End of Year Accounting Tips for Beginners

In 1752 the English New Year was moved from the end of March to the beginning of January.  Thankfully, the Georgian authorities saw fit to leave the Financial New Year where it was.  I love the 18th century Georgian authorities.  If it wasn’t for them I’d have to deal with the New Year Hangover and the Financial New Year Hangover at the same time.  Like many self-employed people, the end of the financial year, and tax return deadlines finds me in a bad mood, usually late at night with a large pot of coffee and tons of paperwork to spill it on.  When you’re self-employed the focus is on the day job – working to earn money and delight clients.  Paperwork can wait – but it can’t wait for ever.  There has to be an easier way and if, like me, you’re a persistent ‘deadline surfer’ the following might help.

Timing, Tools and Advice

  • Whether you like it or not, you have to make book-keeping a significant priority in your life.  The taxman demands up to date and accurate records and the fines for getting it wrong can be fatal.  So take note; get into a routine with your book keeping and accounting and stick to it.  Diary it into your schedule on a regular basis and stick to the diary.  Treat it as if it was work for a client.
  • There are several important dates in the financial year, make a note of them and keep an eye out for them as they come up.  If you don’t already fill in your tax returns online, register to do so now.  It’s going to become a requirement soon and the deadline for filling them in is currently a whole, delightful three months later than the paper deadline.
  • Accounting software or book keeping software is an investment that you won’t regret.  Double check with your accountant on systems they recommend and check that the cost falls under ‘allowable expenses’.  The accounting software available is usually simple to use and it takes nearly all of the hard work out of record keeping, allows you to keep centralized records, produce professional invoices and it will also cut the time your accountant needs to prepare accounts – saving you even more money.
  • Get help.  There are a vast number of free resources available to small businesses and the self-employed.  HMRC, for a start, are there to help and are more than willing to offer advice and support to new business.  Their role is to collect taxes not crush promising new enterprises who can generate those taxes.  In addition Business Link has specialist advisers and can offer access to courses or seminars to help in many different areas.

Accountancy tasks can be time consuming and for small businesses it’s a task that can take you or your staff away from the real business of making money.  Planning tasks carefully, knowing the key dates in the tax year, employing an accountant and making the most of accounting software will help to keep you feeling bright and fresh in the coming financial year.  You might even want to raise a glass to the memory of those enlightened authorities of the 18th century.

Neil blogs about small business and entrepreneurism, on everything from bookkeeping software to digital marketing.  When he’s not online he enjoys good food, cycling and painting.

 

FreeTaxUSA and The Amended Tax Return

As the April deadline approaches and you have already sent your tax return in the mail to the IRS or you have completed a return on the computer, the only way to change the tax return is to file an amended tax return. If you have filed with FreeTaxUSA, you can sign in with your account and correct the return.

The Internal Revenue Service does not let you do an e-file amended return.  Your only choice is to prepare and send back the amended return.

If you completed your original tax return through another source besides FreeTaxUSA, you can go to the website for the IRS and use form 1040X to manually do an amended return. If you would like to use FreeTaxUSA, just enter all of your tax information.

It is recommended that a person not amend their tax return until they have received their refund or paid their taxes.  Often times, the IRS will automatically correct any errors, in which case, you do not need to amend anything.  The IRS sends a notice as to the adjustments that were made or asks for more documentation.

Tax forms can be tricky at times.  With the misplacement or miscalculation of one number throwing many things off.  When this occurs you must make every effort to correct the mistake through an amended tax returnSoftware from FreeTaxUSA makes this process as well as your initial tax filing easy.  Tax returns do not have to cause headaches.  Careful preparation is key.

The Advantage Of Using Taxbrain If You Make Charitable Donations

There are several online services created to help people in filing tax forms. One company known as Taxbrain, helps people get the most money they can in a refund.

As a business, this company partnered with Charity Deductions to create a way for clients to use the contributions they make to charities as deductions. This partnership allows people access to a huge database of information.

The database includes the market value of charitable donations so people can easily find what pertains to their contributions and just import the information directly into their taxbrain form.

The Vice President of the tax service has stated that people have always had a difficult time in calculating their donations and placing them into their various forms for tax purposes. This is especially hard when people donate merchandise that does not carry a specific price tag. The database provides monetary values they can use with confidence when filling out their forms.

More Internal Revenue branches are cracking down on the claims people make in the hopes of getting more money out of the government. One area that was always questionable was the area of non-monetary donations. The new combined service allows people to list their values with confidence.

Many items people donated in the past were valued far below what they were actually worth, which gave the individual a lower refund amount. Now, they can get back what they really deserve to receive. This system works for people who efile taxes as well as for those who still use the paper forms.