Author: kitty

Warren Accounting Group knows how hard you work for your money, and we want to help you keep as much of it as you can. Tax season is months away, but it is never too early to consider ways to reduce your tax burden. Here are 5 ways to reduce your taxable income and keep more of your money.

1. Have a Plan

By planning throughout the year, you are likely to have a better idea what tax bracket you will fall into. If you’ve planned early in the year, you will have time to use some of the tax strategies that will lower your income and benefit you most. And, when you get closer to the end of the year, if you revisit  your strategies, it could help you identify any final opportunities. For example, you may find out you can contribute more pre-tax assets to your 401(k) at year’s end which will help reduce your taxable income.

2. Contribute to Retirement Funds

Contributing to your retirement fund can benefit you by reducing your tax burden in the short term and set you up financially for the future. Your benefits will vary depending on what funds and opportunities you have available to you.

401k: Your contributions are taken out of your paycheck by your employer, so your taxable income will be lower which could reduce the federal taxes you owe at the end of the year. This also benefits you later on in life, as you will have access to your 401k account when you retire.

Traditional IRA: Your contributions to a traditional IRA account are not taxed, lowering your taxable income for the current year.

Roth IRA: Your contributions will not immediately lower your tax bill, but your withdrawal and earnings will be tax-free when you retire.

3. Contribute to a Health Plan

If you are eligible for a health savings plan, contributing to it could reduce your tax burden. Health savings plans are used to pay medical expenses and the withdrawals are tax-free. These account contributions are pre-tax, reducing your taxable income. In addition, any balance left in your health savings plan is rolled over into the next year. So, if you contribute and don’t need to use it, it is available to you year after year.

4. Contribute to a 529

Setting aside money to help send your children or grandchildren to college is another great way to lower your taxable income. In North Carolina, the 529 earnings are free from federal and state taxes, as long as they are used for qualified educational purposes.

5. Make Donations

Charitable donations are deductible, that includes items and cash donations. These types of donations will be itemized on your return, and they can add up. Having a receipt for your donation and making an itemized list of what you donated will help you estimate the value and reduce your taxable income.

If you have any questions about reducing your taxable income, Warren Accounting can help! Our team can review your financial situation and discuss ways for you to take advantage of these and other tax savings opportunities. Contact us today to schedule a meeting!

Who you choose to manage your financials can have an enormous impact on your business. It is important to choose a firm that meets you and your business’s needs.

Here are a few tips on what to look for when choosing a bookkeeping and accounting partner for your company.

1. Industry Experience

Consider industry experience when you are searching for a bookkeeping and accounting firm. It is important to choose a provider who has experience in your specific industry, so you know that your bookkeeping is in capable hands. When deciding, success rate is another key factor to consider, and you want to make sure the company you choose is qualified and familiar with your line of work.

2. Services Offered

To ensure you choose the right company, it is important to make sure they can meet all of your needs. Your needs can change and evolve throughout the years and knowing that your bookkeeping company can grow and evolve with you can save you time and money in the long run.

3. Pricing

You should look at the pricing structure and the flexibility of your bookkeeper. You should want your bookkeeper to match your budget, but ensuring they can scale up their services as your business grows is also important.

4. Communication/Accessibility

Working with someone local vs an online group can make a big difference to your business. When it comes to your business’s finances, it is extremely beneficial to choose a firm that is responsive and dedicated to communication. You want to be sure you are working with someone you are able to speak with should issues and questions arise. Having a dedicated point of contact who addresses your concerns is particularly important.

5. Reputation

As you do your research, it is important to read client reviews and comments to get a good idea of who you will be working with. Make sure you carefully evaluate potential providers, ask for recommendations, and take the time to do your due diligence. Remember it is important that your accounting and bookkeeping provider not only be able to handle your financial affairs efficiently, but that they also become an essential partner for your business.

Warren Accounting Group is equipped to assist you in any and all tax, bookkeeping, and payroll services. We know how important it is that your financials are managed properly, so you can focus on growing your business. Schedule an appointment with us today, https://www.warrenaccountinginc.com/contact/.

