Top Career Opportunities in Accounting 2022

A significant number of college students are reassessing their career path. They’re discovering they won’t make as much as they anticipated. A study conducted by Real Estate Witch found that undergrads across all majors overestimated their starting salaries by 88 percent. There are numerous well-paying opportunities in accounting for 2022 and the U.S. Bureau of Labor Statistics projects a significant growth rate in all areas.

Bookkeeper

A bookkeeper maintains a company’s day-to-day financial transactions. They record, prepare and present financial statements to supervisors and managers about some or all of an organization’s accounts. They’re responsible for keeping a running total of costs and income and it represents an excellent opportunity for those entering the field. Bookkeepers enter data, verify billing statements, and work with multiple types of financial software.

Personal Accountant

There’s an almost endless need for personal accounts. They keep track of and help individuals and business owners manage credit card and bank statements, keep tax records, review expenditures, and ensure staff are paid.

Tax Preparer

Individuals, entrepreneurs and small businesses utilize the services of a tax preparer throughout the year to ensure their finances stay on track. Tax preparers prepare taxes, ensure clients are only paying what they should, and help them organize records. They may work for a larger company, but often operate their own business out of their home.

Forensic Accountant

Law enforcement agencies, lawyers, private investigators, insurance companies, government agencies and financial institutions employ forensic accountants. They’re often called as expert witnesses in court cases to prove embezzlement, fraud and other financial wrongdoing. They analyze financial statements, bank records and other documents.

Environmental Accountant

The job includes recording income, expenditures and other transactions related to cost savings. Many companies and corporations employ environmental accountants to create social responsibility statements in terms of energy costs and similar changes relating to green practices.

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Tax Preparation
posted by Mark Battalini
June 26, 2022

Adjusting Your W-4

There are some very good reasons to adjust your withholdings on your W-4. The form tells your employer how much money to keep out of your check for federal income tax. It will have an effect on your tax liability and prevent you from receiving an unexpected tax bill when filing your federal return.

Your W-4 is also critical for preventing a penalty for underpayment. Some people choose to claim every possible withholding, essentially living on less throughout the year to obtain a large refund at tax time. The IRS wants you to reduce your tax bill and have a refund that’s as close to zero as possible.

Life Events

Any time that your life circumstances change, you should complete a new W-4 with your employer. That includes a marriage, divorce or the birth or adoption of a child. Major life events also include buying a house, getting a raise, and contributing to educational funds. Some of those changes will make you eligible for credits on your federal tax return.

Part-Time Employment

If you normally work all year, but get laid off or experience downtime, you’ll need to adjust your withholding to account for those changing circumstances.

Second Job

It doesn’t matter whether you get a part-time job, work the gig economy, run a side hustle, or have a home business, you’ll need to adjust your withholding. There are a great many types of income producing ventures that are viewed as self-employment by the IRS, which makes you liable for income tax on the amount, along with the self-employment tax, Social Security and Medicare.

Spousal Employment

If your spouse gets a new job or changes jobs, they’ll also have to complete a W-4. Any change in income – an increase or a decrease – will have an impact on your income and amount of taxes you owe. Couples need to use both incomes and approximate as closely as possible what they need to claim on their W-4.

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Accounting
posted by Mark Battalini
May 21, 2022

When do You Need Payroll Services?

If you’re a small business owner, you may attempt to maintain your payroll with software that can be obtained anywhere software is sold. You may think you’re saving money, but you may find yourself spending more time attending to accounting and payroll tasks than operating your enterprise. Even if you only have a single employee, you can benefit from the services of a payroll processing service.

It’s important that you understand the IRS ultimately holds you responsible for all payroll requirements, even if you hire a payroll service. Do your research and choose a payroll company that meets your individual needs and has experience. Ask friends, family and other business owners which service they use and if they’re satisfied with the company.

Accuracy

A payroll service will know exactly how much in taxes to keep out for each employee and ensure their pay check arrives on time, whether pay periods are weekly or bi-monthly. The service will calculate federal, state and FICA for employees, along with creating W-2s and 1099s. It will enable you to stay compliant with all applicable state and federal laws.

