What to Do if the IRS Audits You?
One of the worst fears of any taxpayer is to receive a notice from the IRS that they are being audited. But having an audit done doesn’t necessarily mean you did something wrong. Plus, only a fraction of taxpayers are chosen for audits each year. For example, in 2022, the IRS audited about four income tax returns out of 1,000.
That said, if you do receive an audit notification, you can take several essential steps to ensure that your audit goes smoothly. The best thing you can do is understand the process and take proactive steps to prepare.
Here is what to do if the IRS audits you.
What Happens When You Get Audited by the IRS?
First things first, don’t panic! It is vital that you understand the audit process and prepare for it.
The most common type of IRS audit is a “correspondence audit,” which means most of the process is done via mail. The IRS will send you a letter detailing why they are auditing you,...more
The 10 Most Common Missed Tax Deductions
Let's be honest; taxes are confusing. Tax law often changes, and knowing what you're eligible for can be confusing. In most cases, people miss tax deductions simply because they don't know about them.
As a Colorado Springs tax accountant, clients are often surprised at the deductions they can take. At Bennett CPA, I work with clients to ensure they are taking advantage of all the deductions they are eligible for. This is the best way to lower your tax liability and maximize your refund.
Here are a few of the most common deductions that people often overlook.more
Is Home Remodeling Tax Deductible?
If you're a Colorado Springs homeowner, you may be asking, "Is home remodeling tax deductible?" The answer can be complex, but here are some things to consider when deciding if your remodel qualifies for a tax deduction. It really depends on the type of repairs you're doing and the way you're tracking your expenses.
As a Colorado Springs CPA, Merrill Bennett is your go-to tax expert. Bennett will help you understand the details of home remodeling tax deductions and how to best track your expenses to maximize your deductions. You never have to feel overwhelmed or stressed about tax season when you have Bennett CPA on your side.
Keep reading to learn more about home remodeling and tax deductions!more
Are Quarterly Tax Payments Required?
Taxes are a complicated issue. For business owners and self-employed individuals, knowing when and how much to pay can be tricky. In the United States, quarterly estimated taxes are due on April 15th, June 15th, September 15th, and January 15th of each year. In short, these quarterly tax payments are required for individuals who will owe more than $1,000 in taxes for the year. But let's take a closer look.
Bennett CPA is your tax expert in Colorado Springs. Merrill Bennett is a certified public accountant who can help you determine if quarterly tax payments are required for your individual or business situation. With years of tax experience for individuals and businesses, Bennett CPA can help you understand the complex world of taxes.
Keep reading to learn more about why quarterly tax payments may be required for you.
Are Holiday Bonuses Taxed?
It's that time of year again! The holidays are here and with them come bonus payments. Bonus payments, or bonuses, can be a welcome source of extra income during the holidays. But before you make any plans for what to do with the extra cash, it's important to understand how bonus payments are taxed.
At Bennett CPA, Merrill Bennett has years of experience filing business and individual taxes. As a CPA in Colorado Springs, you can have the confidence that your taxes are completed accurately and on time. Plus, Bennett CPA is here to answer your questions about taxation all year round.
Let's take a look at what bonus payments are and whether they get taxed.more
How Do I Change My Name with the IRS?
Changing your name with the IRS is an essential step in managing your taxes, especially if you've gone through a legal name change or a legal business name change. If you've gone through a marriage, divorce, or another event that necessitates a name change, you'll want to ensure the IRS is aware of this. Therefore, you may be asking, "How do I change my name with the IRS?" Here is what you need to know about your taxes, updating your name, and how to make the change with the IRS.
