Latest News on Denver Accounting & Taxes

If the new year for you means starting a business, there are several things you’ll need to do upfront to set yourself up for success. To help you begin, here’s a checklist for starting a small business:

Get your Employee Identification Number (EIN) – First, you’ll need to get an EIN to identify your business when filing your Denver tax return and to include in other documentation. The exception is if you’re a sole proprietor or have an LLC (see below), in which case you can just use your social security number. You can apply for an EIN online.

Figure out your business structure – Next, determine the type of business you will have. There are a number of ways you can set up your business:

Sole proprietorship – Sole owner of an unincorporated business.

Partnership – A relationship with another person to carry out a trade or business, with both of you contributing money, property, and labor, and expecting to share any profits or losses of the business.

Limited Liability Company (LLC) – A private company with the pass-through taxation of a sole proprietorship or partnership, but with limited liability.

Corporation – A corporation where you and your shareholders (if applicable) exchange money and/or property for the corporation’s capital stock.

S Corporation – A corporation that passes corporate income, losses, deductions, and credits to you and your shareholders (if applicable) for federal tax purposes.
Each business structure has its own tax implications and liabilities which are important to learn about.

Choose a tax year – A tax year is basically the annual period of reporting income and expenses. You can choose your tax year to follow the calendar year of 12 consecutive months starting January 1 and ending December 31, or a fiscal year of 12 consecutive months that ends on the last day of any month except December.

Have employees fill out their forms – If your business has employees, they will each need to fill out a Form I-9 to verify their identity and authorization to be hired as an employee in the U.S., along with a Form W-4 for tax withholding purposes.

Mark your calendar for quarterly tax payments – Estimated taxes for businesses are due four times a year. Depending upon when you start your business, you may want to mark your calendar with this year’s tax due dates: April 18, June 15, and September 15, along with January 15, 2017. Thorough record-keeping and sticking to the due dates will help you avoid any penalties.

And remember that it never hurts to speak with an accountant or tax professional. They can be instrumental in helping you decipher what kind of business taxes you’ll need to pay dependent on the type of business you set up and Colorado’s specific tax laws, as well as which of your business expenses are tax deductible.

Bloch, Rothman & Associates have been helping businesses with their Denver business tax preparation and planning for decades. Fill out the form online for a free initial consultation, or call us at 303-321-7160.

This month, congress voted to extend some expired tax breaks, or tax extenders under the Protecting Americans from Tax Hikes Act of 2015. Almost half of these tax provisions were extended permanently, while many more have been extended for at least one more year. The tax provisions include tax breaks for teachers, families, and even energy saving tax benefits. Below is a list of tax extenders that could potentially benefit you and your family:

Tax Breaks Extended Permanently:

Educator Expense Deduction: If you’re a teacher, this tax deduction can help you save money on supplies you have purchased for students. You can deduct up to $250, unless your spouse also teaches, then you can deduct up to $500.
Enhanced Child Tax Credit: Dependents under 17 years old may be eligible for a tax credit up to $1,000. Before the permanence enhancement, the amount of money necessary to qualify for the law would increase in order to get partial or full credit.
Tax-Free Retirement Accounts and Qualified Charitable Distributions: For people who are 70-1/2 or older, you may be able to exclude up to $100,00 from income distributions if paid to an IRA account or a qualified charity. This is a great benefit for retired people who have already paid off their homes and no longer have large deductions such as mortgage interest.
 

Temporary Tax Break Extenders through 2016:

Tuition Deduction: Good news for students and parents with college tuition and fees. You are able to deduct up to $4,000 which includes books, supplies, and tuition. This applies to you even if you only take one class!
New Qualified Fuel Cell Motor Vehicles Credit: If a vehicle you purchased runs on either hydrogen or oxygen, it creates electricity that is known as a fuel cell vehicle. If the vehicles weighs less than 8,500 pounds, you can receive a credit of up to $4,000. If your vehicle is heavier, you may be eligible for more credit.
Mortgage Debt Exclusion: If for some reason your home goes into foreclosure, has a loan modification or short sale, you will be able to exclude the amount of debt forgiven. This is valid on your principle residence from your taxable income up to $2 million.
Nonbusiness Energy Property Credit: If you are a homeowner and made home improvements that are energy efficient, you will still be able to claim the Residential Energy Property Credit. This is worth up to $500.
With so many changes in tax deductions and credits, it’s hard to know what you are eligible for. That’s where your Denver tax specialists, Bloch, Rothman, and Associates come in. We can help you get through tax season stress-free and with a maximum return. Contact us today! 

Even though December is almost over, it’s actually not too late to lower your taxable income and increase your tax benefits. Follow this year-end planning tips to help save money in the new year:

1.Max out your contributions: If you have a 401k, health savings account, or an IRA, right now is a great time to contribute as much money as you can before the end of the year. You will not only lower your taxable income, and you will be thankful of the benefits in the long run. Through your employer or on your own, contributing to a retirement fund is always a good plan. You can contribute up to $5,500 and up to $6,500 if you’re over the age of 50 annually.
 