Depending on who you ask, there are many different strategies a business could implement to ensure it is successful. One tried-and-true approach that can always benefit your company is having a quality bookkeeping and accounting firm you can rely on.

Ensuring that your finances are handled properly is a great way to stay on top of expenses, income, and records and keep your business moving in the right direction. Here are some key reasons bookkeeping can help your small business succeed.

1. Accurate Budgeting and Performance Tracking

Budgeting is made easy when bookkeeping is done accurately. It is easy to see the correlation between expenses and profit and prepare for the rest of the year when you know exactly how much money you are spending and saving. Partnering with a quality bookkeeping firm can help you track your performance and monitor the success of your business over time.

2. Allow You to Focus on Your Business

Bookkeeping can be time-consuming for business owners, especially if you are unfamiliar with it. Keeping up to date with changing tax laws and compliance requirements can be a burden on owners.  Working with a bookkeeper can take this burden off your shoulders. When a bookkeeper is responsible for keeping track of your finances, you can focus on the bigger picture which is running your business. Having the bookkeeping duties off your “to-do-list” can be a major relief, especially for small business owners who already have to wear many hats.

3. Prepare for Tax Season

Preparing for tax season becomes much easier when your financial information has been organized and maintained all year. Accurate bookkeeping and accounting can make a huge difference on the time and energy you spend filing your taxes.

4. Maintain Peace of Mind

Not knowing where your business stands financially can cause stress, anxiety, and fear. When working with a bookkeeping firm who is responsible for your records, you will always know where your business stands. This saves you time and money, plus it can keep you from worrying. You can rest knowing your books are in order and your bookkeeper is looking out for you and your business’s best interests.

We understand how many moving parts are involved with owning and running a business. We also know how important it is that your accounting and bookkeeping needs are monitored, maintained, and reviewed. When you work with Warren Accounting Group, you can trust that your records and books are up to date and accurate. Give us a call to schedule a meeting today.

In the fast-paced world in which we live, both time and money are invaluable resources. However, for businesses throughout eastern North Carolina, finding ways to streamline their financial processes is crucial.

This blog explains five ways outsourcing accounting and payroll services can free up your time and save you money, which allows you to focus on what matters most – growing your business.

1. Effective Financial Management

Accounting and bookkeeping services are more than just crunching numbers. The team at Warren Accounting Group have the experience to manage your business finances meticulously. From tracking your business’s expenses and revenue to generating comprehensive financial reports, our team will ensure your business stays on top of its financial game.

2. Precise Payroll Processing

The task of payroll can be tedious and time-consuming, and making common errors could lead to penalties. By outsourcing your business’s payroll to the experienced and dependable team at Warren Accounting ensures accurate calculations, timely deposits, and compliance with tax regulations. Collaborating with Warren Accounting Group for payroll processing not only saves you time but mitigates any risk of costly errors.

3. Tax Optimization and Compliance

Navigating tax regulations can be daunting. When you use Warren Accounting Group you will receive expert guidance in optimizing your tax strategy while maintaining all necessary compliance. When deductions and credits are identified, your business can significantly reduce your tax liability, which leaves more money in your business’s pocket.

4. Cost Savings through Payroll Processing, Accounting, and Tax Optimization

Every hour you spend on non-core tasks like accounting and payroll is an hour you can lose from revenue-generating activities. When you outsource your payroll processing and accounting needs, you are able to direct your time and energy toward business and customer development, which drives growth for your business.

5. Scalability and Adaptability

As your business grows, so do the financial complexities. The accounting professionals at Warren  Accounting Group are equipped to manage your evolving financial needs. Whether you are restructuring or expanding your business, their expertise will ensure your financial strategies will remain aligned with your business’s goals.

Time and money are both priceless commodities for businesses. When you outsource your accounting and bookkeeping services you are not just making a practical choice, but you are making a strategic investment in your business’ future.

If you are seeking efficient accounting and payroll services in Rocky Mount, Tarboro, Wilson, Pinetops or other cities throughout eastern North Carolina, Warren Accounting Group is your partner in financial success. By enlisting professionals like Robert Warren and Bonne Rose Allen, you are ensuring your business’s financial health and growth. Contact us today by calling (252) 827-5259.

