|Schedule C Income||50,000||50,000|
|Adjusted Gross Income||40,967||37,174|
|Federal Income Tax||4,139||3,570|
|Self Employment Tax||7,065||7,065|
Each year we must report to Uncle Sam whether we likei t or not. It is not enjoyable for anyone, but must be done. We put together a list of some end of the year ideas that might be able to save you some hard earned money on your taxes.
There are some deductions that were not renewed and have yet to be signed into law to be in effect for the 2015 tax year. These include the sales tax deduction, mortgage insurance premium deduction, above the line deduction for qualified tuition, exclusion of income for discharge of qualified principal residence indebtedness, $250 deduction for school teachers.
We hear about fraud and think this could never happen to us. In the 2014 Report to the Nations on Occupational Fraud and Abuse published by the Association of Certified Fraud Examiners, Asset Misappropriation accounts for about 85.4% of fraud causing a median loss of $130,000. On average the amount of time from when fraud commenced until it is detected in the study was 18 months.
Fraudulent asset misappropriation occurs many different ways by theft of cash, fraudulent disbursements, skimming, cash larceny, payroll schemes, check tampering and expense reimbursements schemes.
Most small business owners are busy with scheduling, customers, employees, ordering, sales and marketing that they don't have time for bookkeeping. They will hire a bookkeeper, trusted friend, family member or company to help with the task.
Just a few tips that may help a business owner protect against fraud:
Background check. A pre-employment background check will usually provide criminal record information.
Review bank statements. In today's digital world, most bank statements are sent electronically. If a bank statement is mailed, the owner should always open statement first. Look for unusual items such as transfers to other bank accounts, large transactions and debit transactions to unknown vendors.
Bank reconciliations monthly. Request bookkeeper provide a copy of reconciliation. Look for unusual items such as old outstanding deposits in transits and outstanding checks.
Online banking. The owner should go online to review the bank account. Most banks will provide online copies of cancelled checks. Review cancelled checks for the payee and endorsement.
Online banking access. Limit access capabilities for online banking. Owners should have full access, while other users should be set up with controls and limited access. Controls can limit access to specific bank accounts if the company has more than one account, dollar limits for daily amounts or transactions, ability to transfer between accounts, and online bill paying.
Check registers. Many small business owners use accounting programs, such as Quickbooks. Compare the payee/vendor on checks written to the actual cancelled check with online banking. As an example, fraudster may issue check payable to "CASH" for $x,xxx and then cash the check. However, in the accounting program, the fraudster would change the check payee from "CASH" to "ABC Supply Company" so it is not noticed by owner or manager.
If your company becomes of victim of fraud it is advisable to notify the appropriate authorities. All too often when fraud is discovered no criminal charges are made. Owners terminate the fraudster's employment and will agree not to press charges in return for restitution. Unfortunately, if there is no public criminal record the fraudster's next employer may be the next victim.
By Traci A. Malik, CPA CFE MAcc
Gathering your documents for your personal taxes can be daunting for some. When clients come into meet with us or drop off their tax documents, we tend to get asked about how to save money on tax preparation and what are the documents that we need. Hopefully, this will help serve as a guide for you.
What we need:
What we don't need or may cost you more:
If you would like a tax organizer to help with the planning of the documents needed, please feel free to contact us for one. We look forward to helping you with your taxes!