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3 Reasons You Should Hire An Accountant To Handle Your Tax Return

Posted by on Feb 13, 2017 in Uncategorized |

It’s often said that death and taxes are the two things no one can escape from, and there’s a lot of truth to that. If tax time has you stressing out yet again this year, perhaps it’s time to get some professional help with that tax return. An accountant can help with your finances in a variety of ways but most tend to specialize in handling tax returns. Here are three reasons why you should take the plunge and pay a professional to do your tax return for you this year instead of going it alone. Keep Up With The Latest Tax Laws When’s the last time you read the federal tax code? Never? How about the tax code at the state or local level? It’s no secret that tax law is not exactly a very exciting subject so you can excuse yourself if you haven’t kept up with the latest changes. But failing to do so might mean that you end up leaving money on the table when you file this year’s tax return. If you hire an accountant, you will have someone on your side whose job it is to stay up to date on this kind of information. If there are any loopholes in the code this year that can benefit you, you’ll be the first to know. Spend Money on an Accountant to Save Money Some people don’t like spending money on an accountant if they are getting a tax refund because they feel like it eats into the amount of money they get back. What they are not realizing though is that having a professional go to work for them can sometimes result in an even bigger refund than they would get otherwise. Accountants are great at finding new ways to juggle your income with your expenses and deductions in order to get you the maximum refund possible. You’re Self Employed or Have Multiple Streams of Income Some people find taxes to be confusing even if their tax return is fairly straightforward with just one source of income to report. But things can get especially crazy if you became self-employed in the last year or started a business to create a second stream of income outside of your main office job. This kind of income often means additional forms will be required, which means more of a headache for you to deal with if you don’t have anyone to help you. An accountant has likely helped hundreds of people with your background in the past and will be able to tackle your complicated tax return with ease. Before you file your tax return this year, consider the benefits of getting professional help. An accountant may be able to find additional deductions or loopholes that could increase your refund or reduce the amount you owe. Reach out to an accountant such as Kenneth L Lahner CPA for more...

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The Advantages Of Hiring A CPA For Small Business Owners

Posted by on Dec 29, 2016 in Uncategorized |

Many small business owners attempt to conduct their financial activity on their own. Alternatively, they may hire a part-time bookkeeper to come in and make sure that their transactions are logged. But what most business owners really need is a CPA — even those who have small or medium-sized businesses. Here are a few of the principle advantages of hiring a CPA rather than relying upon a bookkeeper or other professional. CPAs Can Save Money on Taxes CPAs are very well-versed in business taxes. Not only will they be able to ensure that you pay your taxes correctly and on time, but they’ll also be able to advise you on the ways to structure your business and your expenses to pay less in taxes. Bookkeepers may know how to report taxes, but they haven’t undergone the training that is necessary to be able to identify potential benefits, such as new deductions and credits. CPAs Can Create Projections When growing a business, small business owners need to be able to project out their expenses reliably. CPAs aren’t just trained in recording financial information — like bookkeepers are — but they are also trained in the ability to develop business plans and create future earnings projections. Through this, a CPA will be able to tell you whether or not your choice to expand your business could be risky. CPAs can also tell you how your business will fare in the coming years and will be able to tell you whether or not your business may need help for upcoming shortfalls. Essentially, a CPA provides basic financial advisory services as well as bookkeeping and tax services. CPAs Create GAAP Financial Reports CPAs operate on the Generally Accepted Accounting Principles (GAAP), which are necessary for all types of loans and investment. These are reports that are specifically consolidated to be consistent with known standards, and that will give potential investors and lenders valuable information about your company’s expenses and worth. Through these financial reports, you’ll be able to better tell your company’s own financial situation while also representing it accurately to others. CPAs aren’t as expensive as one might think. Many CPAs do contract out the simple work — such as data entry — to a bookkeeper and focus their more expensive billing on items such as taxes. There are also CPAs that focus primarily on small business owners and can function as a valuable partner in the company’s future success. Contact a company like Amos Maney & Payne CPA’s LLC for more...

