Sovereign Tax Solutions

04/13/2024

01/17/2023

Tax Tip for Hair Stylists

12/17/2022

5 Tax Deduction Tips for Small Business Owners

It's tax deduction season time! Now is the time to consider making business or personal purchases that can help reduce your 2022 tax bill. I'm going to share an example with you on how you can possibly save $1000 on certain purchases, as well as give you 5 year-end tax tips.

If you want to reduce your taxable income, you need to take steps to do this before the end of the year. One of the best things you can do if you're looking to fund and grow your business in 2023 is purchase items that can be an essential part of your business in 2023.

For example, let's say your taxable income for 2022 is $50,000, and you purchase a product for $3,000; you would reduce your taxable income by $3,000.00, which means that instead of being taxed on the full $50,000, you'll only be taxed on $47,000 of income given a 30% tax rate which means that you could possibly save $1,000 in owed taxes! Outside this example, you will also find below 5 additional tips on how to save money before the end of the year.

Tip #1: Stock up on prepaid expenses: If you need supplies or inventory for your business and you have extra cash sitting around consider prepaying for these expenses to reduce your tax burden.

Tip #2: Try switching to an annual plan for any subscriptions: If you have a subscription service or membership, you'll want to consider switching to an annual option instead of a monthly or quarterly.

Tip #3: Write off bad business debt: Bad debt can be written off before the end of the year and then deducted from your taxable income. Run your accounts receivable aging reports to see which receivables are unpaid from customers and write that off.

Tip #4: Write off or write down equipment and inventory: Review your business inventory and equipment. Obsolete damage or worthless equipment can be written off.

Tip #5: Give employees bonuses or gifts: In addition to receiving a potential tax deduction for paying bonuses or gifts to employees, you may also receive goodwill from them, especially around the holidays. (For gifts I would highly recommend limiting each gift to $25.00 per employee). Happy saving!

10/31/2022

To all of my NJ homeowners and Renters, if you have not applied for the ANCHOR program, you need to do so now. This is for homeowners and Renters. NJ State Gov announced a new property tax relief program for homeowners and renters who own or rent their primary residence on October 1, 2019. Even if you already filed your taxes you can still apply! To find out more, click the link below.

The Affordable New Jersey Communities for Homeowners and Renters (ANCHOR) program replaces the Homestead Benefit. ANCHOR Frequently Asked Questions (FAQs) for homeowners.

06/15/2022

FRIENDLY REMINDER: 2022 Q2 Estimated Tax Payments are DUE TODAY! If you don't know what estimated tax payments are, and how this can affect your business or when their due dates click the link below to find out more
https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes
If you're a business owner that usually owes the IRS every tax year, you'll definitely want to start making those estimated tax payments. It's not too late to get started. Payments are due every quarter so you'll want to get started as soon as possible.

06/01/2022

Reminder: 2022 Q2 Estimated Tax Payments are Approaching. If you don't know what estimated tax payments are, how this can affect your business, or when they are due, please be sure to read the post below.

https://www.irs.gov/pub/irs-pdf/f1040es.pdf
https://www.irs.gov/pub/irs-pdf/f1120w.pdf

05/12/2022

If you owe the IRS and you're still unsure of where to send your payment. Click this link to find out where payment should be sent https://www.irs.gov/businesses/small-businesses-self-employed/where-to-send-your-individual-tax-account-balance-due-payments?fbclid=IwAR2DP-nQx_iQOKNPt_k538ap1zbNH1A4tLBAS8Plm51wBKAzltEkMW13i0Q

Where to Send Balance Due Tax Account Payments

02/17/2022

Have your Student Loan Obligations affected your tax refund in the past? If so, I have news for you.

Read below….
The Education Department will not restart collections via the Treasury Offset Program for six months after the Covid-19 payment pause ending of May 1, 2022.
So What does this mean for me you ask…⁉️
➡️ Student loan collections have suspended the offset of tax refunds until November 1, 2022
➡️ If your prior year refunds have been offset due to student loan obligations and you receive a tax refund between now and November 1, your refund will NOT be seized
➡️ If you file an extension of your 2021 Tax Return or receive your tax refund after November 1, your tax refund can be offset due to current student loan obligations
If you are someone that is affected by this scenario, I suggest filing your tax return as soon as possible to avoid having your tax refund seized. You can read the full article below for more details.
Full article : https://www.cnbc.com/.../education-department-wont-seize...
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Data is a real-time snapshot *Data is delayed at least 15 minutes. Global Business and Financial News, Stock Quotes, and Market Data and Analysis.

02/16/2022

🗣To all my people in the service industry please note!

If you're in the service industry and get tips, remember your tips are taxable income and you must report them. Check out this tax tip with info on reporting tips when filing your taxes: https://go.usa.gov/xtdsh

02/16/2022

📌The PATH ACT has been lifted. This means that for anyone who claimed Earned Income Tax Credit and/or Additional Child Tax Credit, your refunds will begin to process.

Here’s what you need to know….🤔

❗ Taxpayers affected will not see an update to their tax refund status for several days after February 15, 2022.
👉The "Where's My Refund" (WMR) is projected to update the deposit date for some early EITC/ACTC refund filers by February 19, 2022.
👉 The first batch of PATH HELD Refunds will have direct deposit dates of February 23, 2022.
👉Where's My Refund will update the second batch of deposits dated for early EITC/ACTC filers by February 26, 2022.
👉The second batch of PATH HELD Refunds will have direct deposit dates of March 2, 2022.

Below you will find the timeline:

March 15th - PATH ACT lifts. EITC/ACTC refunds start to process.
March 16th -Daily Transcript update.
March 17th - Daily Transcript update. WMR Update from 2/16.
March 18th Daily Transcript Update. WMR Update from 2/17.
March 19th - Daily Transcript Update. WMR Updates for 2/23.

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