Simple Tax Question...

When someone calls or emails me with what they think is a Simple Tax Question, they think that by giving me Fact A + Fact B + Fact C + Fact D, with my astounding analytical skills, I can put those facts into my mondo-superconductive-massively-powerful tax brain and spit out a definitive answer to their Simple Tax Question.

Taxpayers are thinking in linear terms.

Tax work is not linear and can't be solved by linear thinking.

Most situations involve a series of questions in order to have all the facts necessary to come up with an answer.    Knowing what questions to ask...and when it's necessary to dig deeper is what makes tax work challenging and rewarding.

You can't give good tax advice with limited information any more than you can make good paella with limited ingredients.

Taxes and paella.   Both involve a lot of ingredients.

For Kansas City, tax preparation services contact Alliance Financial & Income Tax today at 816-220-2001.

DIY Tax Software Football Ads

After seeing the boxed software's ad for the hundred-zillionth time during football last week, the ad where they say (paraphrasing) 'This is you not doing your taxes' or something equally as stupid and unmemorable (which is why I can't remember it) I went to their website and looked up what they're going to charge you.

For you to 'not do your taxes' with them, you will be spending a considerable chunk of change.

I'm assuming that you won't see the preparer face-to-face.  I don't know if they will have you fill out their paper interview or if they will interview you via Zoom?   

If you're going to pay $200 and up, why wouldn't you just use a local Enrolled Agent? Somebody who will be there for you in the offseason? Is somebody you know you can get a hold of when you need assistance?

Contrary to their claims, when it's tax season, you will be doing your taxes whether I prepare them,  they prepare them, or you prepare them. There is a certain amount of work that you have to do to facilitate that.  

You can go mountain climbing afterward, but tax work is a hand-in-hand process.  

I'll do the hard part, but I need your assistance with documents and answers to my questions.  Don't let an ad fool you.

Today, I may take a nap.  The equivalent of mountain climbing season is about to start for me, and I am trying valiantly to get rested up, but football is getting in the way.   😂

See you soon.

Mike Mead, EA, CTC

https://www.afitonline.com/appointments

816-220-2001

Christian Health Sharing

The amount you pay to a Christian Health Sharing ministry is not deductible on your federal tax return as health insurance because it's not insurance, it's a sharing ministry.

Unless you give something above and beyond your premium amount, it's also not deductible as a charitable contribution.

If you file a Missouri tax return, however, the amount you pay to a Christian Health Sharing ministry is deductible on the Missouri tax return.

 

2023 Tax Strategies Jackson County Taxpayers Should Make Now

 

Resolutions? Really?

 

It’s kind of what you do in January — new year, new goals, new me … right?

 

Well, as someone who’s made resolutions and failed to keep them over many years, I’m all about focusing on what I know is doable. 

 

As your Blue Springs tax pro, I’m of course going to talk about all of this in terms of your tax standing. And I’m not merely talking about filing your 2022 taxes over the next couple months.

 

But, hey – while we’re on the subject, let’s focus on it for just a second. 

By the end of the month, you should have your 1099s and W-2s (K-1s come out by March), and you most likely have other documents that you’ve held onto for deduction purposes as well. What I recommend… 

 

1. Get them organized. 

 

Sure … we can handle the “receipts in a shoebox” thing – but it just means that things take way longer, and you might not always be happy with that result. Getting things organized on your end will ensure my team and I can get everything processed and submitted to the IRS as soon as possible. (And that will probably ensure a better, quicker result on their end.)

 

2. Schedule an appointment with your favorite Blue Springs tax pro (wink, wink) ASAP: https://www.afitonline.com/appointments

Alright, but now that we’re in a new year, it’s time to right the wrongs of 2022 … and as the hoary old cliche goes, the early bird gets the worm.

 

In this case, the person who starts implementing tax strategies at the beginning of the year gets a better tax standing for next year. Okay, so that analogy, not strong… but you get the drift. 

