7 Money Moves to Make at Year’s End

I don’t know about you, but I’m ready to see 2020 in the rearview mirror. But before you turn that calendar page and close the book on this dreadful year, take a bit of time to set yourself up for financial success in 2021. Spend these last two months reviewing what went well for you financially and what can be done better in the coming year.

Here’s my seven-item, year-end essential financial checklist:

  1. Spend an hour or two doing a review of the last year.

First, sit down with a paper and pen (or computer, if you prefer), as well as whatever financial records you have from the last 10 to 12 months. This may be your budget, an app such as Mint, or your bank’s website. You want to look at your income, your spending, your debts, and your goals. Did you meet your goals or fall short of them? Did you make progress toward paying off debt? Did your income decrease or increase? Did you notice any changes in your spending? Be honest with yourself and get a realistic picture—approach this without judgment or self-criticism, but instead with a positive attitude. This isn’t about beating yourself up—that’s not productive. Instead, it’s about making a few adjustments that can make a big difference.

  1. Set your financial goal(s) for the next year.

It’s tempting to get carried away with goal setting, but be realistic about what you can feasibly improve. Strive to set one or two goals and establish a plan to reach them. As the saying goes, a goal without a plan is just a wish. Putting systems in place will help ensure you can reach your goal rather than just wishing for it to come true.

Perhaps you want to save up for that long-awaited post-COVID trip? Pay off your car or buy a new one? Create an emergency fund? Increase your retirement savings? Or start a college savings plan for your kids? Maybe you want to pay off that credit card or student loan, or pay for home improvement? Perhaps it’s possible for you to set aside $20 a week or $100 a month—or more! Maybe by eliminating one or two expenses—a subscription or a weekly Starbucks run—you can channel that money toward your goal.

  1. Talk to a CPA about your tax standing.

Before 2020 is over, you might want to make some adjustments to your tax withholding. If your income changed significantly this year (and for many it did), whether it went up or down, you might be concerned about owing too much taxes. Schedule an appointment with a CPA for a year-end review. We can work with clients to make a few tweaks that could benefit your tax position for the coming year.

  1. Consider Health Savings Accounts (HSAs).

If you have a high-deductible health insurance plan and are not enrolled in Medicare, you may qualify for an HSA, which is a savings plan specifically designed to help people prepare for medical expenses. You may contribute up to a maximum amount per year ($3,550 for self-coverage and $7,100 for family coverage). This is an investment I recommend, if you qualify. Doing so not only lowers your taxable income for that tax year, but if the money is used on medical expenses, you will never owe any taxes on it. Plus, if you don’t use the money during that year, it can roll over to the next year. Health care costs are on everyone’s minds during the pandemic, so this could help to ease your mind, particularly if you foresee you will incur medical costs in the near future.

As a side note, I often am asked about whether Flexible Savings Accounts (FSAs) are similarly a good idea: I don’t really like them. An FSA, which is usually offered by an employer, requires you to predict at the beginning of the year how much money you will need to spend on health care in the next 12 months. If you put this money aside and don’t end up using it all, you lose access to the money. Though it’s better than no medical savings at all, in my opinion, the rules on FSAs are too inflexible to make this plan advantageous.

  1. Review your Social Security and disability benefits.

Each year, every American receives a statement from the Social Security Administration that details how much retirement savings have been put aside for you by the government. Those of us who are still far from retirement usually throw the statement in the trash with hardly a glance. But it’s a good idea to review it. If there’s income on there that isn’t yours or other erroneous information, it could be an indication of fraud.

If you’re receiving federal disability benefits, check to make sure you’re still eligible. People who don’t work for five out of the last 10 years lose these benefits. Getting back into the system takes about $5,000 of annual income, so it’s easy to maintain your benefits, but it can be very painful to lose them.

