Tag: <span>taxes</span>

The accounting world is transforming rapidly, driven by emerging technologies and shifts in tax regulations. For businesses and accounting professionals alike, staying ahead of these trends is essential to streamline operations, ensure compliance, and remain competitive. Here are five key accounting trends to watch in 2025 that will shape the future of the industry.

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1. Artificial Intelligence and Machine Learning in Accounting

Artificial intelligence (AI) and machine learning are revolutionizing the accounting sector. In 2025, AI will be even more integral, helping businesses automate time-consuming tasks such as data entry, invoice processing, and reconciliation. AI-driven tools can learn from previous accounting entries, predict patterns, and flag inconsistencies, minimizing human error and streamlining workflows.

For businesses, leveraging AI in accounting translates to faster and more accurate processing. AI tools also enable real-time analysis, helping finance teams make data-informed decisions without waiting for end-of-quarter reporting. As a result, AI can free up accountants to focus on higher-value activities, such as strategy and financial planning, rather than spending time on repetitive tasks.

2. The Rise of Digital Transformation and Cloud-Based Accounting

The shift to cloud-based accounting continues to gain momentum, as more companies seek flexible, scalable solutions. In 2025, cloud-based platforms will be the preferred choice for most businesses, as they enable real-time access to financial data from anywhere with an internet connection. This is particularly valuable for remote teams and companies that need to collaborate across locations.

Digital transformation in accounting is about more than just storing data in the cloud. It’s a complete overhaul of traditional processes, including automated workflows, integration of financial software with other business applications, and the use of data analytics to gain deeper insights into business performance. Embracing these digital solutions enhances efficiency and provides real-time access to financial data, which is vital for timely decision-making.

3. Increased Focus on Data Analytics and Real-Time Reporting

With advances in data analytics and reporting tools, accounting is evolving from a traditionally backward-looking discipline to a proactive, strategic function. In 2025, expect data analytics to play a crucial role in driving business decisions. Companies will use analytics to assess profitability, forecast revenue, identify inefficiencies, and even predict financial risks.

Real-time reporting will become more common, as stakeholders demand timely insights to respond to changing market conditions. Accounting teams will increasingly rely on data dashboards that offer instant updates, enabling management to make agile and well-informed decisions. This shift to real-time data aligns with a broader trend towards more dynamic, responsive business strategies that can adapt quickly to new challenges and opportunities.

4. Preparing for Updated Tax Laws and Compliance Standards

Tax regulations and compliance standards are in a constant state of flux, and staying up-to-date is more critical than ever. In 2025, we expect to see significant updates in tax laws related to digital transactions, international trade, and sustainability initiatives, which could have a substantial impact on businesses of all sizes. This will require accountants and tax professionals to stay informed and adaptable.

In response, businesses will likely adopt specialized tax software that incorporates real-time updates to tax codes and compliance requirements. Automated tax solutions are becoming increasingly sophisticated, making it easier to navigate changing regulations and reducing the risk of costly errors. Companies that invest in proactive tax planning and compliance management will be better positioned to handle the complexities of the evolving tax landscape.

5. Emphasis on ESG (Environmental, Social, and Governance) Reporting

As consumers and investors place more emphasis on corporate responsibility, Environmental, Social, and Governance (ESG) reporting is gaining traction across industries. Accounting departments are taking on a more significant role in ESG reporting, helping organizations track and report on sustainability efforts, social responsibility, and ethical governance practices.

In 2025, ESG reporting will become a standard practice for businesses as regulatory bodies start to mandate certain ESG disclosures. Accountants will be responsible for ensuring the accuracy of these reports, as investors and stakeholders demand transparency in corporate practices. Companies that prioritize ESG metrics in their accounting processes will not only align with evolving regulatory requirements but also improve their brand reputation and investor appeal.

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Technology making waves

The accounting profession is undergoing a significant transformation, driven by advancements in technology, evolving regulatory requirements, and a growing emphasis on sustainability. By staying ahead of these trends, businesses and accountants can leverage technology to enhance efficiency, navigate complex tax landscapes, and build trust through transparent reporting.

