Tax Planning

Out with the Old, in With the New: How to Prepare for Tax Season

Now that the holidays are over, it’s time to start preparing for the next season. This can be a very stressful time for most taxpayers because of the fear they will owe the IRS or they will not receive as big of a refund as they had received for the previous years. There are ways to ensure that you are more than ready for tax season so you don’t have to scramble to be prepared for whatever your CPA asks you for. Some of the most important things you can do to get ready to file your tax return are having the appropriate information for your return to be filed, knowing what deductions you qualify for, and understanding which filing status you’re going to pick.

Gather your personal information 

Most CPAs will ask that you bring your previous tax return and any forms such as W2s, 1099s, rental income, or any other source of income you have received. You should also bring your social security card or tax ID card as well as your driver’s license to ensure your tax return is filed properly. Ensuring that you bring all the applicable items is vital for your return to be filed accurately. Some additional items you may need to bring if applicable:

  • Dependent information
  • Childcare payment records
  • Death certificates
  • Alimony payments

Make note of any deductions

Any deduction applied to your tax return is considered a reduction in your income and in turn, could potentially reduce the total amount of income tax you would have owed after filing your tax return. If you are looking to itemize your deductions, it is important to keep a record of all the expenses you may have. Deductions can range from:

  • Self-employed 
  • Rental homes
  • Investments
  • Real estate
  • Property taxes
  • Charitable donations
  • Medical expenses

Figure out how you want to file

If you just got married, how you typically file your tax return will change. Your filing status is typically based on what will result in lowering what you owe in taxes; your marital status or family situation. If you’re married, you have the choice to either file jointly with your spouse or separately. If you file head of household, it is required that you are not married, a qualifying person has lived with you for more than half the year and that you’ve paid more than half the cost of keeping up a home for the year. 

Getting a head start on the most stressful time of the year, tax season can be extremely beneficial for you. Understanding what you want to be placed on your tax return is important and dependent on how much of a refund or how much you will owe at the end of the year. If you are having difficulty understanding what you can and can’t place on your tax return, talk to a CPA to see what is allowable to ensure that your tax return is filed properly.

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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Don’t Let the Grinch Steal Your Holiday Pay: Tax Tips to Survive the Season

The holidays can be a very expensive time for everyone, especially when it comes to purchasing gifts for family and friends. In order to make ends meet, this may mean that you might pick up some extra shifts at your job, change your withholding status so less is taxed from each paycheck, or perhaps you did so well at your job that you even received a holiday bonus. Regardless of what helps you make more money this holiday season, be cautious of any tax implications it may cause when filing your next tax return. 

Work more overtime 

With the holidays around the corner, you can expect that most employers will ask that you work overtime. This is an easy way to make more money in exchange for working more hours. It is important to keep in mind that overtime will be considered part of your adjusted gross income for the year and if you work enough overtime throughout the year, this could move you into the next tax bracket – which could lead you to owe. If you do end up owing, you will only pay the higher tax rate on the portion of your income that exceeds the income threshold for the next highest tax bracket. 

Going Exempt

Some taxpayers will choose to go exempt for the holidays, meaning they stop withholding to the government and State in order to receive a bigger paycheck back from their employer. Although you’ll be receiving more money back in the short term, it is important to not stay at exempt for too long, as it could potentially lead to you owing the IRS next filing season. If you’re looking for a way to pay fewer taxes on your holiday bonus, consider maximizing your year-end contribution with your 401(k), IRA or a qualifying charitable organization to get a tax deduction. 

You received a bonus

Employers giving their employees extra cash is common around the holidays and can help pay for presents. If you do receive a bonus, this will be considered a supplemental wage, meaning it will also be considered income when it comes time for filing your tax return. Additional types of pay that could be considered income is severance pay, vacation pay, bonuses, moving expenses, overtime and any commission that is received.

 Always be aware of how working overtime, changing your withholdings and receiving a bonus will affect you when it comes time for filing your taxes. Working more hours this holiday season will mean that you most likely get a bigger paycheck and it will also mean that it could move you into a higher tax bracket. Even if you choose to go exempt this holiday season to have more money in your pocketbook, it may lead to you owing at the end of the year. Finally, if you receive a bonus at the end of the year, it will be considered an additional income and will be reported on your tax return. 

