The IRS w… Read More
The IRS w… Read More
Did you know, that acc… Read More
Not all startups are designed for venture capital. There are several criteria that VC’s look for when deciding whether to deploy capital or not. There is a reason for that. Some companies are just not capable of utilizing such a massive influx of cash. Startups need to have the ability to scale quickly and take over the market. These startups are also expected to pull this off within 3 to 5 years. As much as I would like to say that everybody can use this growth accelerator to achieve domination, I, unfortunately, cannot. Here are some guidelines to determine whether venture funding is right for you.
Is your startup scalable? What does this mean? It means that your company can grow without collapsing on itself. If your startup is not scalable, then perhaps you will run out of resources when demand increases. For example, take the Impossible Burger. The Impossible Burger captured a deal with Burger King, and almost McDonald’s, but they collapsed under their own success. They did not have the infrastructure in place to keep up with demand.
Can your startup take over your target market? Does it have the ability to crush the competition? Facebook is a perfect example of a startup taking over a market. Not only did they do that during their rapid growth, but they maintain this market dominance and growth by purchasing potential competitors.
Another example is Google. Google was not the first search engine to come onto the scene. Instead, they had a better search algorithm, which gave them the ability to capture the market. They did this in the face of Yahoo! and other search engines. Just like Facebook, they also continue to buy potential competitors to snuff out threats.
Your target market needs to be large enough. A one-billion-dollar market may seem significant, but it is not. A very rough rule of thumb is to assume that you will be able to acquire 1% of the market. If you did obtain 1% of the market, that means your company’s revenue is ten million. By using a revenue multiple of say, 3x, your startup’s valuation is now 30 million. Although good, it is not what a VC is looking for.
Is there a need?
Your market may be enormous, and the potential upside gigantic, but is there a need? Innovation needs to be continuous within every industry. This is how society improves! Does your startup accomplish this? You may be able to find a niche market that can produce enough income to make you comfortable, but that is where it stops. Companies like this are not fit for venture funding. Why? To be blunt, it is because your startup will not disrupt the market.
It is a natural desire to want capital to scale your business to unimaginable heights. Every company has this opportunity, but each path is different. Sadly, some doors are open to one and shut to others.
The original text is hosted on Medium.
Originally From: https://cashmoneylife.com/tax-guide/
Taxes are a part of life. While I don’t mind paying my share of taxes, I do have a problem with the complexity of the tax system.
This is made worse because I am also a small business owner which adds another layer of paperwork and administration.
Taxes can also be incredibly complicated to figure out on your own, leading many people to seek out help from tax professionals or tax filing software.
Tax filers often get bogged down in the jargon of taxes and trying to keep up with all of the tax credits, deductions, tracking expenses, and managing the various tax forms.
That’s why we created this extensive tax guide—so you can learn about the basics of tax filing and see how you can get the most benefits and fewest headaches out of filing your taxes.
The IRS lists the following requirements to help you determine whether or not you are required to file taxes.
If your income is higher than the number given for your status, you’re required to file:
In addition to the income limits above, if you meet any one of the following criteria, you will be expected to file:
The IRS has five basic tax filing statuses:
How your income is taxed varies based on how much income you have, how you earned it, and other factors.
While a flat tax has been talked about (for years), the current U.S. tax system is actually a graduated scale where one who earns more pays more.
There are also standard deductions you can take when filing your taxes. These standard deductions can reduce the amount of income taxes you owe.
The United States uses a marginal tax system, or a gradual tax system. The marginal tax rate means each additional dollar you earn is taxed at the rate which falls within your income tax bracket.
The tax code has operated like for decades, even though the rates themselves have changed several times, and has had many other one-time changes, like an economic stimulus check when the economy was doing poorly in 2008.
Finally, the government may tax capital gains differently than earned income. Capital gains are investment gains.
Let’s look at each of these to see how they impact your tax obligations.
Here are the current tax rates.
