TAKE TIME TO ORGANIZE YOUR TAX DOCUMENTS

Tax time can be a daunting experience for taxpayers who don’t have their tax documents ae organized before consulting a tax preparation firm. But it must be done to ensure that your taxes are in order and that you are getting all the deductions to which you are entitled.

The best thing to do is to organize your tax documents as they come to you during the year rather than stuffing everything into a file folder or, worse, having them loose in different places and waiting until the last possible moment. If you are self-employed, you will have your quarterly income statements.

You may find Turbo Tax handy if you are filing yourself.

Filing System Eases the Burden

Tax documents are organized into two basic topics, income and deductions. You may use envelopes or folders to keep these documents. Organize our files by tax topics to reduce errors and make the task easier for your accountant, if you hire a CPA, or for yourself if you do your own taxes.

Income documents are provided by your employer, whether it is one company or more. By law, they must provide your income statements to you by Jan. 31. That, however, doesn’t mean you can’t start before then with your deductions.

Common Deductions

Have a folder for deductions, such as charitable contribution receipts, medical expenses, interest paid on your mortgage, child care, student loans, automobile registration, government credits, and contributions made to you 401K and other retirement accounts. You may have other deductions.

Consulting with a Public Certified Accountant

Keep handy your bank account routing numbers, and other information for filing taxes electronically to ensure you have everything you need. Take all of this information to your tax advisor to reduce the time it takes to configure your taxes. At Li, Friezen & Grossetta, CPAs, PC, we can help you organize your taxes by providing checklists.

TIME FOR A NEW YEAR FINANCIAL REVIEW

The beginning of a new year is a great time to review your investment accounts and determine if any changes are necessary. Times change and so do the companies in which you may have your future financial picture involved.

A thorough review of your portfolio may determine if you need to makes changes ranging from the amount you need to invest or perhaps to move into another company or industry.

Changes in Your Personal Situation

Your personal situation may have changed in the last year. For example, you may want to add to your investment portfolio to take advantage of changes in the financial market, reduce your investment to add more income to support monthly living expenses, or place your money into companies you don’t already have.

Industry Investments

If you have made a significant investment into a particular industry, for example automobile manufacturers, you need to have a resource that keeps on top of the industries in which you are invested. This can be a daunting task for individuals but professionals keep abreast of changes you may not even be aware of yet.

Assessing Your Tax Picture

Taxes are a huge consideration in your personal financial plan. You must pay taxes, of course, but many tax advantages exist to help you reduce your tax burden. Changes in tax law occur all the time, so it’s in your best interest to have a qualified tax professional evaluate you tax picture. Also, changes in your personal situation may affect your tax picture and save you money.

Your Next Step

We at Li, Friezen & Grossetta, CPAs, PC, a premier certified public account firm in Tucson, have the expertise in all investment and tax areas to help you grow your financial future. We represent individuals as well as companies and offer free consultations.

SO YOU SAY YOU WANT TO BE ACCOUNTANT

Counting came easy for you as a kid, math was your forte in high school, and you aced your first accounting class in college. If this sounds like you, accounting may be your calling. Congratulations, you have just embarked on one of the most lucrative, stable professions available to the Americans. But easy there turbo, in the words of the great philosopher Friedrich Nietzsche, “before you can fly, you must first stand and walk.”

The Key is Education

Like many things in America, education can be the key to opening doors. In order to be an accountant, some education is usually required, and the more education you receive, the better your chances of success and prosperity. Trade school, community college, and four year universities are all portals to the accounting profession. But, if you want to make the big bucks, your best bet is to earn a CPA which requires a 150 credit hours (maybe 5 years of university schooling), and passing a difficult certification test which some claim is even more difficult than the bar. Once you’ve earned your CPA, an MBA may be on the horizon, and it will surely help distinguish you from the pack.

The Various Sections of Accounting

Below are the four basic sectors of accounting that any potential accountant should be familiar with.

Public Accounting—you consult, keep books, help with auditing, and advise with taxes.

Management accountants—you are responsible for analyzing your company’s financial data, drafting up budget plans, and determining strategies for maximizing allocation of funds.