At Bennett CPA, Merrill Bennett helps individuals and small to medium-sized businesses with their taxes. As a certified public accountant in Colorado Springs, Bennett has years of experience in the tax industry to help with your needs. By working with Bennett CPA, you can have the peace of mind that your taxes are being handled by a professional who is up to date with the latest tax...more
10 Tips for Filing Taxes for the First Time
Filing taxes can be a stressful process, especially if you're filing for the first time. You probably have heard people complain about how complicated or overwhelming taxes are to file. But don't worry — it's not that bad! Remember that millions of Americans file taxes each year. So while you may be feeling intimidated, it's actually a much easier process than it may seem. Here are 10 tips for filing taxes for the first time!
At Bennett CPA, Merrill Bennett is a certified public accountant in Colorado Springs with years of tax experience. No matter if you are in need of filing your personal taxes or business taxes, Bennett CPA will file your information accurately and on time. As a resource for all of your tax questions, Bennett is here to help you understand the filing process and become prepared for tax season.
Ready to learn the best tips for filing taxes for the first time? Keep reading...more
Small Business Tax Hacks to Save Money
As a small business owner, you're always looking for ways to save money. And when it comes to taxes, there are a number of hacks that can help you lower your tax bill. For example, did you know that you can deduct the cost of business lunches? Or that you can write off the cost of new equipment? In this blog post, we'll share some of our favorite small business tax hacks. Whether you're a sole proprietor or a corporation, read on to learn how to save on your taxes.
Merrill Bennet is a certified tax professional serving the Colorado Springs community. He founded Bennett CPA to provide quality and affordable accounting services to small and medium-sized businesses. With Bennett CPA, you never have to face the complexities of small business taxes alone.
1. Review your expenses and see where you can cut back.
When it comes to deductions, small business owners have a lot of options. But that...more
How Long Do Tax Refunds Take After Being Accepted?
Tax season is stressful. However, if you are getting a refund back, you may be looking forward to filing your taxes. Each year, one of the very first questions you have after filing your taxes is, “how long do tax refunds take after being accepted?” The Internal Revenue Service, or IRS, says taxpayers usually get their refunds within 21 days of filing. However, the answer to this question is not so simple. To answer the question, “how long do tax refunds take to process?”, take a look at some of the factors that will impact how long it takes for you to get your tax refund back.
At Bennett CPA, Merrill Bennett is on a mission to provide affordable, accessible, and quality tax services in Colorado Springs and beyond. From individual tax preparation to business tax planning, Merrill Bennett provides customized tax solutions. At Bennett CPA, you will receive comprehensive...more
How Do I Maximize My Tax Return?
If you are like most people, you may be wondering, “how do I maximize my tax return?” While filing your taxes is a tedious process, it is crucial to pay attention to the way you file your return. How you file your taxes plays a large role in how much you receive back as a refund. It is important to pay attention to what you report on your tax return, such as tax credits, deductions, and dependents. Make sure you take advantage of every available tax strategy to reduce your tax liability, as this is the best way to boost your tax refund.
At Bennett CPA, a certified public accountant in Colorado Springs, Merrill Bennett has extensive experience working with individuals and small businesses to file their tax returns. With a thorough understanding of tax preparation, planning, and consulting, Bennett provides affordable, accessible, and quality tax services across southern Colorado. With individual or business tax...more
10 Small Business Tax Tips You Should Know
Running a business is challenging. On top of running day-to-day operations, managing employees, keeping track of inventory, and communicating with customers, you also have to file business taxes. For any small business owner, this can be extremely overwhelming. Keeping up with your business’ tax records requires constant maintenance. By staying on top of your taxes, you have the best chance to simplify your tax filing and save money.
At Bennett CPA, Merrill Bennett has extensive experience simplifying business taxes for small and medium-sized businesses. As a certified tax professional in Colorado Springs, Bennett CPA offers tax preparation, planning, and consulting services aimed at reducing your business tax liability. Merrill Bennett can provide your small business with tax expertise so you can better understand the financials of your business.