 

Let’s take a look at what you can do now to get ahead in 2023…

 

2023 Tax Strategies Blue Springs Taxpayers Should Make Now
“Start with the end in mind.” – Stephen R. Covey 

 

Welcome to the new year. Everyone likes to talk about having a clean slate, a fresh start, new opportunities. Because I’m a tax pro, I say… let’s talk about taxes.

 

Actually, let’s talk about preparing for taxes aka tax strategies. It’s more fun than taxes themselves (what isn’t?), and it can save you hassles down the road if you start right now at the beginning of the new year.

 

Maybe it seems odd to start the year off by talking about planning for next year’s tax filing. But, actually starting now means things are much easier the rest of 2023.

 

So… what’s the first step in implementing tax strategies? Let’s take a look.

 

Get ready for some paper

 

Everybody’s heard about the shoebox of records (we’ve seen a few, that’s for sure) but you don’t need a master’s in taxation to recognize that as a poor way to get ready to file taxes. 

 

To implement tax strategies, you need to have an idea of what paperwork is involved in reporting to the IRS. This is nowhere near a complete list of the forms you might get, but documents you should get ready to receive: 

 

– W-2 forms for your wages

 

– IRS Form 1099-G (for unemployment compensation, among other things)

 

– 1099-MISC for miscellaneous income, including rent

 

– K-1/1065 for partnership and trust income (these are sometimes late in recent years, but not always)

 

– 1099-R for pensions and annuities, retirement accounts and some other sources

 

– 1099-INT for interest income

 

– 1099-DIV for dividends

 

– 1098 for mortgage interest

 

– SSA-1099/1042S regarding Social Security benefits. 

 

(You might have heard you were also going to get income tax forms if you made just 600 bucks through online selling or a gig job. Thankfully, the IRS put that cute idea on hold for at least another year.) 

 

Go back through 2022 and make a list of all the employers, brokerage houses, and such that may be sending you tax documents. Double-check that employers and institutions that’ll be sending you a tax form have your right address and other details. You’d be surprised what people can mess up … and if they send a tax record to the IRS and don’t file your taxes with it, you’ll have to amend your return later – why take the chance?

 

Most individual taxpayers have everything available by the end of January (most – this can vary depending on your asset and other factors, so stay in touch with us if you think something’s late or missing). By the way, we can’t even start filing federal taxes until the IRS announces their start date.

One challenge these days, of course, is that records come many ways: some by mail, others with an email, or other electronic notice telling you they’re available online.

 

If you need an organizer and we haven’t sent you one or given you access to one online, let us know. Otherwise, get a folder (label it and don’t misplace it) and slip all tax docs in there that come in the mail, as well as printed ones from online.

 

New details for 2023

 

Federal tax information changes every year (they almost seem to delight in changing it …). For starters, Tax Day in 2023 is Tuesday, April 18 since the normal Tax Day, the 15th, is a Saturday and Monday, April 17 is Emancipation Day, a holiday in the District of Columbia. 

Another of the tax strategies to implement is figuring out how much you’ll owe. Scratchpad math will give you an inkling if you’ll owe taxes for 2022. If you paid taxes quarterly in 2022, by the way, you want to wind up owing less than a grand in tax after subtracting your withholdings and credits or pay at least 90% of your tax for the current year or 100% of the tax shown on the return for the prior year, whichever is smaller. If you think you’ll owe money using that formula, try to pay it with your last quarterly filing for 2022, which is due Jan. 17. 

 

This is also a great moment to start budgeting and pre-setting deadlines to pay your quarterly taxes through 2023. 

 

Looking ahead, federal tax brackets were adjusted due to inflation quite a bit for the new year. By looking at these new numbers, you can make another smart move ASAP and make sure you’re having the right amount withheld from your paycheck. Again, we can help, and the good folks at the IRS also have this withholding estimator.

 

Budgeting for other accounts

 

No early-year implementation of tax strategies is complete without considering what you’ll put into your nest egg and other accounts (such as for healthcare spending) that give you tax breaks.