  1. Review your designated beneficiaries.

I’ve mentioned this before, and I’ve seen it happen: A married couple splits up, one of them dies before making changes to the beneficiaries on a life insurance policy, and the ex receives the entire sum. If you’ve had any major life changes—a new child, a new spouse, a divorce—it’s time to take a look at your beneficiaries on all accounts and make sure all the information is correct.

  1. Review your credit report.

Every American is entitled to a free credit report from each of the big three credit-reporting agencies (Equifax, Experian, and TransUnion) each year. Getting hold of all three of them can, admittedly, be trickier than it should be, but even getting two of them should give you a good picture of your credit rating. Review it to be sure that nothing looks amiss. Be sure that any late payments are correct or amended and nothing is a surprise. Anything that doesn’t look right is likely to be a simple reporting error, but it could also be an indication of fraud, so go over it carefully and take steps to make necessary corrections. The result could be an improved credit score, so it’s worth your time.

If you’re ready to make improvements to your financial picture but don’t know where to start, give us a call! We’re happy to make a one-hour appointment with you to go over your current financial picture and make a few recommendations that can get you started.

This November, we are grateful for you! Happy holidays!

End-of-Year Tax Planning Checklist

I know what you’re thinking: “But I JUST filed my taxes a couple months ago!”

It’s been a bizarre year, to say the least. And with the federal government having moved this year’s tax return filing deadline from April 15 to July 15, it’s true that you may just have filed your taxes a couple months ago. Nonetheless, time — and the IRS — wait for no one. We are rapidly heading to the end of 2020 (thank goodness), and the end of the year means performing a few actions and making important financial decisions.

First, although many people may be wondering if the election will affect our tax situation, it’s unlikely that any changes will have an effect on 2020. So you should proceed with your tax planning using current tax laws.

To help you keep your priorities in order and your deadlines straight, we’ve put together this list of end-of-year tax planning tips for individuals and businesses.

Plan Your Gifts

We’re not talking about Christmas shopping here — this refers to financial gifts you may give to loved ones. Currently, the tax law allows for an annual exemption of $15,000 gift per person. A financial gift can be a straight gift of cash, or it can mean college expenses being paid directly to the institution, a deposit into a 529 college savings plan, or even forgiveness on an outstanding loan. Gifts must be given in plenty of time before January, meaning that checks must clear the bank by December 31, 2020 in order to qualify for this exemption. I have indeed heard of court cases in which recipients didn’t cash their checks until January, thereby making the gift questionable — don’t let this happen to you.

The IRS also allows for gift splitting, meaning that a married couple can qualify for the annual gift exemption even if they together give up to $30,000 to the same individual. However, if you wish to do this, you MUST file a Form 709 — U.S. Gift Tax Return — next year.

Consider Charitable Giving

Recent changes to the tax law raised the standard deduction to $12,400 per individual or $24,800 for a couple. For some, this is good news, but if you’re used to itemizing deductions for charitable donations and other expenses, this may not be favorable — you would have to give more than the standard deduction to see any benefit in your tax return. This disincentivizes giving, which has had negative impacts for a lot of organizations.

There are ways to make your donations count, however. First, you can contribute to a Donor-advised Fund (DaF). This arrangement allows you to prepay for donations for several coming years, then advise the account manager when and how much to distribute to the organizations of your choice. Prepaying allows you to surpass the standard deduction, so you can write off the donation but still provide steady levels of donations for the next few years. For example, if you wish to donate $10,000 to a charity, this doesn’t exceed the standard deduction. But if you paid for two years at a time — $20,000 — into a DaF, you could request to distribute $10,000 this year and $10,000 next year, and you can write off the entire $20,000 for the 2020 tax year.

Prepay to Itemize Deductions

Along these same lines, know that the increase in the standard deduction was designed to replace itemized deductions for donations, mortgage interest, accounting fees, DMV fees, real estate tax, and more. In some ways, this streamlines the tax preparation process. However, it limits the benefits of paying certain fees. Sometimes there is a way around this, however: prepayment.