Business taxes are complicated, but with these tax tips for small business owners, you will know how to reduce your tax liability to make filing taxes...more
Employee Retention Tax Credit: What You Should Know
While the Employee Retention Credit (ERC) was ended in 2021 by the Infrastructure Investment and Jobs Act, businesses can still retroactively claim the tax credit on their 2021 tax returns. As a business owner, it is crucial to be aware of these changing tax laws, but it can be difficult to keep track of the ever-changing tax regulations on top of running your business from day to day. At Bennett CPA, Merrill Bennett is a professional tax preparer located in Colorado Springs. As an experienced certified public accountant, Bennett can provide you with tax knowledge so you can better understand the particulars of your business taxes. When it comes to filing your taxes this year, here is what you need to know about the Employee Retention Tax Credit.
What is the Employee Retention Credit?
The ERC is a refundable tax credit for a percentage of qualified wages that businesses or tax-exempt organizations paid to employees.
The ERC was first introduced by the Coronavirus Aid, Relief, and Economic Security (CARES) Act in March 2020. The CARES Act was...more
When Are Taxes Due?
The IRS has started to accept and process 2021 tax returns as of January 24th, 2022, for individual tax return filers. If the thought of filing your taxes leaves you feeling uneasy and stressed, do not worry because many other people feel the same way. Tax season is a stressful time for many people. Taxes can often be complicated and time consuming, but you do not have to struggle through your tax return alone.
At Bennett CPA, Merrill Bennett is on a mission to provide affordable, accessible, and quality tax services to individuals and small to medium-sized businesses across southern Colorado. With years of experience as a certified public accountant, Bennett understands how frustrating it can be to file taxes. His goal is to alleviate the confusion, the struggle, and the doubt surrounding tax season. This is why Bennett CPA has put together a list of important tax information for the 2022 tax filing season,...more
Is Financial Aid Taxable?
College is expensive, which means you’re probably like most students who use financial aid to finance their degree. There are many types of financial aid for students to use for their education, and how you use your financial aid may have an impact on what is reported on your federal tax return. As such, you may be wondering if your financial aid is taxable.
At Bennett CPA, Merrill Bennett is a certified public accountant in Colorado Springs with years of tax experience and knowledge. While taxes can be complex and confusing, Bennett strives for clarity, efficiency, and simplicity. This is why Bennett CPA is here to help clarify whether financial aid is taxable and what this means for your taxes.
What is Financial Aid?
Financial aid refers to the money that helps you pay for your higher education. Specifically, this money can come from federal, state, institutional, and private sources to finance your education. Some types of financial aid include:
How Does Getting Married Affect Taxes?
At Bennett CPA, Merrill Bennett is an expert tax professional in Colorado Springs with the goal of providing affordable, accessible, and quality tax services. With years of experience, Bennett navigates the complexities of tax compliance to make filing taxes as easy as possible. If you are filing taxes after marriage or filing jointly for the first time, Bennett CPA is able to clarify any questions and help you and your spouse with the tax preparation process.
If you are planning on getting married or just tied the knot, now is the time to start thinking about your taxes. While in the midst of planning a married life with your partner, it is important to be aware of the financial changes that come with saying “I do”. Your marital status is determined by your status on December 31st, so as tax season approaches, here are some important tips to know as you prepare to file taxes.
Change of Name and Address
Once married, your name may change. In this case, it is very important to...more
What Tax Form Should I Use: 1040 or 1040-SR?
Tax season can be extremely stressful for both individuals and businesses, and tax regulations seem to be convoluted and change often. As such, it is sometimes difficult and overwhelming to keep up with the requirements for filing taxes, such as the form you should use to file. At Bennett CPA, Merrill Bennett is on a mission to provide affordable, accessible, and quality tax services to individuals and businesses across Southern Colorado. With years of experience, Bennett is an expert tax professional here to help clarify the differences between the following tax forms: 1040 and 1040-SR.
