Category: Success

Spring Clean Your Financial Documents

With tax season upon us and the hint of Spring around the corner, now is the perfect time to focus your spring-cleaning efforts on your financial documents and be ready for the year ahead. Here’s what we recommend you do:

Have A System

Store all of your important papers all in one place. A traditional filing cabinet works great, with separate folders allocated for your utility bills, pay stubs, bank statements, credit card statements and investment information.

Keep similar statements together so you can find what you need quickly. Safely store your important documents in a fireproof and water-resistant container.

To Keep Or Not To Keep

You don’t have to keep everything forever. Here are some rules of thumb to guide you.

          • Utility bills. Keep these for about a year in case there is a billing question that comes up.
          • Pay stubs. Hang on to these for a year, too, or until you can cross reference it to your year-end W-2 statement.
          • Bank statements. Keep these for one year unless you plan to apply for a car or home loan, then keep two years of statements. Lenders typically ask for two years’ worth of statements, and many banks give you free access only to the past six months.
          • Credit card statements. You can typically pitch credit card statements that are older than a year unless you’ve used them to pay for home office or home improvement expenses. If they impact your taxes, keep those statements until you sell your home.
          • Investments. You can throw out the monthly or quarterly statements if you have the yearly statements, but hold on to statements that show trading confirmations.
          • Tax records. Keep all of your tax returns and the supporting documents for at least three years. The IRS can challenge returns for the previous six years if they suspect you haven’t reported income, so you may want to play it safe and hang on to them for six years, especially if you are self-employed. Returns that are decades old and several residences in the past will likely not be needed.
          • Other important documents. There are some documents you will keep forever—birth certificates, marriage licenses, estate planning, death certificates, etc. These documents should be kept in a place that protects them from flood, fires and theft.

Shred

When you have identified what you no longer need to keep and store, don’t just throw them in the trash. Shred them. This will protect you from identity theft, an all too common and devastating problem that results when dumpster divers go through your trash in search of personal information. Then they use it to make purchases or apply for new credit cards.

Donohoo Accounting Services is here to help you with your financial paperwork, tax preparation and business and personal tax returns. If you have questions about which financial documents you should keep, which you should get rid of, or if you need help with your taxes, give us a call at 513-528-3982. We would be happy to assist. For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

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Do You Qualify for a Home Office Deduction?

If you worked from home pre-COVID or have landed a home office job since quarantine, you may be wondering if you qualify for a home office deduction on your taxes. Tax season will be here before we know it, so it’s not too soon to be thinking about these types of deductions.

The answer is maybe. Eligibility rules can be confusing, but here are some boxes you need to check to qualify:

You’re NOT a W-2 employee

Being a W-2 employee means you work for someone else who withholds income, Medicare taxes and Social Security from your paycheck. W-2 employees are NOT eligible for home office deductions.

If you are self-employed, a contract worker/freelancer, or are a 1099 employee, you may qualify for this deduction.

You have a designated workspace

The IRS says home office expenses can be deducted when the home office space is used exclusively for conducting business. A spare bedroom, room, or a nook in your basement would count. It doesn’t have to be a completely separate room and you don’t need to construct permanent partitions, but it does need to be a “separately identifiable space.” Consider arranging furniture to mark your office boundaries, or use a panel room divider, a bookcase or even a curtain.

Your space is used regularly and exclusively for work

In order to qualify, the space must be regularly used for business, and not a shared space for your personal tasks. That rules out your kitchen table. Spaces that are used only occasionally or incidentally for business don’t count either.

It’s your principal place of business

If you meet with patients, clients or customers outside of your home, your home office could still qualify if you use the space exclusively and regularly for invoicing, scheduling and other business-related tasks.

A freestanding structure on your property could also be a deduction if you have a studio, garage or barn that you work out of. If you use part of a large room in your home as your dedicated workspace you could deduct it if you figured out the percentage of your home this space accounts for.

You can calculate your home office deduction using the regular method or the simplified method.

The regular method considers the actual expenses of your home office — such as mortgage interest, insurance, repairs, depreciation, insurance and utilities — as a percentage of your whole house. The simplified option allows the qualified taxpayer to determine actual expenses by multiplying a prescribed rate by the square footage of the office space.

Donohoo Accounting Services knows that determining your eligibility for a home office deduction is confusing. We are here to help you understand the IRS rules, how they apply to you and which calculation method to use. With more than 20 years of experience in the business, we can help you find every deduction possible to reduce your tax burden. Give us a call today at 513-528-3982 for a free consultation.

