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Your 2023 Tax Day Checklist – Changes, Deductions & General Tips

Mon, 20 Feb 2023 01:28:48 GMT

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 .

Earned Income Tax Credit FAQs: Who Qualifies & How to Apply

Fri, 20 Jan 2023 01:16:16 GMT

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.

What is a “qualifying child” for tax purposes?

In order to claim a child as part of your EITC application, they must meet the IRS’s rules for a qualifying child . A child qualifies if they:

Have a valid Social Security Number
Are younger than you
Are under age 19, are under 24 and a full-time student, OR are any age and permanently and totally disabled
Are legally your child, sibling, grandchild, niece, or nephew
Live in the home with you for more than half of the tax year
Do not file a joint return with another person (like their husband or wife)

What Disqualifies You from Earned Income Credit?

If you made more total income last year than the amounts listed in the table above, you won’t qualify. Additionally, won’t qualify if you:

Have investment income of more than $10,000
Were not a US citizen or resident alien for the entire year or did not live in the US for more than half the tax year
Need to file a Form 2555 for foreign earned income
Do not have a valid Social Security Number
Did not earn any income

There are also special qualifying rules for members of the military and the clergy , as well as taxpayers with disabilities . If these situations apply to you, visit your local CPA for help determining your eligibility!

Can a Business Owner Get Earned Income Credit?

Self-employed taxpayers and sole proprietors can qualify for the EITC if they meet the requirements listed above. If your total earnings from all sources—including wages and tips from all jobs, gig work , and side hustles you had in 2022—fall below the thresholds, you can apply for the credit.

When filing your tax return, the IRS requires you to report all business income and deduct all allowable business expenses to arrive at your net earnings. Businesses have their own separate tax credits and deductions outside of the EITC.

If you need help understanding which tax credits or tax deductions apply to you, the tax preparation experts at Leadingham Rodgers are happy to help.

How Do I Claim the EITC?

If your tax situation is fairly simple or straightforward, you can claim the credit with an e-filing service. But for more complex situations, especially for independent contractors, a trusted Certified Public Accountant can help. At Leadingham Rodgers, our team has helped thousands of people, from individuals to large businesses, prepare and file their tax returns accurately and optimally.

Call Leadingham Rodgers today if you’re ready to get help preparing and filing your tax return for the 2023 tax season!

Leadingham Rodgers: Expert Tax Services for Montgomery, AL

With deep roots in the local community, the CPAs at Leadingham Rodgers take an active role in all our clients’ financial futures. We keep current on all the latest tax laws, identifying tax planning and preparation opportunities that can optimize your liabilities today and in the future. Whether you’re an independent contractor or running a business with 500+ employees, our accountants have the knowledge and expertise to maximize your savings. Call us today at 334-721-2548 or contact us online to learn more.

Debt Management 101: How to Get the Upper Hand on Business Debt

Tue, 20 Dec 2022 00:46:11 GMT

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.

How to Prevent Business Fraud: 5 Tips from CPAs

Sun, 20 Nov 2022 00:29:26 GMT

As a business owner, your job is to manage the big picture, making sure that your vision is executed at every possible level. But while you’re making connections, nurturing your brand image, and keeping the wheels of your industry turning, it’s easy for smaller details to slip between the cracks. Nowhere is this more true than in the case of your finances—which is how businesses lose an average of 5% of their revenue to organizational fraud every year.

“Organizational fraud” is a complex term covering deceitful activities committed against businesses by outside agents and internal employees. Whether you’re running a cozy coffee shop, a major manufacturing company, or anything in between, your finances are at risk without a robust fraud prevention plan in place. So, how can Montgomery businesses protect themselves? Let’s take a closer look.

What Are the Most Common Frauds in Small Business?

The Association of Certified Fraud Examiners (ACFE) defines three major categories of fraud for every size of business: corruption, asset misappropriation, and financial statement fraud.

The most common source of occupational fraud is:

Asset Misappropriation (indicated in 86% of reported cases): any theft or misuse of the company’s resources by an employee. Common examples include skimming money, lying on expense reports, and stealing/misusing company property.

The next two most common fraud categories are:

Corruption (indicated in 50% of reported cases): dishonest behavior perpetrated for the financial gain of individuals in power. Common examples include bribery, kickbacks, bid rigging, and other conflicts of interest.
Financial Statement Fraud (indicated in 9% of reported cases): schemes that involve intentional misrepresentations or omissions on a company’s financial statements. Common examples include overstating net income, concealing liabilities, or incorrect valuations of assets.

As you can see, many fraud cases involve more than one type of dishonest activity. Altogether, these actions account for hundreds of thousands of dollars in lost revenue annually.

Top Organizational Fraud Prevention Tips

Involve Employees in Financial Fraud Training

More than half of all fraud tips in 2022 came from employees, meaning they can be your greatest asset. No one likes to come across as a paranoid boss or manager. But with the right fraud training programs, you can deter employee fraud and equip well-meaning employees with the knowledge of what red flags to watch for. That way, everyone can work together to protect their mutual interest in the company’s success.