At Loeffler Financial Group, we’re dedicated to helping our clients stay ahead of the curve. Our team leverages the latest tools and insights to provide proactive, customized solutions that meet today’s accounting and compliance needs. As we move into 2025, embracing these trends will position your business for success in an increasingly dynamic financial landscape.

Tax season can be a challenging time for both individuals and businesses, but with a little proactive planning, you can avoid the last-minute rush and headaches that often come with filing. Here are ten essential tips to help you get a head start, stay organized, and make your tax filing process as smooth as possible.

1. Start Early and Set a Timeline

Begin your tax prep early to give yourself ample time for gathering documents, consulting professionals, and correcting any issues that may arise. Break the tasks into manageable steps by creating a timeline, with specific goals for each week. Mark key deadlines, especially the tax filing deadline in mid-April (April 15, 2025) for most individuals. (March 15 deadline for S-Corps and Partnerships; and October 15 for returns on Extensions.)

2. Organize Your Documents in Advance

Being organized is one of the most effective ways to reduce tax-time stress. Start by creating a checklist of essential documents you’ll need, such as:

• Income documents (W-2s, 1099s, investment income statements)
• Receipts for deductions (medical, charitable contributions, business expenses)
• Bank statements and credit card records for tracking business-related expenses Consider using a digital tool or app to scan and store your receipts and documents for easy access. Digital storage is not only more convenient but also helps you keep all necessary documents in one place.

3. Review Last Year’s Return

If your finances haven’t changed dramatically, last year’s tax return can serve as a great reference point. Review the forms, deductions, and credits you claimed last year to make sure you’re not missing anything. A quick look back can also remind you of important documents to gather and areas where you might be able to claim similar deductions this year.

4. Stay on Top of Common Deductions and Credits

Knowing which deductions and credits you’re eligible for can make a big difference in your tax liability. Here are a few commonly missed ones:

• Home office deduction for self-employed individuals
• Charitable contributions (cash or items donated to qualifying charities)
• Medical and dental expenses if they exceed a certain threshold of your income
• Educational credits like the American Opportunity Credit or Lifetime Learning Credit Make sure you keep detailed records for these deductions, as the IRS may request proof if you’re audited.

5. Track Business Expenses Carefully

If you’re a business owner or self-employed, accurate records of your business expenses are essential. Some common deductions include:

• Office supplies, equipment, and software
• Advertising and marketing expenses
• Business travel expenses
• Vehicle expenses if used for business purposes Maintain organized records of each transaction and consider using accounting software to track your business expenses throughout the year. This will make filing your taxes easier and more accurate.

6. Check for Any New Tax Law Changes

Tax laws can change frequently, and staying informed is essential to avoid missed deductions or unexpected tax bills. Each year, review the latest IRS guidelines or consult with a tax professional to stay up-to-date on new rules. For instance, recent changes may affect deduction limits, eligibility for credits, or even income tax brackets.

7. Prepare for Estimated Taxes if Self-Employed

If you’re self-employed or a freelancer, you likely need to make quarterly estimated tax payments. These payments help prevent large tax bills (and penalties) at year-end. Set aside a percentage of your income each month to cover these taxes, and make sure to submit payments on time—typically in April, June, September, and January.

8. Double-Check Your Tax Forms for Accuracy

It’s critical to review all of your tax forms, including W-2s, 1099s, and other income statements to ensure accuracy. Even small mistakes can delay the processing of your return or result in additional tax due. If you find any discrepancies be sure to contact the relevant party immediately to get a corrected form.

9. Consider Hiring a Tax Professional

If your tax situation is complex or you’re unfamiliar with recent changes, a tax professional can offer invaluable expertise. They can help you identify deductions you may not be aware of, ensure compliance with tax laws, and even save you time. Additionally, a tax advisor can help you with planning strategies to minimize your tax liability in the future.

10. File Electronically and Use Direct Deposit for Faster Refunds

Filing your return electronically is faster, more accurate, and more secure than filing by paper. Additionally, choosing direct deposit for your refund can shorten the waiting time significantly. E-filing with direct deposit is generally the quickest way to receive any refunds you may be due.

