List Your Wages as Wages

No one likes paying taxes, but paying taxes is just a part of life, plain and simple. Unfortunately, some people try to get out of this “fact of life” by taking the wages that they have received and then claiming that those wages aren’t wages at all. These individuals typically claim that their wages are actually reimbursements for a loan or that the company made a mistake in the way it listed the money received. 

Whatever the case may be, lying about wages or even underplaying the amount of wages received is never smart and will never result in a good outcome. Know that it is possible to be honest and to file your taxes legally and to still benefit. All you have to do is find the right accountant in Naperville, such as the financial pros at Susan S. Lewis, Ltd.

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Starting A New Business

Are you thinking about starting your own business? Opening up a new business can be exciting, but it can also be incredibly stressful, especially if you don’t go about it in the right way. Begin by thinking about your reasons for opening a business and assessing your startup budget. It’s important to be realistic about whether or not opening a business is really the right choice for you and if doing so is financially feasible. You may wish to bring in an accountant in Naperville to look at your current finances and give you a “yes” or “no” on whether starting your business at a given time is a smart move. If you get a “no,” don’t take it as a never. Work with your accountant to discover what changes you will need to make or what kind of financing you will need in order for your business plan to work.

Once everything is set up and you’ve actually started running your business, don’t kick your accountant in Naperville to the curb just yet! You will need your accountant to help you determine what tax category your business falls under and to set you up with the correct forms. For most new business owners, filing as a sole proprietorship is the way to go. Under this category, you won’t have to deal with the IRS until you hire and pay employees. Of course, when you’re ready to take that major step, your accountant can help you with that as well.

Simple Tips to Keep in Mind When Working with an Accountant

No matter who you are or what you do, if you’re earning a wage in the United States, then taxes are inescapable. Since you can’t escape taxes and other financial responsibilities, you might as well embrace them. Fortunately, you can do just that by choosing to work with an accountant in Naperville. As you work with your accountant, however, there are a few things that you should keep in mind.

Tip #1: Change is a Good Thing

If you do things the way you’ve always done them, you’ll always get what you’ve always gotten. That old saying couldn’t be more true than when you apply it to your taxes. Don’t be afraid if your accountant advises using a different tax form or claiming different exceptions than you usually do. Change can be scary, but it can also be a good thing, so embrace it. As long as your accountant in Naperville is trustworthy and experienced, you can trust him or her to make the right choices for you, even if they aren’t the choices you’re used to making.

Tip #2 Be Honest

This second tip might sound overly simplistic, but you’d be surprised just how many people lie and cheat on their taxes. Most people don’t tell big, outright lies, but they are still dishonest in small ways. Maybe they underreport their earnings for the year or claim exemptions that aren’t rightfully theirs. Know that any dishonesty will eventually come back to bite you, so be honest, even if it means you have to pay a little more on your taxes than you would like. Only work with accountants who uphold this same standard of honesty and integrity.

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Selecting an Accountant in Naperville

There’s a famous saying that tells of the two things in life that cannot be escaped: death and taxes. This statement is incredibly true and, like clockwork, your taxes must be filed each year. Many people are able to file their taxes on their own, but some have more complex taxes that demand the attention of a professional. If you are self-employed, have recently been through major changes in your life such as a divorce or new employment, or if you just struggle to understand how to file your taxes properly, seeking an accountant in Naperville is a wise idea.

A good accountant is one who will sit down with you and talk about your finances, your work, and your record keeping tactics. Through this conversation, he or she will work to uncover tax write-offs or benefits for which you may be eligible, saving—and in some cases—earning you money. Always choose a certified accountant; you can check the state registry to determine if the accountant you are interested in is certified or not. These are the accountants who will have the skills, qualifications, and training they need to guarantee your taxes are filed correctly, on time, and in such a way that ensures maximum benefits for you.

Take your time to consider what you need in an accountant in Naperville. Every person’s needs are different. If you own your own business, for example, your taxes will not be the same as someone who is a contract employee or who works a traditional job. Rest assured, however, that there is an accountant out there for everyone; you just have to find your perfect match.

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Easy Relief From Everyday Money Worries

Simple strategies to lessen your financial stress.
By Emma Johnson

With so much troubling news coming out of Wall Street, financial anxiety is high. While you can't control the stock market, you can tackle some of your smaller money issues and put a bit of that anxiety to rest. Here is where to start.

THE ISSUE: I'm enrolled in a flexible-spending account, but I'm feeling overwhelmed by the paperwork.