Tax Day is right around the corner – and it can sneak up on you quickly. Don’t get caught off guard this tax season! Filing for a tax extension can buy you some time to thoroughly review your taxes and file with complete accuracy without being in a rush. Here are some frequently asked questions regarding tax extensions:

1. What exactly is a tax extension?

Filing for a tax extension means you are requesting extra time to file your tax return to the IRS—but you are still required to pay your taxes by Tax Day, April 15^th. To file for an extension, submit Form 4868 to the IRS by April 15^th. If your extension is approved, your new tax filing date is October 15^th.

2. Pros of tax extensions?

Filing for a tax extension can benefit you in many ways. First, simply having more time to go through your documents and accurately providing your tax information is an advantage. Also, you can avoid paying late filing fees, save on tax prep fees, and you’ll likely have more time to seek a potential refund. If you can’t file your taxes on time, it is best to file for an extension.

3. Cons of tax extensions?

There are a few “cons” that come with filing for a tax extension. Taking longer to file your taxes means you must continue stressing about filing them until it gets done. If you are filing for a tax extension – you still must pay off your taxes by April 15^th. If you are looking for an extension on paying your taxes, the IRS offers payment plans.

4. What are some reasons to file a tax extension?

There are many reasons to file for a tax extension. Maybe you don’t have all the records and documents you need to file by April 15^th. Or maybe you are working on changing your retirement plan? You may even have an emergency in your life that prevents you from filing on time. Whatever the case may be, filing an extension allows you more time to file your taxes.

5. Is filing for a tax extension “bad”?

Filing for a tax extension is not considered a bad thing. A crucial part of filing taxes is providing correct and accurate information to the IRS. Filing for an extension allows you to prepare your taxes and information correctly, and despite what many people believe, filing for an extension does not increase the odds of you getting audited.

It can be a great way to save yourself from stress and ensure you are providing correct information to the IRS. Tax season can be chaotic, demanding, and tense. If you are still struggling to decide whether you should file for an extension, contact Warren Accounting. We can help with individual or business tax preparation and provide you peace of mind.

With Tax Day right around the corner, here are eight things you should keep in mind as you prepare your 2023 taxes. If you have any questions or need help filing your 2023 taxes Warren Accounting is here to help you.

1. Income tax brackets shifted.

There are still seven tax rates (brackets) but the income ranges for each have changed slightly to account for inflation. The following tax rates and income ranges will apply for 2023.

2. Slight increase to the standard deduction.

The standard deduction increases to $13,850 for single filers and married couples filing separately. Single head of household filers, who are generally unmarried with one or more dependents, rises to $20,800. And the standard deduction for married couples filing jointly increased to $27,700.

3. The Child Tax Credit could provide a tax break.

Tax credits are normally better than deductions. Credits reduce the tax you owe dollar for dollar and deductions reduce how much of your income is subject to being taxed. The Child Tax Credit is $2,000 per child under age 17. The credit is also subject to a phase-out starting at $400,000 for joint filers and $200,000 for single filers. For other qualified dependents, you can claim a $500 credit.

4. Itemized deductions are mostly the same.

For many filers, taking the higher standard deduction saves them the hassle of keeping track of their receipts. However, if you have a large amount of tax-deductible expenses, it may be beneficial for you to itemize. The rules for itemized deductions have not changed much, but we would like to point them out.

Local & State Taxes: The deduction for state and local income taxes, property taxes, and real estate taxes is $10,000.

Mortgage Interest: The mortgage interest deduction is limited to $750,000 of indebtedness. But if you had $1,000,000 of home mortgage debt before December 16, 2017, you will still be able to deduct the interest on that loan.

Medical expenses: Medical expenses must exceed 7.5% of adjusted gross income (AGI) can be deducted in 2023.

Charitable donations: The annual income tax deduction limits for gifts to public charities are 30% of AGI for contributions of non-cash assets—if held for more than one year—and 60% of AGI for contributions of cash. If you give both can and non-cash assets, the overall limit is generally 50% of AGI.

Miscellaneous deductions: No miscellaneous itemized deductions are allowed.

5. 401(k) and IRA limits are slightly more.