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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Planning Thanksgiving on a Budget

With the holiday season around the corner, things can start to get expensive. It can be overwhelming shelling out a bunch of cash on presents and food every year, especially if you don’t have a set spending limit. So, what can you do to cut costs but still make the most of your time with friends and family? Setting a budget for yourself is one of the best ways you can have an amazing holiday that won’t hurt your wallet. Below are a few tips and tricks to make sure you get to overeat without overspending this Thanksgiving.

Create a budget

Making an honest budget that sets parameters for how much you can comfortably spend will give you a better idea of how much wiggle room you actually have when buying food and presents for your friends and loved ones. Recycling decor from previous holidays and searching for the best sales going on at your local grocery store can help save you money but will still give you the Thanksgiving that everyone will be raving about for years to come.  

Create a shopping list and stick to it

When we think about the holidays, many of us picture ourselves eating an exorbitant amount of food. If you’re hosting a holiday dinner, or even just attending one, don’t go overboard while shopping for groceries. Create a shopping list of what you want to purchase and then make sure you stick to it. Try looking for sales a store is having, specifically on non-perishable items and bread. Typically, items that are in season will either be on sale or cheaper, so try picking up these types of items so you won’t have to pay for food items that may currently be valued at a higher, out-of-season price.

Prioritize what’s important

Making your menu from scratch may end up saving you more money than buying something that was pre-made. You can even check to see what’s in your kitchen cabinets, as most recipes call for ingredients that you already have. There seems to be a stigma about cooking a meal where people feel that it will take them hours.  If you’re not a fan of cooking or don’t feel very experienced at it, then you can stick to cooking easy side dishes that will complement the main courses. If you’re on a really tight budget, you may want to consider cutting out the cost of alcohol since it is on the pricier side. If you would like to have wine with your meal, you can always ask friends and family to bring a bottle or two. You can also alleviate some of the costs by hosting a potluck-style Thanksgiving and asking your friends and family to bring their favorite dish.

Thanksgiving can still be fun even if you have a budget in place. While it can be expensive trying to buy food for the whole family during the holidays, being mindful of how much money you will be spending this November is essential to avoiding a different kind of holiday hangover – a financial one.  And don’t forget that the most important part of Thanksgiving isn’t about all the food you eat, it’s about spending time with loved ones.

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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How To Prepare For A Tax Audit

So, you’ve done your taxes and alas, the IRS has sent you a letter that you are being audited. The walls are caving in, you’re having panic attacks, and can’t possibly fathom what are you going to do. Take a deep breath and read this article on how to prepare for a tax audit. Rest assured that you don’t need to be nervous. IRS audits are just trying to figure out if incomes and figures add up right; it simply inquires of your tax return. The IRS its self says that an audit is,” to determine if income, expenses, and credits are being reported accurately.” Follow these steps and be prepared.

How do I handle an IRS audit?

The first step to handling an IRS audit is reading and acknowledging the notification letter. Don’t ignore the IRS letter, even though it might seem easier and tempting to ignore bad news. Read it, read slow, and read it one more time.

Check the letter is legitimate and actually notifying you of an audit. An IRS audit letter will come to you by certified mail, it will include personal information such as name, taxpayer ID, form number, employee ID number. Just because you receive a letter from the IRS doesn’t automatically mean you’re being audited.

Read which year in question they are auditing, and what documents specifically the IRS are asking for. Prepare all the necessary returns and explanations for the representatives.

Types of IRS Audits

There are different types of IRS tax audits. These are:

  • Correspondence Audit
  • Office Audit/In-person Audit
  • Field Audit
  • Taxpayer Compliance Measurement Program Audit

Preparing for an in-person audit

There are steps you can take when preparing for an in-person interview. This is an interview where you physically have to be in the IRS office and speak with IRS employees. The IRS may question abnormally high deductions, and ask to see proof.

Carefully prepare for this office audit by gathering the necessary returns and explanations that were requested in your IRS letter.

Once in this audit, don’t say more than what is asked. Do not offer up any extra documents other than what you were asked to bring. The less you say the better, because saying more leads to more questions.

It is important to know that you do have the right to have an attorney present if you feel that it is needed.

