When you create a trust you transfer all of your assets, securities, properties, bank accounts,  and real estate to one or more persons whom you “trust”.  You no longer own these assets, the “trust” does.  You still have access to all these assets while you are alive.  You instruct your trust to pay out all income to you during your lifetime, and up on your death whatever is left would be given to your beneficiaries.  You can put instructions in the trust as to who has access to it.   Your property will avoid probate after you die. You will need to appoint a trustee to take care of the trust and follow it’s directions.   During you life, you can be your own trustee, meaning that you can be the person responsible for taking care of all of the assets while you are alive.  You can continue to control your assets and decide what you want to do with them.   After your death, your trust would be passed on to a successor trustee that was named in your original Trust.

A trust is an effective way to protect your assets during the course of your life, as well as after you pass on.  It can provide financial security for your family members after you are gone.

Here are the steps to follow in order to create a trust:

1. Look into the different types of trusts. A “living trust”  is one in which the assets are controlled and used by you during your life, and are dispersed after you die as dictated by the trust.  The probate process is bypassed for all assets included in the trust.

2. Different from a living trust, a “testamentary trust” goes into effect only after you die.  It is typically connected to a will and can reduce or remove estate taxes paid by your beneficiaries.  A testamentary trust is still subject to the probate process.

3. Establish the trust once you have decided on the type that is right for your needs.  Decide who you want as your trustee (the person obligated to ensure that the terms of the trust agreement are implemented).

4. Consult with your financial adviser, lawyer, or banker.

5. Acquire the proper documentation from your adviser (or purchase a software program to assist you) and complete the documents to create the trust.

6. Fund a living trust.  Identify the assets you wish to include in your living trust.  These assets are the ones over which you have control and wish to control during your lifetime.

7. Change the titles of the assets in your living trust; put them in the name of the trust.

That is all there is to it.  Trusts are a great way to help your surviving relatives avoid paying excessive estate tax, or to avoid the entire probate process all together.  The probate process is normally long, drawn out over many months, and carries fees around five to six percent of the total asset value.  This is a good way to spare your family the time and expense of  probate.

There are many different types of expenses that count as tax deductions that are commonly missed by average people.  Of, course, it is necessary to keep all relevant receipts to provide proof of the incurred expenses.

The following is a list of the top 8 commonly missed tax deductible expenses:

1.  Moving Expenses for First Job

In the United States, logged mileage and moving expenses for your first job (this only applies to your first job) can be claimed as a tax deduction.  To be able to claim this deduction, it is very important to clearly document all itemized expenses associated with the move.  Make sure to keep all relevant receipts as supportive information.  Of course, you will not be able to deduct the charges from your taxes if you were reimbursed for the moving charges by your employer.

2.  Educator Expenses

Not only is education a worth-while investment for the person who is receiving the education, it is also a way to get a tax refund if you are an educator.  Educators who meet the qualifications can be refunded up to $250 on purchased educational items.  It is not necessary to itemize these purchased items.

3.  Expenses fo Higher Education

Getting a college education is always a wise choice, as well as  an excellent investment in your future.  Most students’ adjusted gross income is lower than $65,000.  If this circumstance applies to you, you can deduct up to $4,000 of your expenses related to your higher education.

4.  Home Improvement/ Energy Savings Credit

You can claim up to $1,500 for home improvements that increase the energy efficiency of your home.  Some examples of energy saving improvements would include things like replacing an old hot water heater with a tankless water heater, or using a high-efficiency furnace.  In addition to being able to claim up to $1,500 as a tax deduction, you will also be able to save significant amounts of money in electricity and gas bills over the life of the new appliances.

5.  Home Improvements for Medical Reasons

Home improvements aren’t inexpensive, but the good news is that they can count as a tax deduction.  If you have modified or remodeled your home for medical reasons, like wheel chair access to the shower, you are eligible to deduct the expenses for the remodel from your taxes.  Make sure to clearly document any expenses associated with remodeling your home for medical reasons.

