When is the Best Time to Start Saving for Retirement?Posted on June 7th, 2018
Wondering when you should you start saving for retirement? The answer is quite simple — start saving as soon as you can. The sooner you begin putting money away, the more time it will have to grow into a hefty nest egg. Because the interest you earn in a retirement account is compounded, each year’s interest gains will generate more and more income, without any extra work from you.
If you haven’t started saving yet, don’t beat yourself up over it — talk with a financial representative, create a plan, and start making up for lost time. Here are a few tips on how to start saving for retirement at any age.
Saving for Retirement in Your 20s and 30s
Today’s young adults often enter the workforce with quite a bit of debt, and it’s completely understandable that most believe that they simply can’t afford to save for retirement. If you’re in this position, start by putting aside just a few dollars every month — a small amount you can manage to live without. As you become more comfortable with these small contributions, you can gradually add to the amount you invest.
Invest your money in a 401k, especially if your employer matches your contributions. You can invest up to $18,000 toward your 401k annually. If your employer doesn’t match your contributions, consider investing in an IRA, which will also allow you to save while taking advantage of tax benefits.
Saving for Retirement in Your 40s and 50s
Entering your 40s and 50s with no retirement savings? Instead of thinking about what you haven’t accomplished, shift your priorities and make your commitment toward retirement savings a top priority. First, figure out how much money you will need to live on when you’re no longer working. Estimate your post-retirement income, even if it’s just Social Security, and then estimate your expenses. The difference between your projected income and expenses is the gap you will need to cover.
Next, start saving as aggressively as you can. In your 40s, you can still contribute up to $18,000 in your 401(k) each year. Once you turn 50, you can increase that amount by $6000. You can contribute $5,500 into your IRA annually until you turn 50. After that, you can contribute $6,500 each year.
Contact Us Today!
It is never too early or too late to start saving for retirement. Any amount you can put aside will help offset your costs and provide for you in the future. For more retirement tips and help with tax-saving strategies, contact David Reinus, CPA in Thousand today to schedule a consultation.
Should I Outsource Filing My Tax Return?Posted on February 12th, 2018
With tax season upon us, many working adults are dreading having to complete and file their return. Some of us are fortunate enough to have simple, straightforward filings, making the task more annoying than daunting, but for those of us with complications hiring a professional can save you thousands.
When Should I Outsource My Filing?
Some of the complexities that would benefit from having a professional complete your filing include:
- Having multiple sources of revenue, including freelance or contract work or stock investments
- Earning over $200,000 per year, which drastically increases your chances of being audited
- Investing in tax-deferred or tax-free savings accounts like a 529 plan
- Owning your own business or being a stakeholder in a shared business
- Experiencing a major life change, such as getting married or divorced, changing jobs, or purchasing a home
- Owning one or many rental properties, where rental losses and deductions can be taken
In these and other more challenging situations, hiring a CPA can provide savings in both time and money. Being that they’re very familiar with the tax code, they can advise on areas in which you could see a greater monetary return. Additionally, having someone else stress about getting everything together and getting it reported accurately frees up your time to focus on more pressing concerns.
Tax professionals also provide relief from anxiety associated with filing your tax return. If you’re fearful of missing something or getting penalized or audited, it’s best to leave your filing to a professional. Most CPAs will also provide continued support beyond tax season to provide you with continued financial advisory. What’s more, they serve as the record keepers for all of your federal and state filings to maintain your tax information should you ever need it.
While there are pros and cons to outsourcing your tax filing, the decision is ultimately a personal one. Your circumstances are unique, as are your needs. If you would like to inquire about having a professional Certified Public Accountant complete your filing on your behalf, please give us a call today. Our team of professionals would love to hear from you.
How Outsourcing Payroll Helps Small Business OwnersPosted on April 1st, 2015
Taking care of payroll is a time-consuming process that all businesses with employees are responsible for. In most cases, for business owners who have little financial knowledge and whose time is devoted to other business responsibilities, outsourcing payroll helps them save time. But outsourcing payroll also helps small business owners:
Shorten the Learning Curve – If you tried to do payroll on your own, you’d be spending a lot of your time staring at a computer screen, learning payroll software and trying to figure out how to enter everything correctly. By getting payroll help from an outside financial expert, there is no learning curve to paying your employees.
Keep Employees Happy – As you might imagine, the do-it-yourself process described above would involve a hefty time commitment, which could mean that your employees aren’t paid on time, or receive paychecks with errors in calculation. Getting accurate and timely payroll assistance is the easiest way to ensure your employees’ happiness.
