Richard A. Lindsey, CPA

Lindsey & Waldo, LLC – Certified Public Accountants

  • Jun 26

    While the 2015 hurricane season is predicted to be below historical averages, it is still wise to be prepared when safeguarding our tax documents and records. You should complete the following before it’s too late.

    • Create an electronic back up of your records.
      • These records should include bank statements, tax returns, insurance policies, and so much more. You should store this electronic copy in a different place than the original documents.
    • Document/inventory your valuables.
      • The best way to document your valuables is by taking pictures or video of the items in your home.
    • Update your emergency plans.
      • These should be reviewed and updated once a year and related parties should be notified of any changes or updates.

    If for some reason you don’t have these safeguard procedures in place when the next disaster hits our area, the IRS can be of some help. Upon a taxpayer’s request, the IRS can provide you with the previously filed tax returns and filed forms such as W-2s, 1099s, etc.

  • Jun 5

    Bryan Martin had always dreamed of owning his own business, but, according to a Time.com article, it wasn’t until insurance giant Zurich shuttered their regional Indianapolis office where he worked that he decided to strike out on his own.

    “It’s the scariest thing I’ve ever done,” the article quoted Martin, who had just turned 51 and has a wife and 13-year old twins. “Right now, I’m just worried about financially making all this work.”

    Are you out there with Martin? Has the rising unemployment rate sent you into the entrepreneur minefield? Are you crawling along like a soldier, poking the ground with a stick, trying to find, identify, and avoid the tax mines just to pay your mortgage and put food on the table? A growing number of the nation’s jobless are doing just that.

    But as the ranks of brand new entrepreneurs swells so is the likelihood of errors and even, dare I say it—IRS audits! The IRS audits individual returns with Schedule C income at twice the rate of those without. Since the IRS’ Tax Gap analysis identifies underreporting of business income as a $109 billion problem, accounting for more than half of the total underreporting by individuals, the chances of those audits increasing are pretty good.

    Many new entrepreneurs, strapped for cash, try to cut corners and make the rookie mistake of forgoing the use of accountants and attorneys and picking up TurboTax® to handle their taxes on their own.

    The Internal Revenue Code is fraught with obstacles and the wide-eyed rookie is unlikely to recognize the danger signs. “My neighbor told me I could do this,” won’t stand up against the glare of an IRS examiner. Many budding business owners hear about the generous tax benefits for business expenses from travel and entertainment to the holy grail of tax deductions, the home office. But most have no clue what is allowed and what will send up a red flag. There are many misconceptions about the tax laws and the wrong decision can turn dreams into nightmares.

    The sheer magnitude of available tax breaks causes problems for many rookies. When you’re a self-employed small business owner, nearly everything looks like it should be deductible. After all, many feel they don’t do anything that isn’t business related.

    But the pearly-gate vision of deducting everything leads many an entrepreneur to forget the rules of mine clearing and wander off course into profit-bleeding blunders. Some of the most common mistakes include poor record-keeping, questionable tax deductions, putting expenses on the wrong tax form or line and failing to pay quarterly estimates to Uncle Sam.

    It’s critical that businesses maintain books, records, separate bank accounts and credit cards from their owners. In the event of an audit, people often lose, not because they were trying to get by with something, but because of poor records. When a taxpayer can’t produce records to match the tax return, the auditor smells blood. They have spotted a weakened wildebeest separated from the herd and they are going in for the kill.

    Make no mistake, it will be painful.

    But it doesn’t have to happen. With the proper records and the right advisor you can successfully chart a course across the tax minefield and come out unscathed.

    If you’ve entered the minefield, or are thinking of entering it, remember, our experience can help you identify the obstacles, spot the dangers and chart a successful crossing.