If you prepay enough to exceed the standard deduction, you can benefit from a deduction for the 2020 tax year. For example, say you are part of a married couple who files jointly, and you’ve paid $15,000 in mortgage interest this year and donated $8,000 to charitable organizations. This totals $23,000, which still falls below the standard deduction of $24,800. If you prepaid some charitable giving, real estate taxes, or another expense for 2021 before this year is over, you could feasibly exceed the standard deduction and qualify for reduced taxable income. This provides immediate savings for you and reduces your payment burden for next year — a year when the tax laws could potentially change. Our standard advice for taxpayers is to accelerate income and delay expenses, so this approach checks both boxes.

Convert to a Roth IRA

We recommend that individuals convert their traditional retirement accounts, which defer taxes until withdrawal (at a potentially higher rate than today’s), to Roth IRAs, which contain funds that have already been taxed. This means that when you withdraw funds, you pay no additional taxes — and neither would any heirs on this account. Additionally, traditional IRAs involve required minimum distributions (RMDs). This is the first year in recent memory in which no RMD was required, and the age to begin RMDs moved from 70.5 to 72. The RMD is expected to be back in 2021. However, Roth plans have no such requirement.

But this is general advice and may not suit everyone right now. Contact us, and we can sit down with you to look at your tax rate, income situation, etc. to determine whether this is a good option for you.

Remember that if you plan to make IRA contributions (Traditional or Roth) for 2020, you may do so until April 15, 2021. If you decide to make such a contribution after your tax return has been filed, your CPA can submit an amended return.

Address Retirement Contributions

Speaking of your retirement, now is the time to review your employee contribution to a 401(k) or Simplified Employee Pension (SEP) accounts. If you’re in a position to increase your contribution before the year’s end, it could lower your taxable income, thereby lowering your tax burden. The maximum contribution for 2020 is $19,500 per person up to age 50, and for those older than 50, the maximum is $26,000. Check your paystub; if you’re not close to that and can afford to contribute more, do so.

Cash-based businesses should also plan to make all their pension contributions by the end of the year in order for them to count toward this year’s deductions.

Harvest Your Losses

If you have significant stock gains from this year, this adds to your taxable income. Talk to your financial advisor about the option for loss harvesting. In this approach, you would sell any securities that are not performing well and would result in financial losses; the losses would qualify for tax deduction. This may offset any gains you’ve realized this year, thereby potentially lowering your tax burden.

Review Your Finances Now

The end of the year is the perfect time to make an appointment with a CPA to review your financial picture. If you schedule an appointment with us, we can happily meet with you via videoconference to make recommendations for improving your tax situation, increasing your financial gains, and achieving long-term goals.

As always, remember that we’re here for any of your tax and small business needs. Happy planning!

How to Make Savings a Habit

Tips for saving more money and watching it grow.

Lately, it seems we’re constantly bombarded with terrible news stemming from the coronavirus. So it was a pleasant surprise to read recently about one silver lining to come from the outbreak: the historic rise in personal income and savings.

That’s right. Americans saved a record-breaking 33% of their income in April 2020, creating an increase of 10.5% in personal income.

In the face of tremendous financial uncertainty caused by the virus, with economic stimulus payments in hand, stores closed, and travel and leisure activities almost totally off the table, Americans have been stockpiling cash at unprecedented levels. That’s great news and is sure to help many of us weather the economic storm many experts say is sure to come our way.

But putting money aside in savings hasn’t typically been a habit many of us have cultivated. The vast majority of Americans have no savings — or at least haven’t saved regularly. Now seems like the perfect time to turn our current savings trend into a long-lasting habit that helps us meet future financial challenges, meet savings goals, and develop peace of mind.

How to Save

When I was just starting out in my career, my money was tight. I remember thinking, “There’s no way I can afford to put money aside in savings — I need every dollar I get!” But for most of us, this simply isn’t true. A good household budget will reveal where your money is going each month, and often you’ll find that you’re spending more than necessary on non-essential expenses. Even putting aside $50 a paycheck can add up to more than $1,200 a year. You can decide the maximum amount you can set aside each pay period or month and work with your employer and bank to have those funds automatically deposited or transferred into your savings account regularly. When you don’t actually see that money showing up in your checking account, it will be out of sight and out of mind, which allows it to grow untouched.