Starting in the 2018 tax year, 1040-A and 1040-EZ forms are no longer used. Rather, the only forms that remain in use are Form 1040 and Form 1040-SR, but you are still able to use the 1040-A and 1040-EZ forms to file taxes in the years previous to 2018. For current taxes, the following forms are available.
1. Form 1040
Form 1040 is a tax form used for personal federal income tax returns. This form...more
3 Ways Build Back Better May Impact Your Taxes
Recently, Congress passed the Build Back Better Act, which includes a range of budget provisions, including tax changes. It is important to be aware of changing tax laws, but it can be difficult to stay on top of ever-changing regulations. At Bennett CPA, Merrill Bennett is an experienced and expert tax professional in Colorado Springs who understands these amended laws well. Bennett is able to provide you with the knowledge so you can stay informed and better understand the particulars of your taxes. Here are three of the recent tax changes included in the Build Back Better plan to be mindful of when it comes time to file.
1. Child Tax Credit
Under the Build Back Better plan, the child tax credit enacted under the...more
5 Benefits Of Hiring A CPA To Do Your Taxes
At Bennett CPA, I am dedicated to providing premier tax services to individuals and businesses throughout Colorado Springs. As an experienced CPA, I understand how the complexities of taxes can oftentimes be overwhelming. In order to relieve the stress that taxes often evoke, I founded Bennett CPA with the mission of offering clear, efficient, and honest tax help. With my combined expertise and experience, my goal is to ensure that my clients feel peace of mind when it comes to their taxes..
If you have ever tried doing taxes on your own, then you are most likely aware of how frustrating it can be. The complex tax laws and policies can oftentimes feel like another language with the different terminology used. While many individuals and businesses attempt to take on filing taxes on their own, hiring a tax professional poses many benefits. As a CPA, I have both the experience and accreditation to ensure that your taxes are completed...more
Learn More About 3 Charity Tax Deductions You Can Claim
Did you know that minimizing your taxes is easier than you may think? There are multiple ways you can reduce your taxes dramatically. In order to reduce the amount of taxes you owe as much as possible, it is important to make sure you have claimed all eligible deductions. The more deductions you claim, the less money you will owe. In fact, come tax season, you may even be entitled to a refund! One of the most popular ways to increase your tax deductions is by making donations to eligible charities. If you make a donation to a charity that qualifies for tax deductions, then you are able to claim those deductions on your taxes. At Bennett CPA, I strive to ensure our clients’ taxes are as affordable as possible. To help you increase your tax deductions, I have compiled a list of three charities that are eligible for tax deductions, including the following:
1. BEE World
BEE World, or Biblical Education by Extension, is a Colorado Springs-based religious organization that...more
10 Common Tax Terms Explained
Are you getting ready to file your taxes? If so, you may be wondering what all of those tax terms mean. Don't worry! You're not alone. Each tax season, many people get confused by tax jargon. After all, tax law isn't exactly the easiest to understand. Luckily, I'm here to help make understanding your taxes easy! In this blog post, we will explore 10 common tax terms in easy-to-understand language. By understanding these terms, you will be able to file your taxes with confidence!
Without understanding these terms, filing for taxes may feel like an impossible task. As a certified public accountant in Colorado Springs, I know firsthand how confusing taxes can be. That is why at Bennett CPA, simplicity is one of my core values. I am committed to simplifying the complexities of taxes to help you better understand and be prepared for filing. With my personalized tax services, I will partner with you to ease any confusion and file your taxes correctly and on...more
5 Ways to Reduce Your Taxes in Retirement
Retirement is a significant milestone in life, one that most begin planning for when they receive their first job. In between dreaming of an RV road trip and hoping for more time with your grandchildren, paying taxes is probably the last thing you want to consider when planning for your retirement. At Bennett CPA, it is my mission to provide personalized tax services to individuals across Colorado Springs so they can focus on what matters: making plans for their future.