THE RELIEF: Filling out these claims takes time, but doing so can net you hundreds of dollars each year, by allowing you to pay for health-related expenses with pretax dollars, says Kelley Long, a Chicago-based personal-finance coach and certified public accountant. Even if you spend just $300 on co-pays a year, filing them through a flexible-spending program may save you up to $100 in taxes. To streamline the paperwork, print out a claim form from either your company's Website or the Website of your programs administrator. Then make 12 copies, one for each month and place them in a folder where you will save all your health-care receipts. Once a month (mark your calendar), fill in the expenses you have accrued and fax it to the administrator.

THE ISSUE: A collection agency wont stop calling my house, even though we pay all our bills on time.

THE RELIEF: Return the call, because they aren't going to stop ringing you, says Gerri Detweiler, a personal-finance adviser for Credit.com, an independent education site. If you believe that the bill collector has mistaken you for someone else or called in error, ask to have your number removed from its list. Believe it or not, most will comply, says Detweiler. If the agency still claims you owe a debt and wont take you off its call list, ask to be sent something in writing. (Its required to do so by law.) After that, if you are still receiving calls during dinner hour, ask for the agency's address and send a certified letter telling it to stop contacting you. Additionally, you can file a complaint with the Consumer Financial Protection Bureau (consumerfinance.gov). Also worth knowing: If you are being contacted about a family member who is in debt, you are not legally required to provide any information about him or her to the debt collectors.

THE ISSUE: I need to do a home repair but don't want to put money into my house, since its value has declined.

THE RELIEF: You'll obviously need to call in a professional if the situation is urgent (rainwater is pouring through the ceiling, say) or you're in the process of moving and the sale of your home is contingent upon making the repairs. It also pays to take action if you're planning to stay in your house for five years or longer, as home values may rebound by then, or if the problem is currently small and relatively cheap to fix but could snowball into something bigger and badder if left unaddressed (a leaky toilet, a furnace pilot light that wont stay lit). That said, in today's weak housing market, you should avoid spending more than is absolutely necessary on fixes if you're going to move prior to 2016. Be careful not to over-improve your house for example, by installing a new $45,000 slate roof on a modest home, says David Crook, author of The Wall Street Journal Complete Real-Estate Investing Guidebook (Three Rivers Press, $15). In most cases you wont be able to recoup the costs.

THE ISSUE: I cant cover my bills until I have my paycheck in hand.

THE RELIEF: Most credit-card companies and many utility companies actually allow you to choose your due dates, so call each one that you use and request that your deadline be switched to a day or two after the day when you typically are paid. (And try to keep a small cushion in your checking account in case a bill is unexpectedly high one month.)

THE ISSUE: The purchase I made with my debit card was less than my bank seems to think.

THE RELIEF: Since funds are immediately taken out of your account when you use a debit card, any error on the banks or the merchants part could ding you considerably. You could overdraw, incurring a fee that averages almost $30, and not be able to use your card for additional purchases. So take action. As soon as you notice a discrepancy, contact the financial institution with your receipt in hand, since it should accurately reflect how much money should have been debited from your account, says Greg McBride, a senior financial analyst for Bankrate.com. Already tossed the receipt? No matter. The bank will probably still initiate an investigation.

THE ISSUE: Receipts are taking over my house.

THE RELIEF: Throw most of them away, yes, even those debit-card receipts, once you've verified their accuracy with your bank. The only receipts you should definitely keep are those for purchases that you're planning to write off on your taxes for example, job-search expenses, home-business costs and medical expenses. (Hang on to these receipts for seven years.) You may also want to hold on to receipts for pricey items, such as electronics and appliances, in case you need to return them or make a warranty claim. Everything else is grist for the shredder.

THE ISSUE: I sent in a rebate offer but never received the money.

THE RELIEF: It shouldn't take more than six weeks or so for a check to arrive. If you've been waiting longer than that, call the company's customer-service number for the rebate department, which is usually printed on the offer form. Mention the terms of the agreement and the date you mailed the rebate. If you no longer have a copy of the form, try Googling the brand name and rebate to find a phone number, suggests Kelley Long. Its a bit of a long shot, but you may be able to receive your money simply by providing the purchase date and the products model name and serial number to the customer-service agent. With future rebates, take these preemptive measures: Make a copy of all the required documents, use certified mail to submit the rebate, and read the fine print carefully to be sure that you qualify for the cash-back offer.

THE ISSUE: I'm being buried in credit-card solicitations.