2.Capital Investment Loss: It’s never an easy decision cutting ties with your poorly performing investments, but sometimes it can help to reduce your taxable income if you’re willing to incure the loss. However, if your losses outwgih your gains, you can use up to $3,000 to offset your regular taxable income.  Keep in mind that the IRS won’t let you claim the loss on your taxes if you buy back the stock within 30 days of taking the loss.
 
3.Increase Your Business Expenses: Another element of reducing your taxable income is purchasing anything that you might need for your business. Eliminating funds and creating new items to add as business deductions on your taxes is a great way to use what you have and make smart business choices at the same time.
 
4.Utilize the Time Remaining: You might feel like you are out of time to do anything before the tax season is over – but don’t worry, there are plenty of small things to do before the end of the year that will help immensely come next year’s tax season. Use the remaining days to get on track and keep everything in order. Also, use your tax consultants to know the latest tax laws and provisions.
 
Use your Denver accounting experts to help you understand how you can make the smartest choices for your business. Our team can review your documents and information and provide you with the best solution for your business. Even if you feel like you have run out of time this year, get yourself better prepared for next year and implement a tax plan.

Contact Bloch, Rothman & Associates today at 303-321-7160 and set up your free consultation for the new year.

While it is unlikely that a natural disaster – such as an earthquake, drought, forest fire, heavy storm or hurricane – will affect you in your lifetime, over three quarters of a million people are affected in the US each year by these kinds of naturally occurring events. Gathering paperwork and receipts, and getting all your ducks in a row in time for the tax filing deadline can be stressful and time consuming even in the best of times. When a natural disaster strikes your business around the time of a natural disaster, paperwork is the last thing on your mind, but there are a few important things to know to help ease your mind should a disaster strike.

The IRS helps business and home owners who have experienced a natural disaster with extended deadlines and tax credits, the most significant of which is the casualty loss deduction. The casualty loss deduction allows tax payers to receive an accelerated tax refund if they live in an area that has been declared a “federally declared disaster area” by the US President. Some of the details of the casualty loss deductions are:

Tax Extensions: The IRS postpones deadlines for estimates tax payments, as well as for payroll taxes for businesses. Penalties and fees are also usually waived as long as the new post-disaster, extended dates are met. You can always check the IRS website for the most up to date disaster relief announcements.

Tax-free Donation Relief: Those who have been affected by natural disasters are often in need of financial assistance both in the short term and the long term, and there are many organizations who step up to help. The last thing you or your employees need to worry about is the additional burden of paying taxes on money or donations they receive. The IRS has allowed organizations to provide tax-free assistance to employees affected by natural disasters. 

Record Keeping with Disaster Tax Relief: We always recommend keeping an electronic back-up of all of your tax-related documents, in the event that the originals are lost to an unforeseen event. It is best to keep the back-up in a separate location that the original documents. You should also keep a record of any damage and repairs that are made to your property. Photos, videos and receipts can help establish property values and validate various claimed deductions. Documentation of payment received from insurance companies and federal agencies is also very important, as you will need this kind of paperwork to prove that these monies were not income and are not taxable as such.

If your business has been affected by a natural disaster and you need advice on how to move forward, the professionals at Bloch Rothman and Associates will help you every step of the way. We are here to help make sure that your business recovers as quickly as possible and that you take advantage of all of the tax relief and benefits you are privileged to in your time of need.

It’s the end of the first week of December and 2015 is coming to a close. It’s important to start thinking about your taxes for the year. Chief among those thoughts should be the dozens of expired tax breaks congress did not renew for 2015. Some of the continuing tax extenders include schoolteachers having the ability to take an above-the-line deduction for supplies in their classrooms they purchased on their own. There are also deductions that may have been allowed in previous years, but may not be deducted for this year the tax deductions were not extended by Congress. Examples of these deductions include qualified charitable distributions for those with IRAs that can be directly given to charity. For taxpayers living in states with low income taxes or those who have had several sales tax expenses, you may not be able to apply the tax deduction.

Regardless of where you fall in the economic spectrum, you should have at least a basic understanding of your tax bracket to get an understanding of your tax burden. Perhaps you’ve reached an upper tax bracket; or you’ve been in a higher one for a while and have taken losses this year, and now you’re in a lower bracket. The best course of action, no matter your situation, is to look at the big picture. Make projections for what you think 2015 should look like, and then determine what actions are best suited to your goals. Tax experts like Bloch, Rothman, & Associates can assist you with those details.

 

The next step is to take a look at your deductions. If you can identify potential deductions such as charitable contributions and real estate tax payments, you are one step ahead. The end of the year is also an ideal time for those in the highest tax brackets to figure out their estate planning.

 

2015 is also the year many parts of the Affordable Care Act became an essential component of tax planning. If you didn’t have health insurance in 2015 you will very likely incur a tax penalty. The penalty is higher this year than last as the program has become more established and governmental agencies have worked through some of the bureaucratic delays in enforcement. If you did not have health insurance last year (2014), and still did not in 2015, the penalty may be compounded. It is important to talk to a professional about some of the effects that the ACA may have on your tax burden both this year and in year to come.

With all the changes to the tax code this year, it’s imperative you have a trusted tax expert help you with all of your personal tax preparation. Bloch, Rothman & Associates, LTD is the tax firm for you. Contact us today for your free consultation.