Preparing for a correspondence audit

A correspondence audit, also known as a mailed in audit, is usually just the IRS requesting additional information relating to your tax return, such as receipts or canceled checks. In many cases this audit is just asking you about a simple mistake that you can correct by mailing in all the correct documents. If you’ve read your letter carefully and provided the correct documents, then these audits can be simply resolved.

Preparing for a field audit

The last type of IRS audit is a field audit, where the IRS may actually come to your home or to your job. This can be scary but remember to breathe and don’t offer information if you aren’t fully prepared. Remember if you feel that you need an attorney or tax professional you can request to have the audit done in their office.

Tips for preparing for an IRS audit

Understand the issue

To better prepare yourself for any of these types of tax audit, read up on the tax laws that are specific to the problem. Knowing this information will better prepare you for questions asked by the auditor and leave them more satisfied with your answers.

Be polite & honest

When being questioned be polite and courteous and answer each question truthfully. It is not wise to lie to the IRS.

Gather the right documentation

Make sure that all the documents presented are accurate, clear, and on time. Be sure you have all the documents at the auditing. If you have all the correct information the auditing process will run much smoother.

Request more time

If you feel that you need more time to prepare for the audit you can request it. Don’t hesitate to let the IRS know. You can go on their website and request more time to prepare.

What Happens After an IRS Audit is Done?

Once all the auditing is wrapped up you will receive an examination report, which is wise to look over carefully for anything that might confuse you. Don’t hesitate to call the IRS and ask about anything you need to clarify. If you disagree with a finding let them know, so that you and the auditor can come to a compromise.

If you follow these tips then the audit process will be a breeze, or at least a little easier to handle.

Avoid tax burdens with Optima Tax Relief. Read more about the benefits of working with a tax relief company.

You can learn more about the different types of IRS audits and What Happens in an IRS audit in our dedicated blog post.

How to Prepare for a Recession

A thriving economy is something all taxpayers rely on in order to purchase goods and provide for their families. That is, until the economy takes a turn and it slides into a recession.  When a recession hits, it can leave taxpayers scrambling as they try to pick up the pieces of their lives and figure out what options they have for their next move.  For many, a recession is the worst thing that could happen to them, as it could put your job is at risk, lower your wages and bring your employment growth to an abrupt stop. With current talks of a possible recession, it is a scary time for many Americans who do not know what the future holds. Here are a few tips to help prepare for a recession in order to protect yourself.

Make sure you have emergency savings

We can’t emphasize this enough! Having emergency savings can give you the cushion you need if the economy takes a downturn or if you lose your job. However, we all know accruing a large sum of money in a savings account is easier said than done. If you want to beef up your savings, there are options available to you, and getting a side gig such as driving for companies like Uber or Lyft can also help boost your savings. 

Pay down your debt

If you have credit card debt, vehicle loans, student loans, or other kinds of debt, it is important that you focus on paying this down. The faster you pay it off, the less you will have to pay in additional interest, which could prolong the amount of time you are holding onto your debt obligation. Lowering your total debt will allow you to have much more disposable income which could be placed in your savings that can be used in times of emergency or hardship.

Live within your means

The holiday season is in our midst, which means family gatherings and plenty of food. Everyone also looks forward to the holidays because of all the shopping that gets done! With Black Friday and Cyber Monday just around the corner, everyone is getting ready to spend big on presents for both themselves and their family. It is important to remind yourself that you don’t want to bleed your wallet dry.  Instead, try to be cautious of the frivolous spending that is often done during this time. Regardless if you are celebrating a holiday or not, it is recommended that you set up a budget for yourself to ensure that you’re not overspending. Just doing this can help save people money – and prevent them from going further in debt.

With just a few simple adjustments to your spending habits, you can have more money in your pocket in case the economy turns south. It is important to have a savings plan in mind to prepare for worst-case scenario situations. Whether you are worried about a recession or not, you should always put money aside and these several tips will help you build a solid financial foundation regardless of how the economy is doing.

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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When Filling Your 1099 Avoid These Common Pitfalls

Every year around tax filing time as the deadline draws closer many employees scramble to file their taxes, however many seem to make the simplest mistakes that may end up costing them in the end. Some even meet the unfortunate fate of having Uncle Sam knock on their door or more realistically come to the mail to open an audit notification from the IRS.