Filing Requirements

Businesses are held to different filing times and requirements than private individuals. A payroll service will help ensure you meet filing deadlines and pay the appropriate tax amounts to avoid penalties and fines.

Paying Yourself

Depending upon the type of business you have, you may be required to pay yourself. A payroll service can do this and it’s especially important if you’re considered self-employed. The service will calculate your own taxes, along with personal state unemployment taxes and federal unemployment taxes.

Saves Time

Payroll is a complicated process and the average business owner spends more than 6 hours per month handling payroll. A payroll service will streamline the process, take care of all the details, and give you more time to spend on operating your business.

Are You Eligible to Claim Child Tax Credits?

If you have children, you’re probably familiar with the Child Tax Credit. It can put some much-needed cash in your pocket, but there are criteria for qualifying for the credit.

Age and Qualifying Child

A qualifying child is one that didn’t turn 18 before Jan. 1, 2022. A qualifying child is defined as the taxpayer’s son or daughter, stepchild, eligible foster child, brother, sister, stepbrother or stepsister, or half-brother or half-sister. Descendants of those qualifying children may also qualify, such as a grandchild, niece or nephew. The child must have a Social Security number that’s valid for employment.

Financial Support

The child can’t have provided more than one-half of their own support during 2021.

Living Arrangements

The child must have lived with the taxpayer for more than one-half of the tax year. The home must have been in one of the 50 U.S. states or District of Columbia for more than half the year. A permanent home can be a house, apartment, mobile home, or temporary lodging and doesn’t have to be in the same location throughout the taxable year.

You may still be eligible for a lesser amount of money if your home wasn’t in the U.S. for more than half the year. Bonafide residents of Puerto Rico may also be eligible to claim a Child Tax Credit even if they received no income and paid no U.S. Social Security taxes.

Taxpayer Dependent

You can’t claim a child as a dependent if you or your spouse are claimed as a dependent on someone else’s tax return or are residents of Canada or Mexico. The dependent must be a U.S. citizen, U.S. resident alien, or a U.S. national. Joint custody situations only allow one parent to claim a child on their income taxes. You can also claim that child if they died before Jan. 31, 2022.

Earned Income

You must have some type of earned income during the tax year as an employee or through self-employment. It includes wages, salaries, tips, bonuses and commissions.

How to Track Down Your Missing Stimulus Check

There are still millions of people that haven’t received one or more stimulus checks issued by the government during the COVID-19 pandemic. If you’re one of the people that are waiting, you can still receive the first, second or third stimulus checks you’re missing. The stimulus was delivered via direct deposit, by check in the mail, and by prepaid debit card that were also delivered by the U.S. Postal Service.

According to the IRS, first and second stimulus payments can only be clamed on a 2020 tax return. If you’re missing the third payment, it can only be claimed on a 2021 tax return. Individuals will need to know the amount of the missing stimulus payment they’re claiming. You can find that amount by logging into your secure IRS account online. It will provide you with the amounts of all three Economic Impact Payments made to you.

You can’t claim missing first or second stimulus payments on your 2021 tax return. If you haven’t filed an income tax return for 2020, you’ll need to file one now. If you did file a return and didn’t claim the Recovery Rebate Credit, you’ll need to file an amended return.

If you filed a 2020 tax return and it hasn’t been processed yet, don’t file a second return. The IRS is still behind on processing millions of tax returns from 2020 due to errors and lack of personnel. The IRS is also expecting significant delays in processing 2021 tax returns.

People that didn’t receive their third round of Economic Impact Payments can claim it on their 2021 tax return. You must file a federal tax return to claim the funds, even if you don’t normally file or aren’t required to file. Any funds to which you were entitled will be used to reduce the amount of taxes you owe or issued as a refund.

Using online tax preparation software and filing online will help reduce errors that can delay the return and the software will also help you determine your 2021 Recovery Rebate Credit. Depending on your individual circumstances, the stimulus payment will be used to reduce the amount of taxes owed or will be issued as a refund. You can have refunds deposited to a bank account, prepaid debit card or alternative financial product. You’ll need to provide your account and routing numbers.

Can You Get Tax Help for Free?