Create Your Emergency Fund

The upside of squirreling money away these days is that we’re creating an emergency fund for ourselves in the case of job losses, unforeseen medical issues, or repairs on cars to get to essential jobs. Even when the economy begins to normalize and virus shutdowns are in the rearview mirror, keeping an emergency fund intact is critical. Financial guru Dave Ramsey recommends that everyone have an emergency fund of at least $1,000, and this is advice we subscribe to here at Ludmila CPA. If you don’t currently have this much set aside, you should make this a top priority.

Put anything extra after you’ve done your monthly budget into a separate savings account that you can access for true emergencies. This is not for buying clothes, taking trips, or paying bills, which are expenses you should be anticipating and budgeting for. Rather, this emergency fund is for the expenses we don’t see coming — like a new tire or car repair, a busted air conditioner, or a burst pipe in your plumbing — and it should sit outside the accounts you use to pay bills. It should be fairly liquid, so not an investment, but not so easy to use that you’re tempted to. Once you have an emergency fund in place, you’ll enjoy peace of mind from knowing that a true emergency won’t wipe you out financially.

Then you can move to the next step: creating a safety net.

Save 3 to 6 Months’ Worth of Expenses

It’s always a good idea to plan for the worst — a job loss, a catastrophic illness, etc. — by accumulating enough money to live on if you lose your income. With the cloud of virus-related economic uncertainty expected to linger for months or even years, it’s especially wise to start growing your financial safety net of three to six months’ worth of household expenses. You’ll find that having this amount set aside provides tremendous reassurance that you could survive a loss of income. And if you have lost your job, this fund buys you time to find the best job for you, rather than feeling rushed into taking the first one you can find out of desperation.

Once you have this in place, put as much savings as you can into your retirement account(s).

Where to Keep Your Savings

Depending on your purpose and goals, you have several types of savings accounts to choose from:

  • Basic Savings Account: This is an easy option — ideal for having direct deposits automatically placed into it and liquid enough to access in case of emergency. However, interest rates on savings accounts are so low — lower than inflation — that it’s not a great way to grow your money.
  • Money Market: A money market offers more interest — though only slightly more — enabling your money to grow a bit faster. And it’s just a touch less convenient to access, which can be a good thing, as it won’t tempt you to dip into it for non-emergencies.
  • Certificates of Deposit: A CD is a good, conservative savings option that forces you to hold off on using your savings. With this time deposit, you wait for the CD to mature and accrue interest, based on a specified fixed interest rate. These offer slightly higher interest rates than savings accounts, but rates are so low right now that it might be best to select a CD with a shorter term that will mature more quickly. When interest rates are higher, go for a longer period to see that savings maximized.
  • Investments: To grow money, experts recommend a portfolio of diverse assets — real estate, businesses, mutual funds, and other financial instruments offered by brokerage firms. Many tax-favorable accounts deserve attention, namely the traditional and Roth IRA, which you should contribute to regularly. Consult a professional to discuss which one is best for your situation.
  • Health Savings Accounts: An HSA is for families or singles who have high-deductible health plans to accrue savings for medical expenses. The nice thing about this plan is that it enables you to pay for medical expenses with pre-tax money.
  • Education Savings Plans: Plans such as the 529 are designed to help families afford the rising costs of college. Speak to a financial professional to set this up or determine how best to save for your child’s college education.

I’m heartened to see so many people putting aside savings during this difficult time, but for it to make a real difference, now’s the time to start making this a habit, for your long-term financial health. We’d love to help guide you toward the right savings solution — contact us today.

And enjoy your summer!

