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2019 Tax Tip: IRS has issued 2019 standard mileage rates. Beginning Jan. 1, 2019, the standard mileage rate will be 58¢/mile for business use (up 3.5¢ from 2018).
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It’s January, with many taxpayers hopeful that new laws will result in bigger refunds. Yet with the government shutdown having hit at a particularly bad time for the Internal Revenue Service, it’s still not clear exactly when tax season will officially start.
But even if you can’t know for sure exactly when you’ll be able to file your return, it’s not too early to get ready for tax season — whenever it comes.
Here are the 5 IRS Tips for the 2019 Tax Season
1. Watch your withholding
Tax reform caused the amount of money withheld from paychecks to go down in 2018 for many taxpayers. That made their paychecks bigger, but it could result in smaller refund checks for many, and some might even end up owing tax when they file their returns.
The IRS has come up with a tool to assess whether your withholding is correct. If it’s not, you can make adjustments to your payroll withholding by filing a new Form W-4 with your employer. Or looking at estimated tax payments can prevent you from owing penalties and interest.
2. Predict what your refund will be — and when you’ll get it
The biggest motivator for many to file their returns is to get their refund. But tax reform will likely affect those refund amounts in many ways. Higher standard deductions, lower tax rates, and larger child tax credits could boost refunds, while the elimination of personal exemptions, limitations on certain itemized deductions, and the phase-out of various other tax benefits could reduce them.
One thing families should remember is that if you’re eligible for the earned income credit or the additional child tax credit, then your refund will be delayed at least until mid-February. Given the potential for delays to the beginning of tax season, it’s likely that even those who aren’t seeking those credits could have to wait at least that long to get money back from the IRS.
3. Look at these special rules for those without Social Security numbers
If you’re required to file taxes but don’t have a Social Security number and aren’t eligible to get one, then the IRS issues what it calls individual taxpayer identification numbers. These ITINs fill the same role as a Social Security number for tax purposes for certain nonresident aliens, as well as a set of resident aliens and dependents or spouses.
The critical thing about ITINs is that they expire. Therefore, the IRS urges those whose ITINs could expire before they file their returns to submit a renewal application now in order to avoid any future hassles.
4. Familiarize yourself with new tax forms
Millions of taxpayers will have to deal with a new tax form for the very first time during the 2019 tax season. Everyone will use a shortened version of Form 1040, which has been shortened to more closely resemble short-form returns like the 1040-EZ and 1040A. Yet the 1040 will also require new schedules that taxpayers will have to attach in certain circumstances. With the new forms available on the IRS website, it’s smart to get a head start by looking at them before starting your tax prep for the year.
5. Know where to get help
The IRS knows that tax reform will create a lot of confusion, but there’s help available. From online assistance to taxpayer assistance centers and the Volunteer Income Tax Assistance program, Americans can get the guidance they need to deal successfully with their tax returns in the coming months.
Be ready for tax season
Preparing your tax return might seem daunting this year, especially with all the changes that have occurred lately. But with the prospect of possible tax savings, you have a big incentive, and getting ready now will help you get off to a running start when tax season officially opens.
Need more help? Give us a call or setup an appointment, we would more than happy to serve you!
California regulators are currently contemplating whether residents would have to pay a fee on text messages from their cellphones.
The proposed tax would help fund programs in the state that provides low-income Californians with phone service and will be discussed further during the January 2019 meeting by the California Public Utilities Commission.
The rational from California regulators is this: Text messaging uses the same cell towers as phone calls, yet do not face similar fees—particularly in the era where voice calls have dropped precipitously over the last number of years.
The exact amount of the fee has not yet been decided.
So what do you think? Good idea or bad?
Please comment below.
Alvarez Tax Service wishes you a successful and prosperous 2019!
Taxpayers should be aware of a new round of fraudulent emails that impersonate the IRS and use tax transcripts as bait to entice users to open documents containing malware. The scam is especially problematic for businesses whose employees might open the emails infected with malware as it can spread throughout the network and may take months to remove.
This well-known malware, which is called Emotet, typically tricks people into opening infected documents by posing as specific banks and financial institutions. However, in the past few weeks, the scam has masqueraded as the IRS, pretending to be from “IRS Online.” Many of these malicious remote emails were recently forwarded to email@example.com.
The scam email carries an attachment labeled “Tax Account Transcript” or something similar, and the subject line uses some variation of the phrase “tax transcript.” The exact wording often changes with each version of the malware.
Taxpayers should remember that the IRS does not send unsolicited emails to the public, nor would it email a sensitive document such as a tax transcript (a summary of a tax return). Taxpayers receiving a suspicious email are urged not to open the email or the attachment. If using a personal computer, delete or forward the scam email to firstname.lastname@example.org. If you see these types of emails when using an employer’s computer, notify your company’s internet technology (IT) department immediately.
In July, the United States Computer Emergency Readiness Team (US-CERT) issued a warning in July about earlier versions of the Emotet, which it has called one of the most costly and destructive malware affecting the private and public sectors.
Let’s be careful out there!
We wish you and your family happy holidays! Check back with the blog for more tax/ booking information and tips.
Money problems can be avoided by monitoring a few key financial areas. The good news: you don’t have to be a wizard at financial statement analysis; you just have to be vigilant.
Here are 3 things ways to make sure that you’re in tip-top financial shape.
1. Increase your income
One of the best ways stay in fighting financial shape is to make more money. Obviously that’s easier said than done, but here are a few things you can do to keep increasing the bottom line:
- spend your time on tasks that make you the most money
- increase your rates
- consider offering a new line of services
- partner with a business in a related industry, and become an affiliate marketer of their services
Certainly there are other ways, but you’re sharp, so get creative! There are plenty of ways out there to make more money if you put your mind to it.
Whatever you do, the point is this: making more $$ will keep your pockets healthier.
2. Watch how much you spend
A significant number of business errors are the result of not knowing where the money is going. Money should be spent for things that simplify your business and make you more productive. The income statement—also called the profit and loss statement—will help you evaluate your spending habits.
Your income statement will give you the percentages of each expense category relative to revenue. By comparing this report over multiple periods, you’ll discover how your expenditures may have changed as percentages of revenue.
When business is going well, you’ll want to keep spending the same percentages of revenue for the expense categories that are variable. With fixed expenses, such as rent and telephone, what will hopefully be an increase in sales will cause the percentages of revenue for these categories to favorably decline.
3.Keep an eye on your cash on hand
Monitoring cash balances is a simple process. It just requires a regular glance at your company’s balance sheet. Bank accounts appear at the top of this report, and you should frequently compare account balances over time.
Determining whether you have enough cash on hand involves some quick math. Cash, plus the receivables you expect will become cash within a month, should exceed the near-term debts you owe—called “current liabilities” on the balance sheet. Current liabilities include credit card balances, payroll taxes, sales tax, and other upcoming amounts you expect to pay.
4. Let a professional take care of your books while you focus on your business
One of the best ways to stay healthy is to visit the doctor regularly. In the same way, the best way to keep your books healthy is to leave the number crunching to the professionals.
At Alvarez Tax & Bookkeeping Services, that’s just what we do best. No matter what your needs are. Contact us today and let us handle your books while you focus on running your business.
Ever wondered how your tax dollars are spent?
Most of us (US Tax payers) have no idea how much of our money is going to specific government departments, which leads us to the question: Where do my tax dollars go?
Here is a site that gathers information from public government records. Go to the site and just fill out your income and choose your state to see where your money is spent.
Here is the link: https://www.wheredomytaxesgo.co/