6.  Child- Care Credit

A lot of employers provide reimbursement accounts for as much as $6,000 for child-care related expenses, but if you have further expenses, you can add up to an additional $1,000 on your own.  One very commonly overlooked  piece of information is that pre-school can be included as child-care if you drop the kids off and go to work for several hours.

7.  Non-cash Donations

You do not need a receipt for every charitable donation that you make.  You can donate your unused goods, clothing, and furniture to the Goodwill or the Salvation Army.  For items that are worth more than $500, you can get appraisals to determine the value of the donation.  Another form of non-cash donation can be related to driving your vehicle for charitable reasons.  Logging mileage used for the charitable purposes can be used to validate the amount of charitable work carried out.  You will not require a receipt for proof of your charitable work or donation, but you will need to provide documentation.

8.  Work- Related Expenses

Items that qualify as tax-deductible work expense, are things like the cost of doing laundry on a business trip.  Other qualified deductions would include things like education that maintains or improves your job-related skills, the purchase of certain business tools, or even gas used while searching for a job.

Hopefully, recognizing some of the available tax deductions will assist you in saving some serious money on your income taxes.

In small businesses and firms, simple bookkeeping is the main way to record financial transactions. These transactions include sales, purchases, income and payments that are conducted within a business. The management of accounts through manual bookkeeping can be a time consuming task. Besides, if the employee in charge of bookkeeping does not have a sufficient background in accounting, there is a possibility that many mistakes may be visible in the company’s accounts. Here is a list of these type of mistakes:

• Many small businesses prefer bookkeeping to be conducted in-house. This can save you some money, but what’s the use when it is not convenient in terms of accuracy and timeliness? This is a mistake which can be avoided by simply hiring an intern from an accounting firm. However, it’s your choice to do that on a quarterly or monthly basis.
• Moreover, if you haven’t had a proper backup system, you will eventually mess things up as paper files build up quite rapidly. Firms can reduce their burden if they input their financial data into a software program.
• It’s a common observation that when small businesses do their own accounting work, they make far too many accounts than the ones that are actually needed. This makes things difficult when you have to search for a specific transaction.
• There can be some deductible expenses such as tax deductions. In order to receive tax deductions on income, keeping receipts is essential. The improper handling of deductible expenses is a big mistake that small business owners frequently make.

Even if you do end up avoiding all these common mistakes, it’s not a good idea to manage your own accounting. In the long run, you will realize that this job must be outsourced. This way you can prevent errors altogether.  You can also spend more time growing your business, while leaving the accounting to a professional accounting firm.

Bookkeeping refers to recording financial transactions such as sales and payments. Although many small businesses skip this process to focus on their sales, it is one of the most important aspects in a business.

The basic reason for bookkeeping is to manage the finances of a business. Bookkeepers who record daily transactions can determine which sources of income should be collected and which expenditures should be made. In today’s world, bookkeeping can prevent small businesses from being conned as well as ensure the smooth flow of cash into the business.

Another reason for bookkeeping is that it is the first step to full fledged accounting. Without transactions being recorded, the generation of cash flow and income statements will be difficult. As a result, analyzing financial data for a business’ growth will become impossible. In addition, since accounting statements will be missing, a business may have trouble getting an accurate picture of its taxes.

If you’re the owner of a small business, you should make use of bookkeeping. There are two systems which you can choose from: the single entry bookkeeping system and the double entry bookkeeping system. The first method is most suitable for your business since you only record income and expenses. As for the second method, transactions are recorded twice using debits and credits.

The most conventional way to record transactions is by using daybooks, petty cash books, journals and ledgers. Each of these records transactions in different ways, so you should use all of these in your business. However, if you prefer less hassle and a paperless working environment, you can opt for computerized bookkeeping.

The process of bookkeeping is easy. All you need is to put aside some of your time for it, and you can notice how your business will flourish.