Understanding your current tax bracket is useful for tax planning and for long-term planning. If you know your current income tax rate, you can use this information to decide if now is a good time to convert a Traditional IRA to a Roth IRA, sell investments for short-term or long-term capital gains, make tax-deductible charitable contributions, or take other actions that can impact your tax return.
Taxable Income Above
|Married Filing Jointly or
Taxable Income Above
|Head of Household
Taxable Income Above
The Standard Deduction is the amount taxpayers can deduct from their income before paying income taxes. Taxpayers are able to choose between using the Standard Deduction or itemizing their deductions when filing their taxes (itemizing taxes can include deductions such as state and local taxes, property taxes, charitable contributions, and more).
However, the Tax Cuts and Jobs Act significantly increased the Standard Deduction amount, while limiting certain deductions, such as the SALT Taxes (state and local taxes). This change means more people will take the standard deduction when filing their tax returns.
Here are the current Standard Deductions:
|Filing Status||Standard Deduction
Tax Year – 2020
|Married Filing Jointly||$24,800|
|Head of Household||$18,650|
|Married Filing Separately||$12,400|
Long-term capital gains are taxes paid when you sell an investment that you held for longer than a year. Short-term capital gains occur when you sell an investment that you held for less than a year. Short-term capital gains are considered income and are taxed at your marginal income tax bracket.
Long term capital gains are taxed at the following schedule:
|2020 Long-Term Capital
Gains Tax Rate
|0%||$0 – $40,000||$0 – $80,000||$0 – $53,600|
|15%||$40,001 – $441,450||$80,001 – $496,600||$0 – $469,050|
|20%||Over $441,450||Over $496,600||Over $469,050|
Some investments, such as gold or collectibles, are not taxed by the capital gains guidelines.
As you can see from the above federal tax bracket table, there are tax brackets for income ranges.
To determine how much you will pay in taxes, you can start by taking your total income, then deducting all tax deductions and credits form this amount. This includes either the Standard Deduction or your itemized tax deductions.
Then you apply your income to the income tax brackets from above. For example, a married couple will pay the following taxes:
Because the U.S. has a marginal tax system, you only pay the tax rate for your income that falls within each bracket. This does not mean that earning one dollar above the income tax bracket level will increase your entire tax bill by that rate.
For example, receiving a raise from $80,250 to $80,251 will not subject all of your income to the 22% tax bracket – it will only apply to income earned within that specific tax bracket.
Adding the taxes you paid and dividing by your total income results in your effective tax rate.
Some taxpayers mistakenly use the terms tax credit and tax deduction the same way. While they both result in a lower tax bill, they do it differently.
The tax credit reduces your tax bill by the amount of the credit. The tax deduction decreases your tax bill by an amount equal to the percentage of your highest marginal tax bracket.
Here is an example:
Here are a few common tax credits, and how you may qualify for them. Note: some of these are Refundable Tax Credits, meaning you will receive the full amount of the tax credit, even if you don’t owe any federal taxes.
Each of these credits has unique qualifying factors that may be based on your income, Adjusted Gross Income (AGI), number of qualified dependents, and other activities, such as paying for college education, contributing to retirement accounts, certain business activities, and more.
Most tax software programs have automated systems to help you identify which tax credits and deductions you may be eligible to claim when you file your taxes.
There are many different tax deductions. Some of them are available to everyone, while others can only be claimed if you itemize your taxes. Some deductions may also be based on your Adjusted Gross Income (AGI) or whether or not your tax return is subjected to the Alternative Minimum Tax (AMT).
Common tax deductions include:
Qualifying for various tax deductions: Like tax credits, many of these deductions have strict eligibility requirements based on your AGI and other factors.
Most taxpayers find it easier to use a tax product such as H&R Block to calculate their tax deductions instead of trying to do it by hand.
Taxpayers have the option of itemizing their deductions on their tax return, or simply claiming the Standard Deduction (explained above).
You can only choose one or the other.
The best way to decide is to complete your taxes, add up your deductions and take the one that offers you the best overall deduction.