THE RELIEF: Banks are always looking for ways to raise revenue, so they're competing for your business, says Tim Chen, CEO of NerdWallet.com, a credit-card resource site. Shrink your junk-mail pile by taking these steps: First, fill out a form at OptOutPrescreen.com, a joint venture of the consumer credit-reporting agencies. Then, enroll in the Direct Marketing Associations delete list (dmachoice.org). These two services will block offers for five years or more.

From the October 2011 issue of Real Simple. © 2012 Time Inc. All rights reserved.

Susan S. Lewis, an Accountant in Naperville, can help relieve your financial stress and help you keep more of what you earn. Contact us today.

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Tips for Choosing the Right Accountant in Naperville

We hear from lots of folks, especially small business owners, who want to know how to choose an accountant for their small business. Since the right approach to business taxes can literally make or break a small business, we put together a few tips to help small business owners choose the best Accountant in Naperville.

Here are a few helpful tips to help choose an accountant for your small business:

Look for a Naperville CPA

It's amazing, but many of the people we talk to don't know that not every person who calls themselves an accountant is necessarily a CPA. You wouldn't trust your personal health to a doctor who didn't have a medical license, would you? No, you sure wouldn't, so don't trust the finances of your small business to an accountant who is not a CPA.

Ask for References

A professional accounting firm should be able to offer you references and testimonials from their clients. If you are talking to an accountant and aren't able to get your hands on any references, you may want to part ways with that accounting firm and choose a firm with a demonstrated track record of success.

Additional Naperville Accounting Services

The accounting firm that people choose for their small business should be able to offer more than just tax preparation services. For example, the accountants from Lewis CPA offer additional accounting services, like business planning, to help small business owners as they get started or begin expansion plans. If your business is going to grow, doesn't it just make sense to have the right financial business advice?

Keep these things in mind when you choose your business tax accountant in Naperville.

What is the Capital Gains Tax?

   Capital gains are the profits realized from the sale of capital assets, such as stocks, bonds, and property. The capital gains tax is triggered only when an asset is sold, not while the asset is held by an investor. However, mutual fund investors could be charged capital gains on investments in the fund that are sold by the fund during the year. 

There are two types of capital gains: long term and short term; each has different tax rates. Long-term gains are profits on assets held longer than 12 months before they are sold. As a result of the 2003 tax law, the long-term capital gains tax was reduced from 20% to 15% (0% for individuals in the 10% and 15% tax brackets) through 2010; the 2010 Tax Relief Act extends the reduced tax rate through 2012. Short-term gains (on assets held for 12 months or less), on the other hand, are taxed as ordinary income at the seller’s marginal income tax rate. 

The taxable amount of each gain is determined by a “cost basis”— in other words, the original purchase price adjusted for additional improvements or investments, taxes paid on dividends, certain fees, and any depreciation of the assets. In addition, any capital losses incurred in the current tax year or previous years can be used to offset taxes on current-year capital gains. Losses of up to $3,000 a year may be claimed as a tax deduction. 

If you have been purchasing shares in a mutual fund over several years and want to sell some holdings, instruct your financial professional to sell shares that you purchased for the highest amount of money, because this will reduce your capital gains. Also, be sure to specify which shares you are selling so that you can take advantage of the lower rate on long-term gains. The IRS may assume that you are selling shares you have held for a shorter time and tax you using short-term rates. 

Capital gains distributions for the prior year are reported to you by January 31, and any taxes that must be paid on gains are due on the date of your tax return. The reduced rates on long-term capital gains taxes may not be around much longer if Congress doesn’t extend the 15% reduced rate beyond 2012, so it may be wise to take advantage of the lower rates before they are scheduled to expire.


The information in this article is not intended to be tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek legal or tax advice from an accountant in naperville.

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Tax Law Keeps S Corporations Attractive

One fortunate outcome of the 2010 Tax Relief Act is that it keeps the top individual income tax rate almost 5 percentage points lower than the statutory U.S. corporate tax rate. The difference between individual and corporate tax rates is one of the incentives for organizing as an S corporation.

Taxes are really the primary consideration when deciding whether to organize a small business as an S corporation. But some businesses may find that the costs of complying with Subchapter S of Chapter 1 of the Internal Revenue Code could offset the tax advantages. It’s important to weigh the cost of these requirements against the potential benefits of incorporating.