Contribution limits for the traditional IRA and Roth increased slightly from 2022. Individuals can contribute up to $6,500 to an IRA. If you are age 50 and older, you qualify to make an additional $1,000 catch-up contribution. In addition, the contribution limits for tax-deferred 401(k)s and Roth 401(k)s increased to $22,500. And, if you are age 50 or older, you qualify to make an additional $7,500 catch-up contribution.

If you are in the position to do so, consider maxing out your contributions. By doing this you are boosting your retirement savings, and it could also provide a possible tax deduction.

6. You can save more in your health savings account (HSA).

The maximum contribution to an HSA is $3,850 for an individual (up $50 from 2021) and $7,750 for a family (up $100). People aged 55 and older can contribute an additional $1,000 catch-up contribution.

7. The alternative minimum tax (AMT) exemption is higher.

Until the AMT exemption enacted by the Tax Cuts and Jobs Act expires in 2025, the AMT will continue to affect mostly households with incomes over $500,000. The AMT exemptions are $81,300 for single filers and $126,500 for married taxpayers filing jointly. The phase-out thresholds are $1,156,300 for married taxpayers filing a joint return and $578,150 for all other taxpayers. (Once your income for the AMT hits the phase-out threshold, your AMT exemption begins to phase out at 25 cents for every dollar over the threshold.)

8. The estate tax exemption increased.

The estate and gift tax exemption rose to $12,920,000 for 2023. The higher exemption, set to expire at the end of 2025,  could be cut in half at that time if Congress does not act.

The annual gift exclusion, which allows you to give money to your loved ones each year without incurring any tax liability or using up any of your lifetime estate and gift tax exemption, increases to $17,000 per recipient (up $1,000 from 2022).

Here is a list of some of the most common documents needed to prepare a tax return. Before you begin to prepare your income tax return, go through the following checklist. Not every category will apply to you, so just pick those that do, and make sure you have that information available. You’ll be surprised how much time you’ll save by organizing your information ahead of time.

And remember, if you’ve had any life changes, chances are the documents you will need for your taxes have changed too!

Personal Information

-Social Security numbers and dates of birth for everyone on your tax return

-Copies of last year’s tax return for you and your spouse (helpful, but not required)

-Bank account number and routing number, if depositing your refund directly into your account

Income Information

-Wage statement (W-2)

– Unemployment statement (1099-G)

-Pension and IRA income (1099-R)

-Social Security income (1099-SSA)

-Interest, dividends, and income from sales of stock or property (1099-INT, 1099-DIV, 1099-B, 1099-S)

-HSA distributions (1099-SA)

-State income tax refund from prior year (1099-G)

-Alimony received

-Business or farming income – profit/loss statement, capital equipment information

-Prior year installment sale information – Forms 6252, principal and interest collected during the  year, SSN and address for payer

-Miscellaneous income: jury duty, gambling winnings, Medical Savings Account, scholarships, etc.

Credits & Deductions

-Student loan interest paid (1098-E)

-College tuition, fees, and books (1098-T, cashier’s office statement)

-Childcare expenses (need provider’s name, address, and EIN or SSN)

-Medical expenses (unreimbursed insurance, doctor, healthcare facility, and prescription costs)

-For teachers: Canceled checks or receipts for expenses paid for classroom supplies, etc.

-Taxes paid (personal property/vehicle taxes, estimated tax payments made during the year)

-Real estate taxes paid, and mortgage interest paid (1098)

-Charitable donations (receipts for cash and non-cash donations) – even if you don’t itemize

-Expenses related to any 1099-MISC income (receipts, mileage logs, etc.)

-Advance Child Tax Credit amounts received (IRS Letter 6419)

Information Documents

-5498 series forms showing contributions to HSAs, IRAs, etc.

-Bank information for direct deposit of refunds (account and routing numbers)

-Health insurance coverage (1095-A, 1095-B, or 1095-C depending on circumstance; must have 1095-A if anyone in the tax household received Marketplace Insurance)

-IRS notice detailing third stimulus payment (1444-C)

Rental Property

-Record of income (1099-MISC, checkbook register, bank statements, etc.)