Separate Accounting & Cash-Handling Duties

Small businesses are especially vulnerable to asset misappropriation schemes because, often, one person is in charge of all accounting duties. That makes it both tempting and easy for that person to tamper with checks, inflate or fabricate invoices, or skim payments. Make sure you hire at least two people to handle financial activities like handling petty cash, processing payments, and making bank deposits.

You may also want to rotate job duties between these employees so each can check the actions of the other. For example, you might have Accounts Receivable & Accounts Payable employees change out every few months. Better yet, you can enlist the help of a CPA to manage and safeguard your bookkeeping, payroll, and financial statements.

Shore Up Any Digital Weak Spots

In today’s world, computerized payroll, accounting software, and cloud-based workspaces are incredible assets—essentially a requirement for modern businesses. But ensure you keep these systems up-to-date and protected by antivirus software, firewalls, and two-factor authentication checks. Consider choosing software that comes with financial fraud detection tools that can help you detect suspicious activity early.

Encourage an Ethical Company Culture

We all try our best to hire honest people. But sometimes, despite our most vigorous background checks, personality tests, and reference reviews, an employee will crack under the pressures and temptations of fraud. It’s important to set clear boundaries, expectations, and examples for employees.

Give employees ways to report suspected fraud anonymously, and follow up on even the smallest report or tip. Make sure that employees understand clearly what constitutes fraud and how it will be handled. Finally, try to make sure all your employees take their vacation. This isn’t just a gesture of goodwill: fraudsters are known for avoiding vacation because they can’t cover up their illegal activities while they’re away.

Review & Audit Your Accounts Often

It’s all too easy to become complacent when the books check out month after month. But the moment you stop monitoring them for missing checks, unrecognized payments, or other suspicious activities, you leave your account vulnerable to fraudsters. Consider hiring a CPA for surprise audit, review, and compilation services. This can both help you catch early warning signs of fraud and demonstrate to your employees that you’re watching the financial records closely.

Get Support from a Certified Public Accountant

A Certified Public Accountant can be one of your biggest assets in the fight against occupational fraud. The earlier you catch suspicious financial activities in your organization, the better your chances of mitigating losses, maintaining your business reputation, and achieving your business’ goals. Don’t let opportunists—or simple mistakes—cost you what you’ve fought so hard to build. Let the CPAs at Leadingham Rodgers put our accounting and auditing skills to work for you.

Leadingham Rodgers: Fraud Prevention & Forensic Accounting in Montgomery, AL

If you are concerned about your business’ accounts or fraud prevention programs, call the CPAs at Leadingham Rodgers. One of our many accounting services, forensic accounting can provide a detailed analysis of your financial records, investigating for any fraudulent activities and helping you manage any financial losses or illegal accounting practices we discover. Call (334) 721-2548 or contact us online to learn more.

Top Tips for Improving Your Credit Score from Our CPAs

Thu, 20 Oct 2022 00:24:06 GMT

Credit scores can certainly seem mystifying. They’re a unique combination of the data analytics efforts of 3 major credit reporting agencies: Experian, Equifax, and TransUnion (or Dun & Bradstreet for businesses). Each of these companies gathers data about your credit history, analyzes your financial creditworthiness, and tells lenders how likely you are to repay your debts in the form of a FICO® score from 300 to 850.

Nobody can opt out of having their credit history rated on this scale, yet it’s a critically important aspect of financial health for businesses and individuals alike. Improving your credit score can mean the difference between securing a business loan, getting a mortgage, or purchasing a big-ticket item to expand your earnings—or your family. So, how can you take control of your credit score and make it work for you? Let’s dive in!

Why Knowing Your Credit Score is Important

Keeping an eye on your credit score gives you a greater understanding of what potential lenders are going to see if you need to apply for a loan or credit card. Watching it over time can help you catch any inaccuracies or signs of identity theft. It can also help you plan to improve your credit ahead of a big event, such as buying a house or acting on an important capital expenditure.

Your credit score doesn’t just determine whether or not a lender will agree to loan you money. It can also determine your interest rate for repaying what you owe. Generally speaking, the better your score, the less you’ll have to pay over time.

What credit score do you start with?

Before you start building credit, you don’t have a score at all. It isn’t zero or even 300 (the lowest possible)—it simply isn’t . Once you open your first line of credit, you’ll get a score, which will likely be somewhere between 300 and 850, depending on your unique circumstances. Scores are calculated based on:

Your track record of making regular, on-time payments
How much debt you’ve accumulated
Your credit utilization ratio (how much money you owe compared to your available credit)
The mix of loan types you have (such as credit cards, car loans, mortgages, etc.)
The length of your credit history (also called credit age)

How to Check Your Credit Score

There are many ways to check your credit score for free. Some methods of checking will lower your score—these are known as hard inquiries, which are used any time you apply for a new line of credit or a credit line increase. But personal reviews (or soft inquiries) won’t affect it, and you should never have to pay for your scores. Instead, try one of these options:

Ask your financial institution about credit monitoring and reporting. Most big names in banking provide this service to their customers for free.

