Month: January 2017

tax2

As a self-employed business professional, you may regularly try to keep your expenses to a minimum, and this may mean that you try to do as much of the work as possible on your own. There is cost associated with outsourcing certain tasks to other professionals or contractors, and you may think you can save money by doing the work on your own.

This is true in many cases, but there are some instances when there is a true benefit to you to outsource the work to an expert. When it comes to preparing the tax return for your one-person company, there are numerous benefits and advantages for doing so. With a closer look, you may see that it is far more cost-effective to pay for tax preparation services than to attempt to do the work on your own.

Save Time

Tax code changes from year to year and from city to city, and it can be time-consuming and frustrating to attempt to keep up with all of the changes that take place even over the course of a few months. However, you must be aware of these changes if you want avoid paying more than necessary in taxes to the IRS. A professional accountant, CPA or local tax preparers in Orlando and other regional cities can all facilitate this process and can save you a considerable amount of time. This is a professional who is always updated on changes to the tax code, so you can always expect knowledgeable assistance from this professional.

Find Deductions and Credits

Each year, your own tax situation can change. In addition to changes to the tax code that can impact the deductions and credits you qualify for, changes in your business can also impact the deductions and credits that you can qualify for. For example, you may have purchased equipment that qualifies for a depreciation deduction, or you may have made energy efficiency improvements that qualify for credits. You do not want to pay more money in taxes than necessary by overlooking these deductions and credits, and your accounting professional can help you to determine which tax-saving credits and deductions you qualify for.

Avoid Penalties

There are several reasons why you may have to pay a penalty fee to the IRS. For example, if you do not file your small business tax return on time or if you do not file an accurate return, you may be required to pay the taxes due plus penalties, and interest charges. This can be costly and burdensome for your small business to deal with, and these penalties and fees can be avoided altogether when you have a professional prepare your small business tax return.

The bottom line is that you may be able to avoid paying the professional service fee to an accountant or tax preparer when you prepare your own small business tax return. However, this is a nominal fee in comparison to the hundreds or even thousands of dollars that you can save by using these professional services. From avoiding costly penalties to finding more deductions and credits that you may qualify for, the fact is there are many financial benefits associated with using professional tax services to prepare your tax return. You can easily learn more about the services of a tax preparer and set up a time to meet with a preparer personally about your current year’s tax return.

Since 1960, the United States Department of Agriculture has generated baseline expenditures for the costs of raising a child from birth through their 18th birthday – it doesn’t include the costs of sending the child on to college, or expenses incurred if a child returns to the home in their 20s.

Those reports showcase just how stark the current economy is. From 2003 to 2013 – the most recent year that the abstract has been published, the cost of raising a child in constant dollars has gone up by 40%, while household income has risen by 5%.

Raising a child has several co-factors that alter the cost: Living in cities tends to make the cost of raising a child rise, though less so than the typical increase in income; in terms of family financial stress, it’s slightly less economically disadvantageous to raise a child in the city even though the total expense is higher.

The second cheapest place to raise your child is in rural America, where the costs of the most expensive factors, notably housing (roughly 31% of the total) is less. Children are also cheaper to raise in batches – hand-me-down clothes help a lot, and having multiple children reduces the per-cost surcharge for housing costs.

Categorical Comparisons

Compared to the 1960s, housing as a percentage of the total expenditure has remained roughly constant. The cost of food has dropped by 50% – it was 24% of the total tally in 1960, and is 16% now; likewise clothing has gotten much less expensive — which will come as a surprise to anyone who’s tried to buy clothes for a teenager. The difference is 11% in 1960 and 6% now. Both of these are signs of increasing agricultural efficiency and industrial automation.

Where costs have gone up are health care — we aggressively treat more diseases and conditions in children now — and in the cost of child care and education, which has exploded with the rise of the two-income family compared to 1960. Once inflation-adjusted dollars are used, the overall cost of raising a child has risen from $192,000 in 1960 to a median value of $234,000 in 2014.

Cost-Cutting Measures

While nobody is advocating massive cost reducing strategies when it comes to raising a child, there are some places where things can be trimmed. If you’re about to move, look for a balance between a good school district and home prices; higher priced homes, past a certain point, don’t correlate to a substantially better educational experience.

Look at having your children work outside the home for pocket-money. Mowing lawns for the neighbors isn’t demeaning; it’s a way for your children to appreciate the value of hard work and doing a job to the satisfaction of someone else, while they earn their own pocket money.

While food as a percentage of total expenses has shrunk, eating habits have gotten noticeably worse. Pack lunches for your children – take the time on Sundays to pack a week’s worth of lunches and freeze them; they’ll be less expensive than eating out and will generally be healthier.

Conclusions

A large part of childcare costs stem from out-of-home daycare, which is nearly unavoidable in two-income or single-parent families – and the added features that come from raising a child in the 21st century, like cell phones, data plans, and laptops for schoolwork. Medical costs have also gone through the roof, largely as school districts try to protect themselves from lawsuits stemming from injuries and treat everything involving a child as an ER visit.