It’s never too early to prepare for Tax Season

By taking a proactive approach, you can make tax season a far less stressful experience. Start early, stay organized, and keep these tips in mind as you prepare. Whether you’re filing for yourself or your business, a little preparation can help you save time, maximize deductions, and reduce the risk of errors. Here’s to a smooth tax season!

At Loeffler Financial Group, we often see businesses making some common bookkeeping mistakes that can have serious long-term consequences. The good news? They’re all fixable! Here are the top errors and how you can turn them around:

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1. Not Keeping Personal and Business Expenses Separate

The Mistake: Mixing personal and business expenses is one of the most common errors. It can make your records messy, leading to confusion at tax time and making it harder to track business performance.

How to Fix It:

• Open a separate business bank account and credit card.
• Use software or apps to track expenses and make sure they are categorized correctly.
• Regularly review your statements to ensure expenses are clearly defined.

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2. Neglecting to Reconcile Bank Accounts

The Mistake: Failing to reconcile your bank accounts regularly can lead to discrepancies between your books and actual bank balances. This makes it harder to spot fraud, errors, or overlooked transactions.

How to Fix It:

• Reconcile your bank accounts at least monthly. Compare your statements with your records to ensure every transaction is accounted for.
• Use accounting software that allows you to automate this process, making reconciliation faster and more accurate.

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3. Forgetting to Track Receipts

The Mistake: Misplacing receipts or forgetting to track small purchases is a common issue. This not only affects tax deductions but can also lead to a messy audit trail.

How to Fix It:

• Use digital receipt tracking apps or accounting software with receipt capture capabilities.
• Make it a habit to scan and store receipts as soon as you make a purchase.
• Label and categorize receipts in real-time to save yourself headaches later on.

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4. Misclassifying Expenses

The Mistake: Incorrectly classifying expenses is easy to do, but it can distort your financial reports and affect your taxes. For example, mixing operating expenses with capital expenses can lead to incorrect deductions.

How to Fix It:

• Familiarize yourself with common expense categories or work with a professional bookkeeper to set up a consistent system.
• Use accounting software with predefined categories to minimize errors.
• Review your expense categories regularly to ensure transactions are properly classified.

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5. Delaying Bookkeeping Until Tax Time

The Mistake: Waiting until the end of the year or tax season to update your books can create a stressful and overwhelming situation. It also increases the chance of missing important deductions or details.

How to Fix It:

• Set a regular schedule (weekly or monthly) to review and update your books.
• Consider hiring a professional bookkeeper or using automated software to keep your financials updated in real-time.
• Review your books regularly to identify any issues early on.

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6. Failing to Track Accounts Payable and Receivable

The Mistake: If you’re not keeping track of what you owe (accounts payable) and what you’re owed (accounts receivable), you could be missing payments or neglecting to chase down outstanding invoices.

How to Fix It:

• Set up a clear system to track both payables and receivables.
• Use accounting software that alerts you to overdue payments and outstanding invoices.
• Schedule regular reviews of accounts payable and receivable reports to stay on top of your cash flow.

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7. Ignoring Payroll Tax Responsibilities

The Mistake: Failing to calculate and pay payroll taxes correctly can lead to penalties and compliance issues. This is especially common for small business owners managing payroll manually.

How to Fix It:

• Use payroll software or a third-party payroll service to automate the process.
• Stay updated on tax laws and deadlines to ensure you remain compliant.
• If payroll becomes too complex, consider outsourcing it to a professional service like Loeffler Financial Group.

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8. Not Using Financial Reports for Decision-Making

The Mistake: Many businesses fail to use the wealth of information in financial reports, such as income statements and balance sheets, to make informed business decisions.

How to Fix It:

• Run financial reports monthly to monitor your business’s health.
• Review key metrics like profit margins, cash flow, and expense trends to identify areas for improvement.
• Work with a financial advisor to interpret the data and implement strategies for growth.

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The Solution? Proactive Bookkeeping!