Due to recent changes in the tax laws, the Standard Deduction has been increased, and certain deductions have been decreased. So for many people, the Standard Deduction will offer a better option.
However, you may wish to itemize your deductions if you live in a state with high taxes or can otherwise claim a lot of tax deductions.
Again, this sounds complicated, but most tax preparation programs will do the heavy lifting for you. The software will walk you through your tax situation and add up your deductions as you go. Then it will recommend the option that is best for your situation.
The U.S. tax system is a “pay as you go” tax system. While you only file taxes once a year, you are technically supposed to pay taxes on your income as you receive it. Most people do this through payroll deductions. However, there are times when you do not have taxes withheld from your income. In these cases, you should pay Estimated Taxes.
Some examples of when you may be required to pay estimated taxes include when you receive a large lump sum of money, self-employment income, investment income, or other times when you receive a large amount of money that hasn’t had taxes withheld.
You must pay estimated tax if both of the following apply:
In other words, you need to ensure your withholdings and credits are at 90% of your current tax year obligation, or at least 100% of what you owed last year (110% for high income earners). If your withholdings are less than the lesser of these two amounts, then you should pay estimated taxes.
Who Does Not Have To Pay Estimated Tax?
You shouldn’t have to pay estimated taxes if you owe less than $1,000 in taxes this year, or if your employer has withheld enough money from your payroll. One way to avoid paying estimated taxes is to withhold additional funds from your paycheck using the IRS Form W-4.
How Much Estimated Tax to Pay?
The IRS provides estimated tax worksheets (IRS Form 1040-ES) that you can use to help determine your tax withholding requirements to avoid estimated tax penalties. You can also use tax preparation software to help run the numbers.
Taxpayers with irregular income may have a more difficult time determining how much they may owe in estimated taxes, especially if their income is greater at the end of the year. Thankfully, there is a safe harbor rule, which allows taxpayers to avoid estimated tax penalties as long as they pay at least 100% of their previous year’s total tax liability through a combination of tax withholdings and estimated tax payments.
Estimated Tax Deadlines
Estimated taxes are paid four times throughout the year, on the following dates (or the first business day following the date, if it falls on a weekend or holiday).
Estimated taxes are due by the deadline, even if you have requested a tax deadline extension.
How to File and Pay Your Estimated Taxes
The IRA allows taxpayers to pay estimated taxes by mail or electronically.
Estimated taxes aren’t the only unexpected tax situation you might encounter. The AMT is an alternative method of figuring your tax.
Congress created the Alternative Minimum Tax back in the 1960s to prevent high-income households from receiving too many tax deductions and credits, and thus avoiding paying their “fair share” of taxes.
The AMT rules require high-income households to prepare their taxes using two methods – the normal way, and using the AMT rules. Thankfully, most tax filing software will help you do this automatically.
You must fill out IRS Form 6251 to determine if you need to pay the AMT.
You will then compare the outcomes after completing your tax normal tax return and your return using AMT rules.
AMT rules prohibit certain tax credits and deductions, including the standard deductions and credits, state and local taxes, and property taxes up to a certain amount.
Taxpayers who live in a high-tax state an have children are more likely to pay additional taxes under the Alternative Minimum Tax Rules compared to a single person or a family in one of the lower-tax states.
In 2020, the exemption amount for singles is $72,900 and $113,400 for married couples who file jointly. You can read this article for more information on Alternative Minimum Tax rules.
The ideal tax refund is somewhere close to zero – that means you had the ideal amount withheld from your paycheck. However, sometimes you may discover that you either owe the IRS money, or you have a larger than expected refund. In either situation, you may decide to change the amount the IRS withholds from your paycheck. This can help you avoid big surprises.
You can easily change your tax withholding using the Personal Allowances Worksheet on IRS Form W-4.
Note: Make small adjustments
If you had 6 allowances last year, you probably shouldn’t reduce it to 0 this year. Doing so may have unintended consequences. Make small changes based on your current tax situation.