Internal audit— internal auditing involves managing business activities, focusing on internal fraud detection, and identifying inefficiencies.

Government accountants—you are basically the IRS’s hall monitor, searching for fraud, and exposing criminals.

ACCOUNTING 101

All about the Paper

Some accountants consider a cash flow statement the most important component of a financial statement. A cash flow statement will differ from an income statement by reporting what funds are actually available. For instance, an income statement will not account for revenues that will never be collected, or expenses that have no effect on cash flow such as depreciation. It will help explain any changes in cash or cash equivalents during the beginning or ending of an accounting period.

Balance, Balance, Balance

Put simply, the balance sheet reports the company’s assets, liabilities, and stockholder’s equity. The balance sheet must be read in tangent with the income statement and cash flow statement. The asset component of the balance sheet reports the company’s resources such as cash; the liability component of the balance sheet indicates the companies obligations owed to customers; the Stockholder’s equity is calculated by subtracting liabilities from assets.

Incoming Statements

Income statements deal primarily with revenues and expenses, gains and losses. It is one of the two general ledger accounts required for every company. A large corporation may have thousands of income statements: advertising expense, digital advertising expense, rent expense, and ect. By the end of the accounting year, the balance of the income statements are calculated and then transferred to Retained Earning for a corporation, or owner’s capital for a small business.

Reach out the Pros

When it comes to finances, however, the do it yourself attitude is not usually ideal. You want a qualified professional handling your most treasured treasure in order to maximize profit, and increase the probability of success for your company. If you interested in consultation reach out to us today at Li, Friezen & Grossetta, CPAs, PC

LUCRATIVE TAX BREAK FOR EXPORTERS

If you export a U.S. made product, then you ought to consider forming an Interest Charge Domestic International Sales Corporation (IC-DISC) in order to maximize profits. An IC-DISC is corporation that elects to be taxed in a unique fashion. Actually, the corporation’s income is not taxed. The earnings generated by the ID-DISC are taxed after they have been distributed to its shareholders. The shareholder can expect to pay a tax rate of 20%-23.8%, instead of the ordinary tax rate hovering between 39.6%- 43.4%. Huge savings indeed!

An IC-DISC is available to manufacturers, exporters of goods, and even exporters of services, exempli gratis engineering, or architectural services. In order to qualify the company must present receipts for selling, exchanging or otherwise disposing of export property; leasing or renting property outside the United States; supporting service related to sale, exchange, lease, or rental property outside the U.S. Moreover, in order for the items to comply with the definition of “export property” it must be: made, grown, or extracted in the United States; held for sale, lease, or rent in the ordinary course of a trade or business outside the United States; no more than 50% of its fair market value can be contributed to articles imported into the United Sates.

Please consult Li, Friezen & Grossetta, CPAs, PC if your business is a U.S. based exporter. If you own a large company, you can register a separate IC-DISC corporation operating as a subsidiary business of the one you already own. As mentioned above, the potential savings are immense. It would bring us great joy to help your company qualify for IC-DISC benefits, and assist in structuring operations to prepare for this lucrative tax benefit.

R & D TAX CREDIT INTERPRETED WITH LENIENCY BY THE U.S. TAX COURT

A decision issued in Eric G. Suder, et al. v. Commissioner was favorable for businesses utilizing the Credit for Increasing Research Activities (R&D tax credit). For those unfamiliar with the R &D credit, it is tax credit for research expenditures. The recent case helped defined the scope of the term research expenditures, for the court ruled that company’s do not need to “reinvent the wheel” to claim the R&D tax credit.

The Argument of IRS

The IRS held that ESI—the company of plaintiff Eric G. Suder—did not attempt to solve any uncertainty or develop any of its products or designs with the research they wrote off for the R&D tax credit. The IRS also argued that ESI’s projects were based on existing knowledge already known by the company. An expert witness testified that there were no technical challenges facing the ESI’s projects, and that the research dealt with nothing more than inquiry into low-cost versions of products already on the market.