Request a free credit report from the Annual Credit Report Request Service online or via phone call. Through December 2023, you are entitled to free weekly reports.
Use a reputable online credit monitoring service such as Credit Karma .

Tips for Improving Your Credit Score

Always Make Payments on Time

Making your credit card or loan payments on time is the single most important factor in your credit score. It’s best not to carry too much debt, but making the minimum payment on time is better than missing it, especially by more than 30 days. Late payments of 30 days or more can drop your score by up to 100 points and stay on your credit report for more than seven years.

Individuals should set up reminders or automatic payments to never miss a due date. Businesses should consider streamlining their bill payments, either through an upgraded accounting system or working with a Certified Public Accountant (CPA).

Manage Your Credit Utilization

The second most important factor in your credit score is your credit utilization ratio, which is typically represented as a percentage. The lower your balance, the higher your score is likely to be, because it shows lenders that you’re being responsible and spending within your means. Typically, you should use less than 30% of your credit card limit on any given card.

Smart ways to manage this ratio include paying several times throughout the month, paying off your balance before the billing cycle ends, or asking your creditor for a higher credit limit. You’re more likely to receive an increased limit if you’ve recently gotten a raise or have had a good track record with that card for a few years.

Discuss Debt Management Options with Your CPA

Whether you’ve gotten behind on your bills due to illness or job loss, or you aren’t sure how to pay down your accumulated debt, a CPA can help. Debt management is just one of the many things we do for our clients here in Montgomery, both on a personal and business level. We can help you choose the right steps for your situation, from getting you on a good schedule to negotiating with your creditors, and ultimately improving your credit score.

Get Smart About Your Credit with Leadingham Rodgers

Credit scores are a fact of life. But instead of seeing them as a millstone around your neck, you can take control and turn them into valuable assets. As Montgomery’s trusted accounting firm, Leadingham Rodgers is ready to help clients manage their debt, set up a responsible credit history, and rehabilitate their financial health for the long term.

Your Reliable CPAs in Montgomery, AL

Leadingham Rodgers’ CPAs have deep roots in the community here in Montgomery. We’re committed to helping all our friends and neighbors in the area take control of their financial situations. Whether you need business accounting, personal tax help, consulting, or something totally unique, our team is ready to use our expertise to help. Call us today at (334) 721-2548 or reach out online for more information.

Appreciating our Teachers: A Tax Guide for Montgomery’s Educators

Thu, 29 Sep 2022 00:13:54 GMT

Employees in education and health services make up about 10% of Montgomery’s local economy. More than contributing to municipal financial wellness, our educators play a vital role in raising Montgomery’s children with the knowledge they need to succeed. In this blog, Leadingham Rodgers returns the favor by providing our top 5 tax planning tips for Montgomery’s under-appreciated educators. We hope this tax guide helps you get the most out of your return so you can focus on the work you love!

Top 5 Tax Tips for Teachers

Keep Track of Out-of-Pocket Educator Expenses

A June 2021 study found that 94% of public school teachers use their own money on school supplies for their classrooms: at an average of about $478 per school year. Sound familiar? The good news is that you can deduct many of these expenses, so long as you are an eligible educator and your school hasn’t already reimbursed you.

Eligible educators are K-12 teachers, counselors, principals, or aides who work 900 hours or more in a private or public school. Starting in 2022, teachers may now deduct up to $300 of out-of-pocket classroom expenses on their tax returns. If you haven’t already, make sure to keep track of your receipts and other documentation for any deductions you plan to make.

What can a teacher write off on taxes?

Items eligible for the Educator Expense Deduction include:

Classroom supplies, such as books, computer equipment, writing materials, and anything else that aids in student learning.
COVID-19 protective items such as masks, hand sanitizer, hand soap, physical barriers, or any other precautions recommended by the CDC.

Deduct Expenses for Continuing Education

Have you participated in professional development courses, gone back to school, or otherwise spent money on continuing education related to your current job? If so, you may be eligible for the Lifetime Learning Credit.

The Lifetime Learning Credit can help you cover certain expenses related to continuing education, up to $2,000 per tax return. There’s no limit on how many years you can claim the credit, as long as the courses you’re enrolled in are for growing your skills as an educator (not for a personal pursuit or a different career).

You can use the Lifetime Learning Credit to help you cover:

Tuition
Books & supplies
Lab fees
Transportation and travel fees

See if You Qualify for the Student Loan Interest Deduction

The interest accrued every year on student loans can feel especially overwhelming on a teacher’s salary. Fortunately, there are several options available to teachers who are paying off student debt from college. The options differ depending on whether you have a federal or private student loan, but a Certified Public Accountant can help you navigate the best choice for you.