Minimize Tax Errors – Payroll taxes have to be filed periodically, which can be a mess to keep-up with if you don’t know what you’re doing. As is the case for all matters of tax preparation and filing, the best way to avoid filing late or making mistakes is to get help from a professional accountant. A CPA can make sure that your taxes are paid correctly and in accordance with all deadlines.
Payroll is another back-office process that is often best left to experts. If you run a business, and have employees helping you provide a product or service to clients, outsourcing your payroll offers significant benefit for your time and your employees’ satisfaction. To learn more about getting payroll help from a CPA, contact our Thousand Oaks accounting firm to see how we can help.
Why it’s Important to Hire a CPA for Business TaxesPosted on March 27th, 2015
Certified Public Accountants are more than accounting experts. As a part of their training and licensure, CPAs are required to be familiar with laws and regulations that relate to tax preparation and filling for businesses and individuals. With unlicensed bookkeepers and accountants, there’s no guarantee that you’re getting a professional who can help you when you really need it.
CPAs present an advantage for business tax preparation by way of:
Guaranteed Work – Because CPAs have accounting experience and are required to keep up with professional knowledge, you get a higher level of assurance. With their extended training, and formal education (for some), certain CPAs even guarantee their work and can provide further assistance, should you require additional support.
In-Depth Familiarity with Tax Laws – Tax law is no simple thing, but a CPA – as previously mentioned – has to have a thorough understanding of tax regulation in order to receive their license. The best way to avoid being audited by the IRS is to stay within all guidelines, which is where a CPA often proves most handy in business tax preparation.
Tax Audit Assistance –When you are faced with an audit, or if the IRS flags your tax return for errors, your best defense is someone who knows how to correct tax mistakes. Chances are, if you made the miscalculation in the first place – you’re lost on how to go about correcting it the right way. CPAs work with the IRS on your behalf. This level of tax help is typically not offered by an unlicensed accountant or standard bookkeeper.
While some financial professional may be able to fill out or file forms, only a licensed accountant is able to provide business clients with a system of support that prevents tax errors, and provides help in the event that a mistake is indeed made.
At David Reinus, CPA our office handles business tax planning, preparation, and tax problem resolution in Thousand Oaks, CA. If you have any questions about getting business assistance from a CPA, please call our office for your consultation.
Tips for New Business FormationPosted on March 10th, 2015
Entrepreneurship is the oft-cited American dream, which largely rests on the ability to succeed and exist on our own terms – this includes starting one’s own business. Whether you’re planning for a hometown eatery or multilevel enterprise, the initial stages of business ownership can appear to be an endlessly taxing process of licenses, forms, and questions with few answers.
What do you do when the demands of small business formation require juggling these requirements in order to start your business the right way?
Put your best foot forward beginning with the first step:
1. Create a Business Plan: A business plan is more than an outline for what you want to do — it is a roadmap that governs the layout for your business, taking into account what kind of business you will be running, the products and services that will be offered, the resources needed to fund the company, the market in which you will operate, and company management and objectives.
2. Learn the Business of Running a Business: This step is highly advisable, especially for novices. Great ideas don’t always beget great successes. The reason that 90% of businesses fail in the first year isn’t because of a lack of talent or a lack of resources; lack of knowledge is a large contributing factor. Pair yourself with someone who has experience. Find local workshops/business accounting professionals or sign-up for online training.
3. Select the Structure: Will your business have the independence – albeit with the full liability—of a sole proprietorship? Do you intend to limit the liability of your personal assets with an LLC or will your company have the distinct legal identity of a corporation? The structure of your business is a big decision and a large factor in how your company will operate. Choosing a business structure that is the most suitable for you is an essential piece of the puzzle. Consulting with an accounting professional is a way to ensure that you understand the options available and what they will mean for your company.
4. Finance your Firm: Great businesses do not function on inspiration and passion alone: Money is an object. Luckily, there are many resources available to help you get your business off the ground. The U.S. Small Business Administration provides a wealth of resources to help small business owners identify loans and grants that will help you get your business started.
5. Get Your License and Permit: Business licensing and permits depend largely on the type of business you will be operating, the state you will operate in, and applicable federal guidelines. Companies that operate in certain federally-regulated industries, including alcohol, aviation, wildlife, firearms, and radio and television broadcasting, are required to obtain federal licenses or permits to run. This is a hugely significant area for consideration. Ensure that your business is compliant from the start!
The truth is that forming a small business is a lengthy process and can be quite challenging. The five steps above are intended to serve as a starting point for your business formation but are certainly not all-inclusive.
Entrepreneurship is not an elusive goal. The Small Business Administration reports that there are 28 million small businesses in the United States. With some hard work and careful guidance, your business can join the fold. If you have questions about starting a new business – our accounting office can help. Contact David Reinus at (805) 496-0018 today for more information about new business formation.