The Courts Rebuttal

The court disagreed completely with the IRS. They held that no business needs to “reinvent the wheel” with their research in order to be eligible for the R&D tax credit.  Moreover, the uncertainty requirement stipulated by the bill may be satisfied even if the business knows the technical possibility of that goal, but is unsure of the optimal method for achieving it. Thirdly, research expenditures for such knowledge already existing in the form of manuals or online references still can merit an R&D tax credit.

Basically, the decision allows for a broader interpretation of what can be claimed as an R&D credit. It is not the case that an R&D tax credit requires research into a completely novel entity. The recent court decisions shows that research into efficiency can also be claimed using the tax credit.

TAX ACCOUNTING CONSIDERATIONS FOR PROFESSIONAL SERVICE FIRMS

Professional service firms throughout the greater Tucson area often require expert tax planning and tax preparation related services. This ensures that these businesses are operated at peak performance and enjoy the best tax savings possible. From medical offices to law firms and insurance agencies as well as technology companies and consultants, these businesses all rely upon the dedication and detailed work provided by an experienced CPA firm in Tucson.

Guidance And Assistance With IRS Related Tax Problems

While businesses have many choices in this regard, one tax planning and tax preparation firm above all others has delivered on its promises of providing professionalism and outstanding service one client at a time. Li, Friezen & Grossetta, CPAs, PC is a trusted and respected source for professional service firms that require highly effective tax planning and tax preparation. In addition companies that require detailed guidance and assistance with IRS related tax problems can rest assured that the professional staff of Li, Friezen & Grossetta, CPAs, PC is always standing by in ready to assist.

Financial Statement Preparation To Mergers And Acquisitions

Other important financial functions that are offered by Li, Friezen & Grossetta, CPAs, PC when it comes to professional service firms includes everything from financial statement preparation to mergers and acquisitions. In addition, reviews and budgeting as well as financial forecasting are routinely conducted by this trusted name in Tucson accounting. Other common services offered to professional service firms include QuickBooks support and training as well as new business advisor services and business plan development. With so much to offer it is difficult to imagine a professional service firm choosing any other CPA in the Tucson area.

Known For Providing Hands-On Service

Li, Friezen & Grossetta, CPAs, PC even offers comprehensive services when it comes to outsourced accounting, bookkeeping, CFO services and payroll related services. In short, this is a Tucson accounting firm that has all the bases covered for businesses large and small alike. From manufacturing firms to industrial businesses and retail outlets,  Li, Friezen & Grossetta, CPAs, PC offers the expertise, years of experience and knowledge that businesses expect and deserve. Known for providing hands-on service with a wide range of financial planning and preparation, this is a Tucson CPA that simply gets it right. Contact Li, Friezen & Grossetta, CPAs, PC today to learn more about Tucson CPA services that are effective and affordable.

YEAR-END TAX PLANNING TIPS WORTH CONSIDERING

As the end of the year approaches individuals and businesses alike would be well advised to consider a few simple year-end tax-planning tips. While working with a tax accounting firm is often the best strategy, there are still some important basic strategies that each individual and business should be aware of as a way to enjoy greater tax savings. For example, establishing a tax-free savings account is always a good strategy for those wishing to save money at the end of the year with regard to a tax bill.

Charitable Organizations

This combined with retirement preparations can go a long way in helping individuals and businesses save money over the long term. In addition, making any charitable donations as the end of the year approaches is always a good way to improve one’s tax position. Along with contributions to charitable organizations, political donations, union dues, interest and other investment expenses as well as the cost of safety deposit boxes and medical expenses should all be taken into account as the tax year comes to a close.

Improve One’s Tax Position At The End Of The Year

These are all just general guidelines as it is always a good idea to work with an established accounting firm to enjoy the best results when it comes to tax planning. Other common strategies used to improve one’s tax position at the end of the year include contributing to an education related savings plan. The specifics with regard to these various tax strategies should be discussed with your tax accountant. Li, Friezen & Grossetta, CPAs, PC is a firm with years of experience in the industry that offers free consultations and a generous amount of resources for those wishing to enjoy experienced tax preparation services.

