-based accounting solutions can mesh with your existing operations to save you money and allow you to focus on growing your business. So contact us today. We would love to work with you to design a simple, effective virtual accounting solution for your company.

How Your Smartphone Can Make Your Life a Little Easier at Taxtime

Author: Jenny Shilling 

Keeping track of your mileage is a royal pain. Just like picking up after your dog during your evening walk, but you still do it, right? Yet, there is a way to make keeping track of your mileage much easier. Everyone has one, we never leave the house without it these days. What am I talking about? Your phone. It's either attached to your belt, in your pocket, or in your purse. Children carry them. By installing a simple "app" to your smartphone, you can make keeping your mileage record a breeze.

According to Google and Bing, three of the "best" mileage applications for the iphone are:

1. Tripcubby
2. Milog
3. Triplog

For your Android phone the "best" applications are:

1. Mileage Tracker
2. Trip Master
3. VR Mileage Tracker
4. Mileagetrac
5. Mytracks

The standard mileage rate for business miles driven in 2013 is $0.565 cents per mile. The rate for miles driven for medical or moving services is $0.24 per mile. Lastly, the rate for miles driven in service of charitable organzations is $0.14 per mile.

Transportation expenses that you can deduct include the ordinary and necessary costs of all of the following:

1. Getting from one workplace to another in the course of your business or profession when you are travelling within the general area where you do business.
2. Visiting clients or customers.
3. Going to a business meeting away from your regular workplace.
4. Getting from your home to a temporary workplace when you have one or more regular places of work.

Sadly, you cannot deduct commuting expenses no matter how far your home is from your regular place of work, even if you are working during the commute.  Parking costs at your regular place of work fall under the commuting category too.

So, investing $0.99 to $5.00 on a smartphone application can help take the frustration out of trying to keep track of the miles between Point A and Point B. According to the online reviews, they are "user-friendly" as most phone apps are, and designed to make your life easier. As we all carry the phone with us at all times, and they are always "on", it is one less step you would have to take to keep track of your mileage, unlike the GPS unit in your vehicle.

So when your accountant asks you for your mileage log next April, you will be able to hand him a concise log instead of a handwritten log of numbers that may or may not be correct. Having a GPS handle your mileage can make your life easier, but only if you check it out.  If you have questions about tracking your mileage, tax deductions, or general tax questions, the Specialists at the Tax Office, Inc. are here for you. Contact Us at 916-773-7053916-773-7053, or at #plan4tax, or www.facebook.com/plan4tax.

Focusing on Your Core Business 

Author: Paul Cantelli

Is accounting a core focus of your business? Is it an area where you excel? If the answer to either of these questions is no, you're like most people who own a small business. While accounting and bookkeeping are crucial to complying with tax law and to understanding what is going on with your business' operations, you can outsource accounting and bookkeeping duties to an expert third party. Here are five ways that this helps:

• Reduces your accounting costs: When you outsource accounting, you bring in experts with the right tools to get the job done quickly and efficiently. Instead of paying salaries, payroll taxes and benefits for your staff to fumble through the process, you just pay a reasonable fee to an expert.
• Provides better financial information: When you have a professional accountant handle your bookkeeping, you will get the benefit of receiving professionally prepared reports. This helps you better understand how your business is performing and where your money is coming from and where it is going. The professional statements you get when you outsource accounting may also help you get a loan since lenders typically require detailed financial reports.
• Keeps better track of cash flow: Have you ever been caught short without enough cash on hand to pay a vendor? When you outsource accounting, your accountant can help you plan your expenditures so that they better track your business' receipts.
• Saves time: Do you have time to do everything you need to? Getting outside help with your books frees you and your staff up to work on tasks that are directly related to your business.
• Plans for tax time: If you get your books to your accountant in February to file your taxes in April, it's already too late to plan. When you outsource, your accountant can help you plan throughout the year and save you money on April 15.

