The Blog Of TL Wall Accounting

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Archive for August, 2012

10 Things Accountants Can Do For You

The very first post on this blog, after introducing ourselves, was one titled 5 Reasons You Might Need An Accountant. That post was just over 6 months ago, and where as know that most readers probably loved it, even that post might not have been succinct enough to grab you. So this is a quick post that will list 10 things accountants can do for you because really, unless you love math and statistics, wouldn’t you rather be doing other things? Here we go:

1. Handle all your bookkeeping. If you keep all your records in a shoebox and groan whenever it’s time to put all that stuff together in some cohesive way, you know what I mean.

2. Do your taxes. No, accountants won’t pay your taxes, but they will calculate what you owe, total up what you’ve already paid, take care of all your itemization and even file them electronically for you.

3. Help you budget your money. Whether you need help here for your business or your personal life, budgeting your money helps it go a long way.

4. Make recommendations on how you can get your money to help you. Accountants aren’t financial advisors in the way that means they’ll invest your money. But they can offer advice on who to talk to in investing your money, advise you on whether you should incorporate or not, offer banking advice, etc.

5. Show you charts, graphs, etc, letting you see how you spend and earn your money. You can’t control your money if you’re unsure how you’ve been spending it. You also never really know where you should be concentrating your business efforts without knowing what makes you more money over other things.

6. Work with you on learning how software can help you track your money. TL Wall Accounting works with Quickbooks and can teach you how to use it so you can manage your money better. Other accounting companies might use other software or teach you how to track things using Excel spreadsheets. Either way, they’ll give you tools you can use to help yourself.

7. Accountants can pay your bills. If you’re so inclined, many accounting companies will actually pay your bills for you; using your money of course. They’ll either help you set something up where bills are paid automatically through electronic transfers from your bank or you can give them your checkbook and they’ll handle that for you. You can even have them give you an allowance if you feel you can’t trust yourself.

8. Accountants can negotiate payment arrangements for you. Not all accountants will do this admittedly, but if you’ve gotten yourself in trouble either before you hire an accountant or while having one, some will contact your creditors, be they credit card companies or the IRS, and set up payment arrangements for you, based on their assessment of your ability to pay. They will also tell you if you need to go to someone like Consumer Credit Counseling for more extensive assistance.

9. Accountants know a lot of professionals they can recommend to work with you in many areas. They know lawyers, investors, money managers, even people who offer non-standard services that they work with as clients or even as a customer. You can bet that if an accountant is recommending them, they’re probably pretty good at what they do.

10. Peace of mind. Okay, we ended that original article with this same reason, but truthfully, if you weren’t getting something from it that was making you feel at ease, why would you do it in the first place? 🙂
 

Claiming Dependents On Your Weekly Or Biweekly Paycheck

How many dependents do you claim on your taxes? I’m not talking the once a year tax-preparation, but the daily or weekly or biweekly taxes that are deducted from your paycheck.

Most people across the country will claim the same number of dependents that they do on their yearly tax form. What this is supposed to do is remove enough tax so that when you file your income taxes for the year you’ll either have paid everything that you owe or will either owe a little bit more or get a very small refund.

What some people do is claim fewer dependents on their paycheck so that more money is taken out at every pay period. What this does is guarantees them a refund when their taxes are done, and many people plan around that refund. However, it might not be the best use of their money. Let me explain.

Getting a refund from the government is nice. However, by taking more money out of your check it’s the government that gets to use that extra money to build interest on than you. If you have no problems with the government using your extra money then that’s fine. But if you’d like to use that extra money you might think about claiming one less dependent and then rolling that money over into some kind of investment. Not only would you be growing money for yourself, but because you’re investing it you get that extra bit tax-free for a while, which means you won’t have to pay much more on your yearly taxes, if you have to pay anything at all.

Did you know that you can claim anywhere up to nine dependents for your pay checks whether you have that many dependents or not? This is not a recommendation by the way, but it’s something you should probably know.

Every once in a while if you need a little bit of extra cash, it might not hurt to look into claiming more dependents for a pay period or two. What you’re doing in essence is borrowing against yourself instead of having to take out a loan or asking someone else for money. If you claim 9, for instance, you might not have any taxes taken out of your check or very little, and you can roll that money into something else. You could even roll it over into some kind of investing, but the tax amount that you’ll owe on it at the end of the year will still be higher than what you might want to deal with if you decided to do it more than a couple of pay periods.

That’s the main thing you needs to think about if you decide to claim more dependents than you actually have. You will still owe the government its money, and if you don’t plan for that then when you do your taxes at the end of the year you might be shocked to find out how much money you owe. Of course you could probably keep doing the same thing and borrowing against yourself, but that’s not a wise thing to do. Still, if you ended up having to make a deal with the government to pay back outstanding taxes, it will cost you a lot less than the interest on a credit card.

This is just something to think about if you’re ever in a spot where you need a little bit more money, or maybe want to take some of the money and invest it so that you’re making money rather than allowing the government to make money off of you. Of course you’ll want to talk to your accountant or money manager to see how this type of thing will work for you if you’re going to invest it, as well as talking to your accountant if you’re planning on upping your dependents for a short period of time so you can be warned as to around how much that might end up costing you if you don’t catch back up later on.