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How To Network During COVID-19

The coronavirus pandemic has significantly affected the way we conduct business, especially when it comes to sales. We’ve all had to get creative about how we build meaningful connections and establish or maintain business relationships virtually. Until in-person meetings return to full capacity (which likely won’t be any time soon), most of our efforts will need to be done via screens. But don’t worry. It’s entirely possible to network in the time of COVID. And we’ve put together some ideas on how to get it done:

Have a “help first” attitude

Networking is not synonymous with selling, and in fact, a sales pitch right out of the gate can be quite the turn off. Begin your initial interaction by asking questions. Get to know the person you are speaking with. Find out what their pain points are, and ask how you can help them or who you could introduce them to. The good karma will find its way back to you when the time is right.

Reach out to potential connections

LinkedIn was built for this purpose. But to be successful on the platform, it’s wise to include a message with your invitation. Tell them why you are interested in connecting, even if it’s that you work in the same industry, have the same alma mater, or would just like to get to know them better. You can always leverage your mutual connections for an introduction, too.

Take advantage of virtual opportunities

Many businesses and networking groups are hosting morning coffee breaks or virtual happy hours. These events can offer an informal way to get to know each other on a personal level, and have a little fun, too. Additionally, networking groups and Chambers have moved their meetings online to allow their members to continue to connect professionally.

Follow up from virtual conferences

If you’ve attended a virtual conference recently, consider reaching out to the presenters or panelists. While you may not be able to get your hands on an attendees list, most presenters welcome the chance to connect with their audience.

Explore national/regional virtual groups

The internet knows no boundaries. This is an opportunity to network outside of your geographical area. If your business can serve clients remotely or in other locations, this is your chance to meet people you might not have otherwise met.

Show grace

With many professionals now working from home — along with spouses, roommates, and kids in virtual learning — you may witness (or experience) interruptions, barking dogs and connectivity issues. Show grace. This is a challenging time for all of us, and we need to be understanding and kind to one another.

Be consistent

Keeping your name out there on the networking circuit is an important way to let people get to know you, like you and trust you. Don’t show up once, disappear and expect to get great results from networking.

Donohoo Accounting Services understands the challenges of virtual networking. We’re faced with it, too. We’re here to offer our help and support with any of your financial needs, whether it be tax preparation, COVID-19 relief or saving for college, so you can focus on growing your network. With more than 20 years of experience, we’re your trusted partner in quality accounting and tax support. Contact us at 513-528-3982 or on our website for a free consultation. For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

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6 Tips For Working From Home

Because of the need for physical distancing to help stop the spread of COVID-19, many of us are required to work from home. While for some this may be a new challenge in a difficult time, adjusting to working from home can be easily done when armed with the right information helping you quickly develop a routine that helps you stay productive. These tips are designed to help you make the most out of working from home, allowing you to stay safe while staying focused on your work.

Maintain Regular Working Hours

While you may not be required to go into your office, working from home doesn’t mean you should let it disrupt your regularly scheduled work week. Setting a regular schedule with designated working hours helps maintain a healthy work-life balance that can help maintain productivity.

Get Dressed for a Regular Workday

While it may be tempting to work in your pajamas, getting dressed for a regular work day can go a long way in helping you stay focused on your work. Developing a regular morning routine that involves professional grooming habits can help put you in the right mindset for the work day and make you more productive.

Designate Working Space

One of the challenges many people face when working from home is keeping your work life separate from your home life. But designating a specific room or area to work from that’s comfortable, with plenty of natural light can help you stay focused and on task is essential for working from home.

Socialize with Coworkers

While it’s important to maintain social distancing to help stop the spread of the COVID-19 virus, that doesn’t mean you still can’t interact and socialize with your coworkers. While you may be working out of the office texting, emails, phone calls and even video chats help you combat feeling isolated while maintaining personal and professional relationships while you work from home.

Take Regularly Scheduled Breaks

Knowing your company’s break policies can be an essential part of working from home, as taking time away from your computer and phone helps avoid fatigue and keep you focused. Many workplaces offer employees an hour for lunch along with two 15 minute breaks for an eight-hour work day, so make sure to take full advantage of your breaks to give yourself time to relax.

Give Yourself Time to Adjust

Easing into working from home can be difficult and if you’re used to a busy office environment, the adjustment might take longer than you think. While it can feel stressful, frustrating and lonely, don’t be hard on yourself and know that it takes time to adjust.

At Donohoo Accounting Services, we’re also working from home and understand its challenges. From interns to CEOs, adjusting to this new normal is taking its toll on all of us. Whether you’re a business owner or an employee, one thing is certain — we could all use extra attention to our finances. If you haven’t filed your 2019 taxes, give us a call at 513-528-3982 for a free consultation and let us find every deduction possible to reduce your tax burden. For more tips and our latest updates, check us out on Facebook, Twitter or LinkedIn!

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