Filing Taxes During the Coronavirus | COVID-19 Update

We understand these are turbulent times for many people and it can be really scary. If you haven’t heard yet, to ease the burden of these times, the tax deadline has been extended to July 15 rather than April 15. We are currently out of office and are working from home. Even though we may not be able to help you face-to-face, there are still actions you can take to stay on top of filing your taxes during the coronavirus.

Here are some things you can do for filing your taxes during the coronavirus.

1. Get a scanner and scan all your tax documents. First of all, you will do yourself a favor and have a digital copy of all the documents. As long as you keep a good backup copy of your hard drive, no need to keep paper.

2. You can send your scanned documents to us using the secure file transfer at: https://ludmilacpa.leapfile.net. We scan all the documents we receive. If you do it for us, you should see some tax prep cost savings.

3. We conduct meetings over the phone and over the Zoom video chat. Industry experts say that virtual meetings are what the majority meetings will be in the future. Learn the new technology to keep up with technology.

4. Be pro-active and scan all your 2020 tax information. It will be helpful to you when the next tax season rolls around.

5. If you are not into all this technology yet, just put all your tax info into an envelope and mail it to: 930 Tahoe Blvd # 802-393 Incline Village, NV 89451.

We cannot wait to go back to normal business when we can be in the same office sharing a cup of coffee together. Until then, we will make it work to the best of our ability. And hopefully, everybody will learn something important that can be utilized in the future (either new technology or the new understanding how important it is for us, human, to be together). If you need help with filing your taxes during the coronavirus, please give us a call!

Is Your Business Ready To Jump Into Tax Season?

tax seasonAs we approach April, the time of year that makes business owners shake in their boots and CPAs guzzle coffee by the gallon, take comfort in one small silver lining: It’s a leap year, so you get an extra day of preparation. Okay, well, I did say it was small…

As the turbulence of last year’s changes to the tax law has stabilized, we have a better handle on how best to adjust and hopefully started putting plans in motion last year that will pay off this year. Nonetheless, there are always a few changes, and keeping them straight can be tricky, so we’ve rounded up the following list of important business tax deadlines, so you can be as prepared as possible for tax season:

March 16:

  • S-Corps, partnerships, and multiple-member LLCs must file returns or extensions. Bear in mind that if you miss this deadline, even by just one day, you’ll be charged a monthly penalty of $195, which will be assessed every month you’re late, per owner. The charge is not prorated, so don’t miss that deadline.
  • File for an extension. If you don’t think you can make the deadline for S-Corps, partnerships, and LLCs to file, be safe and file an extension, which gives you until September 15, and you won’t have to pay that steep penalty. (C-Corps and other entities, see below for your deadline and extension information.) But it only works if you file for the extension by March 16. Business tax extensions are filed either electronically by tax preparers OR by mail using Form 7004. We prefer electronic filing, because we receive a record of acceptance from the IRS, which is not the case with paper forms (unless you use certified mail with return receipt, which would be your next best option).
  • Newly formed corporations must elect S status by today. By electing to become an S-Corp instead of a C-Corp, you’ll be converting a corporation from paying its own taxes to passing income to the owners or shareholders, thus avoiding double taxation during tax season. If you wish to change to S status, you must do so by March 16.

April 15: Tax Day

  • C-Corps, trusts, sole proprietorships, and single-member LLCs must file return. Sole proprietorships file their returns on their individual Schedule C forms by the standard filing date for individuals. This is also the date on which you’d need to file for an extension in order to avoid penalties. The extension would give you until October 15.
  • Single-owner LLCs and partnerships run by married couples are disregarded entities, which file Schedule C by April 15. In these cases, the businesses are not seen by the IRS as distinct from their owners, so they file their returns on their individual Schedule C forms by the standard filing date for individuals (April 15). NOTE: This only applies to LLCs organized in community property states, such as Nevada and California. In some states, LLCs owned by married couples may have to file separate tax returns, so be sure to speak with us about the rules in your state.
  • Pay California LLC fee of $800. If your business is located in California, your $800 LLC fee is due today. The fee is due even if your business is formed in a different state but is registered as a Foreign LLC or S Corporation in California.