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Challenges You May Face With Small Business Accounting & 3 Ways to Overcome Them

Posted by on Nov 28, 2016 in Uncategorized |

Owning and operating a small business can bring you a great deal of job satisfaction and financial security. However, you do have to contend with the business side of things, including accounts payable, accounts receivable, billing and payroll (if you have others working for orwith you). Managing small business accounting can be treacherous, especially if math was never your strong suit or balancing a checkbook is difficult enough. Here are some challenges you may face with this part of your business and how to fix each of them. Logging Every Entry Every Time The root word of “business” is “busy.” That said, you already know how busy things get for your business and when you have some down time. Still, a challenge for most small business owners is entering every sale and every purchase into their books every time and right when those things occur. By entering these items immediately, you are keeping your books current and accurate, but it is not always easy to do. You may find that you either have to delegate tasks outside of the accounting realm to others so that you can focus on the books or delegate the accounting tasks to someone else while you work outside of the office. Avoiding Accounting & Setting the Books to Auto-Calculate Accounting software of the best kind auto-calculates everything for you. Gone are the days of spreadsheets where you have to create the function and the equation and hit enter for every line. If you avoid accounting for your business because you are concerned that you simply cannot spend hours hunting, pecking, and forming equations, buy advanced accounting software for small business use and then set your books to auto-calculate for every entry. No hours wasted, and business continues as usual. Avoiding Massive Errors on Your Taxes The final challenge for most small business owners with regards to their accounting needs comes at tax time. Navigating the forms for small business taxes can be quite daunting. However, if you have invested in good accounting software, you can import all necessary data from your software into an online tax preparation and filing system. Most of this auto-populates for you and then you do not have to read or understand what the tax form questions are requesting. If it becomes too discouraging, you can always consult or hire a small business accountant just for the purpose of completing and filing your...

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Accounting Tasks For Small Businesses

Posted by on Oct 26, 2016 in Uncategorized |

Maintaining good financial records is essential when it comes to keeping your small company solvent. Although you might hire an accountant to handle vital tasks like payroll or the filing of taxes, there are some accounting tasks that you should be doing on a regular basis. Use the following schedule to help you stay on top of your small company’s financial health in the future. Daily Accounting Tasks Taking the time to perform a few simple tasks each day will help ensure that your company’s financial health is never placed in jeopardy due to errors or oversights. Here are two accounting tasks you need to be doing daily. Count the cash you have on hand. Knowing how much cash your company has available at any given time will help you identify any discrepencies in your tills or cash account. You can better identify poor spending habits or employee theft that could be placing your company at risk when you conduct a daily accounting of your company’s cash. Review incoming and outgoing payments. It’s important that you identify how much money your company has coming in and going out each day. This information will help you adjust your financial plan in order to ensure that your company’s accounts remain in good standing. Monthly Accounting Tasks Working with an accountant to complete some important tasks each month will help you keep your company’s financial health on track. Here are two tasks that your accountant can complete on a monthly basis to help you gain a better understanding of your company’s financial status. Review month-end balance sheets. Going over your balance sheets with an accountant each month will ensure that you are able to identify any potential problems before they jeopardize your company. Outstanding customer accounts can be identified so that payment can be demanded in a timely manner. Compare profit and loss statements. If you want your company to experience steady growth, you need to be consistently becoming more profitable. At the end of each month, you should work with your accountant to compare your company’s profit and loss statements with those from previous years. You will be able to see growth patterns and adjust your marketing and spending strategies accordingly to encourage growth in the future. Working with your accountant to establish regularly-scheduled accounting tasks on a daily and monthly basis will benefit your company in the future. Taking the time for some basic accounting each day and month will help you identify opportunities for growth and investigate potential errors that could put your company’s financial health at risk. For more assistance and tips, contact certified public accounting firms in your area, like Carmines Robbins & Company...

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Selecting The Most Advantageous Tax Benefit Of Education Costs

Posted by on Sep 15, 2016 in Uncategorized |

Many tax filers pay education expenses for themselves or for their children. There is more than one potential tax treatment for the cost of education. Tax filers can usually obtain the most advantageous tax outcome by conceptualizing a hierarchy in which the various options are ranked relative to their financial benefit. American opportunity credit The most preferred tax benefit for the cost of education is usually the American opportunity credit, also known as the AOC. The AOC can be for as much as $2,500 per student. A portion of the AOC is referred to as being refundable. Up to $1,000 of the AOC may be refunded to you, even if there is no tax liability for it to offset. The cost of books is included along with tuition and mandatory fees to calculate total costs for the AOC. The AOC is only available to undergraduate students and can be claimed for a maximum of four years per student. For undergraduates continuing their classes beyond four years, as well as graduate students, another credit is available. Lifetime learning credit The lifetime learning credit (LLC) is 20 percent of up to $10, 000 in costs, so the maximum credit is $2,000. There is no refundable component of the LLC, so it is useful only to the extent that it offsets tax otherwise payable. There is no limit on the number of years you can claim the LLC. Unlike the AOC, the LLC may be claimed for the cost of a single class to improve job skills, even if the student is not pursuing a degree. Even though there is no limit on the number of students you can include for the LLC, $10,000 is the cost limitation for all students combined. If there are several students reported on your tax return, you might need to use an additional deduction to obtain the maximum tax advantage. Tuition and fees deduction Although there are differing tax benefits for the cost of education, each student is eligible for only one benefit each year. If your qualifying costs for the lifetime learning credit are near the LLC limit, you may claim the tuition and fees deduction for any students not already included on a tax credit. Unlike a credit that offsets actual tax dollar for dollar, a deduction simply reduces the amount of income that is taxable. The tuition and fees deduction has been extended through 2016 and may be claimed for up to $4,000 in qualified expenses. Itemized deduction If not already included to claim another tax benefit, education expenses incurred to improve your own job skills may be deducted as an itemized deduction. If married, the same would apply to your spouse. Contact an accountant, such as those found at Alexander & Associates CPA, for more specific information about the additional requirements of claiming tax credits or deductions for the costs of...