Being Prepared Can Save Money

Author: Keith Huggett

Most people only pay attention to taxes in April and at the end of the year, but spending a little time on midyear tax planning can help your business save a bundle. If you wait until the last minute to take advantage of tax breaks for small businesses, you might miss the boat. Plan ahead and you might even be able to give bigger bonuses this year.

Midyear tax planning might save you some money in one or several of the following ways:

• Purchase new equipment: One of the requirements for taking a write-off on equipment expenses is that it must be in service before the end of the year. This means that any new equipment that is purchased in late December and not delivered until January won't make the cut for this year.
• Start a retirement plan: In order to take a deduction on some retirement plans, you have to have the plan set up by a specific date. However, you can often make deductible contributions to the plan until the date your taxes are due, which gives you even more opportunity to save.
• Upgrade employee medical plans: Health plan premiums are generally deductible, as are employer contributions to health savings accounts. If you don't currently offer medical benefits and want to, get a plan in place well before the end of the year to maximize your tax benefits.
• Review estimated quarterly tax payments: Although you probably set estimates for the final two quarters of the year, midyear tax planning gives you an opportunity to revise those figures if necessary. If you are having a good year, you may want to increase your estimated payment to avoid penalties. If your income is less than last year, reducing your payments accordingly will keep more cash available for your business.

Big Business, Small Business, CFO's Provide Answers

Author: Keith Huggett 

No matter what size your business is, it can benefit from the advice provided by a CFO. Whether you have just started up your company; if you've been in business for years, a CFO has experience, knowledge, and insights that he or she can apply to questions and situations that apply specifically to your situation. Here are some reasons why every company needs an outsourced CFO:

1. Raising capital: A CFO helps to lead your management team. He adds credibility to your company and stability to your financial team.  He gives your CEO someone to bounce ideas off of, when putting together your financial vision.

2. Avoiding mistakes: An experienced CFO is prepared to handled the unexpected. He's dealt with missed deadlines, budgeting errors and cost overruns many times. He can help the team understand how to handle these issues and more, without the stress and panic that often accompanies them.

3. Optimize cash management: Instead of having cash flow issues popping up at inopportune times, an experienced CFO will be able to show the management team how to plan for the future and stretch each dollar accordingly to prevent cash flow issues.

4. Improve company management: Having been in business for many years, the experienced CFO knows the ins and out of how to run a business properly. He is intimately knowledgeable about each and every part of the business structure and plan. With such knowledge he can advise the CEO about where to make expansions and cuts as needed for improved growth.

5. Planning & Proposals: A good CFO knows how to constructively challenge a plan, proposal, number, or claim. Having spent many years being a part of both good, bad, and neutral plans he has learned how to improve such things and give helpful advise for improvement.

6. Building credibility: Investors appreciate and value a senior CFO's contribution. They know that a good CFO can be a trusted advisor and will improve the company's, and the CEO's, performance.

7. Gaining investors: Companies that meet or exceed plan, manage cash and headcount well, have a history of delivering accurate, on-time financials, typically get high marks from existing investors. It is far easier to get additional investors when your current investors are happy.

8. Create an aura of confidence: Having access to a CFO reassures employees, creditors, suppliers, banks, service providers, and investors. You will attract better people, get better terms, and operate better as a whole.

9.  RoI: A part time CFO more than pays for himself, providing CFO expertise without full-time employee headcount. Many startups use a part-time CFO for as little as five hours per month and can scale his involvement as their needs grow. As affordable as a part-time CFO is, how can you afford not to have one?

10. Gain knowledge: While you have the CFO working with you, your management team has the opportunity of a lifetime to learn from a very experienced businessman with a wealth of knowledge about the business world. Take advantage of it. Ask questions. Learn as much as the CFO is willing to teach you.

If you are interested in finding out more about CFO services the Specialists at The Tax Office, Inc, would like to direct you to their Client Accounting Services (CAS), which include CFO Plus services, CFO services, Controller, Accounting Manager, Bookkeeping, and Payroll Packages. Contact Us to learn more.