29Jun
Taxes for Ride-share Drivers, Part II: Tracking Expenses
Taxes

open road in the countryIf you missed our last post on the tax considerations of being a ride-share driver, check it out here for more information. Here’s a quick summary if you missed it. First, if you work for a company like Uber or Lyft, you are not a traditional employee, which means that your taxes are going to be slightly more complicated than if you were receiving a paycheck with taxes already deducted. Second, you need to pay taxes on all income you receive, including tips through credit or cash.

Once you’ve calculated your gross income, including tips and payments, the number might seem quite a bit larger than what you actually made. When Uber reports your earnings to the IRS, they report the gross amount that they paid you, including tolls, Uber fees, and device subscriptions. However, the fees that drivers pay to the company are actually deductible, so it’s important to deduct them to avoid paying more tax than you owe. Keep in mind that you will also be responsible for self-employment taxes.

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24May
Medical Expenses: What You Can and Can’t Deduct
Taxes

vaccinating a child

With medical costs increasing all the time, many taxpayers are looking for ways to maximize their tax savings on medical expenses.  Per the 2010 health care law, taxpayers under age 65 can deduct medical expenses that surpass 10% of their adjusted gross income.  (Taxpayers who are 65 or older can still use the previous 7.5% threshold through the 2016 tax year.  After that, they too will be subject to the new 10% threshold.)

For example, if you make $100,000 and have $12,000 in deductible medical expenses, you would be able to claim $2,000 of that on line 4 of Schedule A.  One thing to keep in mind, however, is that you can’t double-dip.  Amounts paid with pre-tax dollars, such as medical premiums through your employer, and any amounts for which you were reimbursed are not deductible.

If you find that your out of pocket expenses are close to the threshold amount, you will want to carefully track every expense, as they can add up.  Here are some tips to make sure you are tracking all your possible deductions:

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20May
How to Tell If You Need QuickBooks Consulting
Business Ownership

screenshot of quickbooks onlineIf you’re a small to midsize business owner, you might be wondering what exactly a QuickBooks consultant actually does. As ProLedge founder Patrick Bonnaure notes, “you put the word ‘consultant’ into someone’s title, and you’re guaranteed to have fuzziness around the function of that individual.” Bonnaure says that the most commonly accepted definition of a QuickBooks consultant is someone who is certified as a QuickBooks ProAdvisor, and someone who focuses on projects as opposed to ongoing bookkeeping work.

The basic definition is useful, but doesn’t necessarily explain why you would hire a QuickBooks consultant as opposed to sending the project straight to your internal bookkeeper and CPA. First, it’s important that you are sending QuickBooks projects to Certified QuickBooks ProAdvisors.

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18May
Moving Employers? Don’t Miss This 3-Step Checklist
Personal Finance

filing cabinets at the officeAll around us, a change is happening in the workforce. Much of today’s work looks significantly different than work of days past. Unlike past decades where employees exchanged loyalty and hard work for long tenures with one company, new generations of workers are switching jobs more frequently.

But switching jobs isn’t as simple as, well, “just” switching jobs. Moving from one company to another without making proper tax considerations, especially if you get a raise, is an almost surefire way to end up with an unpleasant surprise come April.

So: what exactly should you do when leaving one job to start a new one? Here’s a simple, three-step checklist to kickstart your process:

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10May
Your Post-Tax Season To-Do List
Personal Finance

to-do list written on paperAfter tax season, accountants everywhere take a deep breath and hopefully, a short break. However, it’s a myth that financial planners and accountants are only busy during tax season. True, it’s the busiest time of year, but there is plenty of other work to keep us busy in the months to come.

Similarly, after the stress of tax season, clients shouldn’t put off thinking about their taxes until next year rolls around. Working with a tax planner now can help make next year’s taxes as smooth as possible. With this season fresh in your mind, take this opportunity to roll out the kinks from what may have been problematic this season.

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03May
Tax FAQs: “How Long Should I Keep My Tax Records?”
Personal Finance

shredded paperAlmost every year, we receive multiple phone calls from clients asking, “How long should I keep my tax records?” Especially if you don’t have a good system for organizing them, paper records can pile up and seem like a hassle.

But wait! Don’t shred those documents until you know exactly how long you need to keep them, because it’s always better to be safe than sorry. If you’re ever considering throwing away a record from your financial history, give us a call first to make sure you’re in the clear.

Here’s a few rules of thumb for you:

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26Apr
The Benefits of Hiring Your Children
Business Ownership

macbook and pig on a desk

The Benefits of Hiring Your Children

If you are a business owner, have you ever considered hiring your dependent children under age 18 as employees?  Hiring your children can be a surprisingly smart tax move.  Your child can earn money at their (presumably lower) tax bracket, and you can write off the cost as a business expense, thereby reducing your gross income.  Your child may even be able to avoid paying taxes on their earnings altogether.  Consider the following scenarios:

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28Mar
Using Software to Track Your Finances
Personal Finance

budgeting on a computerMany people use the concept of a “New Year’s Resolution” to set financial goals for themselves. For some, this means saving more money and for others, it could mean investing more wisely.

My advice for clients aiming to manage their budgets and spending more efficiently? If you’re not already doing it, it may be time to transition from the traditional paper checkbook register to an easy-to-use-software budget manager for balance sheets and income statements.

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24Mar
How to Choose the Best Business Exit Strategy
Business Ownership

green exit sign in a coffee shopLet’s say you’ve launched an extraordinary, successful business. You love the business, and you’ve worked hard to make it profitable. Whether you’re on the verge of retiring or you’ve just begun to grow your company, it’s important to think about what your exit strategy will be.

In the words of Entrepreneur Magazine writer Jeffrey Robbins, “Entrepreneurs live for the struggle of launching their businesses. But one thing they often forget is that decisions made on day one can have huge implications down the road. You see, it’s not enough to build a business worth a fortune; you have to make sure you have an exit strategy, a way to get the money back out.”

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02Mar
Planning for Long-Term Care with the Nebraska LTC Savings Plan
Retirement Planning

walking on a beach in the sunsetAccording to the Nebraska Department of Health & Human Services, 60 percent of Nebraskans aged 65 and older will eventually have long-term care needs, and may require assistance. There are certainly factors that affect who will need this long-term care.

For example, between the ages of 40 and 50, eight percent of people have disabilities that require long-term care services, and 69 percent of people aged 90 or more have a disability. If you have a chronic condition such as diabetes or high blood pressure, a family history of chronic conditions, or poor diet and exercise habits, it is important to plan for the range of services you may require to meet your personal care needs in the future. From bathing to dressing to using the toilet and even eating, long-term care is any support that helps you meet the needs of everyday life.

In an article about long-term care savings plans Shane Osborn, former Nebraska State Treasurer, shares several facts that are cause for thought about why long-term care should be top-of-mind, no matter your age:

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Hancock & Dana, PC
Certified Public Accountants and Business Consultants
12829 West Dodge Road, Suite 100
Omaha, NE 68154

Phone: 402.391.1065
Fax: 402.334.9498

Email: info@hancockdana.com