The San Diego Tax Pro

A Business Owner's Basic Guide to Bookkeeping for Tax Purposes

Whether your business is brand new or a staple of the community, filing taxes can be stressful for every business owner, regardless of experience. Fortunately, there are a few things you can do to make the process go more smoothly. First, always use a professional income tax preparer to help you prepare and file your taxes. Secondly, be sure to practice good bookkeeping techniques to keep all of your important numbers and figures in order. Read on for a basic overview of bookkeeping for tax purposes.

Keep all records As a business owner, it is your responsibility to verify all expenses and transactions on your tax returns. If anything you filed comes into question, you must be able to provide proof. If you cannot, you may face an audit or other penalties. While there is no better evidence than original receipts, other important records to hold onto are gross receipts that show income and assets and employment tax records such as Form 592.

Pick a recording method There are a couple different options when it comes to bookkeeping. However, the type of business you own largely dictates which recordkeeping system is right for you. If your business is large, widespread, and thriving, an electronic accounting software program could save you a great deal of time and energy. On the other hand, if your business is smaller-scale and conducts a manageable number of transactions, you might consider keeping written records in a journal or ledger.

Decide how to organize Even the most accurate and relevant transaction records cannot guarantee a flawless tax return. Your records should be arranged in an orderly fashion, such as by year and type of income. With an effective organization system, you can easily access the transactions in the event that your tax return is disputed by the IRS.  

The best way to ensure a smooth, seamless tax return is to put your trust in a reputable tax preparer. The San Diego Tax Pro has over 30 years of experience helping San Diego business owners prepare and file stress-free tax returns. Call our office at (888) 690-9245 to learn how we can help your business this tax season.

Top Mistakes Individuals Make When Filing Their Own Taxes

Everyone looks forward to the day that his or her tax refund arrives in the mail. Unfortunately, there are a number of small mistakes that can have a big impact on your tax return. Here is a closer look at some of the most common mistakes individuals make when filing state and federal tax returns without the assistance of a professional tax preparer:

Discrepancies with claims Few errors will send up a red flag faster than numbers that don’t add up, such as claiming a tax amount that is different than the total amount received by the state. If the IRS or state tax authority finds errors in your math, your return could be delayed. You may even find yourself being audited by the IRS.  

Identification numbers are wrong One of the most common tax return mistakes at both the state and federal level is taxpayers incorrectly writing their identification numbers. Don’t think just because you use the numbers often that you could never get them wrong. Everything on the form needs to be double-checked for accuracy.

Unsubstantiated excess SDI or VPDI This is one of the most common mistakes made on California tax returns. In order to claim a credit on excess State Disability Insurance or VPDI, you will need to meet certain conditions set forth by the Franchise Tax Board. If you claim credit without meeting these requirements, your tax return could be delayed.

Wrong adjusted gross income Many individuals list their adjusted gross income (AGI) incorrectly due to a calculation error or missing transaction records. Make sure all of your numbers are correct, or you could be waiting an unusually long time for your refunds this year.

With the San Diego Tax Pro on your side, you can avoid these and other problems for an accurate and error-free income tax return. With more than 30 years of experience, we are your number one resource for tax assistance in San Diego. Call (888) 690-9245 for additional information about our tax preparation and filing services.

Tax Terminology: Tax Credit

Don’t be intimidated by the number of unfamiliar terms that appear on your tax return forms. Every term has a definition that will help you file your taxes efficiently and accurately, and none should be overlooked—including “tax credit.”

As this video shows, tax credits are special benefits that reduce the amount of taxes you are responsible for, potentially saving you thousands of dollars per year. For example, if you own a business located within the San Diego Enterprise Zone, you may be entitled to a tax credit on employee wages and certain business-related purchases. The state of California offers many other tax credits designed for individuals as well as businesses. Click play to learn more.

For over 30 years, The San Diego Tax Pro has been helping San Diego residents and business owners prepare and file income tax returns. Contact an experienced income tax preparer by calling our office at (888) 690-9245.

Income Tax: Useful Tax Terminology Every Tax Payer Should Know

Attempting to file your taxes on your own can be an overwhelming task. Many times perfectly competent people get tripped up on unfamiliar legal jargon that can hamper their efforts to file correctly and on time. That’s why more Americans today are turning to tax preparation experts for their tax return needs than ever before. A tax preparer is well-versed in tax terminology and can capably file your tax return without error. However, all tax-paying individuals should be acquainted with the following basic tax terms.

1040 Form The 1040 is the form used by individuals when filing their taxes. Depending on your income tax needs, you may choose to file with a standard 1040, 1040-EZ, or 1040A. Your tax preparer will help you determine which form is correct for your tax filing purposes.

Standard Deduction Each person who files a tax return is eligible to use a standard deduction while filing, which decreases the sum of his or her taxable income. The amount of the standard deduction depends on both age and filing status. Married couples receive a different standard deduction than single filers, as well as individuals who claim head-of-household status. Senior citizens also qualify for a different standard deduction amount.

Personal Exemption If you are married, you and your spouse can claim a personal exemption, which will reduce the total amount of your taxable income. And should you have children under the age of 18, you may be eligible to claim each child as a personal exemption as well.

Itemized Deduction Should you have enough expenses that the IRS will allow you to deduct from your taxable income, you may want to consider using those itemized deductions in lieu of a standard deduction. If the total sum of your itemized deductions is higher than a standard deduction, it could be of greater benefit to you when filing your taxes.

Let The San Diego Tax Pro take care of all your tax return details. For more than 30 years, our tax return service has been expertly handling both individual and business tax returns. Call our San Diego office today at (888) 690-9245 for more information on our tax return options or to set up an appointment with an income tax preparer.

Your Tax Preparer: Tax Deductions And Important Tax Terms

Making sure that your taxes are correctly filed each year is important for several reasons. First, it’s the law to file an income tax return. Second, you may get back hundreds if not thousands of dollars in income tax paid over the course of the previous year. These links can provide additional important information that you should know when filing your taxes.

• Why should you have a tax return professional do your taxes? MSN.com discusses the benefits of using a tax return service.
• If you don’t know the difference between a tax exemption and a tax deduction, this article from Kiplinger can help explain essential tax terminology.
• Using itemized deductions can be advantageous when they add up to more than a standard deduction. Investopedia.com provides an informative guideline to how itemized deductions work.
• Planning on tying the knot this year? Bankrate.com breaks down everything you should know about filing your taxes as a married couple.
• Not filing your tax return can result in significant penalties. Business Insider discusses why you don’t want to overlook filing your taxes.

For over 30 years, The San Diego Tax Pro has been helping San Diego residents correctly file their income taxes. Filing your tax return can be a complex and confusing process, so let our tax return service do it for you. Call us today at (888) 690-9245 to schedule an appointment with an experienced tax preparer.