There are dozens of reasons why you need assistance with your taxes, especially if you’re doing them yourself. If you’re one of the millions that prepare their own taxes online, the services offer help in the form of popup windows, but those can be even more confusing and you may want to speak with a real person that’s knowledgeable about your particular circumstances.

You should bear in mind that the IRS was overwhelmed with calls in 2020 and again in 2021. People waited for hours on the phone to have their questions answered. That situation is likely to continue in 2022 and beyond.

Volunteer Income Tax Assistance (VITA)

VITA can be found online. You enter your zip code and the distance within which you want to find a volunteer. If you don’t find someone within your search criteria, keep expanding the distance. The online search will provide you with the name of the agency, it’s location and directions for contacting it. VITA help is available at a variety of locations ranging from colleges to community centers.

Tax Counseling for the Elderly (TCE)

To qualify for TCE, you must meet certain criteria. You’ll need to be a senior citizen, disabled, earn moderate or less income, or not be able to speak English very well.

IRS Taxpayer Assistance Center

These are IRS offices where you can search for a location where you can make an appointment to speak with an IRS representative. However, these sites can be 50 miles or more away from your location.

Taxpayer Advocate Center

The service is an independent organization within the IRS. It can be a good resource for those with a financial hardship due to a tax situation, levy or lien.

AARP Foundation Tax-Aide Program

Operated by the AARP for over 50 years, its focus is on those age 50 and older with a low to moderate income, though technically they offer help to any taxpayer.

MilTax Program

This is for current military personnel, a spouse or dependent child of someone in the military, or those who have served in the past. The organization offers help over the phone 24/7 and appointments can also be scheduled for MilTAX at a VITA office.

Local Services

Each year libraries and community centers in almost every town offers services provided by volunteers to help individuals with their tax-related questions. Some offer tax preparation seminars and workshops.

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Tax
posted by Mark Battalini
April 17, 2022

Biggest Tax Credits You May Qualify For

Everyone is looking for ways to reduce their tax liability. There are dozens of ways business owners can reduce their taxes, but not necessarily for the average person. The following are 5 big tax credits that you may qualify for without even knowing it.

Earned Income Tax Credit (EITC)

The EITC is one of the best-known credits. It can range from a few hundred to several thousand, depending on the number of children you have and your filing status. The credit will factor in your adjusted gross income, investment income and earned income. You won’t qualify if you can be claimed as a dependent on someone else’s taxes, lived outside the U.S. for 6 months or more, or earned more than $10,000 in investment income. You may be able to claim children up to 24 years of age if certain criteria are met.

American Opportunity Tax Credit (AOTC)

Formerly known as the Hope Credit, the AOTC helps if you’re paying for college expenses that includes tuition and course materials. The allowable amount is determined according to your modified adjusted gross income. Students must be enrolled at least half time and the credit is available on a per-student basis.

Lifetime Learning Credit (LLC)

You can claim this to help offset the costs of post-secondary education, even if you’re not pursuing a degree. It’s available to those within specific income brackets.

Child and Dependent Care Credit (CDCC)

The credit is available to help mitigate the costs of child care services for children under age 13 so parents can work. The credit also encompasses caring for a spouse, parents, or other individual that’s mentally or physically incapable of caring for themselves.

Savers Tax Credit (STC)

Previously known as the Retirement Savings Contributions Credit, it provides a credit if you contribute to retirement plans encompassing a 401(k), investment retirement accounts, and some other types of retirement plans. Age, along with dependent and student status will be factored in.

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Tax
posted by Mark Battalini
April 17, 2022

What is the Penalty for Not Paying Taxes?

Individuals that don’t pay their taxes in full by the deadline of April 15 each year are subject to a monetary penalty. The IRS can charge up to 6 percent interest on the unpaid balance and may choose to add a late payment penalty of 0.5 to 25 percent. Individuals that don’t pay their taxes are digging themselves a financial hole that can be almost impossible to escape.

Notices about the unpaid balance will begin to arrive and the letters will take on a more severe tone the longer a taxpayer ignores them. The IRS may place a tax lien against any property and financial assets that the person owns. The IRS will then be entitled to some or all of the money if an asset is sold.