Two options include:

Student Loan Interest Deduction : deduct the lesser of $2,500 or the amount of interest you actually paid during the year on your taxes.
Alabama Math & Science Teacher Education Program ( AMSTEP ): a federal loan repayment program that benefits qualifying high school teachers in math and science at $2,500 per semester or $5,000 per year.

Factor in Private Tutoring & Other Self-Employment

If you offer paid tutoring services outside of your normal working hours, you’re considered self-employed. While tutoring may not feel like gig work , you can still deduct business expenses on Schedule C. Whether you meet with students over at the Lowder Regional Library or virtually from your own home, any expenses that are ordinary and necessary to providing your services could be eligible for deduction.

The best way to know what you can deduct is to meet with a trusted CPA at Leadingham Rodgers!

Don’t Forget Charitable Donations

In our experience, teachers are some of the most compassionate and giving people in our community. If you’ve made any charitable contributions to your school—or any other cause that’s close to your heart—don’t overlook them when tax season comes around.

Whether you bought library books for your school’s collection, donated backpacks to kids in need, or contributed to a local fundraiser, you can claim a charitable deduction on your tax return. Keep track of any receipts for donations you make throughout the year and tally them up as part of your tax preparation in the new year.

Get Tax Prep Help from a Certified Public Accountant

Our educators are out there building the future—giving of themselves to help spark a sense of curiosity, imagination, and excitement for learning in our youngest community members. We understand that you’re busy enough without all the worries and complications that tax planning and preparation can bring. So why not let the experts at Leadingham Rodgers give you a helping hand?

Our local tax experts are here to help you keep track of expenses and take full advantage of the latest tax laws and legislation. Our CPAs take a proactive approach and will work diligently with an appreciation for the great work our educators do!

Local Tax Services for Teachers in Montgomery, AL

At Leadingham Rodgers, we provide comprehensive tax services for individuals, the self-employed, and businesses alike. We can help you organize your personal financial statements, prepare your taxes, and take every possible step to ease your tax burden during the school year and all year. Call us at (334) 721-2548 or get in touch online to learn more about what our CPAs can do for you!

Attracting Top Talent in the Great Resignation: Employee Benefits

Sun, 28 Aug 2022 00:05:30 GMT

Whether you run a small, medium, or large business, your workforce enables you to pursue your dreams. But the so-called Great Resignation may have you wondering about the competitiveness of your benefits and how much money you can devote to payroll. As a business owner in this time of change, how do you offer employee benefits that will help you fill those empty positions and reduce turnover?

Paying for increasingly expensive benefits options can feel impossible. But don’t worry—even small businesses with tight budgets can make themselves competitive. At Leadingham Rodgers , our accountants are seasoned business consultants, here to help you strategize, budget, and set yourself up to weather the Great Resignation in stride.

Start By Reviewing Your Budget with the Essentials

Start with the basics: while you want to be as competitive as possible, you still need to do so realistically for your business’s bottom line. Just be sure to set clear goals about how much you can spend, and why you want to offer additional benefits to begin with.

Of course, some employee benefits are required by state, local, and federal laws, so you’ll need to factor those in first. In Alabama, businesses are typically required to contribute:

Social Security & Medicare
Workers’ Compensation
Unemployment taxes
Military leave and certain other leaves of absence (jury duty, for example)

You’ll face different requirements as you grow. For instance, if you have over 50 employees , you may be required to offer some form of health insurance.

Consider Competitive Benefits to Attract Employees

Now that you have your baseline, you can begin exploring creative and competitive benefits packages that will help you find and keep the talent you want. Some of the benefits employees value most are:

Health, dental, and vision coverage
Paid vacation, holidays, and sick leave
Paid family leave
401(k) retirement plans
Life & disability insurance

In Alabama , about 81% of companies offer medical insurance, 86% offer paid vacation leave, and about half offer paid sick leave and retirement plans to full-time employees. Meanwhile, only 7% offer childcare benefits, and 10% offer hiring bonuses—options that more and more employees are prioritizing in the modern era, and which could give you a competitive edge.

Don’t Forget to Highlight Additional Perks

Benefits don’t always come with large price tags. There are plenty of other ways you can position your business as a great place to work. Can you offer flexible work hours or remote options? What about access to professional development classes or simply a casual dress code? Survey your current employees to see what matters to them—then find ways to incorporate their feedback.

If popular perks like remote work or half-day Fridays aren’t possible for your business, consider other ways you could afford to be flexible, such as discounts on gym memberships, expanded mental health support, or even charitable giving drives that boost employee morale.

Take Advantage of the Employee Retention Tax Credit

All of these ideas may sound great, but how are you supposed to fund these employee benefits? The first step is not to leave money on the table. The employee retention credit is a refundable tax credit based on your employee costs from December 2020 through November 2021. That includes a percentage refund on certain wages and benefits.