When to Adjust Your Tax Withholding
There are times when you want to make a proactive change to your tax withholding. Some of these include:
You can use the IRS tax withholding calculator to recalculate your personal allowances each time a new life change happens.
Tax fraud is a growing crime. Discovering you’re a victim of tax fraud often occurs when you try to file your tax return electronically and find out someone has already filed a tax return using your Social Security Number. When this happens, the IRS will reject your return.
At that point, you will need to contact the IRS and open a case with them.
Other ways you may discover tax fraud include:
If you receive a letter from the IRS, it may contain some of the following information:
Contact the IRS via phone, mail, or in-person if you discover you are the victim of tax fraud. And you may also wish to start monitoring your credit reports, as it is likely you may soon become a victim of identity theft.
One of the best things you can do to avoid an IRS tax audit is to check your tax return for errors. Additionally, if you fill out your forms incorrectly, you might be red-flagged for an audit.
If your forms are sloppy or illegible, you could find yourself facing a tax audit. This is a good reason to use tax software and file your tax return electronically.
Here are a few more red flags that might initiate a tax audit:
The IRS may also randomly select individuals for audits. So it’s possible you may be audited even if none of the above issues are present.
It’s a good idea to keep detailed tax records in the event you audited. You can also use a tax preparation service or accountant that offers audit protection. Some tax software programs even come with or allow you to purchase audit protection as an add-on feature.
Most freelancers work on a 1099 basis instead of as a W2 employee. Employees paid on a W2 basis have their income tax, social security tax and FICA tax withheld from their paychecks. However, contractors paid on a 1099 basis typically don’t have anything withheld from their payments. If you receive a check for $500, you receive the full amount. Nothing is withheld for taxes. This means income taxes are your responsibility.
Your income will be reported to the IRS on Form 1099 and it is your responsibility to pay taxes on it. Many freelancers choose to pay quarterly estimated taxes. This breaks up your tax payments throughout the year and keeps you on the right side of IRS requirements.
You will want to keep detailed records of your income and expenses. It’s also a good idea to categorize your expenses so you have a good idea of how much you are spending in each category (and certain expenses may be classified differently by IRS rules).
it’s much easier to do this as you go, instead of trying to play catch up when your tax return is due.
The business structure you choose, such as an LLC or corporation, may also require you to maintain separate funds in a business checking account or savings account. You may also wish to open a business credit card, which may offer unique rewards programs and itemized spending reports.
There are three ways to file your tax return:
Which is best? This depends on your situation. If you have a simple tax return, the DIY route is a quick and easy way to go. Of course, you can also use tax software if you have a simple return. And if you have a lower income, you may be eligible to file your taxes free.
It’s only when your tax return becomes more complicated that you need to decide whether to use one of the more advanced tax software programs or hire a professional tax service. Keep in mind there is a big difference between going to a retail tax return office and using a professional CPA or enrolled agent.
Most tax situations can be handled with tax software. However, you may wish to hire an accountant if you are a small business owner, have multiple rental properties, or otherwise have a complicated tax situation.
Organizing your tax documents should be a year-round task. You should keep detailed records of everything related to your tax return. Personally, I recommend scanning everything into your computer and regularly backing it up. This ensures you have a long-term record and makes filing easier when tax season arrives.
Before you sit down to do your taxes, make sure you have everything you need. This will include:
This article provides a more in-depth guide to organizing your tax records.
January 27, 2020, is the first day you can officially file your 2019 tax return. Tax returns are normally due on April 15 each year, unless the 15th falls on a weekend or holiday.
If that is the case, the tax return is due on the following business day.
What happens if you don’t file your taxes on time? Don’t do it! Filing a tax extension is free, and you can do it at any time. Just be aware that you need to pay any money due by the tax deadline, or you may owe penalties or fees. The deadline to file your tax return if you filed an extension is October 15th.
