As taxes for 2023 come closer and closer, business owners should start to consider what they can do to reduce their taxes. The Internal Revenue Service (IRS) will soon be releasing its guidelines for taxes in the upcoming year, and it’s important that business owners take note of any changes in tax rates or deductions so they can plan accordingly.

For individuals, taxes may be increasing for some depending on your current income bracket. This could lead to higher taxes due by April 15th of next year. It is important to calculate your taxes as soon as possible so you have ample time to make any adjustments that might reduce your overall tax bill.

One way to minimize the amount of taxes owed is by taking advantage of deductions or credits. It is important to review any tax documents and be aware of any changes in the tax laws so you know what you can deduct or claim on your taxes. Additionally, it may be beneficial to speak with a financial advisor who has knowledge on taxes and the latest tax rules to ensure you are taking advantage of all possible deductions.

Another way to reduce taxes is by contributing money into a retirement account such as 401(k). This will help reduce taxes now, while also saving for retirement in the future.

In conclusion, taxes for 2023 are coming soon and business owners should start preparing accordingly. Reviewing your taxes early and taking advantage of deductions or credits could help you minimize the amount of taxes owed by April 15th. Additionally, contributing money into a retirement account is an excellent way to save taxes now and for the future.

If you have any further questions or concerns about taxes for 2023, please contact a tax professional for additional guidance.

Have you ever wondered what entity restructuring is and why it might be important for your business? Entity restructuring is a process that allows businesses to reorganize their corporate structure to better suit their needs. It can involve forming new entities or changing the ownership or management of existing entities. In this blog, we’ll discuss the basics of entity restructuring and how it can benefit your business.

What Is Entity Restructuring?

Entity restructuring is a process that allows businesses to reorganize their corporate structure to better suit their needs. This may include forming new entities, such as limited liability companies (LLCs), corporations, limited partnerships (LPs), or other legal structures; changing the ownership or management of existing entities; and transferring assets among different entities. The goal of entity restructuring is to improve the efficiency, profitability, and sustainability of the business.

Why Should You Restructure Your Business Entity?

There are many reasons why you might want to consider restructuring your business entity. For example, if you’re planning on expanding your operations into multiple states or countries, then you may need to form separate entities in each jurisdiction to take advantage of local laws and regulations. Additionally, if you’re looking for new sources of capital or investors, an entity restructure can help make your business more attractive by allowing investors access to certain tax advantages they wouldn’t have had access to before. Last but not least, restructuring could help protect personal assets from potential liabilities incurred by the business.

How Do You Know If You Need To Restructure Your Business Entity?

The best way to determine if you need to restructure your business entity is by consulting with a qualified attorney who specializes in business law. An experienced attorney will be able to assess your current situation and advise you on whether a restructuring would be beneficial for your particular situation. Additionally, they can provide valuable insight on how best to proceed with the process in order to maximize the benefits for both you and your company.

Final Thoughts on Entity Restructuring

In conclusion, entity restructuring is an important tool that allows businesses to reorganize their corporate structure in order to improve efficiency and profitability while also protecting personal assets from potential liabilities incurred by the business. If you think that a restructured entity could be beneficial for your company’s growth and success, then it’s important that you consult with our Cedar City accounting firm. By taking these steps now, you’ll be better positioned for success down the line!

As a solopreneur, taxes are one of the most important aspects of running your business. Taxes can be complicated and confusing, but with the right knowledge, you can make sure that you’re staying compliant and keeping your finances on track. Here’s a quick overview from A A Tax & Accounting of the top tax tips for solopreneurs in 2023.

Determine Your 1099 Status

In order to determine whether or not you need to file taxes as a 1099 contractor, you’ll need to know if you are classified as an independent contractor or an employee. Generally speaking, if you have control over when, where, and how you complete your work, then you are likely an independent contractor who must submit 1099 forms each year. In order to determine your status definitively, it’s best to consult with our professional tax accountants to determine the right business structure for your needs. 

Keep Accurate Records

It’s always important to keep accurate records throughout the year in order to ensure that your financial records stay organized and up-to-date. For example, if you purchase business supplies throughout the year it’s important to save receipts so that these expenses can be deducted from your taxable income come tax season. Additionally, tracking mileage is also important for maximizing deductions. Make sure that all of your records are secure and accessible when needed.

Calculate Quarterly Taxes

As a solopreneur, it’s important to understand and abide by quarterly tax regulations in order to avoid penalties and interest charges. You may be required to pay estimated taxes four times a year based on what you expect your income will be for the entire year—so make sure that these payments are made on time every quarter! Consulting with an experienced accountant is essential for accurately calculating quarterly taxes as well as staying up-to-date on any changes in taxation laws which could affect your business.

Taxes are certainly one of the more complex aspects of being a solopreneur—but understanding how they work doesn’t have to be overwhelming! By following these simple tips—determining 1099 status, keeping accurate records, and calculating quarterly taxes—you can feel confident knowing that all of your financials are taken care of come tax season. Plus, investing in help from experienced professionals like CPAs or lawyers can provide additional peace of mind when filing taxes each year! A A Tax & Accounting in Cedar City, UT is here to help with all your tax planning, accounting, and filing needs.

You’re not the only one feeling the impact of the rising costs of goods and services on your bank account. Inflation has made everything much more expensive — causing you to go through your income much quicker than normal. To combat this, you may have decided to take on a side hustle to bring in extra cash each month. 