 

In 2023, you’ll be able to kick in more than three grand to a health flexible spending arrangement, for instance. You can put a couple grand more into your workplace retirement plan, up to 22,500 bucks (if you’re older than 50, your catch-up contribution went up, too). The limit on annual contributions to your IRA went up 500 bucks from 2022 to 6,500 dollars. 

 

Again, set a budget and fix your dates to contribute – and you’ll be sitting pretty by early 2024.

 

Tax planning and putting tax strategies into play never really stops despite what the calendar says. You can make plans for your tax situation looking ahead, and we’re always here to advise you.

 

Here for you, 

Mike Mead, EA, CTC

Alliance Financial & Income Tax

807 NW Vesper St

Blue Springs, MO. 64015

816-220-2001

If You Think....

If you think you can claim head-of-household because you moved out of daddy's house and have your own apartment, you might consider using a Blue Springs tax pro.

If you think that because you pay your own bills and support yourself, you are considered a dependent, you might consider using a Grain Valley tax pro.

If you think income doesn't have to be reported because no one sent you a W2, you might consider using an Independence, Missouri, tax pro.

There is much more to tax preparation than what do-it-yourself tax software would have you believe.

So, until they have "Solve Your IRS Tax Problems In A Box," you might consider using a tax professional.

Hire an Enrolled Agent. We can solve your IRS tax problems.

5 Ways to Achieve Financial Freedom

 

Financial freedom is something that everyone strives for, but it can be challenging to achieve. It requires discipline, planning, and a willingness to make sacrifices in the short term for long-term gain. However, with a little effort and the right strategies, it's possible to achieve financial freedom and take control of your financial future.

In this post, we'll explore five ways to achieve financial freedom. From creating a budget and paying off debts to building an emergency fund and investing wisely, these strategies will help you get on track and achieve your financial goals.

1. Create a budget and stick to it.

Creating a budget is an essential step in achieving financial freedom. A budget helps you understand where your money is going and where you can cut back. It's essential to track your spending and make sure you're not overspending in any one area. There are plenty of budgeting apps and tools available to help you stay on track.

2. Pay off your debts.

Debt can be a significant obstacle to financial freedom. It's essential to focus on paying off high-interest debts, such as credit card balances, as soon as possible. This will help you save money on interest charges and free up more money for other financial goals.

3. Build an emergency fund.

An emergency fund is a savings account set aside for unexpected expenses, such as a car repair or medical bill. It's important to have an emergency fund to fall back on so you don't have to rely on credit cards or loans in a pinch. Aim to save enough to cover at least three to six months' worth of living expenses.

4. Invest wisely.

In addition to saving for the short term, it's essential to consider your long-term financial goals. Investing in stocks, mutual funds, or other types of investment vehicles can help you grow your wealth over time. It's never too early to start thinking about retirement, so make sure you're contributing to a retirement account, such as a 401(k) or IRA.

5. Create multiple streams of income.

Having multiple streams of income can help you achieve financial freedom more quickly. This may involve starting a side hustle, investing in real estate, or finding ways to monetize your skills and talents. Diversifying your income streams can help you weather any financial storms that come your way.

Conclusion:

Achieving financial freedom is an attainable goal with the right strategies and discipline. By creating a budget, paying off debts, building an emergency fund, investing wisely, and creating multiple income streams, you can take control of your financial future and achieve the freedom and security you deserve. Remember to stay committed to your goals and be willing to make sacrifices in the short term for long-term gain. With a little effort and planning, you can achieve financial freedom and build a secure and prosperous future.

The Benefits of Hiring an Income Tax Professional

 

Income Tax Professionals: 

What They Do and Why You Need One:

Filing taxes can be a daunting task, but having the right help can make filing your income tax much easier. Income tax professionals are experienced individuals specializing in filing taxes and helping you get the most out of your return. Let’s examine what they do and why you need one. 