If you think you may want to amend a return, below are five places to start:
You usually have three years to file an amended tax return, dating from when you filed the tax return that needs correction. So if you didn’t take a credit on your most recent tax return, you can file your amended return and possibly get a tax refund for it.
The proper form for filing an amended tax return is 1040X. This guide has a more complete overview of when to file an amended tax return.
Some people aren’t required to file a tax refund, especially if they have lower income. And you don’t technically need to file a tax return if the IRS owes you money. Of course, you can’t receive your refund if you don’t file your tax return. So it’s a good idea to go ahead and file. Finally, the longer you take to file your tax return, the longer you wait to receive your refund.
On the other hand, you definitely want to file your tax return if you owe the IRS money. If you are running out of time to file your return, you want to do three things:
OK, so you missed the deadline and you haven’t filed for an extension.
What happens if you let it slide? If you don’t owe any taxes, nothing happens. Of course, you won’t get a refund either, if the IRS owes you one. And some people aren’t required to file a tax return.
But if you owe money, you absolutely need to file your tax return.
What happens if you owe money and don’t file a tax return? Penalties and interest, my friend.
And they aren’t pretty!
Here is a rough outline of the penalties you may owe for failure to file or pay your federal taxes.
The IRS may also assess penalties for underpaying your taxes, or not paying estimated taxes.
Underpayment penalties can be assessed at different levels, based on whether the IRS determines if there was criminal intent.
You can pay your tax bill by mail with a check, or online. Paying online is faster and more secure, but may come with a charge if you use your credit card to pay your taxes. You may consider sending checks by Certified Mail so you can ensure the check was delivered.
You still need to file your tax return or an extension, even if you are unable to pay your taxes. After that, you should contact the IRS to communicate to them that you are aware you owe money, but you are unable to pay it.
The IRS may allow taxpayers to have an extension to make the payment or to enter into a payment plan.
Note: the IRS may charge penalties or fees for these arrangements, so it’s still a good idea to pay your tax bill as soon as possible.
You can get creative to pay your tax bill if needed.
However, I would avoid payday loans and other high-interest short-term loans. You may try getting a personal loan from a bank, using a peer to peer lending company such as Lending Club, or possibly using a credit card.
What if I Don’t Pay My Tax Bill?
The IRS can file a Notice of Federal Tax Lien if you don’t pay your taxes. This can hurt your credit score and cause other financial and legal difficulties.
Failure to file your return or to pay your taxes can result in fines, ruined credit, or even jail time.
Some people may discover they need more time to complete their tax return. This can happen if you have a complex tax situation, something changes in the previous or current tax year, or if you simply procrastinate. If this describes your situation, you can easily file for a free tax extension.
Note: filing a for a tax extension extends the deadline to file by 6 months, but it does not change the date you must pay taxes (if any are due). So it’s a good idea to at least estimate how much taxes you might owe, and send that amount to the IRS before the deadline. Then you can formally wrap up the paperwork after the fact.
Filing a tax extension is easy and free. Simply download IRS Form 4868, fill it out, and mail it to the IRS. Or, you can file an electronic extension through most of the major tax software programs, including TurboTax or H&R Block Online.
E-File your tax extension for free:
How to File your Tax Extension By Mail:
Filing an extension manually is also easy – just download the form and fill it out, either on your computer or by hand. Be sure to estimate the amount of taxes you think you will owe when you file your extension and be sure to pay that amount before the tax deadline.
These steps will guide you:
Remember – you must request tax extensions. The IRS states tax extensions are automatic, but that you must request them by April 15th. After you request the extension, you have until October 15th to file your return. But remember, any money you owe is due by the tax deadline. Taxes filed after October 15th are late and may be subjected to additional penalties or fees.
What happens if you don’t file your taxes? Some people aren’t required to file a tax return (generally only if their income is too low). However, most people are required to file a tax return. If you are due to receive a refund, there is no penalty for not filing a return. However, if you owe money and don’t file a return, you will be subject to penalties, fees, and possibly even jail time if the government determines your actions were meant to defraud the government. This article provides more information about what happens if you don’t file your taxes.