If you didn’t already claim this credit on your 2020 or 2021 tax return, you can still claim it on amended payroll tax returns through the end of 2024. To qualify, you must prove that you experienced a 50% decrease in revenue in 2020 or a 20% decrease in 2021. Alternatively, you can qualify if government-mandated COVID-19 restrictions created significant operations disruptions.

The requirements and definitions of “ significant operations disruptions ” are somewhat open to interpretation. That’s why you should work with a trusted accountant to see if you qualify, explore all of your options, and help you claim this credit.

Develop an Employee Benefit Funding Strategy

Employers have plenty of options to ensure that everyone is provided for without breaking the bank. Of course, each business is unique and requires a unique strategy. For instance, you might choose to split the cost of health insurance with your employees, rather than taking on the full burden. Or, you could choose plans with higher deductibles and lower premiums.

This process can be a tough balancing act, but having a trusted partner on your side makes it easy as you plan to expand or revise your benefits offerings. At Leadingham Rodgers, our accounting services have helped businesses small and large manage their bookkeeping, forecasting, and even payroll administration to ensure that everything goes smoothly—now and in the long run.

Leadingham Rodgers: Business Consulting & Accounting Services in Montgomery, AL

At Leadingham Rodgers, we provide comprehensive, flexible strategies that address the most pressing issues affecting your business: from funding employee benefits, to tax preparation, to computerized payroll services. We’re here to support your needs, whether you have 5 employees or 500. Call us at (334) 721-2548 or get in touch online to learn more about what our CPAs can do for you.

Business Entities in the Gig Economy: Freedom to Profit

Thu, 28 Jul 2022 22:36:09 GMT

To many, the gig economy offers a chance to hustle toward their American dreams. But navigating the financial side of being a gig worker can be tricky without some guidance. If you make over $400 in any given year as a self-employed person, you’ll have new tax burdens (and tax benefits) to navigate. So now, in the month of independence, Leadingham Rodgers is here to provide some basic financial advice for people hoping to thrive in the gig economy.

Do you sell floral arrangements on the side? Conduct estate sales for clients? Create digital assets for online companies? We’ll help you understand what kind of organization you’re starting and what financial preparations will work best for your brand of hustle.

Am I Part of the Gig Economy?

The fundamentals of gig work have existed for generations: it’s a form of self-employment that is flexible, often changing, and ultimately in your control. But the digital gig economy has changed the landscape forever, with an economic impact that is expected to hit $455 billion by 2023.

America’s self-employment rate is now 28.2%, which includes millions of freelancers, independent contractors, artists & craftspeople, delivery drivers, and so much more. So if you’re a sole proprietor, an independent contractor, or a freelancer, you’re a gig worker—whether you’re making money on the side or doing gig work full-time.

Financial Tips for Gig Workers & the Self-Employed

Investigate Your Insurance Options

The gig economy can offer a wide range of benefits to any individual or business entity. Unfortunately, it doesn’t come with the same capital-B benefits that full-time work typically does, so you’ll have to think carefully about health insurance and other protections.

Make sure you have suitable types of insurance to cover any potential gaps that could keep you from going into debt in the case of an accident. Start with health insurance, then think about liability insurance, disability insurance, and car insurance (especially if you drive a lot for your work!).

Keep Track of Your Expenses

The most successful side-hustlers are also the best bookkeepers. It’s important to keep careful track of the time you spend on projects, both for accurately billing your clients and discovering areas of improvement and growth. If you travel for work, you may be able to write off your gas and toll expenses on your tax return. Maintain a careful inventory of all legitimate business-related expenses, from printer ink and paper to health insurance to professional membership dues.

A Certified Public Accountant can help you discover legitimate deductions that can make a big difference on your tax bill, including exploring options like the home office deduction . There are a lot of ways to lower the amount you owe.

Budget Wisely and Often

One of the biggest challenges for those new to self-employment is remembering to set aside enough money from their paychecks to cover taxes. Because you won’t have anyone regularly deducting taxes from your paycheck, you’ll face a painful bill from the IRS in April if you haven’t been setting enough aside.

Remember—as a gig worker, you’re also responsible for paying the full amount of Social Security & Medicare taxes that a traditional employer would normally cover a portion of. That’s why we typically recommend setting aside 20-30% of your earnings to be safe.

File Quarterly Taxes

Paying your local, state, and federal taxes quarterly allows you to pay in smaller increments rather than all at once. Plus, if you expect to owe more than $1,000 and meet certain other requirements, the IRS may actually require to do so. Because there are additional rules on calculating and paying estimated taxes, we encourage independent contractors to seek advice from one of the expert accountants at Leadingham Rodgers!

Embrace the Freedom to Profit on Your Terms

From big-picture goals to your everyday financial challenges, a CPA can address all your unique needs to make sure you have everything under control. Our team will explore all of your deductions and filing options when it’s time to file, and we can provide expert consulting services to help you manage your money wisely throughout the year. That way, you can focus on getting more gigs and building your reputation.

No matter the good or service you’re providing to your customers, our team is equipped with the knowledge to help you be successful.