What Tax Professionals Do: 

Tax professionals understand the laws and regulations that govern tax filings. They stay up to date on changes in tax laws and know how to apply them to your situation to maximize your return. Tax professionals also have audit experience, should you ever be audited by the IRS. In addition, if you have any legal questions regarding taxation, a qualified tax professional can give you sound advice. 

Why You Need a Tax Professional:

Suppose you are an individual or small business owner. In that case, it is essential to have someone who understands the complex rules of filing taxes to help make sure that everything is done correctly and that you are taking advantage of all deductions for which you qualify. Additionally, many people don’t realize how much help they need until after they’ve started their taxes or received an audit notice from the IRS. Having access to knowledgeable advice from a trusted source before this happens can save time and money in the long run. 

Tax professionals can also provide support beyond simply filing returns each year. Their knowledge of financial planning strategies can help ensure that you are setting yourself up for success financially in the future, as well as reducing your taxable income now. This advice is invaluable when it comes time to retire or make other life decisions with financial implications. 

Conclusion: 

Having a qualified income tax professional on your side can make all the difference when it comes time to file your taxes each year. These experts understand the finer points of taxation law and regulations, allowing them to provide sound advice about filing returns correctly and taking full advantage of available deductions. Furthermore, their knowledge of financial planning strategies can help set up successful financial futures for individuals and small businesses alike! So if you're looking for assistance with filing your taxes this year, consider hiring an income tax professional—you won't regret it!

Tax Preparation & Planning

 

Tax Preparation & Planning

Effective Blue Springs, Missouri, tax preparation and tax planning can help you to minimize your future tax liability. I can help you proactively manage both your personal and your business tax issues, including understanding how upcoming business opportunities impact your tax status and vice versa. Not all tax planning opportunities are readily apparent. By having Alliance Financial & Income Tax on your team, you are more likely to benefit from those opportunities. We understand how the latest federal, state, and local tax legislation and other developments affect you and your business, and I am constantly identifying new ways to reduce federal, state, or local tax liabilities.

It's Tax Time

 

We hope the new year is off to a great start for everyone. We just wanted to touch on a few subjects before tax season gets going. 

We are conducting both in-person and virtual tax appointments.

Our intake forms have been updated and need to be completed before we may prepare your tax returns. This will ensure you do not miss any possible tax credits or deductions. There have been many changes to the tax code in the past couple of years.

We want to make it as easy as possible for you to get your taxes completed. So once you have gathered all the tax documentation, you may:

·  Mail your information to us, and we will contact you with any questions.

·  Stop by the office between 9-5 to drop off.

·  Use our client Secure File Portal

·  Schedule a time for either an in-person or virtual appointment by calling the office or clicking Appointments.

The filing deadline this year for corporate tax returns is March 15th, and for personal tax returns, it is April 18, 2023. To ensure your personal tax return is completed and filed on time, we must receive all your information by April 1st. We will not begin working on your tax return until we receive your information. 

If you require an extension to file, please e-mail Jessica White at jwhite@afitonline.com. There is a $25 fee for processing extensions. (The request must be in writing)

We are here to help, so please do not hesitate to contact us if you have any questions or if we may be of any assistance. 

We are truly thankful for the confidence and trust that you place in us, and we are looking forward to seeing you soon.

 

As always, we are in your corner.

 

Mike Mead, EA, CTC

Julie Naudet, AFSP

WARNING: IRS Audits Rapidly Increasing…

 How Confident Are You That Your Tax Return is Accurate?

Could You Be Missing Potential Deductions?

10 million taxpayers missed out on a chance to receive a bigger refund last year simply because they should have filled out one line on their tax return.  Will you miss a similar opportunity this year?

Today’s tax laws are increasingly complicated, and the rules for deductions and credits change yearly. Are you aware of all the deductions and credits that might be available to you this year, even on the most basic of tax returns? Perhaps you feel secure in your do-it-yourself tax preparation software, but let’s face it… There is no substitute for an experienced tax professional who can answer your questions and ask you the questions that might be key to saving you tax dollars.