Expatriates and some military members may qualify for additional tax extensions. This is especially true for military members who served in tax-free zones in the current or previous year.
This article provides additional information regarding military member tax deadline extensions. American civilians working overseas may also be able to file for a longer extension.
The table below shows an approximation of when your federal tax refund should be direct deposited into your bank account or the date your check will be mailed.
This table is based on previous tax return charts.
Remember, this is only an estimation and not a guarantee.
How to use this tax refund chart: This schedule only applies to tax returns filed electronically. The left column represents the date your tax refund was accepted by the IRS. This article has more information on when to expect your tax refund, including FAQs.
|Tax Return Accepted By IRS before 11:00 am between…||Direct Deposit Sent*||Paper Check Mailed*|
|Jan 27 and Feb 02, 2020||10-Feb-20||14-Feb-20|
|Feb 03 and Feb 09, 2020||17-Feb-20||21-Feb-20|
|Feb 10 and Feb 16, 2020||24-Feb-20||28-Feb-20|
|Feb 17 and Feb 23, 2020||2-Mar-20||6-Mar-20|
|Feb 24 and Mar 01, 2020||19-Mar-20||13-Mar-20|
|Mar 02 and Mar 08, 2020||16-Mar-20||20-Mar-20|
|Mar 19 and Mar 15, 2020||23-Mar-20||27-Mar-20|
|Mar 16 and Mar 22, 2020||30-Mar-20||3-Apr-20|
|Mar 23 and Mar 29, 2020||6-Apr-20||10-Apr-20|
|Mar 30 and Apr 05, 2020||13-Apr-20||17-Apr-20|
|Apr 06 and Apr 12, 2020||20-Apr-20||24-Apr-20|
|Apr 13 and Apr 19, 2020||27-Apr-20||1-May-20|
|Apr 20 and Apr 26, 2020||4-May-20||8-May-20|
|Apr 27 and May 03, 2020||11-May-20||15-May-20|
|May 04 and May 10, 2020||18-May-20||22-May-20|
|May 11 and May 17, 2020||25-May-20||29-May-20|
|May 18 and May 24, 2020||1-Jun-20||5-Jun-20|
|May 25 and May 31, 2020||8-Jun-20||12-Jun-20|
|Jun 01 and Jun 07, 2020||15-Jun-20||19-Jun-20|
|Jun 08 and Jun 14, 2020||22-Jun-20||26-Jun-20|
|Jun 15 and Jun 21, 2020||29-Jun-20||3-Jul-20|
|Jun 22 and Jun 28, 2020||6-Jul-20||10-Jul-20|
|Jun 29 and Jul 05, 2020||13-Jul-20||17-Jul-20|
|Jul 06 and Jul 12, 2020||20-Jul-20||24-Jul-20|
|Jul 13 and Jul 19, 2020||27-Jul-20||31-Jul-20|
|Jul 20 and Jul 26, 2020||3-Aug-20||7-Aug-20|
|Jul 27 and Aug 02, 2020||10-Aug-20||14-Aug-20|
|Aug 03 and Aug 09, 2020||17-Aug-20||21-Aug-20|
|Aug 10 and Aug 16, 2020||24-Aug-20||28-Aug-20|
|Aug 17 and Aug 23, 2020||31-Aug-20||4-Sep-20|
|Aug 24 and Aug 30, 2020||7-Sep-20||11-Sep-20|
|Aug 31 and Sep 06, 2020||14-Sep-20||18-Sep-20|
|Sep 07 and Sep 13, 2020||21-Sep-20||25-Sep-20|
|Sep 14 and Sep 20, 2020||28-Sep-20||2-Oct-20|
|Sep 20 and Sep 27, 2020||5-Oct-20||9-Oct-20|
|Sep 28 and Oct 04, 2020||12-Oct-20||16-Oct-20|
|Oct 05 and Oct 11, 2020||19-Oct-20||23-Oct-20|
|Oct 12 and Oct 18, 2020||26-Oct-20||30-Oct-20|
How long does it take to process a tax return? You will receive your tax refund faster if you e-file, since the IRA can process returns more quickly and accurately. Filing a paper return can take significantly longer and may result in errors since they must be manually entered into the IRS system.