May 15:

  • Private foundations must file Form 990-PF. This is the deadline for private foundations to figure their taxes based on investment income and to report charitable distributions and activities. Extension to file is available to be able to file by August 15.

September 15:

  • LLCs, Partnerships and S Corporations which have requested 6-months extension. This is the final deadline of the year. If the deadline is missed, the late filing penalty of $195 per owner will start accumulating starting back on April 15!

And if your fiscal year ends on a day other than December 31 … Your filing deadline is the 15th day of the third month AFTER the end of your fiscal year (the 15th of the fourth month for C Corporations). So if your fiscal year ends July 31 and you are an S Corporation, the return or extension is due by October 15.

And our most important tax advice? Don’t wait until your appointment with us to prepare your records during tax season! In order for us to be most effective with our time, and in order to work with you to forecast the next year and make informed recommendations, it’s important for you to give us access to all documents early, so that we can prepare your return in a timely fashion and our appointment can focus on planning, which we firmly believe is the most important service we can provide. And please don’t hesitate to contact us with questions or issues you’d like to discuss, no matter what time of year it is – not just during tax season.

Contact us today to schedule an appointment or to discuss any deadlines or requirements that may pertain to your business. Happy tax season!

A New-Year Checklist for Financial Health

financial healthJanuary is always a great time to wipe the slate clean and start fresh, tackling long-overdue tasks and starting on the right foot. Even more ideal is that this year is 2020 — as in giving your finances some 20-20 vision to be real with yourself and find opportunities to improve your financial health.

So here’s my “2020 Vision” list of financial moves you should consider making this year. Even if you only tackle a few of them, you’re well on your way to a financially healthier, happier new year.

Make sure you have a living trust.
This applies particularly to adults who have children who are minors. Are they protected against disaster if something happens to you? In most cases, without a living trust, your estate will go through probate before plans are established for your offspring. But with a trust, your wishes are followed immediately, including any and all rules you’ve established in the trust (age at which beneficiaries receive assets, for example). With a trust, you can designate a guardian for your children, too. Having a will is an important first step in designating whom will receive your belongings, but without a trust, your estate still will go through probate, with or without a will. Although a CPA cannot prepare this legal document, a CPA can prepare or assist with the balance sheet you’ll need to organize your finances and help create a list of assets for the trust. The best-case scenario is to work with a CPA and attorney as a team in this process, and our firm is happy to recommend area attorneys who can assist you with this.

Address life insurance.
Your policy should pay out about five times your annual income per working parent. Even if your children are older, it’s still important to have life insurance if your kids are pre-college age and living at home, and if you have a mortgage. If you are still young, you’ll find that the rates for term life insurance are very affordable, perhaps only about $500 a year. We advise clients to explore leveled term insurance; with this type of policy, you can get a 10, 20, or 30-year term without a price increase. Although such a policy might be more expensive early on, it levels off, making it much easier to adapt to the payments. At our firm, we have seen cases both with and without life insurance, and I can tell you that it makes a huge difference for the survivors’ lives to have the safety net of such a policy. We are happy to refer you to professionals who can find the right plan for you.

Make sure you’re getting the most from your retirement plan.
It doesn’t matter how young you are, the time to start thinking about retirement is now. The earlier you start, the better the result. If you have a retirement plan at work, plan to contribute up to the maximum allowed. If you don’t have a plan at work, look into setting up a Roth or Traditional IRA. For self-employed individuals, it’s a good idea to contribute to self-employment IRAs. For Roth and Traditional IRAs, if you’re 49 or younger, the maximum amount you are allowed to contribute each year is $6,000; if you’re over 50, you can contribute $7,000. However, if you have a 401k plan and you’re 50 or older, you’re allowed to contribute $19,500 per year, starting in 2020. (Note that the IRS goes by the year you turn 50, not your birthday. So if you turn 50 this year in October, you’re still considered 50 in January.) If you’re self-employed, you can contribute 25% of your net income to a self-employment IRA; doing so decreases your taxes. In other words, if you earn $100,000 annually after deductions, you can put $25,000 away and it comes off your taxable income amount. But note: You will pay taxes later. With a Roth IRA, your contribution comes from taxed income, so you won’t pay taxes on that when you withdraw funds later. There are also income limits, so consult with us. We can refer you to an expert on retirement plans to find the right one for you.