Tax Returns, but No Taxes

S corporations are rarely subject to a corporate income tax; rather, their profits (and losses) are passed through to shareholders, who are taxed at the lower individual income tax rates. (A recent decision in Japan to cut the corporate tax rate by five percentage points means that the United States could have the highest effective corporate tax rate in the world.)1–2

Despite their potential lack of tax liability, S corporations must still file tax Image by agrilifetoday via Flickr

returns. They must also file certain legal documents and maintain a board of directors, who must meet on a regular basis and approve the company’s major transactions. Some states impose additional requirements, fees, and taxes on S corporations.

Separate but Shared

An S corporation is usually treated as a separate entity from its shareholders. This means the shareholders generally cannot be held liable for the corporation’s debts (except in cases of misconduct). Shares can be exchanged between existing, new, or even deceased shareholders without disrupting operations or dividing the firm’s assets (the number of shareholders is limited to 100).

S corporations also may have access to attractive benefit plans, which could help remove some of the disadvantages of competing against larger corporations in the job market. Reorganizing as an S corporation could offer some appealing tax benefits, but it also has the potential to be time-consuming and expensive. Weighing the trade-offs may help you decide whether incorporating would be a smart move.

1) The New York Times, December 13, 2010
2) The Wall Street Journal, December 29, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek an Accountant in Naperville or legal advice from an independent professional advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security.

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How Interest Rates Can Influence Financial Decisions

Few Aspects of Economy Have as Much Effect on Spending, Saving

Throughout much of the past decade, the Federal Reserve has relied on its control of short-term interest rates to influence economic activity. Some would even say that it has made some fairly unconventional moves: Like cutting the federal funds rate 11 times in 2001. Or keeping rates under 2% for much of the decade. Or taking them almost to zero in response to the 2008 credit crisis, along with other monetary moves designed to push down long-term rates.1–2

On the surface, adjusting interest rates might seem to be an overly simple solution for steering the world’s most powerful economy: Growing slowly or not at all? Cut interest rates. Growing too fast? Raise interest rates. Economy seems fine? Leave rates alone.

The reality is that there are few mechanisms in any economy that can influence behavior more effectively than interest rates. Consider how low interest rates can affect important financial decisions.
Decisions About Spending and Saving

Image by RambergMediaImages via Flickr

Low interest rates create incentives for people and businesses to spend money, especially on purchases that may require financing. Interest rates directly affect borrowing costs, so lower rates may help increase the affordability of big-ticket items, such as automobiles and real estate. For example, home sales tend to be higher when mortgage rates are 5% than when they are 10%.3

The Fed’s primary motivation for cutting interest rates is usually to stimulate spending. Lowering rates may help encourage businesses to purchase capital goods and durable equipment; households may find that they are able to purchase items that were previously out of reach.

By contrast, higher interest rates reduce incentives to spend and increase the potential benefits of saving. In theory, higher interest rates dampen consumer demand. If the supply of goods and services remains the same, then the result should be less upward pressure on prices — in other words, less inflation.
Decisions About Debt Maturities

When short-term interest rates are low relative to long-term rates, it raises the risk that institutions and individuals seeking to own debt may overinvest in bonds with longer maturities in an attempt to increase yields. If interest rates rise, the value of existing bonds can be expected to fall. The longer the maturity, the greater the effect may be on the value of the bond. The principal value of bonds fluctuates with market conditions. Bonds redeemed prior to maturity may be worth more or less than their original cost.
Decisions About Risk

When rates are low, investors may turn to higher-risk investments in pursuit of greater return potential. Over longer periods, more investors may be lured to riskier positions until an unhealthy percentage of economic resources is exposed to too much risk. The more economic resources that are pursuing speculative investments, the greater the risk that a financial crisis could occur.

We’re likely to see low interest rates persist for the foreseeable future. When it comes to your portfolio, it’s important to strike a balance between making decisions based on your long-term interests and making decisions based on the current influence of interest rates.

1, 3) Federal Reserve, 2010
2) The Wall Street Journal, November 4, 2010

The information in this article is not intended as tax or legal advice, and it may not be relied on for the purpose of avoiding any federal tax penalties. You are encouraged to seek tax or legal advice from an accountant in Naperville or a Naperville Financial Planning advisor. The content is derived from sources believed to be accurate. Neither the information presented nor any opinion expressed constitutes a solicitation for the purchase or sale of any security. This material was written and prepared by Emerald. © 2011 Emerald Connect, Inc.

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Your Taxes, Your Accountant

When it comes to the city of Naperville, Illinois, you should keep current on which taxes you are required to pay. Naperville taxes are collected to cover a wide range of local and governmental expenses from school funding to road repair. The easiest step is to hire an accountant in Naperville who will help you understand your taxes and to make sure that once April 15 comes around you are getting the write-offs you deserve by paying these taxes.