How long does it take to get a tax refund? The IRS processes 90% of electronic tax returns within 21 days (their stated goal). Some people receive their tax refunds in as few as 8 days, and the majority receive their refunds within 10-14 days. Some refunds may take longer if there are errors or other problems.
Are there any known tax refund delays? There are federal laws that require the IRS to withhold tax refunds until Feb. 26, 2020, when the taxpayer claims either the Earned Income Tax Credits (EITC) or Additional Child Tax Credits (ACTC). Tax refunds that claim these credits after that date are processed as they come in. The IRS also announces other known delays through press releases.
When will my refund be in my bank account? You will receive your tax refund more quickly if you elect to have it directly deposited into your bank account. Some banks make these funds available immediately, while others may place a hold on the funds. Paper checks take longer, as they must be mailed, deposited, then cleared by your bank.
What day of the week does the IRS deposit refunds? ACH transactions are processed on each business day during regular office hours.
What day of the week does the IRS mail paper checks? The IRS mails checks on Fridays.
Contribute to your retirement accounts. Most contributions to your defined contribution plans such as a 401k, 403b, TSP, etc., need to be made by December 31st.
Donate to charity. Any donations you make to a qualified charity can be deducted when you file your taxes next year. This includes donations such as tithing or giving to an organization such as Goodwill, or the USO.
Pay qualified business expenses. If you have your own business, you can write off certain expenses. I run a couple of websites, so for me, this would include prepaying for web-hosting, buying a new computer, paying for advertising, or other qualified business expenses.
Additional tips for saving money on your taxes:
Filing with the IRS can be taxing, but with the knowledge from this guide in hand, you should be able to confidently approach your taxes as part of your full money management.
Making savvy financial decisions all year long can help you to save money at tax time as can being aware of changes to tax laws, deductions, and credits.
If you feel like you need additional resources, working with tax software or a financial advisor can simplify tax filing tremendously.
Originally From: https://cashmoneylife.com/turbotax-review/
TurboTax is the most popular tax preparation software on the market. I use this software myself and recommend it highly. The service is easy to use, even if you’ve never used tax preparation software in the past.
They ask questions – in plain English – and all you need to do is gather your tax documents and input the required information. Sometimes you don’t even need to do that. TurboTax can often import information from online sources, making tax preparation even easier.
TurboTax added their fifth version, TurboTax® Live, for the 2017 tax year. This is the third year this service will be available to taxpayers. The “live” part of the title refers to live assistance by a CPA or an enrolled agent (EA). With this version, you prepare your tax return the same way you would with the other TurboTax versions. But you’ll have a tax specialist available and live to help you with any complications.
Once your tax return is done, it will be reviewed by a CPA or EA, who will make any necessary changes prior to filing. That will ensure that your tax return is done right, and includes every deduction you’re entitled to.
No tax knowledge is required. TurboTax is an extremely user-friendly program. It will ask you all of the necessary questions, and all you need to do is input the information. You don’t have to know anything about preparing taxes whatsoever. TurboTax has a large volume of tax preparation resources, including live-support on the premium versions.
100% Accuracy Guarantee. TurboTax runs thousands of error checks and then double-checks your tax return before you file. If you receive an IRS or state penalty or interest charge because of a TurboTax calculation error, TurboTax will pay the cost.
Audit Support Guarantee. This guarantee applies to every TurboTax return. It entitles you to free one-on-one audit guidance from a trained tax professional. They’ll help you learn what to expect, and how to prepare for the audit. If need be, you’ll even have access to their Audit Defense program, which will provide you with full-service audit representation.