Whether you are planning for your retirement or have already retired, there are a few things you can do to reduce your retirement taxes. While you will no longer be taxed on your income, the funds that you remove from most of your retirement accounts will be. At Bennett CPA, I understand that paying taxes is the last thing you want to spend your hard-earned retirement funds on. For this reason, I have compiled a list of a few ways I help my retired clients save money from being spent on excess taxes.
6 Tax Tips For Small Business Owners
Being a small business owner most likely means that you are used to doing everything yourself. While that may be ideal as you expertly run your business, it isn’t when paying taxes. At Bennett CPA we won’t let you take on the complexities of small business taxes on your own. As tax experts, our team of experienced professionals have partnered with small businesses throughout Colorado Springs to alleviate the burden and stress that comes with the planning and paying for taxes.
Filing for taxes is a process that many choose to ignore until tax season. The reason for this is most likely due to the complex nature of taxes that leaves most small business owners feeling intimidated. However, at Bennett CPA we believe that taxes can be made easy when they are broken into small and manageable steps. Try implementing these tips into your small business tax preparation to optimize your finances and avoid unforeseen trouble when paying your taxes.
1. Correctly Classify Your Business
1099 vs. W-2: What To Expect For Your Taxes
There are many aspects that will affect how you file your taxes, including what category of worker you fall under. At Bennett CPA, we are passionate about helping the residents and business owners of Colorado Springs file their taxes efficiently. One of the biggest questions people have when it comes to their taxes is understanding the differences between the taxes of an independent contractor and an employee. We are here to help walk you through the differences between an independent contractor’s taxes and an employee's taxes.
Differences Between 1099 Contractors And W-2 Employees
The type of tax form that will need to be completed depends on if workers are independent contractors or employees. Self-employed workers, also known as independent contractors, must fill out a 1099 form to report their annual income. On the other hand, employees are given a W-2 filled out by their employer that includes all the required information needed to report your wages and payroll taxes.
Can I Repay Coronavirus-Related Distribution For Retirement?
Tax planning can be difficult, especially during a pandemic. As a premier certified public accountant in Colorado Springs, Bennett CPA is passionate about ensuring all businesses and individuals are prepared and equipped for their yearly taxes. Tax laws are constantly changing, and even minute differences can impact your finances from year to year. CPAs are experiencing many Coronavirus-related questions this year, including questions regarding relief for retirement plans and IRAs.
In our current climate, many people are questioning whether they are able to repay Coronavirus-related retirement distributions. These distributions have the ability to immensely impact people’s financial health, so it is important to understand whether or not they can be repaid. In an effort to better serve my clients in Colorado Springs, I...more
7 Tax Deductions You Should Know About
One of the best ways you can minimize your tax liability is by claiming all of your deductions. While there are some tax deductions that are commonly known, there are others that many people miss when preparing their taxes. As a licensed CPA in Colorado Springs, I understand the struggle of trying to figure out which tax deductions you can claim. When people file their taxes, the ultimate goal is to owe as little money as possible or better yet, be eligible to receive a refund. At Bennett CPA, I will make sure to find all of the eligible deductions you can claim on your business taxes and your personal taxes. Some important tax deductions to be aware of include the following:
1. Charitable Gifts
Many taxpayers know they can deduct the large charitable gifts they donate each year. But even the little things add up, and you can deduct more than just the money...more
Child Tax Credit: Everything You Need To Know About Recent Changes
It can be difficult to stay up to date with tax laws, especially when it is common for them to be amended annually. At Bennett CPA, I understand the importance of continually researching and being prepared every tax season. As a licensed CPA providing individual tax services and business tax services in Colorado Springs, I am equipped with the knowledge to help you navigate tax changes and how they might impact your family and business. Starting summer 2021, there are some notable changes to the Child Tax Credit.
What Are Advance Payments?