Leadingham Rodgers: Certified Public Accountants in Montgomery, AL

Whether you are working alone or starting a business entity, there are several issues to consider from a financial perspective. The sooner your finances are secured and stabilized, the sooner you can analyze the success of your endeavors and forecast your progress. Call Leadingham Rodgers Accountancy at 334-721-2548 or contact us online to secure and grow your finances!

Business Consulting FAQs– Answering Your Questions

Tue, 28 Jun 2022 22:09:06 GMT

In today’s market, business owners face an abundance of advertised services that all claim to help companies grow and thrive. With all this marketing, it can be hard to determine what is truly beneficial for your business. But at Leadingham Rodgers, over our many years serving clients in all their accounting needs, we’ve seen one thing proven time and time again: if you’re looking to increase profits and overcome challenges, hiring business consulting services is essential.

So, is this service right for you? We’re here to answer 5-8 frequently asked questions about how business consulting services can strengthen the financial forecast of any organization. From payroll to inventory, assets to borrowing, we answer your questions and guide you toward a more successful and financially stable future.

Why Hire Business Consulting Services?

Even if you are an experienced business manager with a strong sense of financial control, the view of an impartial outsider is always beneficial. Our full business audits can identify potential areas of improvement that you may have overlooked with an eye toward your future goals.

Whether it’s reducing your expenses or increasing your revenue, our business consulting services give you the best chance of boosting your profitability in a smart, sustainable way. Better still, our assistance allows you to focus on running your day-to-day.

What Aspects Of Business Are Included?

Leadingham Rodgers is proud to offer a wide range of business consulting services covering HR and payroll, qualified retirement plans, litigation, mergers, acquisitions, and more. Whether you need a single service or a combination of multiple services, we’re here to help.

Our services are suitable at every stage of your business journey. Whether you’re just starting out, facing uncertain times, or are ready to take your business to the next level, financial consulting helps make it happen.

What Are The Main Benefits Of Business Audits & Consulting?

Business consulting can be used to help build a clear strategy that is focused on your business goals. This extra sense of direction can also streamline your business through optimized services and removing unnecessary expenses. Likewise, working with a consultant can save you time and effort by allowing a trusted partner to handle your financial planning.

Data-driven financial advice takes personal opinions out of the equation, ensuring that the proper decisions are made. We use only the necessary data and industry trends and make the most beneficial decision possible for your business—after all, our success is a result of your success. From growing your team dynamics to utilizing new technologies, financial consulting services can work wonders for the future of your firm.

Can You Provide Accounting & Bookkeeping Too?

Pinpointing areas of business where financial changes can be made is one thing, but implementing them is another. Many consulting services don’t offer accounting and bookkeeping services, but at Leadingham Rodgers, we can also help manage your payroll reporting, tax preparation, monthly bookkeeping, and more.

We especially recommend accounting and bookkeeping services to those companies that do not have a dedicated HR department or accounting team. By streamlining all aspects of your finances through one service, you’ll save time and money. Keeping your financial records organized, timely, and accurate is a key step to unlocking your business’s full potential.

How Much Does Business Consulting Cost?

Business consulting costs can vary by business and location. Most firms offer a free consultation to review your goals and will explain their rates. Typically, firms charge by the hour, but some may charge lump sums for providing financial plans and recommendations.

Leadingham Rodgers is fully committed to giving you the best possible value for money, and all consulting services are tailored to reflect your requirements. If you only need help with payroll services, you’ll only pay for help with payroll.

Grow Your Business with Consulting Services

Our financial audits and consulting services are built with small businesses in mind, delivering actionable advice that can actively help your company thrive and expand. When you work with us, you gain a true partner in your success—an accountant committed to providing close, personal attention to your financial forecast. Let us build your business a financial blueprint to maximize your profits and spending!

Discover Our Expert Consultation Services

Leadingham Rodgers makes expanding your business easy! We can handle all your financial needs and give you peace of mind. Our team is equipped to serve all kinds of businesses and provide personalized support and advice. Call us at 334-721-2548 or contact us online to reach your financial goals!

21st Century Taxes: A Bookkeeping Checklist for the Digital Age

Sat, 28 May 2022 21:51:51 GMT

In the digital age, many small businesses and individuals are still relying on old-fashioned bookkeeping techniques and hand-written ledgers to manage their accounts. Of course, we understand. Making the shift to computerized payroll or digital bookkeeping can feel daunting after years of doing things the way you’re used to. But to do business or thrive when tax season rolls back around again as a modern entity, you need 21st-century help.

Thankfully, you’re not alone when you make the switch. Leadingham Rodgers CPAs are well-versed in all things bookkeeping, from the latest accounting software to personalized consulting services . Here are our tips for bringing your books into the modern age—use this helpful checklist to take the measure of your financial fitness and get started today!

Digital Ledgers

While many aspects of bookkeeping have remained untouched over the years, one of the major changes has been the shift towards digital tax filing. The IRS now actively recommends electronic filing over filing by mail. Taking their recommendation is especially important if you’re filing taxes in multiple states.