What is a 1099 form?

For those that don’t know, 1099 forms are for people who are self-employed, have stocks dividends, capital gain distribution, or are receiving unemployment benefits. They are given to the employee from the company who has made them an independent contractor and pays them over $600 for their services. The company has a copy, and they send you the form to fill out as well. Before filing your 1099, here are a few tips that can help 1099 employees avoid these common pitfalls.

What are the Different Types of 1099s?

To not be confused there are several types of 1099 forms to file. They all can be found at the IRS website. Don’t file the wrong one or you will get fined from the IRS.

1099-DIV

The 1099-DIV is for those who need to report stocks and dividend as well as capital gain distributions.

1099-MISC

The1099-MISC is for those who are independent contractors or collect real estate disbursements or tips. It is also the one form you will fill out if you are considered an employee.

1099-INT

The 1099-INT is used to report interest income, and several other variations of the form.

How do You File Taxes with a 1099?

Need to file your taxes with a 1099? Follow these tips to help you.

1. Make sure the information is accurate. Report your income that you make right. Not only do you have a copy of your 1099, but the company, and the IRS have the copy that the company has sent them. So whether you report the correct information or not, the IRS already knows what it should be, if you report less than earned income they will tax you, add on interest to the tax you owe, and probably audit you.

2. Always, always, always file the W-9. People seem to always make this common mistake, but you must fill it out correctly if you are hired as an independent contractor. If you made more than $600 from the contractor, you must report it.

3. The 1099 form is not a tax return but rather valuable information that the IRS needs. You still need to file you 1040 and input the information where designated from your 1099.

4. Be extra careful when filling out your 1099 that you have the right account number, especially if you have to file multiple 1099-MISCs. Just like filing your regular tax returns, remember to sign and date all your pages. Include the right social security number and if needed, always have a professional look over your form or use a tax software.

Still need some assistance? Consider working with a tax relief company. Unsure if you should work with a tax preparer? Learn more about the tax preparers and how you can avoid getting scammed here.

What Happens when your Data is Breached?

A data breach or cyber hack could involve the loss of your personal information like your social security number, credit card numbers, bank account information, email address, and/or passwords. Having personal
information compromised could have serious repercussions and can hurt businesses and consumers in a number of different ways and can be a costly expense with the potential to damage lives and reputations.

With the severe levels of harm a data breach could cause, what can you do to prevent identity theft or having your personal information stolen? Hackers are looking for any opportunity to steal your personal data at any given time. They look for any weak spots you may have in your data security in order to breach your data and use your personal information against you. Here are some of the popular ways people’s accounts are hacked:

  • Weak passwords. It is important to ensure that you are utilizing complex and unique passwords for any accounts that may hold highly sensitive information. The weaker a password it, the more open you are to potentially get hacked. 
  • Unintentionally downloading a virus. You could accidentally download a virus or malware by downloading certain software you come across. 
  • Failure to keep your security software up to date. Always be sure to check that your firewalls, anti-virus, and anti-spyware software have all been updated in order to avoid a data breach. 

With so many ways for a stranger to access your personal information, it may seem as though there is no hope to prevent any fraudulent activity from occurring. There are in fact many ways you can avoid becoming the next victim of a data breach or a cyber hack. Here are a few ways that you can protect yourself:

  • Monitor your bank accounts. Check your accounts regularly to ensure that no unauthorized charges were made to your account. It is also important to double-check that no credit cards were opened in your name and to report any changes made without your consent.  
  • Utilize a credit monitoring tool. Utilizing software that monitors your credit could potentially (the rest of this sentence is missing)
  • Try not to overshare on social media. Avoid posting pictures showing you are away on vacation or when you’re not anywhere near your home. This could potentially lead to burglars breaking into your home and stealing your personal belongings, including sensitive and personal information. 
  • Protect your phone. ake sure that you always have a password on your phone to ensure that no one else can gain access. Having a password on your phone will stop any intruders from attempting to steal credit card or password information. 
  • Halt any suspicious activity immediately. If you see suspicious activity, don’t hesitate to contact your financial institution. It could also be beneficial for you to activate your alerts so you could be notified of any fraudulent occurrences. 