Advance Child Tax Credit payments are early payments from the IRS totaling 50 percent of the estimated amount you can claim on your 2021 tax return. For 2021, the credit amount is $3,600 annually for children under six years old, and $3,000 for children between the ages of...more
5 Tax Changes To Be Aware Of In 2021
Understanding tax laws and the way they change means being well prepared for every upcoming tax season. As a top-rated CPA in Colorado Springs, I understand how crucial it is to continuously research and educate myself on tax laws. You need all of the details so you can stay informed. Here are 5 of the biggest tax changes to be aware of in 2021, and how they might impact you.
1. Child Tax Credit Changes
There are some important changes happening with the Child Tax Credit. These changes can help families receive advance payments of the Child Tax Credit this summer. Starting July 15, the IRS will pay half of the total amount in advance monthly payments. When you go to file your 2021 income taxes, you will be able to claim the other half. For children ages 05, the tax credit is $3,600 (previously $2,000). And for children ages 6-17, the tax credit is $3,000 (previously $2,000). You can...more
What You Need To Know About The American Rescue Plan
Here at Bennett CPA in Colorado Springs, we believe in providing you with all the information you need surrounding taxes so you can stay informed. Whether you are preparing for tax season or looking to understand new legislation, our goal is to help you understand the ins and outs of your taxes.
The COVID-19 pandemic changed many things for people all over the country in the past year. More than 9 million workers lost their jobs due to the pandemic, and we are still recovering from the financial impact. On March 11, 2021, the American Rescue Plan Act (ARP) was signed into action. This act is designed to support workers across the United States who need extra support during this difficult time.
What Does The American Rescue Plan Do?
The goal of the ARP is to provide direct relief to Americans in the wake of the pandemic. The American Rescue Plan gives relief to many...more
Filing Your Taxes Late? Here Is What You Can Do
Monday, May 17 was the official tax return deadline for 2021. The IRS has asked taxpayers to file early if possible, due to their own enormous backlog of returns they are sorting through. But even with a month’s extension, many people still struggled to get everything in order and file their returns by then. And whether you are filing late or have forgotten to file your taxes altogether, not staying on top of your taxes can cost you dearly.
This is why at Bennett CPA LLC, we are prepared to help people with all of their tax needs in Colorado Springs. We provide individual tax planning strategies unique to you, to help you take charge of your wealth. No matter what tax questions you have--about the late tax refund for this year or preparing to file next year’s on time--Bennett CPA is here to answer them. Whether it was due to a family emergency, lost documents, or even procrastination, if your taxes are late, read on to find out what...more
What You Need to Know About Applying for PPP Loans
Paycheck Protection Program (PPP) is a business loan program that’s designed to provide an incentive for small businesses, in order to keep their employees on payroll. It was started in 2020 through the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) to help small businesses, self-employed individuals, some nonprofits, and sole proprietors continue to pay workers.
At Bennett CPA LLC, we are invested in helping small businesses succeed by offering consulting services, tax planning and preparation, and more for individuals and businesses in Colorado Springs. While the PPP program originally closed in late summer last year, it opened back up in 2021 and more businesses are able to apply by May 31st. Would your business benefit from applying for a PPP loan? Should you apply for a PPP loan? We can answer your questions so you can make an educated decision about what’s best for your business.
Who Qualifies for PPP Loans?
There are a number of...more
2021 Tax Deadlines: Everything You Need To Know To Stay Organized
Merrill Bennett, CPA
Bennett CPA LLC is a top-rated tax preparation company in Colorado Springs where we take pride in providing straightforward and simple solutions for our clients. We understand that everyone is going through difficult times, and we aim to take the burden of tax preparation off your shoulders. Whether you have a question about your business taxes or are unsure if you qualify for certain tax breaks, our team is here to answer all of your questions.