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Two Reasons to Hire an Accountant for Your Small Business

Posted by on Aug 5, 2016 in Uncategorized |

Whether you do direct marketing or sales for a popular product brand or have a skill that you provide for local clients, your small business is important to you. Equally important are the profits and expenses your business accumulates over time, but these profits and expenses can make things confusing during tax season or cause you to lose track of how much money your company is actually making. A small-business accountant can help you keep your finances in order and keep your financial records accurate, even if your home business doesn’t look like a traditional brick-and-mortar company. Here are two reasons to hire an accounting company for your business needs. Tax laws Self-employment taxes can be confusing and very detailed, and you may not know what you can write off as expenses and what you have to pay on at the end of the year. Since you do not pay into social security and other state and federal taxes throughout the year, you must file taxes appropriately and on time to avoid penalties. Your accountant understands IRS laws on both a federal and state levels and will help keep your finances organized so you file taxes on time and get the most deductions you can to favorably offset anything you owe at the end of the year. Balancing You might be surprised how quickly your profits seem to disappear. Balancing what you put into your business versus what you get out of it is mind boggling at times. If you have employees, you have wages to pay out as well as other expenses for things such as marketing, supplies, inventory, shipping, and more. You may be under the false impression that you have more income that you really do based on what clients owe you rather than what they have actually paid, which can cause your finances to become imbalanced fast. When it comes to keeping your accounts positive and helping you stay on track with spending, an accountant can be a blessing for your small business. You hope that you have a home business that is so successful you have an income you can rely on. To protect your assets and your income, hiring a small-business accounting firm can be a wise investment for you. Whether you hire an accountant just to do your taxes or need someone to balance your books every month, an accountant such as Teri J Henderson, CPA, P.A. can keep your finances balanced and help keep surprises from taking your business...

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5 Tips For Keeping Your Finances In Order As E-Book Writer

Posted by on Jun 21, 2016 in Uncategorized |

If you have been able to quit working for another employer and work solely for yourself as an e-book writer, you need to make sure that you have your finances together. As an e-book writer, you are essentially running your own business with yourself as the sole proprietor, and you need to to treat your writing and productivity as a business. Here are four tips that will help you keep your finances together as a professional e-book writer. Get A Tax ID The first thing you need to do is get a tax I.D. for your business. That way, when you set up accounts with book sellers, such as Amazon or Barns & Noble, instead of providing them with your social security number and making that information more readily available for someone to gain unauthorized access to, you can provide them with the tax I.D. for your business. This will also help establish that you are running a business and will help you separate your business and personal expenses.  Open A Business Account Second, you need to open a business banking account. This will be the account where all of your earnings from your e-book sales will be deposited into. This will also be the account you use to pay any expenses related to your e-book writing career. Having all of your earnings and expenses come out of one account will help you keep better track of how you are doing financially with your e-book writing business.  Set Up A Pay Date Third, you need to make sure that you pay yourself. Set up a specific pay schedule for yourself, such as once a week or once a month. You’ll want to coordinate your pay date to line up with when you get paid from the various companies that distribute and sell your e-book.  When you pay yourself, you’ll want to make sure that you are also setting aside a set percentage of your income for state income taxes, federal income taxes, and self-employment taxes every payday. You should make quarterly payments for your state and income taxes.  Track Your Expenses It can be easy to feel like you don’t have that many expenses as an e-book writer, depending on the topic that you write on. However, all those little expenses add up, and they can be subtracted from your overall earnings, which will lower your income for the year. Set up a spreadsheet to keep track of your earnings. This spreadsheet should keep track of the following information:  Date Of Expense Amount Of Expense Payment Method Reason For The Expense Payee  Additionally, you should scan all your receipts and create both a digital and physical file so that you have a detailed recored for tax purposes of all of your expenses.  Your business expenses include anything related to creating e-books, such as payment fees for editing programs, subscriptions to industry magazines, software programs, and research expenses.  Set Aside Time To Keep Your Finances In Order It can be tempting to not keep track of your expenses and income, and just wait till the end of the year to do so. However, it is smart to sit down once a week and dedicate ten to fifteen minutes towards looking at your finances. This gives you a dedicated time each...

