How I Got A Tax Refund

How I Got A Tax Refund

Tickled is not the word.  Relieved is a better one.  Yesterday, I talked with my tax preparer and found out that instead of paying like last year, I am getting a refund. We are talking about going from paying over $1600 to getting a refund of $10.  To some, this is insignificant.  Not to me.  It's a balancing act.  On the one hand, you don't want to owe taxes, right?  But on the other, you don't want to give Uncle Sam an interest-free loan.

 
I think one of the major factors that helped me to almost break even was this.  I made my business a priority.  In prior years, I focused so much on providing quality services to my customers that I was too tired to devote the time needed to my own books.  I know some folks might say, "Shush.  Don't admit that," but I believe that honesty begets honesty.
 
One of the ways I made my business a priority was to upgrade it from a dba to an L.L.C.  I wasn't thinking about tax savings at the time but I was able to deduct these costs associated with it:
 
  • Articles of Organization    $125
  • Home Occupation Use Permit    $80
  • Business License    $50
  • Costs of opening a business bank account
  • Ordering business checks
  • US Post Office box rental
  • Accounting system software upgrade
Second, I hired an employee.  Doing everything yourself only works if you're not growing.  When you're too worn out to take care of yourself, that's a sure sign that you need some help.  Sure, there are costs to doing that. Here's a few I encountered:
 
  • Job posting online
  • Socialmedia advertising
  • Background check
  • Training
  • Cloud technology and apps, i.e. Logmein.com, Google for Business, Stamps.com, etc.
  • Adding Payroll software
Just the same, this paled in comparison to the peace it brought me and the capacity to better position my business.  No longer exhausted, I was able to recognize deficits and seize the opportunities Life presented. Moreover, my new husband got a happy, more energized wife.
 
For added measure, I upped my estimated tax.  Using Paycheckcity.com, I estimated my income for the coming year and divided the estimated tax withholdings by 4.  Then I made quarterly payments to the IRS using the electronic equivalent of Form 1040-ES.  As the sole member of my LLC, it was both mandatory and critical..  It was pretty cool when my tax preparer told me that my estimated tax paid came to within $10 of the actual tax owed.  That's pretty savvy if I have to say so myself.
 
Understand, I am not offering a formula like Charles Givens' rule for increasing your take-home pay.  Though I must admit that back in the 90's I found it very helpful.  Neither am I offering tax advice.  My intent is merely to celebrate a victory and pass along information that helped me get there.  For more helpful advice about deductible business expenses, go to this IRS Website:  http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Deducting-Business-Expenses.  It'll help you position your business for success come next tax season.
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Odyssey Administrative Services, LLC is a dynamic bookkeeping and administrative services company, bringing skill and insight to its clients.  With over eleven years in cash and accrual accounting and thirty-one years in administrative support , OAS specialists work with clients, CPAs and tax preparers to organize and maintain vital financial records.   To hear more about our services, email us at info@odysseyadministrativeservices.com.

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