It is important to build your awareness of potential security breaches and cyber hacks to ensure you avoid being the next victim. Always be sure to keep yourself up to date on all security measures to ensure that your information is not vulnerable to theft of any kind. If you believe your information has been compromised or want to learn more about it, you can visit the IRS website.

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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Common Mistakes Taxpayers Make when Filing their Tax Return

Tax season can be stressful, especially when you’re unsure if the information you provided on your tax return was accurate. The IRS encounters errors on a regular basis, often causing delays when processing your tax return or sending your tax refund on time. There are many of these common mistakes taxpayers make when filing their tax returns that lead to these delays.  Here are some ways you can avoid those mistakes and ensure that when you file, you file properly.

Make sure to include all income on your tax return

Many taxpayers underreport their income. This is usually an innocent oversight, such as forgetting to include income from rental property, retirement income, 1099 income, stocks, or other supplementary incomes. It’s important to remember that your income is directly reported to the IRS, so accidentally leaving out any source of income could leave you at risk to be audited. Reporting all income when filing your taxes is necessary for your tax return to properly process and be accepted with the IRS.

Choosing the right filing status

Failing to select the correct filing status on your tax return could potentially cause future tax problems. For example, some married taxpayers will choose to file single when they should have chosen between Married Filing Separate or Married Filing Joint. This could raise a red flag with the IRS if a person repeatedly selects the wrong filing status. Don’t forget – if you are married but living separately, you can still claim single on your tax return. 

Know who you can claim on your tax return

Claiming ineligible dependents on a tax return could also signal a red flag with the IRS. The IRS will only allow you to claim dependents if you are supporting the person that is being claimed and may even ask you to provide substantiation to prove it. Make sure to keep any receipts as proof, because if you are audited and you cannot provide supporting documentation, penalties and interest will be added to whatever balance may be owed – or even be deducted from your refund.

Double-check your tax return

Make sure to never use anything but your full name when filing your taxes. Using a nickname could cause your tax return to be rejected or in a worst-case scenario; the IRS could consider it identity theft if you file your return with your full name the following year. Some other common mistakes that could be avoided by simply double-checking the information provided include, failing to sign your tax return when mailing it off to the IRS or placing incorrect bank account numbers on your return. While these mistakes may seem minor and relatively insignificant, they can cause major problems for your tax returns for years to come.

Always be mindful of how you are filing your taxes and make sure to check your tax return for accuracy before sending it to the IRS. Taking just a few minutes to verify your work can prevent these simple mistakes, and help you get the most out of your tax return.

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

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Tips to Help Understand and Avoid Tax Scams

You’ve just received a notice from the IRS.  It indicates that, after multiple attempts to get in touch with you, they are going to levy you. You start to panic; you don’t remember the IRS ever attempting to reach out to you.  Maybe you’ve never even owed a tax liability. After calling the number on the notice, the agent on the line tells you to pay up – or face the consequences. Afraid that the IRS will levy your bank account – and possibly seize your house – you provide your payment information over the phone. You check your bank account and your entire savings are gone. You contact the number again, but the line has been disconnected. When you do get in touch with a real IRS Agent, they tell you that you never owed a balance with them in the first place.  You were just scammed.

Millions of Americans will receive communication from scammers impersonating the IRS, using scare tactics to get people to fork over their hard earned money.  These scammers will attempt to take your money by calling your personal phone, sending malicious emails, and sending fake letters like the one in the example above.  Below we will break down these different forms of communication and the different tactics they will take to gain your trust and steal your money.

One of the most common forms of tax scams is by leaving automated voicemails on your personal phone that tell you the IRS will be collecting on owed taxes or that there is a warrant for your arrest. In some cases, they will even mirror their number to make it appear similar to an actual IRS number. These fraudsters will most likely ask for cash payments sent to a temporary address or try to get you to tell them your social security number. Some may even ask for your bank account number directly in an attempt to bleed your account dry.

Sending false emails is a tactic known as “phishing.” When people click on a link in these emails, it uploads a virus that steals your sensitive information, allowing them access to your passwords, and even your bank accounts and credit cards.