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Ready To Turn Your One Person Business Into A Small Business With A Few Employees? What To Know

Posted by on May 20, 2016 in Uncategorized |

If you have always been self-employed with your own business and you worked as a one man team, but you know you’re going to expand and create a larger business for yourself, there are some experts you want help from along the way. You want to make sure you are doing everything the right way, and it’s important to know your finances are in order. Here are a few things you’ll want to consider doing before you add more people to your staff. Employment Paperwork Sit down with a lawyer and create the necessary employment paperwork for the people that will work for you. These documents should include the details of their pay, their obligations as an employee, non-disclosure agreements, future non-compete information and more. The lawyer will know what is supposed to go into the documents, and make sure that everything in the documents is legal and binding. This makes hiring the employees less stressful, and you should have contracts that are specifically created for your business and industry of work. Payroll Taxes and Banking Doing the payroll and dealing with taxes and banking concerns can be very time consuming and confusing, especially if you don’t know a lot about the tax laws in your state. Hire a professional accountant, like Blueback Accounting, that specializes in payroll services for small businesses, so they can make sure that all taxes are being withheld from paychecks, and to make sure that you’re saving the right amount for taxes throughout the year. This can end up saving you from a lot of complications down the road. Workers Compensation Insurance Workers compensation insurance is great for protecting you financially against liability problems. You don’t want to get sued and lose your business because one of your employees has an accident while on the job, or because something happens to them that they try to blame on you. An insurance agent can talk with you about other coverage you’ll need when you take employees on. If you are ready to start making more money and you need to hire more professionals to work for you, make sure that you cover these three areas before you begin. Trying to figure all of these things out on your own can be difficult, and small errors can end up costing you big time. Hire the right professionals to work with you and start finding your new employees to expand your business right...

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Accounting For Your Retail Business

Posted by on May 10, 2016 in Uncategorized |

Do you run a small retail store? Is keeping up with the bookkeeping a struggle? If so, don’t feel bad. You know your business and can be successful with your sales, but you do not have to be an accountant, too. Outsourcing your accounting is smart business! Why Outsource Your Accounting? Letting a professional take care of your accounting will allow you more time to focus on sales. On top of that, here are some more benefits you will reap. As long as you have the funds, your bills will be paid on time. Your receivables will always be up-to-date and should you have past-due accounts, they will be dealt with. Bank statements will be reconciled in a timely manner. You will always have current reports such as: Profit and loss statement Balance sheet A budget, should you desire Budget versus your actual receivables and expenses Detailed account of your receivables Accounts payable aging Vendor reports Your merchant statements from credit card transactions will be reconciled and recorded for you. Sales taxes will be filed. Your accounting professionals will handle tax filings for any taxable business property you have.   Come tax time, you will be presented with accurate information including year-end adjustments such as depreciation on qualifying assets. Your taxes will be easy to file. No more last minute scurrying around, trying to find everything your accountant needs. You Still Have Control You will work with the accounting service to set up a plan that works for you. If there are any aspects of your bookkeeping that you would like to retain in-house control over, you should be able to. For example, if you want to continue paying your bills, you should be able to do that. You may want to ease into relinquishing tasks over time. Your accounting service might use a web-based software that allows you to have access at any given time. Any bookkeeping tasks you have retained can be completed online. This gives you and your outsourcer the ability to see what each has done. If you are like many retail business owners, you spend time after hours working on your bookkeeping. Imagine not having to do that anymore. You deserve to be able to focus on your customers and selling during business hours, and you deserve to have free time when your store is closed. Why not outsource your accounting to a professional service and get back to doing what you enjoy and do best? Contact a company like Broutman & Co., P.C. for more...

