Tips on balancing your personal finances with a budget

Properly handling your personal finances can make your life much easier.

Balancing your budget and properly managin your personal finances is important for the present and the future.

Think back to your grade school playground when you would try to balance yourself on the balance beam. It wasn’t always easy, was it? Fast-forward to today when you have a budget to constantly balance with money on one side and expenses on the other. For most people, balancing finances can be a daunting task. Here are some tips on how to better balance a personal budget:

1. Save more money.

Saving money is a huge way to help balance your budget. It’s important for both individuals and small business owners alike. Set a small portion of your earnings aside every week or month for a savings account. As time goes on, you’ll have a growing amount of money put away in savings that you can use in an emergency situation. This will also give you some extra spending money down the road that you can use to increase your overall budget, which in turn should make it easier to balance.

2. Find ways to cut your spending.

It’s never easy to choose what not to spend money on, but it’s a must in order to balance a budget. Limiting your expenses will help you keep more of your money and make you more stable in terms of finances. Think in terms of “wants” and “needs.” If you truly need something, by all means, spend money on it. If you only want something, consider if there’s a cheaper alternative or if you need whatever it is at all.

3. Focus on your essential expenses.

By cutting your spending, accounting for your essential expenses will be easier as these costs will sit front and center on your financial platter. These costs may include food, clothing, gas, and other necessities that keep us all up and going each day. If you splurge frequently by going to the mall and spending money on needless items, this will take away money from your essential expenses, which will turn your budget upside-down.

4. Find ways to increase your income and personal finances.

Making money is tough as it is. That’s why it is even more difficult to find methods to increase the income you’re already earning. If you work as an employee, there’s always a possibility you could get a raise at some point. If necessary, consider on-the-side work or even taking a second job if you are struggling to get by financially. You may have some talents unrelated to your main line of work that you could utilize to earn some extra income. When money isn’t tight, it makes life much easier, and it makes balancing a budget a whole lot simpler as well. In addition, personal finance software can be very helpful in making income calculations and projections.

Contact 1800Accountant.com today to discover how you can better manage your money. The accounting firm works with both individuals and small business owners. To better balance your personal or small business budget, call 1-888-749-0117 or visit www.1800accountant.com to get started on a successful financial path today!

Summer is here! How can you reduce your taxes through tax deductions and other methods for vacations?

Enjoy a summer vacation on a beach and save on your taxes while at it.

There are potential tax savings and tax deductions you can take advantage of when taking a summer vacation. (Photo courtesy of Flickr Creative Commons)

Summer is officially here. The kids are out of school, and people are starting to take some time off from their hectic schedules to hit the beach, visit family or friends, and just get away from it all for a bit. What many individuals may not be thinking about is their tax obligations of taking a summer vacation. Here are some tips on what to be aware of and how to reduce your taxes and expenses:

1) Be aware of the taxes you’ll incur in different areas

No matter where you travel, there’s a good chance you will wind up facing different tax obligations, primarily when it comes to sales taxes. Many states, cities, and counties have different tax laws, and taking a vacation could put you in an area where the taxes are higher or, ideally, where they are less than what you’re used to paying. It may be worth researching this information prior to embarking on your trip to help you find places where tax requirements are a little lower. Even if you can’t do this, at least be prepared for the changes in taxes that will inevitably arise from one place to another.

2) Tie in small business-related activities to your vacation for tax deduction opportunities

If you are one of the many small business owners out there, you may be able to write off some expenses associated with your vacation as a business tax deduction. The main thing to keep in mind with this is that a trip or activity must be directly related to conducting business. The great thing about this, though, is that you can spend 90% of your vacation enjoying it and 10% on business, and then you can write off the 10% you spend on business expenses that are part of the vacation. Vehicle rentals, hotel accommodations, meals, and entertainment are a few potential costs you can claim as tax deductions if they are specifically part of small business activity.

3) Shop around for the best prices

From airline flights to rental cars to restaurants, there are countless areas in which you can look for money-saving opportunities for a vacation. By saving money, you can also save on how much you pay in taxes and other hidden fees tied to these expenses. Always remember that just because something has a price tag on it does not necessarily mean this is the actual amount you’ll be spending on it. Taxes are applied to a large percentage of items and services, so be sure you do some homework to get the best deals – and to pay the lowest in taxes you possibly can. Small business owners are constantly trying to reduce their expenses, so they should be used to doing this research.

4) Take advantage of any savings for kids, seniors, veterans, and others traveling with you

Various places of business offer discounts to kids under a certain age, seniors over a certain age, military veterans, and others. These discounted prices can be very beneficial when taking a summer vacation. Therefore, they can also save you on your taxes, even though it may not seem like a direct savings. Look for chances to limit how much you spend on a summer vacation. You’ll benefit from the savings when you get back to your normal routine.

How to determine the specific market for your small business

You have to determine your market and where your potential customers are located when operating a small business.

Defining the market for your small business is essential, such as where your potential customers live and where you should operate your company. (Photo courtesy of Flickr Creative Commons)

When starting a small business, one of the keys to giving your products or services the best opportunity to become popular is to clearly define your market. This means knowing precisely who your customers are, knowing where they live, and understanding their purchasing habits. Small business marketing may seem complicated, but it’s not terribly difficult if you spend some time answering these questions.