Whether you’ve decided to take on freelance virtual assistant duties, sell used goods on Facebook Marketplace, or do odd jobs around your neighborhood, you probably love having some extra wiggle room in your budget each month. However, it’s important to keep in mind that you are still responsible for paying taxes on any income you generate from a side hustle.

Unlike your full-time job, most side hustles do not automatically take out taxes on your extra income. In the eyes of the Internal Revenue Service, you are considered to be a self-employed individual. This means that you need to be prepared to cover both your income tax and self-employment tax when tax season rolls around.

To make sure you’re taking the necessary steps to reduce your tax burden, AA Tax & Accounting Services, LLC has put together a guide covering what actions you should take so you can meet your self-employed tax responsibilities. We’ll help you calculate how much of your side hustle income should be set aside to cover your taxes and understand when your tax payments are due to the IRS.

Calculating Self-Employment Taxes

No matter what type of side hustle you’ve taken on to increase your monthly income, you are responsible for paying taxes on that extra money. Come tax season, the Internal Revenue Service requires all self-employed individuals to pay both income tax and self-employment tax because you are considered the employee and the employer.

Self-employment tax is 15.3% of the first $142,800 of income you receive, plus 2.9% of anything you earn over this specified threshold.

Whenever you receive a paycheck from your side hustle, you should be setting aside at least 25% of it to cover the taxes that are not automatically being dedicated. We recommend having a separate account to store these funds so they don’t accidentally get spent on bills, leaving you without money to pay your taxes come tax season.

To help reduce your tax burden when filing your return, you can (and should) make estimated quarterly tax payments so you can reduce the chances of a large tax bill later on.

For more detailed information on tax withholding from side hustle earnings, we recommend using IRS Form 1040-ES to calculate your estimated tax payments.

Making Estimated Tax Payments

As we mentioned, it is important that you set aside money for taxes any time you earn income from your side hustle. Instead of holding onto this money all year, you can make estimated quarterly tax payments to the Internal Revenue Service if you expect to owe more than $1,000 annually. Estimated quarterly tax payments can be submitted to the IRS by the following dates:

• April 15th
• June 15th
• September 15th
• January 15th

If you are earning money through a side hustle and don’t pay quarterly taxes, you may find yourself dealing with a tax penalty come tax season. By setting aside a minimum of 25% of your extra income and submitting quarterly tax payments, you’ll be setting yourself up for success when filing this year’s taxes. You may even find yourself earning a refund instead of owing additional money!

Tax Consulting Services in Cedar City, Utah

If you’ve taken on a side hustle to bring in some extra cash each month, we recommend consulting certified public accountants like AA Tax & Accounting Services to better understand what you will owe come tax season and how much you should be paying to the IRS quarterly.

The AA Tax & Accounting Services team can help you execute the right self-employment tax strategies for peace of mind. Contact us to schedule an appointment.

Once tax returns have been filed, most people breathe out a sigh of relief and promptly put it out of their mind, unless they are waiting on money back. However, something that is less pleasant to consider is when there is a mistake in your tax return.

Identify What Went Wrong On Your Tax Return

There are unfortunately a number of ways you can have mistakes occur on your tax return. The three most common ways errors happen are:

Personal tax preparation error – Sometimes, the error occurs when you prepare your taxes on your own. These errors may occur due to incorrect math, claiming inaccurate tax credits or deductions, or other easily made mistakes.

Employer mistake – If your employer makes an error in your withholdings, whether the issue is with your state or federal taxes, that can lead to a significant issue with your overall tax return.

Inexperienced tax preparer – There are many different levels of tax preparers ranging from a seasonal preparer to a trained accountant. If you opt for the cheaper and less experienced services of a seasonal tax preparer to file your tax return, the chance for errors is much higher.
By working with AA Tax & Accounting Services, you can have your taxes properly prepared the first time around. Also, you can be reassured by our guarantee that if an issue does arise with taxes that we file for you, our tax resolution service will be provided for free to correct the issue.

Start To Work Toward Resolving Your Tax Mistake

Once the error is known to you, it is critical that you start the process to correct the mistake on your taxes. It is best not to wait to see if the IRS will contact you with a penalty. Instead, it is always best if you start the resolution process before you are pressed to do so.

You may need to do a bit of research to determine if the mistake you have identified is the only one. After you correct one error, your tax returns may receive more attention to be sure that all the mistakes are caught and fixed.

Determine What You Need To Be Filed To Correct The Issue

If the IRS reaches out to you concerning a correction on your tax returns, they will help you through the process of correcting the filing error. However, if you find the problem on your own, there are different steps you may need to take.

For instance, if there is an error on your federal taxes, you will need to file Form 1040X, which is the amended U.S. individual income tax return. By filling out this form, you can correct previous federal tax return errors. Should you have more than one year of federal tax return mistakes to correct, you will need to file a Form 1040X for each year.

As for your state taxes, if you are a Utah resident, you will need to file the Utah individual tax return Form TC-40. On line 29, you will indicate that you are filing an amendment, with line 37 detailing what you previously paid. From there, you can correct your state tax return.

Take Your Tax Preparation To Cedar City’s AA Tax & Accounting Services

If you are concerned about making new mistakes and want your tax return filed properly, then AA Tax & Accounting Services is here for you. Our Cedar City accountant has helped countless people prepare and file their taxes, and he can help you overcome your tax hurdles as well.

For help with your tax preparation, contact us to meet with our accountant and start enjoying greater tax protection.