By recognizing and correcting these mistakes, you’re not only avoiding future headaches but also setting your business up for success. If you’re feeling overwhelmed or unsure about fixing these issues on your own, we’re here to help. At Loeffler Financial Group, we specialize in cleaning up books and setting up efficient systems to keep you organized and compliant year-round.

Ready to fix your bookkeeping? Contact Loeffler Financial Group today at 717-393-7366, and let’s get your books back on track!

New Year! New Goals! But guess what else January brings…That’s right—the unofficial start of tax season, and here at Loeffler Financial Group, we’re gearing up to make it as painless as possible for you! We even made some great improvements to our building to better serve you, and our clients!

We understand tax prep isn’t exactly the most exciting part of the year (trust us, we know!). But fear not, because we’re all in this together, and we’re here to offer you a quick reminder.

It’s time to start gathering those tax documents. Round up your W-2s, 1099s, receipts, and any other relevant paperwork. And if you don’t have everything just yet, no need to stress. You still have almost two months until the deadline comes knocking. But remember, the sooner you start, the smoother the process will be!

Here at Loeffler Financial Group, we’re genuinely thrilled because we’re all set to be your tax season partners! Whether you’re a tax prep pro or a rookie, rest assured, we’ve got your back and can guide you every step of the way.

We’re more than just an accounting firm; we’re family. This year, let’s breeze through tax season together, making the journey as easy and stress-free as possible. Stay tuned for helpful tips, important updates, and gentle reminders along the way.

Let’s tackle tax season head-on, together! Call 717-393-7366, or book right online for an easy and stress-free Tax appointment.

An Enrolled Agent (EA) is a federally-authorized tax practitioner who has technical expertise in the field of taxation and who is empowered by the U.S. Department of the Treasury to represent taxpayers before all administrative levels of the Internal Revenue Service for audits, collections, and appeals.

What does the term “Enrolled Agent” mean?

“Enrolled” means to be licensed to practice by the federal government, and “Agent” means authorized to appear in the place of the taxpayer at the IRS. Only Enrolled Agents, attorneys, and CPAs may represent taxpayers before the IRS. The Enrolled Agent profession dates back to 1884 when, after questionable claims had been presented for Civil War losses, Congress acted to regulate persons who represented citizens in their dealings with the U.S. Treasury Department.

How does one become an Enrolled Agent?

The license is earned in one of two ways, by passing a comprehensive examination that covers all aspects of the tax code or by having worked at the IRS for five years in a position that regularly interpreted and applied the tax code and its regulations. All candidates are subjected to a rigorous background check conducted by the IRS.

How can Enrolled Agent help me?

Enrolled Agents advise, represent, and prepare tax returns for individuals, partnerships, corporations, estates, trusts, and any entities with tax-reporting requirements. Enrolled Agents’ expertise in the continually changing field of taxation enables them to effectively represent taxpayers audited by the IRS.

 

Loeffler Financial Group has a team of Tax Advisors, CPA’s and EA’s to help assist with your taxes each year.  Our team of experts stays up-to-date on all the tax laws and changes for the upcoming tax season.

 

Schedule your tax return appointment online here, or call our office at 717-393-7366!

To read more about our tax office and tax advisors click here.

 

Summer brings warm weather, fun outdoor activities, and new opportunities to earn some additional income. However, taxes on seasonal income need to be handled with care, whether they’re related to your child’s first job or an extra income opportunity for you.

Here are some tips to help you manage the taxes on your summer earnings:

Students should take advantage of tax-free earnings limits. If you anticipate making less than the annual standard deduction ($12,950 for single taxpayers in 2022), none of your earnings are subject to federal taxes! If possible, earn at least that amount each year to maximize your tax-free earnings. Remember, if you can be claimed as a dependent on someone else’s tax return, the limits for tax-free unearned income such as interest and dividends are lower.

Tip: If your annual earnings will be less than the standard deduction, you can claim EXEMPT on your Form W-4. That prevents federal income taxes from being withheld from your paycheck.