Even if the actions aren’t reported on the taxpayer’s credit report, liens are part of public records. It can affect the person’s ability to maintain security clearance, obtain employment, a credit card or loan. Filing bankruptcy is no guarantee that the lien or tax bill will be dismissed.

The account may be sent to a collection agency for recovery. For those that owe tens of thousands of dollars or more, an individual could receive a visit from a revenue officer. During this time, the IRS may begin seizing assets.

The law says the IRS can take the taxpayer’s vehicle to sell at auction, 401(k) accounts, IRAs and homes. The State Department may get involved and can refuse to renew or issue a passport or revoke an existing passport.

However, what many don’t know is that the IRS generally won’t pursue individuals for unpaid taxes after 10 years, but they might, due to the 10 Year Statute of Limitations. The IRS doesn’t consider it in their best interests or cost effective to continue trying to collect and will wipe it clean from their books. It’s a complicated process that can be temporarily suspended under circumstances and the only one qualified to advise an individual on this is a tax professional.

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Tax Deductions
posted by Mark Battalini
April 17, 2022

Can You Write Off Pets on Your Taxes?

Pets are members of the family, but as much as you love them you can’t claim them on your annual tax return – unless they’re a certified service animal. You can’t claim them as a deduction, but you can claim the cost of their medical care, training and maintenance.

The IRS doesn’t recognize therapy animals as certified service animals. If you’re visually impaired, have audio deficits, or have a physical disability, then you can claim certain expenses for your service animal. Be very careful when trying to claim expenses for an animal on your taxes. It’s best to hire a tax professional or you could find yourself running afoul of the IRS.

Some of the expenses you can claim for your certified service dog includes veterinary bills, grooming, training and pet food. Be aware that you’ll need a doctor’s prescription indicating the need for the animal and a receipt for every expense.

The IRS recognizes service dogs for tax purposes. No other animals are allowed and are typically considered farm animals. However, if you have a business, you’re self-employed, and can prove the dog provides a service for the business, you can write off his/her expenses.

An example would be a Doberman or mastiff as a guard dog, but not a Yorkie or Pomeranian. You may also be able to claim a cat as rodent control, provided they live at the business. If the animal produces income through social media, breeding, animal shows, or films, TV or advertisements, there are expenses you can claim. Very precise records will need to be provided.

If you nurture dogs for charitable organizations, you can claim the associated costs as a charitable donation. A portion of travel costs related to volunteer work at a shelter or rescue can be deducted. You can only claim 7.5 percent of the costs of your adjusted gross income (AGI), and the amount will need to total more than your standard deduction.

0 comments
Tax Deductions
posted by Mark Battalini
April 17, 2022

Tax Write-Offs for Alarm Systems

Any business owner that’s been considering the installation of an alarm system should know they can deduct the cost on their federal tax return. The IRS recognizes a variety of qualifying equipment ranging from fire alarms to security systems if they were purchased or financed during the tax year.

Businesses can deduct the entire purchase price up to a specified limit and fire protection systems can now be written off. Allowable expenses include heat and smoke detection units, sensing devices, audible alarms, sprinkler systems, motion detectors, and door and window locks. Monitoring services may be deductible.

Individuals that work from home can deduct the cost of a security system as a business expense, within limits. The line between home office and business can be a little blurry. It’s best to hire a tax professional that is well-versed in the intricacies of the law. Those that work from home due to the COVID-19 pandemic don’t qualify, as they’re employees not business owners.

To claim a security system installed at a home as a business expense, individuals will need to prove that the home is their principal place of business where they meet with patients or clients. The home must also be the exclusive space where inventory is stored. Daycare facilities and properties for rental use are included.

Individuals will need to establish the allowable area where business is conducted. The IRS allows people to deduct a portion of the security system in relation to the area actually used for business purposes. There are two ways that percentage can be determined, so be sure to calculate both ways for the maximum benefit.

As with all IRS rules, there are exceptions. The business expense can’t equal or exceed the individual’s income. However, business owners operating a business from their home can claim depreciation of the system for the portion that protects the business space.

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