A Team Of Professional CPAs

From incorporation related services to tax accounting and tax preparation and planning, Li, Friezen & Grossetta, CPAs, PC is a trusted and respected name in Tucson accounting firms. The company has a team of professional CPAs with a wide range of experience and a commitment to integrity. The firm is known for its hands on approach to tax related services. This provides peace of mind for clients in knowing that they are getting the best tax planning and tax preparation services in the greater Tucson area. Contact Li, Friezen & Grossetta, CPAs, PC today to learn more about Tucson tax accounting services that get results.

USEFUL TAX TIPS FOR NEW BUSINESSES

Those starting a new business can sometimes become overwhelmed with the complexities associated with business related tax issues. As such, here are some useful and simple tax tips for new businesses worth considering. Getting any business off to a good start often means knowing in advance what to expect with regard to tax obligations. For example, the business structure can have a big impact on overall taxation. From partnerships to proprietorships and corporations, there are many options available to business owners when it comes to structuring a business.

Business Structure

Working with an experienced CPA is often the best way to make the most logical and advantageous choice in this regard. In addition, there are four specific types of business taxes that must be considered when operating a business. This includes self-employment tax, income tax, employment tax and excise tax. The type of taxes that a business will ultimately pay may be determined by which type of business structure is chosen. Many business owners choose to pay taxes using an estimated tax payment option.

Employer Identification Number

Equally important is to secure an employer identification number when starting a business. This is important for federal tax purposes. Working with a CPA, a new business owner can acquire an employer identification number quickly and easily. Another important concern when establishing a new business is the type of accounting method that will be used. Two of the most common types of accounting methods in use today include the cash method and the accrual method. This is another instance where consulting with the CPA is often the best option when making this determination.

Coverage For Employees

Finally, employee health care is a key aspect of establishing a small business. There is something known as the small business health care tax credit that can assist small businesses when covering the expenses associated with health care coverage for employees. The specifics with regard to the small business health care tax credit should be discussed with a CPA to determine whether or not a business is eligible for this particular type of tax credit. Consider these simple and useful tax tips for new businesses when establishing a business. Early planning and preparation can go a long way in making the formation of a business easy, convenient and stress free. Contact Li, Friezen & Grossetta, CPAs, PC today to learn more about experienced Tucson CPA services.

TAX PLANNING TIPS FOR SMALL BUSINESSES

Small businesses require accurate and detailed record keeping so they can remain more competitive in today’s modern business world. Here are a few simple tax-planning tips for small businesses that are intended to increase efficiency and improve overall tax planning and tax organization. For example, tracking mileage in a detailed and organized way can make tax preparation easier, more convenient and more rewarding. In most instances a small notebook kept handy in an automobile can make this process easier.

Enjoy Greater Tax Advantages And Better Overall Business Planning

In addition, accurate records can go a long way in making tax preparation easier and faster when tax time finally approaches. Record-keeping that is accurate and detailed actually serves two purposes. One is that it can help a business owner analyze business performance, and the other is that it can satisfy the IRS’s requirements for accurate and detailed record keeping. Complete and accurate records can go a long way in helping business owners to enjoy greater tax advantages and better overall business planning.

Tracking Sales And Expenses And Other Business Metrics Is Essential

Whether it is a simple folder and calculator that is used to maintain records or a complex and advanced software system, tracking sales and expenses and other business metrics is essential to keeping a business going strong year after year. Equally important is for business owners to occasionally review any possible special rules with regard to certain types of expenses. This includes everything from rules associated with gift giving to entertainment and travel. Those that work from home should also explore all options with regard to deducting part of their home for home office use. These rules change from time to time so it is important to stay current in this regard.

Maximizing Tax-Planning Strategies For Small Businesses

Many other factors may be taken into account when considering tax planning for small businesses. This includes everything from considering the ramifications of paying bills early to purchasing office supplies. Finding ways to maximize deductions in a safe and logical way can have a big impact on a business’s bottom line. Working with an experienced and knowledgeable CPA is often one of the best strategies in achieving excellent results when it comes to maximizing tax-planning strategies for small businesses. Contact Li, Friezen & Grossetta, CPAs, PC today for Tucson tax planning that is affordable, reliable and dependable.