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Middle-Income Earner? 5 Tax Planning Strategies You Can Still Use

Posted by on Apr 26, 2016 in Uncategorized |

Are you worried about your tax bill but don’t know what to do about it? Strategic tax planning isn’t just something for high earners or the inherently rich. It’s also something that middle income families can put into practice to lower their tax costs. So, what strategies can you do in your own situation? Here are 5 tips to help lower taxes both now and in the future. Use Tax-Advantaged Accounts. This is an obvious first step, but it’s one that not enough taxpayers take advantage of. By contributing the maximum amount to your employer’s 401k, you can reduce your taxable income and receive the most amount of company matching funds possible. In addition, many middle-income earners can also contribute to an HSA (Health Savings Account), IRA (Individual Retirement Account) and/or a Roth IRA. Traditional IRAs help reduce your taxable income now, and Roth IRAs create tax-free income during retirement.  Know Your Tax Brackets. The United States tax system is progressive — meaning that you pay more taxes as your income increases. By knowing when your income level will trigger a higher percentage of taxes, you can stay under these limits. You should also know the earnings limitations on any tax credits or deductions you receive. For example, by knowing that there is a higher investment tax (the Net Investment Income Tax) for filers who are married and earn more than $250,000, you can avoid paying this extra tax by keeping your taxable income under this threshold.  Max Out Deductions. Itemizing your deductions instead of taking the standard deduction is a great way to reduce your taxable income. However, many filers don’t accumulate enough deductions to itemize each year. Avoid this problem by making strategic purchases and donations. For example, if you don’t always have enough medical expenses to use them as a deduction (the minimum amount of medical deductions is 10% of your income), combine any voluntary medical expenses into one year instead of two. You can often do the same with charitable deductions and unreimbursed employee expenses.  Look for Tax-Free Investments. Most investment income is fully taxable, but there are some on which you don’t have to pay taxes. One of the easiest nontaxable investments is municipal bonds. Many such bonds are not taxed at the state level, at the federal tax level or both. You can also sell underperforming stocks before the year ends to claim the losses against your normal taxable income.  Gift Assets. Rather than giving money to family members or children, try gifting assets — especially income-producing assets — instead. For example, if you give stocks or bonds as a gift to your elderly parent or young adult child, this gift is nontaxable to you and can reduce your future income. And since many people who receive family financial help are in a low tax bracket, the money will be taxed less than it would as your own income. Be sure to keep your gift under the annual tax exclusion amount ($14,000 for...

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Haven’t Filed Taxes Lately? Don’t Panic! Here’s What To Do Next

Posted by on Apr 18, 2016 in Uncategorized |

As the end of each tax season approaches, tax preparers get a lot of questions from worried or procrastinating taxpayers. One of the most common is what to do if they haven’t filed taxes in recent years. Once you miss a year filing your income taxes, the problem can often balloon into several years and may become overwhelming. The good news is that it’s often not as hard or as expensive as you may think. Here’s a handy guide to filing prior years. Where to Get Your Information If it’s been more than a year or life has been hectic, taxpayers often cannot find their W-2 or Form 1099 information. You can still file by collecting these documents again. If you have several years to file, focus on putting together the most recent 3 calendar years’ worth of documentation. This is because you forfeit any refunds if you file more than 3 years late.  Start by contacting employers from the year in question if you can remember all of them. Call your brokerage companies or use your online accounts to locate tax statements for any taxable investment accounts. Do the same for college tuition expenses and student loan expenses (if applicable).  If any employers have dissolved or you cannot locate contact information, you can then turn to the IRS for W-2 information. The IRS gets copies of all W-2s and Forms 1099 sent to you, so you can request a copy of these directly from their website. Due to recent security problems, you will have to wait for copies to arrive by mail. If you’ve moved since your last tax return was filed, either change your address or use Form 4506-T to request your transcript be sent to a different address.  If you were self-employed or have other income, you may need to rely on your own records to determine income and expenses. This can involve looking at bank statements and credit cards statements from prior years. Reconstruct mileage by using records of jobs you did. Check with vendors to see if they can provide copies of sales receipts for large business purchases.  How to File Now that you’ve gathered as many records and information as you can, it’s time to get it filed. You will likely need to consult with a professional tax preparer to do this for two reasons: first, it can be difficult to find do-it-yourself software that can file prior years and secondly, you may need further help reconstructing past information.  The good news is that most taxpayers can use a regular tax preparer to file missing years and will not need to pay a tax attorney or even a CPA. Unless you haven’t filed for more than 7 years, have unusual tax situations or need to respond to IRS audit paperwork, you should be able to file with any qualified professional. For more information, contact HBE Becker Meyer Love LLP or a similar...

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