Between the start of a new year and the first day of spring, it’s common to notice a kind of clenching just behind the pit of your gut. Gradually, as the Christmas decorations come down and Valentine’s Day passes, what started as a barely noticeable discomfort transforms into a formless worry. Day after day, you feel a deadline approaching. And even though you could take action at any minute and put your anxiety to bed, like 80 million Americans on average , you wait until the last minute to file your taxes. If this cycle sounds familiar to you, know that you’re not alone. But in 2023, maybe it’s time to break out of the status quo and take a more proactive approach to the financial filing frenzy. The Leadingham Rodgers Guide to Tax Season 2023 At Leadingham Rodgers in Montgomery, AL, we’ve helped countless private citizens and businesses file their tax returns in a timely and advantageous manner. Here are just a few tips, tricks, and changes to the tax code to consider when filing in 2023! The Basics Before we get into the weeds on tax code changes and deductions, let’s cover the basics of the 2023 tax season. Tax Filing Deadline : April 18, 2023 Extension Deadline : October 16, 2023 The IRS’s Free File program has been available since January 13, so if you have the time, energy, and will to submit yourself, make sure you choose direct deposit to speed up your return. Now that we’ve got that out of the way, let’s talk a little shop. Important Tax Filing Changes A few important things have changed since you filed your 2021 tax return back in 2022. No matter who you are (private citizen, business owner), these changes could be applicable to you in a big way. Standard Deduction Increase The IRS has raised standard deductions for single and joint filers to account for rapid (and drastic) inflation throughout the 2022 tax year. New Single Filer Standard Deduction : $12,950 New Joint Filers Standard Deduction : $25,900 For single filers, that’s an increase of $400 over the standard deduction in 2021. For married couples, the standard deduction has jumped by $800. While those numbers may seem small, especially after a 9.1% inflation peak during the 2022 tax year, they could pay dividends in your return. Tax Bracket Changes “Inflation” is the name of the IRS shuffling game this tax season, and few aspects of filing your tax return have gone untouched by record-high rate increases throughout the 2022 tax year. Across the board, the IRS has raised the upper limits for tax brackets by 7% to account for wage increases in keeping with inflation. For the full tax bracket, click here . For visual learners, Forbes has also released a handy guide to the 2022 tax brackets , which may be slightly easier to read than the IRS’s version. Deductions & Credits There’s a special kind of delight in saving money, especially during tax season and especially when you expected to shell out in the first place. Thankfully, there’s a long list of deductions and credits that you may apply for, depending on your circumstances. Before filing, it may be wise to speak with a CPA to determine your eligibility for the following deductions and credits. Earned Income Tax Credit (EITC) Child Tax Credit (CTC) Child & Dependent Care Credit Education Credits Business Deductions Medical Deductions Charitable Deductions By far, the biggest of these credits is the EITC. At Leadingham Rodgers, we’ve written about the EITC extensively , but to learn about the other deductions and credits, it may be best to get the information you need from the horse’s mouth by visiting the IRS here . General Tax Filing Tips & Tricks If you’re reading this, then you’re already taking a helpful, proactive step toward the timely filing of your 2022 tax returns. But for further encouragement in these trying times, Leadingham Rodgers provides a small list of general tips and tricks for filing your 2022 tax return. Start Now – There’s no such thing as “too soon,” really Accuracy Matters – If you’re struggling to form a complete picture, contact the pros Include Your Gig Income – Don’t forget your 1099s, especially if a freelance or gig employer paid you more than $600 in total throughout 2022 Investigate Deductions & Credits – A trained CPA can help you save the most When in Doubt, Extend – If there’s even a small chance that you won’t make the April 18, 2023 deadline, file for an extension now Ask for Help – As with complex home repairs or mechanical issues with your car, asking for help is a virtue, not a failure Conquer the 2023 Tax Season with Leadingham Rodgers Like fingerprints or snowflakes, no two tax returns are the same. Every financial picture is unique, and if you’re not careful, you can easily overlook valuable deductions and credits. Trust the professionals at Leadingham Rodgers in Montgomery, AL, to ensure the smoothest, most lucrative 2022 tax return. Our trained CPAs can help you uncover options you never knew you had while navigating the ever-changing seas of tax code law and shifting tax brackets. Give yourself or your business the best chance at filing with grace this tax season by calling 334-721-2548 today or contacting us online . Together we can put tax season behind us and get back to making—rather than reporting—money. Trust the Tax Pros & Sleep Easier Tonight, Tomorrow, & For the Rest of 2023! Tax season doesn’t have to feel like one long clenched fist. As an annual part of adult life, filing your taxes is easier with a little knowledge, a little research, and a little help from a trusted tax professional. For businesses and private citizens throughout Montgomery, AL, and beyond, there’s Leadingham Rodgers. To learn how we can help you or your business save the most this tax season, call us today at 334-721-2548 or contact us online .