By implementing digital ledgers, those who need access to certain documents like income and sales records, including gross receipts, payroll receipts and commissions to subcontractors, and business expenses will be able to access them quickly and easily. Likewise, when tax season comes along, your business can seamlessly hand over the necessary data to your accountant.

Accounting Software

If you have yet to take your company’s accounting endeavors online, now is the time to do it. We recommend downloading software to streamline your ledgers across your organization. There are many options on the market, and it may be helpful to discuss them with your CPA to choose a system that best suits your needs.

The industry mainstays are Intuit QuickBooks, Xero, and FreshBooks, each with unique features that give you peace of mind when tracking your finances. Accounting software will provide you with basic accounting features and payroll services to keep your finances organized, monitor your progress, and flag any issues that surface in your day-to-day operations.

Cloud Storage

Cloud storage is a method of computer data storage, that keeps important information backed up in remote online databases rather than your personal computer. Cloud storage is useful not only in accounting, but all aspects of your business. Migrating to the cloud can actually save you money on IT costs, and it’s designed with maximum security in mind, making it safer than local storage. You can also store your tax forms and all financial transactions in the cloud for effortless bookkeeping.

Similarly, cloud storage makes it easier to grow your business while protecting your most sensitive data. If your business outgrows an office space or wants to take on more clients, cloud storage has the infrastructure to expand with you. Cloud storage is a no-brainer when it comes to peace of mind since your data will never go missing or be vulnerable to damage by fire, flood, or electrical problems.

Computerized Payroll Services

These days, it’s hard to find a company that isn’t relying in some way or another on computerized payroll services. But as your business grows, your needs change, and the type of payroll software or system you use might need a refresh, too. With shifting legislative changes, compliance requirements, and modern reporting technologies, even small businesses should take some time to audit their payroll processes and adjust.

You have a lot of options here, from in-house work with advanced software like QuickBooks and Gusto to completely outsourcing your payroll to an online company. Of course, with online services, there typically won’t be someone on the other end of the phone to answer your pressing questions. Choosing a dedicated Certified Public Accountant to help you manage your books gives you the benefit of a dedicated, personalized experience.

Organize Your Finances with Leadingham Rodgers

Whether you are using computerized payroll services or not, it’s beneficial to work with a business accountant to ensure your finances are in tip-top shape. Our team at Leadingham Rodgers can help you file your taxes, provide financial planning, and get your company’s finances digitally organized. We are ready to help your business reach its full potential in the 21st century!

Never Miss a Deadline with Leadingham Rodgers!

Never miss an important financial deadline with the help of our qualified team of experts at Leadingham Rodgers Certified Public Accountants. Get personalized support and advice for your financial goals. Call us today at 334-721-2548 or contact us online to begin maximizing your business’s time and money!

A Guide to Charitable Donations for Small & Big Businesses

Thu, 28 Apr 2022 21:42:16 GMT

Corporate philanthropy is about more than limiting your tax burden. Giving to organizations in your community can serve as a form of invaluable PR, raise awareness for your services, and—yes—limit your tax obligation . But how much should you give? To whom? How can you gently spread awareness of your actions?

At Leadingham Rodgers, we’re all about helping business owners give back. In this guide, we’ll walk you through some basics about charitable giving in your community, and what guidelines you should follow as you go about making a difference to your employees, your customers, and your community.

Why Make Charitable Donations?

We would all love to support our community and help build a better world for future generations. Of course, in today’s economic climate, the thought of giving money away may seem unfeasible. But charitable donations may be more than meets the eye for your business.

By giving to good causes and non-profit organizations in your community, you’ll receive a wealth of benefits in return, including positive press and increased awareness of your brand through sponsored events. Getting involved with a good cause also provides employees with a reason to take pride in the company, creating a shared sense of culture, satisfaction, and goodwill.

Today, 70% of consumers want brands to show social responsibility. Corporate philanthropy can do just that, becoming a significant part of your brand ethos. Perhaps the cherry on top of charitable donations is that it doesn’t have to be a financial burden.

Who Should My Business Give To?

Start by brainstorming causes that align well with your business, your employees, and your customers. Corporate philanthropy does not have to be limited to your area, which is why many companies combine local campaigns with national and international charity work. Ultimately, you can do good for the community and your business while essentially distributing your taxes directly to the organizations that you care about. Charitable giving is an excellent way to involve all of your employees when choosing an organization your business is passionate about.

Then, think about the legal side. According to Federal Government regulations, charitable deductions only count if they are made to qualifying charities with 501(c)3 status . Essentially, charities must meet government requirements to receive donations from businesses, so you’ll want to make sure your charity of choice qualifies.

What Types of Charitable Giving Can We Do?