Independent contractors need to make estimated payments. As an independent contractor, you are responsible for paying all the taxes on your earnings. To do this, you make quarterly estimated tax payments to the IRS using Form 1040-ES. In addition to federal and state taxes, independent contractors need to pay a self-employment tax of 15.3% of earnings.

Tip: Track your expenses and save receipts. By doing this, you can subtract eligible expenses like mileage, supplies and uniforms from your gross earnings. Use this lower-income number to calculate your self-employment tax and correctly estimate your income tax obligation.

Closely monitor tax withholdings. As an employee, your employer withholds taxes based on what you claim on Form W-4. Unfortunately, the tax tables used by this form to calculate your withholdings do not account for seasonal jobs. This typically results in paycheck withholdings being too low for supplemental income workers and too high for students working during the summer.

Tip: If you anticipate earnings in excess of the standard deduction, request a revision of your withholdings. Use tools on the IRS website, review last year’s tax return, or ask one of the tax experts at Loeffler Financial Group for help to estimate the correct amount to withhold. From there, ask your employer to adjust your federal and/or state withholdings up or down.

With a little tax planning, you can ensure that your summer job provides the income you are looking for without the disappointment of unexpected taxes. Please call if you have any questions.

 

Here are five common retirement planning ideas and what you can do to take advantage of them. The key is retirement planning starts now, not decades from now when you are reaching retirement age.

1. Having a plan

Surprisingly, most do not know how much money is needed for retirement. This is being made much more difficult with inflation playing a major role in finding the right answer. A retirement plan should consider how long you expect to live, an estimate of the amount of money you will need, and a description of your desired lifestyle during retirement. Your plan should have measurable goals that you aim to achieve.

Action item: If you have a plan, review it for possible revisions. If you do not, consider getting one put together as soon as possible.

2. Start early enough

One of the most powerful tools for a well-funded retirement is to start saving for your retirement at an early age. The sooner you start saving, the better off you will be.

Action item: Open a retirement account and start saving now. Increase the percent of your pay that you place in tax-advantaged retirement saving accounts. This includes IRAs, 401(k)s, and other plans.

3. Maximize employer contributions

Many employers have plans available to help their employees save for retirement. If your company has a pension plan, understand how it works and how much you can expect to receive upon retirement. If your company has a retirement plan contribution-matching program, take full advantage of this free money by making minimum contributions required to receive this employer match.

Action item: Review your employer-provided retirement saving options. Maximize the benefits they are providing.

4. Consider working after retiring

Do you plan on working during retirement or avoiding work at all costs? Do you plan on having a pension or Social Security covering all your retirement needs or none of it? Too often retirees plan the extremes, but reality is something in between. For example, if you are someone who plans to have your pension plan fail and Social Security go broke, you may be taking too conservative an approach.

Action item: Create a range of retirement funding scenarios, not just the worst-case or best-case scenario. Consider no work or part-time work. Think about some contribution from Social Security and potential pension income if your employer has a program.

5. Understand the true nature of your retirement

Are you being realistic in your future retirement plans? Have you correctly estimated the cost of health insurance? Have you really thought about the impact of relocating to a warmer climate? How important is living close to family and friends? Will you really downsize your home after the kids leave?

Action item: If you have a retirement plan that includes relocating or traveling to far-off places, consider test-driving this idea before you implement it. You may be surprised at the result.

Retirement should be something to look forward to, especially with a little planning.

With tax season in the rearview mirror, now is the time to take a hard look at your federal and/or state withholdings to ensure next year’s tax bill does not surprise you.

A review is more important than ever.

There are a number of tax code changes that will impact the amount of tax you pay next year. So much so, that if you do not forecast your tax obligation now, you may be in for a very unpleasant surprise. This is true because:

No more advance payments for the Child Tax Credit. The one-year requirement of the IRS to pay out half of the Child Tax Credit in advance is no longer in place. So you will not only need to plan for this change, but it will also impact your tax return.

Child Tax Credits are lower. In addition, the Child Tax Credit amount for each child is rolling back to the 2020 dollar amount of $2,000. This could mean as much as $1,600 in lower credits for each of your children.