When looking for an accountant is important to find one that understands you and/or your business. Business clients should pay extra attention to the accountants’ expertise since certain industries have different tax regulations. Don’t be shy ask for industry related references if you have any doubts.

Regardless of whether your accounting is serving you as an individual or your business, or both, a good accountant will help legally maximize your deductions and minimize your taxes. By doing this,the benefits of using a good accountant will pay for their services 10x over by finding missed deductions and leveraging tax forgiveness options. This is the major reason why more and more people and business owners are turning to a professional accountant.

There are many consultants and accountants located in and around the city of Naperville. Make be sure that the person you decide to handle your job to is an experienced, licensed and has a good reputation as an accountant in Naperville.

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Hire an Accountant in Naperville, neighbors!

Every Naperville business owner frowns at the arrival of tax season. Preparing your income tax is a process full of mind numbing paperwork and number crunching guaranteed to wipe the smile off your face. This is the reason why an accountant in Naperville should be hired to produce the best results in your income tax return. Owning a business is not just a matter of marketing, selling and earning profit. You also have to deal with payroll, inventory and yes, income tax returns. A professional Naperville CPA will deal with all the above mentioned factors while letting you focus on the more important aspects of your business.

Naperville tax laws tend to change each year as the IRs implements various regulations regarding tax deductions and tax credits. Sufficient knowledge of such changing laws is then critical for every b

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usiness. For starters, you might forget the deductibles and tax credits that you are entitled to. A certified public accountant will help you better prepare your financial statements and make certain that all laws have been accounted for. This will also make sure that you pay the right amount to the government while maintaining compliance to the various and ever changing tax laws.

The services of a Naperville accountant are not limited to tax preparations alone as bookkeeping and payroll services are also included as services offered. Some even offer the added benefits of training your staff in using QuickBooks, which is a powerful accounting software utilized by various businesses of today. Auditing and strategic business planning are also important for every business as this will give the owner more ideas towards the implementation of new business strategies. The services of an accountant in Naperville are your best solution towards achieving a compliant and well rounded tax return.

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Feed the Hunger for Excellence in Business, Hire an Accountant

     An accountant in Naperville plays a very important role in the business environment and economic structure of the competitive world of today. There is no doubt, the great manner in which the hunger for fame and excellence in life and business has crept in for the reaching of excellence and prosperity has further increased the importance of needing accounting services.

At the same time, the increased slashing of profits and the thinning profits margin has enhanced the genuine need of accounting services. After beginning your partnership with the accounting firm, you realize you are now getting the needed work to be done at the reasonable rates. The accountant features aid in making the business operations efficient and at economical rates. At the same time, the decision to obscure any mistakes in the books and outsourcing your accounting needs the overhead and administrative costs are further decreased which helps in the increase of profit.

During the process of the accounting outsourcing service, your company has look forward to the details of the partnership and services that are provided. The services include everything from the routine accounting that was conducted in house to the preparation of ledgers and the making and keeping of the appropriate entries. The formulation of financial statements is vital so that the meticulous scrutiny of the entire work can be done in a very professional manner.

An insane number of advantages go along with an accounting service and if you own a small business, it is essential to have one.  Take a moment and contact your accountant in Naperville to get started!

Feed the Hunger for Excellence in Business, Hire an Accountant

     An accountant in Naperville plays a very important role in the business environment and economic structure of the competitive world of today. There is no doubt, the great manner in which the hunger for fame and excellence in life and business has crept in for the reaching of excellence and prosperity has further increased the importance of needing accounting services.

At the same time, the increased slashing of profits and the thinning profits margin has enhanced the genuine need of accounting services. After beginning your partnership with the accounting firm, you realize you are now getting the needed work to be done at the reasonable rates. The accountant features aid in making the business operations efficient and at economical rates. At the same time, the decision to obscure any mistakes in the books and outsourcing your accounting needs the overhead and administrative costs are further decreased which helps in the increase of profit.

During the process of the accounting outsourcing service, your company has look forward to the details of the partnership and services that are provided. The services include everything from the routine accounting that was conducted in house to the preparation of ledgers and the making and keeping of the appropriate entries. The formulation of financial statements is vital so that the meticulous scrutiny of the entire work can be done in a very professional manner.

An insane number of advantages go along with an accounting service and if you own a small business, it is essential to have one.  Take a moment and contact your accountant in Naperville to get started!