QuickBooks interface. TurboTax and QuickBooks are both products of Intuit, so you can import information directly from QuickBooks into TurboTax. This will enable you to prepare for income tax filing all year long if you are a QuickBooks user. It will simplify documentation collection, and make tax preparation much easier for the self-employed.
Search for over 400 tax deductions. The federal income tax code is incredibly complicated. There are hundreds of tax deductions, and even seasoned tax professionals struggle with knowing them all. But TurboTax will help you to find any you’re entitled to.
Electronic Filing will help you get your refund faster. Filing your tax return electronically is faster, safer, and more accurate than filing your tax return on a paper form. And since the IRS computers can process electronic returns more quickly, you should receive your tax refund faster (if you are owed money by the IRS).
There’s also the TurboTax Military Discount:
$0 for federal, $0 for state, $0 to file. It’s the TurboTax free version, and it’s available only if you file 1040EZ or 1040A, which are the very simplest tax returns.
You will qualify for the TurboTax Free Edition if you have W-2 income, Earned Income Tax Credit (EIC) and child tax credits. If your situation is more complicated, you may need to purchase one of the other TurboTax versions.
The TurboTax Free Edition works like other TurboTax versions with basic tax preparation. It uses the same question and information input format. But you also have access to the following features:
CompleteCheck. TurboTax will run a comprehensive review of your return before you file to make sure that nothing gets missed.
In order to be eligible for TurboTax Free Edition, you must earn less than $100,000 from W-2 sources. It’s not for people who have business income or 1099 income. You’re also ineligible if you have any capital gains income, or need to file Schedule A for itemized deductions.
The free version does support common IRS schedules and forms, including Schedule B (interest and dividend income) and Schedule EIC (earned income credit).
The Deluxe package is the most popular TurboTax version. It’s for more complicated returns, including those with itemized deductions and incomes exceeding $100,000. However, it does not accommodate investments in rental property or self-employment.
It includes all of the features of the free version, plus the following:
TurboTax Premier includes all of the features of the Free and Deluxe versions. It is specifically for those who have investments in rental property.
Features specific to the Premier version include:
TurboTax Self-Employed has all of the features and benefits of the Free, Deluxe and Premier plans. It’s specifically for taxpayers who earn income from self-employment. That includes independent contractors, freelancers, and business owners.
Features specific to the Self-Employed version include:
*QuickBooks Self-Employed also enables you to snap pictures of your business receipts using your mobile phone. You can store those receipts, and keep a permanent record of your business expenses as they occur.
Here’s your chance to fire your CPA!
TurboTax Live is like hiring a CPA to prepare your income taxes, but at just a fraction of the price. It offers all of the features of the other four TurboTax versions. But it also provides you with advice from a CPA or an enrolled agent (EA), both on-demand and for a final review. This makes it easy to ask questions about more complicated topics, such as the Alternative Minimum Tax.
You can quickly and easily connect to a tax expert, simply by clicking “Expert Help” in the program. You can get help with personal and work income, as well as complex tax situations.
On the final review of your return, TurboTax tax experts will make any necessary changes, and back your return with their 100% Accuracy Guarantee.
If your tax return is complicated, or if you feel that you lack sufficient understanding, TurboTax Live is the version for you. You’re performing the actual information input, but it’s like having a CPA working at your side as you do.
This version is also ideal for those who have complicated business tax situations, multiple rental real estate properties, or K-1 income from several partnerships or S corporations. A CPA will charge $1,000 or more to prepare some of these returns. But with TurboTax Live, you can get a similar level of service for under $200.
You can prepare your income taxes on TurboTax in less time than it takes to get your tax information together for a CPA. TurboTax will cost hundreds of dollars less than a CPA, and generate a similar result. This is a perfect platform for a tax novice. There’s absolutely nothing scary about this program, even if you’ve never prepared a return online before.
If you want a tax return that’s 100% accurate, and provides you with all of the deductions you’re entitled to, TurboTax is an excellent choice. If you’d like more information, or you’d like to sign up for the service, visit the TurboTax website.