Dependent care credits are lower. The dependent care credit is also lower in 2022. So if both you and your spouse work and have daycare expenses, you will need to forecast the impact of this on this year’s tax obligation.

New 1099-K reporting may require estimated tax payments. The IRS will be receiving millions of new informational tax forms reporting activity from those using digital payment platforms. So for those reselling event tickets, using sites like eBay, Esty and Amazon, you will now need to account for all this income. It may now require quarterly estimated tax payments throughout the year.

Be aware of life events. In addition, a change in your situation could create the need to review your withholdings. It could be due to a job change, selling or buying a home, getting married or divorced, or having a birth or death in the family. Whatever the cause, be aware of the potential change and put a sharp pencil to revising your withholdings.

High inflation is impacting everything. Finally, consider the impact of inflation on your situation. This is especially important if you have a small business as higher costs of labor and supplies could dramatically impact your pending tax bill.

Calculating and making adjustments

Using the IRS calculator. The IRS has an online tool to help you calculate how much you will need to withhold. In order to get an accurate reading, you need to have a copy of your latest paycheck or last quarterly estimated tax filing (Form 1040 ES) and a copy of your last tax return.

The IRS tool is here: IRS Withholding Calculator

Simply follow the tool’s instructions and compare the tool’s recommendation to your current withholdings.

Get expert help if necessary. The IRS recently changed the way it calculates recommended withholdings. While the intent is well intended, many are confused by the change. It is always a good idea to call to review your situation if you have any doubts. But do it now, while there is plenty of time in the year to build the proper withholding amount.

File a new withholding form with your employer. Whether you’re paying too much or too little, you can fix it by filling out a new W-4 form and giving it to your employer. If you’re filing quarterly estimated taxes, you can adjust your next quarter’s estimate in a similar way.

In a perfect tax world, you would not owe too much nor get too large of a refund. Think of overpayments as an interest-free loan the government borrowed from you. Conversely, a shortfall means writing a large check when you file your tax return. That’s a surprise few of us want.

Contact Loeffler Financial Group to start planning for your future, 717.393.7366!

 

 

Taxpayers should file their tax return by the deadline even if they cannot pay their full tax bill. Taxpayers who owe tax and don’t file on time, maybe charged a failure-to-file penalty. This penalty is usually five percent of the tax owed for each month, or part of a month that the tax return is late, up to 25%.

If an individual taxpayer owes taxes, but can’t pay in full by April 18, 2022, deadline, they should:

File their tax return or request an extension of time to file by the April 18 deadline.

• People who owe tax and do not file their return on time or request an extension may face a failure-to-file penalty for not filing on time. Loeffler Financial Group can file your extension for you per your request.
• Taxpayers should remember that an extension of time to file is not an extension of time to pay. An extension gives taxpayers until October 17, 2022, to file their 2021 tax return, but taxes owed are still due April 18, 2022.

To get an extension to file, taxpayers must do one of the following:

• File Form 4868 through your tax professional, such as one of the tax experts at Loeffler Financial Group
• Submit an electronic payment with Direct Pay, Electronic Federal Tax Payment System or by debit, credit card or digital wallet and select Form 4868 or extension as the payment type.

Pay as much as possible by the April 18 due date.

• Whether filing a return or requesting an extension, taxpayers must pay their tax bill in full by the April deadline to avoid interest and penalties.
• People who do not pay their taxes on time will face a failure-to-pay penalty.
• The IRS has options for taxpayers who can’t afford to pay taxes they owe.

Set up a payment plan as soon as possible.

• Taxpayers who owe but cannot pay in full by April 18 don’t have to wait for a tax bill to set up a payment plan.
• They can apply for a payment plan on IRS.gov.
• Taxpayers can also submit a payment plan request using Form 9465, Installment Agreement Request.

Interest is based on the amount of tax owed and for each day it’s not paid in full. Interest rates are determined every three months and can vary, based on type of tax; for example, individual or business-tax liabilities. Loeffler Financial Group is here to assist you with any tax questions you have.

Need to file your tax return still? Call 717-393-7366 to book your appointment with one of our tax experts.