Fake IRS notices are sent in an attempt to have you call the number listed on the letter.  Once they have you on the line, they bully you just so they can gain access to your personal information. The letter itself may look like it was directly sent to you by an assigned revenue officer from the IRS, and it can be difficult to tell the difference.

There are ways to protect yourself from scammers. It is important to know that the IRS will never ask for your bank account or card information over the phone, nor will they ever demand you to pay back your supposed balance immediately without first providing you with balance due notices in the mail. The IRS will also never ask you for your payment in one specific or unusual way, such as with gift cards or prepaid cards.  In addition, if the IRS is claiming that there are discrepancies on your tax return and you feel as though their claim is wrong, the IRS will allow you to provide proof your tax return is accurate. Finally, the IRS will never call you and tell you that they are going to have you arrested or sued for not paying your tax liability back to them.

It is important to always verify where the source of notices, phone calls or emails you receive are coming from. Owing the IRS can be frightening, but what’s even scarier is knowing that there are scammers preying on taxpayers, trying to steal from them. Always be cautious and aware of your tax situation and be sure to verify who you’re speaking with and where your money is going. You can contact the IRS directly at 1-800-829-1040 or you can go directly onto the IRS’s website to learn more about preventative measures to take to ensure you won’t get scammed.

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.

Tax Tips for Uber Drivers and those Working in the Gig Economy

So you just joined Uber. Now you have a little extra cash, and you’re the one picking up the tab at dinner when you go out with friends and family. There couldn’t possibly be a downside to earning this additional income, right? Well, while there isn’t necessarily a drawback to having more money in your pocket, there are a few factors to being an Uber driver that you should consider from a tax standpoint. Here are some common questions and tax tips that first time Uber drivers should think about before getting started.

What is the difference between a 1099 earner versus a W2 earner?
If you have taxes being deducted out of every paycheck, you are most likely a W2 earner. At the end of the year, a W2 earner will receive a form that will state their annual wages along with a breakdown of the taxes that were withheld throughout the year.

A 1099 earner, however, does not have any taxes withheld from their income. The total amount of pay you received from Uber (or any other person or entity for whom you were a 1099 earner) during the year will be reported on a 1099 form. It is the responsibility of the 1099 earner to either make estimated tax payments (more on this below) or pay any balance in full at the end of the tax year.

What are estimated tax payments and can they help me avoid owing at the end of the year?
Estimated tax payments, or ETPs, are based on the amount of income that you expect to have earned in the current tax year. ETPs are usually made if a taxpayer believes that they will have a tax balance at the end of the year. A taxpayer may also wish to make ETPs if they are not withholding enough taxes from their paycheck, or if taxes are not being deducted from their income at all. A 1099 earner (or even a W2 earner who does not have enough withholdings listed) has the choice to pay their estimated tax payments bi-weekly, monthly or even quarterly. ETPs must be made in order to avoid owing at the end of the year, and it is even possible to receive a penalty if ETPs are not being made. The IRS allows you to make your estimated tax payments by either mailing a payment in, paying over the phone, or even paying online.

What are tax write-offs and how do I keep track of all my business expenses?
Being that you are a 1099 earner for Uber, it’s a little like running your own business. And just like if you were running your own business, you must document and report any income you have received and expenses you have made. Many of these expenses are tax write-offs. Some expenses that you may experience as an Uber driver include car maintenance, gas, and mileage. You will need to keep proof of your expenses throughout the tax year in order to write them off with the IRS. In order to do this accurately, you will need to keep track of how much of your mileage is used for business and how much is used for your personal life. There are multiple downloadable apps on the market designed to keep track of this for you. If you forgot to do this, don’t worry – you can request this information directly from Uber. Once you know what percentage of your mileage is used for business, you can calculate what percentage of your gas and maintenance can be listed as a tax write-off. Don’t forget to save those receipts; you will need them in case you are ever audited by the IRS!

Whether you’re using Uber to pay the bills or to give you a little extra income on the side, paying your taxes doesn’t have to be scary. Following the steps above and stashing away a little bit of your income can help ensure you don’t get blindsided come tax season. Now get out there and have some fun with your extra cash and remember, drive safe!

Optima Tax Relief provides assistance to individuals struggling with unmanageable IRS tax burdens. To assess your tax situation and determine if you qualify for tax relief, contact us for a free consultation.