Filing your taxes this year may seem more confusing than ever, because of the ambiguity surrounding the filing deadlines. On March 17th, Tax Day for 2021 was officially extended from April 15th to May 17th. This is an automatic action, and citizens do not have to file any paperwork in order to receive the extension. In an effort to help you stay on schedule, the team at Bennett CPA LLC has included some important tax filing...more
How To Qualify For The Child Tax Credit
Merrill Bennett, CPA
As a local business in Colorado Springs, we strive to provide our clients with affordable and high-quality tax services. Bennett CPA LLC understands how quickly taxes can become confusing, and that is why we are here to provide you with the knowledge necessary to make informed tax decisions. As an experienced CPA, Merrill Bennett is able to assist you throughout your entire tax process, from figuring out which tax forms you need to navigating a tax extension.
As an expert in the field, Merrill Bennett is here to answer all of your questions, including, “What is a child tax credit?” It can be extremely confusing navigating your taxes, while trying to determine if you qualify for any advancements or tax breaks. At Bennett CPA LLC, our goal is to provide you with all of the resources necessary to prepare for and navigate tax season.
What Is A Child Tax Credit?
Many stimulus packages have been presented during the pandemic. One of these stimulus packages proposed that the child tax credit be...more
7 Essential Questions to Ask a CPA
Merrill Bennett, CPA
Finding the right CPA for your business is a crucial step toward maximizing your tax profile. When looking for a tax consultant, you can narrow down candidates quickly with focused questions.
As a small business ourselves, Bennett CPA LLC realizes that every part of a company needs to be operating correctly for continued success. If one piece is out of place, it will cause issues for the whole organization. Finding a professional CPA that works with your business to produce seamless results is critical.
What to Look for in a CPA
Many business owners do not realize what important tax questions they are missing the answers to. In addition, the benefits of hiring a CPA for accounting and tax services are not limited to tax season alone. A professional CPA goes above and beyond filing your return with options for tax planning and preparation to strengthen your business’ yearly financial...more
What is the 7202 Tax Form?
Merrill Bennett, CPA
As the United States continues to adopt legislation focused around COVID-19 and tax credits, it can be difficult to keep up with all the changes. While trying to file your taxes for 2020, you may have stumbled across the 7202 form. Today, we are going to explain what this form is, who it applies to, and what it does.
At Bennett CPA LLC, we understand the difficulties of filing taxes as a self-employed individual or as a small business. Compared to a person who is traditionally employed, there are many more forms to be aware of. By utilizing our tax help in Colorado Springs, the filing process becomes clear, simple, and easy.
Form 7202 Explained
The first and most important question to address is “what is form 7202 used for?” This document is a way for self-employed individuals to get tax credits for missing work due to the coronavirus. It has two options. The first is that if you contracted the virus and missed...more
Why Do You Need a Tax Plan?
Merrill Bennett, CPA
Many people only think of taxes when they need to file for their yearly returns. This is not ideal. People who strive to achieve financial longevity need to implement a tax plan. By utilizing an evolving and customized tax strategy, you are able to control your future financial health.
At Bennett CPA LLC, we understand how overwhelming taxes can be. Thinking about the future and establishing a working plan to ensure long-term financial health is difficult to do alone. Let Merrill Bennett, a CPA in Colorado Springs, help you build an actionable strategy to maximize your returns and save you money.
What is a Tax Planning?
Before jumping into the benefits of tax planning for individuals, it is important to understand exactly what a plan is. Essentially, a tax strategy is a way for you to take control of your returns and save money in the long-term. In most cases,...more
5 Reasons Why a CPA is Better Than Tax Software
Merrill Bennett, CPA
Taxes are complicated. Filing laws are continually changing, and tax jargon is hard to understand. Each year various tax forms are shortened, expanded, and updated by the Internal Revenue Service (IRS). Since most people do not specialize in taxes or have formal training, it can be hard to keep up with every adjustment. Utilizing tax software can lead to a fog of uncertainty when you file your taxes. Did you do them correctly? Will you get audited? That is why choosing a tax specialist over tax software is a great way to ensure your taxes are correct.