Though there are many limits to charitable deductions following 2017’s Tax Cuts and Jobs Acts , there are many ways to donate, and many ways to structure charitable giving from a tax liability standpoint. To qualify from a tax standpoint, donations can be given in a multitude of ways:

Monetary donations, including credit card, check, and cash payments
Donations of vehicles, goods, property, or other equipment
Donations of time and travel to help in a volunteering capacity

Whether you decide to sponsor a local sports team, set up a charity drive to donate goods, or organize a company-wide volunteer day, our tax advisors can help you choose a way to give that makes the most sense for your business.

How Can My Business Make Charitable Tax Deductions?

Corporate philanthropy can have a positive impact on the future of your business for many reasons, but you need to understand the financial aspects, too. Charitable deductions will limit your tax burden, meaning they won’t have to put your business in financial difficulties. But, you have to keep a few guidelines in mind to see that relief realized.

While there are several additional rules to understand, one of the critical factors is that corporations may deduct qualified charitable donations that amount to 25% of their taxable revenue, although any excess can carry over to the following year’s tax returns. A certified public accountant is knowledgeable in these rules and regulations and can help your business decide who to give to and how much.

Accounting For Charitable Deductions

If you choose to give to charity, don’t let it cause complications to your company’s finances. Recording your donations needs to be done correctly to receive the beneficial tax deductions. Likewise, you need to be aware of the limitations on eligibility and limits. Our team at Leadingham Rodgers can provide you with qualifying charities and handle filing your tax deductions so you can focus on what matters most.

Make a difference in your community and your business with the help of Leadingham Rodgers Certified Public Accountants!

Receive the Benefits of Charitable Donations with the Help of Leadingham Rodgers

At Leadingham Rodgers , our Certified Public Accountants are here to advise you in all things tax planning, including managing your charitable donations. Our team proudly serves the Montgomery area in philanthropic planning so your business can do the right thing, the right way. Don’t hesitate to get in touch to take the first steps of charitable donations by calling us at 334-721-2548 or contacting us online !

Doing Your Own Taxes: The Dangers & Consequences

Sat, 09 Apr 2022 21:11:04 GMT

Last month, we released an extremely important blog about why you absolutely must have a Certified Public Accountant (CPA) on your team. Regardless of whether you’re an individual employee, self-employed, a business owner, the benefits of working with a CPA are spread across all financial demographics. Today, we want to drill deeper into this idea, discussing the dangers of doing your taxes on your own.

Doing Your Own Taxes: The Dangers

It’s Time Consuming

For all the money we save our clients, the bottom line is that the tax code is complicated.

Unless you’re willing to read over 70,000 pages of instructions, doing your own taxes is simply not a realistic prospect

Depending on your personal financial circumstances, you could be looking at tens of hours of tax preparation. Can you really afford that kind of effort without an assurance that it will pay off?

Mistakes Are Damaging

Worse than failing to optimize your tax return, you run the risk of making an error. At best, small errors result in letters from the IRS requesting additional information or payments that you missed while filing. At worst, you may make false claims or calculations, resulting in greater fines, legal issues, and back taxes.

Are you married? Do you have children? Did you sell stock this year? Have you kept track of work expenses? Have there been major financial events in the past year, such as an inheritance or additional tax implications? These questions are endless, and only a CPA can help you answer them.

No One’s On Your Team

Filing your taxes solo requires that you sift through neutral language to find the right directions and answers. Automated services like TurboTax are indifferent to how much you save—and the federal government has even less incentive. Without a CPA, you’re on your own to interpret complicated codes and directives.

Bound by a fiduciary responsibility, a tax services CPA fights for every cent on your balance sheet. Furthermore, they will provide priceless advice on related or even unrelated matters regarding your finances. Not only do you come out ahead on your taxes, you also gain invaluable advice for the future.

There’s Nothing to Gain

Perhaps the best answer to the question of why one should do their own taxes is its opposite: Why should you do your own taxes? Unless you’re a retired tax code savant with a deep passion for tedious bureaucratic documents, this question is unavoidable.

It’s possible that filing with the standard deduction will save you the most money. But the unspoken truth is that most people that take the standard deduction could have saved a lot more money. So either way you spin it, for the most part, there’s nothing to gain by doing your own taxes.

Leadingham Rodgers Tax Services

Along with our broader consulting and accounting services , Leadingham Rodgers provides comprehensive tax services, including tax planning and preparation.

Tax planning: optimizing your tax return
Tax preparation: organizing and filing your tax documents

Our tax services customers return time and again for good reason: they save far more than they spend on our services.

Start with a CPA Today

But remember, tax planning is a year-round process . It’s important that, when deciding to work with Leadingham Rodgers, you start as soon as you can. Give us a call or visit our website today for a free consultation.

Leadingham Rodgers Can Help Plan & File Your Taxes

Every year, millions of Americans risk the dangers of doing their own taxes. Filing alone may seem cheap and benign, especially through an automated service. But what they don’t see are the dollars left on the table. Leadingham Rodgers’ CPAs provide comprehensive tax services that ensure you save money. Contact us today for your free consultation.