Ensure your beneficiaries are up to date.
Having a trust, life insurance, and retirement accounts means you’ll need to decide whom should receive the benefits of these plans. And if your plans were set up long ago, it’s possible that your beneficiaries have changed — particularly if your family’s demographics have changed, such as with a divorce, a new child, etc. Make sure you take the time to review the beneficiaries listed on all plans and make all necessary updates for your financial health.

Establish a doable savings plan.
Strive to save 10% of your gross earnings. Invest in different kinds of assets for your financial health; don’t put everything in one basket. Put your saved earnings in different savings vehicles — money markets, stocks and bonds (with a variety of risk levels), real estate, retirement plans, and savings accounts. Make sure you have an emergency fund — according to Dave Ramsey, that should be at least $1,000 and up to six months of your earnings. Such a fund enables you to weather unexpected financial storms without disturbing your day-to-day finances.

Create a safe list of passwords.
I’ve unfortunately seen numerous cases in which loved ones couldn’t access important accounts left behind when relatives pass away, all because they couldn’t find the passwords. Take the time to make a list of login information for those important accounts and keep it in a safe deposit box or some other safe place where the people leave behind could access it, in the event of your death. Or tell your CPA to direct the family to this so they can find that information.

Be sure you know what electronic payments you’re making.
We believe electronic, automatic payments are a good, time-saving idea, but don’t let them run on autopilot without checking on them. The beginning of the year is a good time to evaluate everything you’re paying automatically, to make sure those payments should continue. You can automate your payments for telephone, Internet, mortgage, car payments, and more, and you can sometimes work with representatives to find ways to lower those payments. For example, perhaps you’re paying for a sports channel on satellite TV that you never watch — that could save you a nice chunk of change. You might even look at changing providers or negotiating your rates. You might even find that you’re paying a monthly subscription to a service you aren’t using, like a gym membership. Even little changes like that help your financial health.

And finally, now’s the time, before tax season really heats up, to set up your CPA appointment to get your financial health in order.

We wish you all the best for 2020, and we look forward to working with you!

Declare Your Independence … from the Financial Details

Declare Your Independence … from the Financial Details

Do you smell that? That heavenly unmistakable aroma of charcoal grills, freshly cut grass and sunscreen mean summer is here. And with it comes the promise of freedom — of course, America’s freedom, which we’ll be celebrating this summer, but also freedom from the grind of school, the day-to-day routine, and those snow tires (fingers crossed).

Summer represents everything small business owners are seeking when they first start their businesses: the freedom to travel when they want, to be their own bosses, to do their work how they choose at any time they choose. If you want to spend your Tuesday fishing the Truckee River, lying on the beach at Sand Harbor or taking your kids to Disneyland, you’ve earned the right to do it. That’s the biggest perk of owning a business, right?

So why stare at a mound of paperwork and worry about how the billing, payroll, expense tracking, and tax reporting will happen if you hit the road?

Instead, here’s some advice: Close your eyes; breathe in that glorious air; envision your next summer adventure, and declare your independence from your books.

While you’re stocking up on sparklers and packing your picnic basket for Independence Day, celebrate your own freedom from the financial minutiae of running a business.

That’s exactly why we’re here.

The whole reason Ludmila CPA offers a full suite of small business solutions is to enable small business owners like you to focus on their passions, grow their businesses, and, yes, to enjoy the perks of self-employment. We want you to enjoy your summer! (After all, we waited long enough for it!)