A step-by-step approach for a small business to define its market

The first step small business owners should take is to nail down who would be most interested in what their businesses are selling. Are you going to market to men, women, or both? Are you going to market to people under age 30 or those over age 65? Will your products or services be more appealing to kids, and you’ll need to persuade their parents to buy them? Even though you may not be in the target demographic of the group you intend to target, try putting yourself in the shoes of someone who is. Do your best to think about why they’d like what you offer and how it could benefit them.

Next, it’s essential to map out where your potential customers will be. Make this as specific as possible. If you plan to open a physical location, there is plenty of research to do about where the best spot would be for you. Look at demographic statistics, population density, population growth, and where other successful retailers are situated. If you plan to sell items online, consider how effective this strategy will be – and whether your customers are more likely to shop online or in a store. If you offer consulting services, for example, define how you will communicate with your clients. Will you travel to them? Will they travel to you? Will everything be handled over the phone? Several factors go into defining where your customers are located and what the most appropriate ways are to connect with them.

Finally, determining the purchasing habits and purchasing power of potential customers is key for all small business owners. If you’re offering a product or service that is necessary, people may be more willing to buy it. If it’s more of a “want,” it may take more effort to convince others to spend money on it. This also relates to the income levels of individuals you’re targeting. On average, how much money do they make? How much disposable income do they have that they can spend? The answers to these questions will also play a role in setting the prices for what you offer.

Use 1800Accountant.com for all of your small business marketing, planning, development, and tax-filing needs. Call 1-888-749-0117 or check out www.1800accountant.com for more information.

Do home repairs qualify as tax deductions?

Home repairs may be tax deductible.

Home repairs qualify for tax deductions in certain cases. (Photo courtesy of Flickr Creative Commons)

Homeowners often enjoy tax deductions for a wide range of reasons. These include deducting property taxes, deducting mortgage interest, and deducting home office expenses for small business owners. However, when it comes to making repairs to your home, there are only specific ways in which you can deduct the costs of making these changes.

Generally speaking, taxpayers are not allowed to deduct basic repairs they make to their residence due to old or rusted parts of their home from normal deterioration. The good news is that there are a few exceptions that can help you reduce your taxes. If you suffer a casualty loss related to your home, you may be able to deduct improvements that you make to fix it because of an unexpected disaster, such as damage from a powerful storm or a car accident that affects your home. To claim these repairs as tax deductions, the result of this damage must come from occurrences over which you have no control and are not from personal negligence as a homeowner. Gulf coast residents who are no stranger to hurricanes during the summer and fall months are allowed to deduct the expenses they incur as the result of a hurricane. The one caveat to this is that casualty loss tax deductions tend to be subjected to reductions, especially when a taxpayer already has property insurance that covers a portion or all of the damage.

Tax Deductions for Rental Homes and Energy Efficiency

Another option for home repair deductions is if you own a home and rent it out to tenants. This is because this kind of residence is classified as an investment property. To qualify for tax deductions on improvements made to such a home, you must report all income you receive from renters. Only “ordinary and necessary” repairs can be claimed as a write-off, according to the IRS.

Finally, an improvement made to a residence that improves the energy efficiency of it may be eligible for a deduction as well. These may include installing new windows that reduce residential heat from sunlight or putting solar panels on a home. Along with deduction opportunities, there are options for tax credits that could minimize your tax liability. One of these is the Residential Energy Efficiency Property Tax Credit.

To learn about other IRS tax deductions and credits that will help small business owners keep more of the money they make, contact 1800Accountant.com today at 1-888-749-0117 or at www.1800accountant.com.

Do unreimbursed employee expenses qualify as a tax deduction?

Save money by claiming tax deductions like the unreimbursed employee expenses deduction.

Keep more of the hard-earned money you make by taking advantage of the unreimbursed employee expenses tax deduction when filing your taxes with the IRS. (Photo courtesy of Flickr Creative Commons)

If you are an employee of a business, you will likely incur numerous expenses throughout your time working. In many cases, companies will reimburse their employees for these costs because they are job-related. On the flipside, some of these expenses are not paid back to employees. Fortunately, the IRS allows for certain unreimbursed employee expenses to be tax deductible.

In the accounting realm, an unreimbursed employee expense includes money spent on work-related items or services that an employer does not pay back to an employee after they are purchased. In order for expenses to qualify as a write-off, money must be spent on products or services considered ordinary and necessary for the purposes of carrying out a certain job-related assignment or business profession. Expenses considered ordinary are for common purchases that are accepted within a particular profession. Necessary expenses are appropriate and will help you complete whatever it is that necessitates the expense, but they don’t have to be required costs to be considered necessary.

There are many kinds of unreimbursed expenses. These include depreciation on a desktop or laptop computer that your company had you use, membership fees to a work-related organization, education or training expenses, legal fees related to employment, and necessary medical examinations or tests. Others include passport fees for a business trip, subscription fees for relevant journals or publications, work tools or supplies, travel-related costs like meals or transportation, union dues, and even clothing or uniforms that must be worn on the job.

For taxpayers to claim these expenses as a tax deduction, they have to take the itemized deduction route rather than the standard deduction option. They must also document these costs and save any receipts or records that acknowledge their purchases. These expenses should be listed on Schedule A of Form 1040 when filing your taxes. If you’re eligible for a reimbursement, but you choose not to request these funds from your employer, you aren’t eligible to deduct these costs.

To learn more about tax deductions that can reduce your tax liability when filing them with the IRS, use the accounting experts at 1800Accountant.com. Call 1-888-749-0117 for further details.