A TAX PREPARER WHO KNOWS THEIR STUFF CAN SAVE YOU THOUSANDS: PART 2 FTR TAX TIP OF THE MONTH
Last month, I started telling you the story of a new client who was screwed over by his previous tax return preparer in Chicago. As you might remember, the preparer reported the expenses for his siding installation business as round numbers (putting him at risk for an audit), did not report all the legitimate expenses, and overlooked both the Wisconsin renter’s credit and a deduction for his home office — meaning he paid more than $5,000 extra in taxes. There was another shady thing, too. Working with this preparer, my client was required to pay for his 2019 tax return preparation fee upfront — something I never ask clients to do. When we disputed this, the preparer refused to refund the money. After that, I officially took over the client's case and made three big recommendations to save him money, time, and stress. I suggested that he do the following: 1. Convert independent contractors to employees. The client’s business was organized as an LLC, and he had three or four helpers with him on each job. By classifying these helpers as employees instead of independent contractors, he did not have to worry about the IRS coming after him for misclassification of employees and assessing large penalties. I also offered to set him up with Patriot payroll software so he could continue paying his employees in cash while the software company handled paying the state and federal payroll taxes and filing the payroll tax returns. 2. Elect to be taxed as an S Corporation. This step would allow the client to receive a paycheck for himself and prepay his income taxes through withholding. He would also get the benefit of saving on self-employment taxes (Social Security and Medicare) on the net income that passed through to his personal tax return after expenses. 3. Title and insure vehicles under the business LLC. Before, the client would have been held personally responsible for any injuries or property damage his helpers caused while driving one of his two pickup trucks. By insuring the trucks under his LLC and titling them in the business’s name, he could protect himself from liability. None of those recommendations were brought up by the tax return preparer in Chicago. All she was interested in was collecting a fee and doing a terrible job on my client’s tax return! This just goes to show that if you or someone you know owns a business, it’s vital to find a competent tax return preparer who has your back and will help you pay as little tax as legally possible.
CLASSIC PUMPKIN SOUP
Pumpkins aren’t just for pie — they make delicious soup,
too! This fall, try your hand at this healthy soup recipe and warm up with a bowl.
Inspired by MinimalistBaker.com
INGREDIENTS
• • • •
1 tbsp olive oil
• • • • • •
1 cup canned light coconut milk
2 shallots, diced
2 tbsp honey
3 cloves garlic, minced
1/4 tsp sea salt 1/4 tsp pepper 1/4 tsp cinnamon
2 1/4 cups pumpkin purée (homemade or canned)
•
2 cups vegetable broth
1/4 tsp nutmeg
DIRECTIONS
1. In a large saucepan over medium heat, sauté olive oil, shallots, and garlic for 2–3 minutes.
2. Add the remaining ingredients and bring to a simmer.
3. Transfer the soup to a blender and purée. Pour the blended soup back into the pan.
4. Cook over medium-low heat for 5–10 minutes. Taste and add additional seasoning as desired, then serve!
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