Zen Finance Blog

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The end of the year is near which means good things like holiday parties for many. But it also means end of year tax planning and that it is time to start getting your tax information in order. Soon after the new year you will need to have your tax professional complete your tax return or do it yourself. If you prepare your own taxes you would be wise to use software made for that purpose to save you time and hopefully help you avoid any errors.

In addition tax software may have to find some deductions you may have otherwise missing. Depending on your needs you can usually find tax software under $100. If you have a very basic tax return you will likely be able to get the software much cheaper then that even.

Offshore banks in Singapore will give you secrecy together with your offshore individual accounts. Bank rates at 6.7 percent are coincident for anonymous individual accounts. Secret individual accounts with rock solid secrecy can be closed in Singapore and Cayman Islands for less than 1800 dollar. Rates at 4.2 percent are more public for business accounts then for individual accounts. Looking for decent offshore banks on the Cayman Islands can be done through internet. Look about secret bank accounts to get more sincere knowledge about tax free offshore banking. Offshore banking can be done through in Switzerland or Cyprus. The most general reason for opening a stealth individual accounts or offshore business accounts is 100 percent secrecy. Secret business accounts can have account rates at 6.6 percent witch is less then for offshore individual accounts.

Being prepared for your tax preparer

In doing taxes for the last few years, I have had plenty of people come in not prepared to file their tax returns. There have been plenty of times where I opened the the W-2’s or other important tax information for people. They have no idea how much they made for the year, how much was withheld, or even if the Social Security and Medicare taxes where withheld at the correct rate. I had a client one year who had less than $200 withheld from his pay throughout the year, and was shocked when he learned that he owed around $1500. It pays to pay attention!

Taxes and filing an accurate tax return are very important, and I find it hard to believe that a lot of people do not even open their tax information to find out if all of the information is correct. The interview will go a lot smoother and faster if you are prepared and you have all of your records ready, plus your return will be a lot more accurate. Plus, it is really not fair to the other clients if a tax preparer has to spend 10 minutes opening stuff up that the taxpayer should have already done. That is 10 more minutes other customers have to wait, and everyone hates to wait, correct? It usually seems to happen during ‘peak season’, when we are the busiest, and there are 4 tax preparers and still 2-3 clients waiting.

‘Peak season’ runs for roughly 3 weeks, usually starting the second half in January and into the first week or so of February. Most of the filers during this time have do not have complicated tax returns, normally taking me 20-30 minutes to complete the return. Last season though, I did have a higher than normal number of complicated returns during peak than normal. I don’t mind, I like the harder returns because they help keep me sharp. This usually involves digging for every legal tax deductions I can find.

Now, I don’t know how it is in other tax offices, but where I work, we are really going to be using due diligence. This means do not try to use a child that is not yours as a dependent, do not give us false information for your tax return, trying to take deductions you are not entitled to, things along these lines. The IRS is really cracking down on fraudulent returns, and they have increased the penalties against tax preparers who file returns such as these. I also had to take a required course on fraud and ethics. Trust me, I’m not about to file a fraudulent tax return, I don’t want or need the IRS after me.

Start looking for potential tax deductions right now, especially if this will be your first time itemizing deductions. Keep your money in your pocket!

Another useful business tip - learn how to get extra money for your business, grant proposal example.

Who created accounting principles? Who sets and revises accounting standards? What if you don’t follow all the rules, do you go to jail? Is there an accounting police force that investigates and arrests violators? Here is how it works:

Mainly, it’s all voluntary and it works pretty well. First, double-entry accounting originated in Italy in the 1400’s, so its been around awhile. Accounting principles have evolved over the years just as have accounting standards. The reason why the business system works is that the business community could not function if there was not commonality and consistency in financial statement reporting. It would be chaos, much like if there were no driving rules of the road.

Therefore, in the United States, a body of experts known as the Financial Accounting Standards Board (FASB pronounced Fasbee) was established in 1973, which superseded another board called the Accounting Principles Board (APB). What is FASB? The FASB members go through a lengthy process of analyzing and reviewing problems in the accounting field that are brought to them. After much thought, they will make a pronouncement as to what they think the new or revised way of approaching the treatment of an accounting issue should be.

A big supporter of FASB is the American Institute of Certified Public Accountants (AICPA). Many Certified Public Accountants (CPAs) belong to this prestigious organization and are obligated to abide by its guidelines and principles of behavior of accounting. Other countries no doubt have similar organizations that require high levels of accounting professional conduct.

FASB established an accounting code called “Generally Accepted Accounting Principles” or (GAAP). The assumption is that if a business financial statement is prepared according to GAAP, then the user of that financial statement could rely on or trust the information more readily than if not prepared according to GAAP. Those businesses that deviate from GAAP, and many smaller businesses do, cannot say that their statements are prepared under GAAP; in fact, they should inform the reader that they are not. However, let the buyer beware.

One governmental body that has a policing function is the Securities Exchange Commission (SEC). It is primarily concerned with public companies because their job is to protect investors from unscrupulous acts. Recently, the SEC has gotten into the act of establishing accounting standards. It has its hands full today.

Since most businesses use their financial statements to prepare their required income tax returns, the Internal Revenue Service (IRS) may audit those tax returns and review the financial statements upon which the tax returns are based. Not following the rules can get you in trouble with this governmental body.

You can see that in many ways compliance to the principles and standards is a mixture of voluntary and regulatory behavior. Currently, there is an effort underway to set international accounting standards due to the inexorable globalization process. This is a massive undertaking that will take years, but it is obviously necessary and inevitable.