With our tax return services, you get the following:

•         Assurance that your return has been checked and double-checked for mathematical accuracy and errors that are commonly flagged by the IRS, resulting in fewer chances for contact by the IRS.
•          Tips for better managing your payroll withholding so that you can have the advantage of greater income all year long, rather than loaning that money to the government and waiting for it to come back in the form of your yearly tax return.
•          A list of common deductions that may benefit you in the coming year and tips for limiting your future tax liability.
•          Electronic filing for a quicker refund. 

5 Financial Tips for Young Adults

As a young adult, it's easy to get caught up in the excitement of starting a career, exploring new opportunities, and building your future. However, it's also important to start thinking about your financial well-being early on. Money may not be the most glamorous topic, but it's an essential part of building a happy and secure future. That's why it's crucial to establish good financial habits and make smart financial decisions from the start.

In this post, we'll explore five financial tips that are especially important for young adults to consider. From saving early and regularly to paying off credit card balances and investing in your future, these tips will help you get on track and set yourself up for financial success.

1. Start saving early and regularly: The earlier you start saving, the more time your money has to grow. Even if you're just starting out and don't have a lot of money to save, it's important to establish the habit of saving regularly. Set up automatic transfers from your checking account to a savings account, and make sure you're contributing to a retirement account, such as a 401(k) or IRA.

2. Create a budget and stick to it: A budget helps you understand where your money is going and where you can cut back. It's important to track your spending and make sure you're not overspending in any one area. There are plenty of budgeting apps and tools available to help you stay on track.

3. Pay off your credit card balance in full each month: Credit cards can be a convenient way to pay for things, but they can also be a financial trap if you're not careful. Interest charges can add up quickly, so it's important to pay off your balance in full each month to avoid paying extra in interest.

4. Build an emergency fund: An emergency fund is a savings account set aside for unexpected expenses, such as a car repair or medical bill. It's important to have an emergency fund to fall back on so you don't have to rely on credit cards or loans in a pinch. Aim to save enough to cover at least three to six months' worth of living expenses.

5. Invest in your future: In addition to saving for the short-term, it's important to think about your long-term financial goals. Investing in stocks, mutual funds, or other types of investment vehicles can help you grow your wealth over time. It's never too early to start thinking about retirement, so make sure you're contributing to a retirement account, such as a 401(k) or IRA.

By following these financial tips, you'll be well on your way to a secure financial future. Remember to stay disciplined and make saving and budgeting a priority. With a bit of planning and effort, you can achieve your financial goals and set yourself up for success. It may not be the most exciting topic, but taking control of your finances now will pay off in the long run. Don't be afraid to seek help from a financial advisor or professional if you need it – it's never too early to start building a solid financial foundation.

Although this meme is a generalization, it's also reasonably accurate.

  

Many potential clients who call my office will inquire about my fee as their primary concern.

I understand this because none of us wants to be hit with a price tag beyond our means.  

I am okay with you inquiring about my price tag as long as it is not the first thing you ask. 

 

I want you to care about my quality, my education, the amount of experience I have, and my wonderful customer service.  

I charge a fair fee. I'm not the most expensive, but I'm also not the cheapest.  

These days with as many variables as there are, it is only possible to give an accurate estimate when we know what you need from a simple phone conversation.  

Since people tend to not know what they have, how will I know what it will cost? I charge by the form and by the amount of data you have.  

Does your mechanic tell you what it will cost before you bring your car in for a diagnosis? Will he charge the same for an oil change as for a transmission rebuild? 

Not likely.  

I will do my best for you, I will be available to you, and my fee will be reasonable for my level of experience and knowledge. 

If you base your automotive decisions on the lowest-cost mechanic, your car may break down again as you drive away. 

And, if you base your tax preparation decisions on the lowest-cost provider, you may wind up with IRS or state issues, but your tax pro is nowhere to be found.  

Trust your car to an expert, and trust your tax preparation to the Enrolled Agents at Alliance Financial & Income Tax.

Worth every penny.