As a business owner myself, it’s important that I be able to take the occasional day to be with my family or to travel. Every business owner should do that, but you can’t when a rapidly growing pile of paperwork is sitting in the corner, filling you with dread and anxiety.

You may think it’s a wise decision to save money and handle it all yourself, but trust me when I say the small investment you make in hiring a professional to take that burden off your plate will provide endless returns in the form of improved mental health, quality time with your family and friends, and even improved revenues now that you have more time to focus on your business.

A lot of programs out there these days advertise that you can “Do It Yourself!” But is that a benefit? Aren’t you busy enough? And wouldn’t you feel better-having professionals give it their undivided attention? If you’re not quite ready to turn over the reins completely, we understand. We can still recommend applications that could complement our services and make your life easier. You’ll still reap the rewards of efficiency, time, potential money savings, and the opportunity to catch errors or even fraud.

While you should be able to disconnect from your work sometimes, you might feel more comfortable knowing that our cloud applications for bookkeeping allow you to check in from wherever you are — whether that’s your backyard or Timbuktu — anytime you wish.

Our wide range of small business services includes:

Schedule a meeting today and talk to us about how we can help — we’re happy to customize a plan that enables you to hand over to us only those tasks you’re ready to let go.

Then go celebrate your freedom!

Tips for Personal Tax Prep – Making Tax Season Less Taxing

Tips for Personal Tax Prep

We understand. The whole idea of hauling that box of papers out of the closet, sorting through them to decide what’s important and what’s not, pestering people to collect whatever documents are missing (and not being quite sure what those might be), then heading to the accountant’s office with frazzled nerves as you fear the worst outcome … tax season is rarely anyone’s favorite time of year. Trust us, we get it. We Make Tax Season Less Taxing

For some folks, going to the accountant is like going to the dentist: You dread it enough that you only go when you absolutely have to, and you spend the whole time there with a sinking feeling that you’re about to find out something bad.

The problem with that approach is that there might be something that’s a tiny issue now, something that’s easily fixable with a few adjustments, but it could wind up being a major issue next year. Avoiding your CPA doesn’t prevent the issue; it just makes it worse. (Also like the dentist.)

At our offices, we tend to only see some clients when there’s a huge problem. Maybe a few years ago they thought it would be easier, less scary, to have their friends do their taxes. Then they wind up sitting in our office, terrified because they owe a $4,000 penalty to the IRS for gross income omission.

Had they made the small investment in a CPA, they would have benefitted from a knowledgeable expert spotting such an oversight early on and correcting the mistake—or, at the very least, helping them to anticipate and mitigate the consequences. Paying us for an hour of our time buys you peace of mind. And trust us, there’s nothing more valuable than that.

We’re firm believers in surrounding yourself with professionals. You shouldn’t diagnose your own illnesses, you shouldn’t fix your own electrical system, and you shouldn’t manage your own stock portfolio—not without experts in your corner. And you shouldn’t file your tax return without insight from a trained professional, either.

We also won’t need you to bring in that dreaded box. When you call us and schedule an appointment, we’ll let you know what things we’ll actually need from you—and it won’t be as much as you’d think. At our meeting, we’ll go through your document package together, and we’ll let you know if anything’s incomplete, doesn’t look right, or is missing. Don’t worry about being perfect; no one expects that. We’re in this together, and we know that you’re not an expert. We’ll talk you through what’s next and make filing your tax return as un-scary a process as possible.

Then comes the most important part of the meeting: planning next year. The more thought you put into next year’s tax filing, the more rewards you’ll reap. Next year, we will remind you it’s tax preparation time to help you collect the documents you’ll need and to schedule a meeting. And then we’ll debrief—what went well, and what didn’t? What changed for you? What adjustments should we make in response? What are your financial goals, and how can we help you reach them?

Are you convinced? The April 15 tax deadline is fast approaching, so contact us today to schedule an appointment or to discuss any concerns you may have. We’re ready to help you make tax season a whole lot less taxing.

Are you a small business owner? Check out our tax prep tips for your small business!