It’s a new year and a new time for celebration, commitment, and confidence that we can achieve our goals. For many of us, especially after a year of inflation and uncertainty, those goals are financial in nature. Whether it’s finally making your side hustle your main gig or simply getting your budget in order, the IRS has an incentive that could significantly impact your tax return this year—the Earned Income Tax Credit. We know that many folks aren’t quite ready to think about their taxes just yet—especially those who are self-employed and dreading their Schedule Cs. But the CPAs at Leadingham Rodgers are gearing up for a new season of tax triumphs. After all, we’re here to help clients proactively approach their financial health. So, let’s take a look at one of the options lower-income taxpayers may have for easing the financial burden this tax season. What is the Earned Income Tax Credit? The Earned Income Tax Credit (EITC or EIC) is a financial credit that low- to moderate-income taxpayers can apply toward their taxes. The exact amount granted to each person varies depending on their income and how many children they have. But it’s money on the table that you can use to reduce the amount of taxes that you owe—or increase your IRS refund. Who Qualifies for the Earned Income Tax Credit? The EITC was designed to assist families who aren’t making a lot of money, specifically, families with children. That’s why people with more children in their household usually get a bigger credit. However, in recent years, the EITC has also been expanded to help people without children. Now, any U.S. citizen who worked but made less than a certain amount of money per year could benefit from the extra money provided by this initiative. What is the EITC for 2023? Anyone who worked and earned income but made less than the threshold amounts (outlined below) may be eligible for between $600 and $7,430 in tax credits. That’s increased for 2023, up from a range of $560 to $6,935 last year, in part due to the Inflation Reduction Act.
If Alabamans aren’t nationally recognized for their entrepreneurial spirit, they truly ought to be. With over 400,000 small businesses in the state, accounting for 99% of all businesses here, Alabamans are making incredible contributions to their local economies and communities. But as we all know, the last few years have had their share of unique challenges, leaving many business owners struggling to manage their debts. Debt management is a crucial aspect of any successful business—you have to balance smart investments with healthy cash flow to find the ideal debt ratio for you. Let’s look at business debt, and how you can make it work for you. How Do Small Businesses Manage Debt? Although debt is usually one of those four-letter-words we don’t want to hear, most business owners know that some debt is a good thing. The right amount of debt can help your company grow and expand, achieve a higher credit score, and secure lower interest rates. However, too much debt is never a good thing. You may have multiple payments to monitor and keep track of, making it easy to miss one and rack up penalties. Your repayments may start to interfere with your cash flow. And your business credit score may take a dive, making it difficult to secure additional loans with affordable rates. if you find yourself in a position where a third or more of your business capital is tied up in credit debt, that’s when things may need to change. Here are a few tips for making the most of your debt. Tip #1: Invest in Your Growth It’s important to make investments that will improve your business in the long term. For instance, taking out a loan to purchase a large piece of equipment that will boost your revenue is “good” debt. Whenever you’re thinking about taking on more debt, evaluate it for its return on investment and ability to improve your cash flow while you’re paying it off. Don’t be afraid to make these kinds of investments! Tip #2: Take a Full Inventory of Your Debts As you grow and take on more lines of credit, it’s important to stop and look at the full picture. Categorizing and organizing your debts can help you put together a winning management strategy. Make a note of loan details such as: Total remaining balance How much you pay per month Interest rate Repayment terms & due dates How you pay (check, bank draft, etc.) Type of credit (loan, credit card, bank line of credit, etc.) What the debt is for Tip #3: Pay Down High-Interest Loans First Whenever possible, try to prioritize debts with higher interest rates. Identify the loan that carries the highest rate and do your best to tackle that one first—doing so could save you hundreds if not thousands in the long run. There are a few ways to go about this: Make more than the minimum payment every month Pay more than once per month (for example, every two weeks instead of every month) Set up automatic payments or payment reminders to help you stay on target If you can pay more than the minimum on more than one account, that’s even better. But as long as you’re making regular payments on the other accounts, prioritizing the highest rate will help you reduce the total amount owed faster. Tip #4: Look for Ways to Boost Cash Flow We understand—this is easier said than done, especially in a tough economy. That said, managing cash flow isn’t only important for making your monthly payments. An extra boost can also help you lower your overall debt utilization rate, in turn improving your credit score. Consider cash flow improvements such as: Offering a discount or putting on a sale to entice an influx of customers Small overall pricing increases for products or services where possible Additional marketing to engage more customers online or within the community Cutting non-essential expenses Adding products or services that customers demand Tip #5: Reevaluate Your Invoicing Strategy If you find that a lot of your cash flow is tied up in late or unpaid invoices, it may be time to reevaluate how you request payments and follow up with clients. More frequent invoices may help you minimize issues, so consider shortening your remittance window from 30 days to 14 days, especially if you bill electronically. For clients who consistently lag in payments, you may want to consider new terms. An installment plan could help your client pay what they owe while you keep revenue streams open. Or, you could offer more creative solutions like the 2/10 Net 30 trade credit , where customers get a 2% discount if they pay in full early (within ten days). Otherwise, they can pay in full in 30 days without the discount. Tip #6: Consider Debt Consolidation If your business is juggling multiple debts, struggling under high interest rates, or frequently missing payments, debt consolidation could be a great option to consider. Merging your debts into one fixed payment at a more favorable interest rate makes it much easier to budget consistently and tackle the problem for good. That said, be careful about who you choose, as there are many debt consolidation scams out there. At Leadingham Rodgers, our local CPAs have helped hundreds of business owners find realistic solutions for managing their debt right here in Montgomery. Tip #7: Get Help from a Certified Public Accountant From debt management to financing help, hiring business consulting services from a CPA is a great way to identify opportunities for growth—and areas that are negatively impacting your business. The right balance between good and bad debt is going to be different for each unique business. A CPA can help you strike that balance, offering personalized advice and solutions to help you reach your financial goals for the new year and beyond. Leadingham Rodgers: Debt & Financing Services in Montgomery, AL As a business owner, you have a lot on your plate—let the experts at Leadingham Rodgers help you manage debt, evaluate your financing options, and get you on the healthy side of debt. We have years of experience serving businesses and individuals throughout South Alabama, combining our exhaustive accounting knowledge with our deep roots in the community to find meaningful solutions. Call (334) 721-2548 or contact us online to get started.