-Record of expenses (repairs, cleaning, travel to property, mortgage, insurance, utilities, etc.)

-Depreciation record (cost of assets, date placed into service, prior depreciation taken)

-Documents related to PPP loan and forgiveness and/or EIDL advance and loan

Self-Employed

-Record of income (1099-NEC, 1099-K, receipt book, bank statements, etc.)

-Record of expenses (home office, inventory costs, advertising, fees and taxes paid, travel, etc.)

-Depreciation record for any assets (cost, date placed into service, prior depreciation taken)

-Documents related to PPP loan and forgiveness and/or EIDL advance and loan

Once you have all your documents together, give us a call and let Warren Accounting Group help you file your 2023 tax return. We’re an independent, locally owned accounting and bookkeeping service offering a full range of services and strategies to help businesses and individuals maximize resources and minimize tax liabilities. Our experienced staff is knowledgeable about current tax laws, give us a call and let us put our experience to work for your family or business, (252) 827-5259!

Importance of Tax Preparation

Tax season can be a stressful time, but when you have the right strategies in place, it doesn’t have to be. Proper tax preparation is not only about compliance, but it is an opportunity to reduce your financial burden and maximize your savings. Here’s why tax preparation is so important.

Benefits of Proper Tax Preparation

There are many benefits to proper tax preparation. First, it ensures that you are compliant with tax laws and regulations, which can help you avoid potential penalties or legal issues. Second, you can maximize your tax deductions and credits, which will ultimately reduce your tax liability and increase your refund, or it can help minimize your payment. When you organize your financial documents and records, preparing your taxes is easier and helps decision-making throughout the year. It can also provide you with a clear overview of your financial situation, which enables you to identify areas of improvement, so you make better informed financial decisions. Finally, accurate tax preparation saves you time and stress during the filing process and minimizes your chances of errors or omissions.

Key Steps in Tax Preparation Process

Tax preparation involves several steps to ensure the process goes smoothly. Gather all the necessary financial documents, such as W-2 forms and receipts, to ensure accurate reporting. Next, organize and categorize your income and expenses, this will make it easier to calculate deductions and credits. Review the tax laws and regulations to see if there are any changes that may affect your filing. You should also double-check all calculations to ensure you didn’t miss any eligible deductions or credits. And lastly, file your taxes on time to avoid penalties. You can enjoy peace of mind knowing that your taxes were well prepared and filed on time.

Common Mistakes to Avoid in Tax Preparation

When it comes to tax preparation, avoiding common mistakes is key. Making errors on your returns can lead to penalties, audits, or even legal consequences. One common mistake is failing to keep accurate records. Another mistake you will want to avoid is failing to report all sources of income. Additionally, if you incorrectly claim deductions or credits red flags could be raised triggering greater scrutiny. You should also be aware of filing deadlines. Procrastination and late filings can lead to penalties. And the last thing you need to be sure to do is to review your tax return for accuracy before submitting.  If you are mindful of these common mistakes, you are sure to avoid unnecessary complications.

Tools and Resources for Efficient Tax Preparation

When it comes to efficient tax preparation, tools and resources are key – and they can help simplify the process and ensure accurate filings. You can use tax software to help guide you through the process, and tax calculators can also be helpful in estimating your tax liability. The IRS website also provides many resources, including forms, publications, and online tools. An electronic filing system or tax preparation checklist can help you streamline the filing process as well.  Finally, hiring a tax professional will provide you with expert guidance and advice for complex tax situations. When you use tools and resources such as these, you can make tax preparation less stressful.

Hiring the Professionals at Warren Accounting Group for Expert Tax Preparation

When it comes to tax preparation, hiring professionals is key. Warren Accounting Group has the expertise and knowledge to handle complex tax laws and regulations, ensuring that your taxes are prepared accurately. We can help you maximize your deductions and credits, potentially saving you money. We stay up to date on the latest tax laws, so you don’t have to worry about missing any crucial updates. Additionally, we can navigate any potential audits or tax disputes, providing you with peace of mind. By hiring the tax professionals at Warren Accounting Group for individual or business tax preparation, you can save time, reduce stress, and ensure that your taxes are done right.