As a certified public accountant (CPA) in Colorado Springs, Bennett CPA alleviates the confusion and frustration of filing your taxes. Merrill Bennett specializes in tax planning and preparation for individuals and businesses. Bennett provides comprehensive tax services so you know your taxes are completed correctly. With tax services from Bennett CPA, never worry...more
Form 7202: COVID-19 Related Sick Leave & Family Leave Credit
Merrill Bennett, CPA
As you are preparing your 2020 business tax return on Schedule C you may be surprised by one of the notifications from your tax preparation software: 'Taxpayer may qualify for Form 7202 sick leave and family leave credit' or something along those lines.
Your first question is 'what is this credit', followed immediately by 'do I qualify for this' and finally, 'how much is this credit'?
This is the Sick Leave and Family Leave Credit for coronavirus-related absence from your business, either quarantining and receiving care yourself OR providing care for a dependent who is required to quarantine, receive care or due to a closure of a school or care facility. The take-away here is that you were unable to perform services due to these circumstances.
The credit rate differs for these two types of leave (sick aka self as compared to family leave). For care you required, you can receive a credit up to $511 per day, up to 10 days, For care you provided to another, you can receive a credit up to $200 per day (subject to limitations).
The amount of...more
Am I eligible to claim the Adoption Tax Credit?
Merrill Bennett, CPA
The adoption tax credit in 2020 is up to $14,300 - depending on your specific circumstances - for a child whose adoption is finalized in 2020. So the question is 'Can I claim this adoption tax credit' and 'What qualifies me for claiming this credit'?
As with most accounting and tax questions, the answer is 'It depends on your specific circumstances'. The adoption tax credit falls into two categories - domestic and foreign adoptions - with a subcategory under domestic adoptions for those deemed as 'special needs'. The definition of 'special needs' for purposes of the adoption tax credit can be boiled down to whether or not the child receives support through the adoption assistance program (sometimes called an adoption stipend). If the child does not receive this support then the credit will be limited to the qualified adoption expenses incurred.
The North American Council on Adoptable Children (NACAC) has additional information and a more detailed description of scenarios and who qualifies that can be accessed ...more
2021 Tax Season - When it starts and what you should know
Merrill Bennett, CPA
The IRS recently provided notice of when they would start processing individual income tax returns for the 2020 tax-year: February 12, 2021. While this may seem a lot later than most years, this is only a ~2 week delay compared to 2020's filing season as it started on January 27, 2020. Also keep in mind that while the IRS will not start processing these returns until February 12th, you can prepare and submit your tax returns whether that is through self-prep software or a tax preparer so when filing season starts in earnest you can be ready to file immediately.
The IRS anticipates individuals claiming refunds should receive these within 21 days, with some special exceptions for those individuals claiming the Earned Income Tax Credit (EITC) or the Additional Child Tax Credit (ACTC). This delay in accepting and processing returns with these credits is to hopefully minimize refunds being issued for fraudulently filed returns.
As you begin putting together your 2020 tax documentation don't forget to include any unemployment income you may have received in 2020. This...more
Should I Make The S Election?
Merrill Bennett, CPA
As a small business owner or someone looking into starting your own business, you have no doubt come across articles about making the S election, form 2553 and why it makes sense to be taxed this way as you research how the business should be set up. For a lot of small businesses the S election can make sense from a cost-benefit standpoint, however, due to the passage of the TCJA at the end of 2017, making the S election shouldn't be a foregone conclusion.
Unfortunately - as with a lot of tax and accounting questions - the answer really depends on the specifics of your circumstances (below are just a few):
- How profitable you anticipate your business will be in the near future
- Whether or not you will have employees
- What your 'reasonable compensation' would be if you were taxed as an S corporation
- Any additional w-2 wages you may receive from 3rd-party employer(s)
All this to say, when determining whether or not to make the S election for your LLC, partnership or C corporation, it all requires looking at...more