Friday, April 1st, 2022
It makes sense to consider Hiring an Accountant for year-round provision, rather than just at tax time. There are numerous benefits of hiring a year-round accountant for your business, and the cost is a prudent investment to make in your company, brand, or business.
Some benefits of hiring a year-round accountant include:
Managing Money
One of the specialized accounting services that accountants offer is money management. When you are in business, how you manage money can make or break your success. An accountant is a shrewd and smart resource that can help you manage money well.
Business Planning
The first step in starting a business is typically a business plan. Consult with an accountant for their input at this very critical phase of your company. An accountant can help outline the financial parts of the plan- and make sure that your investment is a pragmatic one with potential returns. They will be able to explain and navigate the processes associated with business loans and financing, too.
Setting-Up
Just getting started? An accountant can make sense of a wide range of bookkeeping responsibilities that you may not even realize you have. You will need to set up an accounting system and appropriate accounting software to implement this. An accountant can make the transition for you.
Growth
You may find that you are in over your head trying to maintain books as your company grows and becomes larger. An accountant can set-up payroll, benefits, and reporting systems so that it runs smoothly as your business burgeons. They may also advise you as to the best strategies to keep your company fiscally healthy.
Retirement
An accountant is an excellent ally when you are planning retirement. They can help you prepare in the years, months, or weeks leading up to leaving your job, and help advise you on your retirement plan options. They may also be able to guide personal investments that can grow and mature into your retirement savings. If selling your business in order to retire, they can be an invaluable resource during that often-complex process, also.
Tax Time and Audits
Naturally, you want an accountant on your team at tax time. An incidental audit can tie you up for weeks and cause you undue hassle and headache. Accountants are familiar with the process and can stay abreast of the most recent tax info that might make a difference for you at year’s end. Let your accountant deal with the IRS and you can focus on your business.
Consider the benefits of having a year-round accountant and talk to the professionals at BMH Accounting to learn more. From specialized accounting services to a tax time audit, don’t go it alone. Rely on the expertise of a reputable accounting firm; call to learn more today.
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Tuesday, March 15th, 2022
When it comes to Tax Planning, being proactive pays. Being vigilant and precise with your tax reporting and expenses can minimize your tax liabilities- and save you money at year’s end. Tax prep and documentation should not be something that only occurs at tax-time; proactive tax planning is something that happens year-round to avoid nasty penalties and maximize deductions.
Some tax planning tips include:
Provide Proof
Prepare to be vigilant about keeping track of business expenses- which can be a bear! A good rule of thumb is that if you plan to deduct an expense, you will need some sort of proof of the purchase, like a receipt, invoice, or canceled check. You can also use bank records, if needed, to document purchases related to business that you do not have an actual receipt for when it comes time to complete or file your taxes and reports.
Document Diligently
Always save invoices or receipts for all your business-related purchases. It helps to write and attach a note explaining the purchase for documenting later, when you may have forgotten the specifics surrounding the expense.
Segregate Accounts
Make sure to keep personal accounts separate from business accounts whenever possible. It can make accurate record-keeping nearly impossible and you could suffer by missing out on certain business deductions this way.
Classify Carefully
Don’t misclassify your workers as the income-tax withholding and employment taxes are quite different. While you do withhold federal income tax and FICA taxes from your employees, you also are responsible for unemployment taxes and your own share of FICA. When you are dealing with staff that are actually independent contractors, you are not required to withhold taxes, making the individual responsible for their own self-employment tax liability. This also eliminates the need to pay separate FICA or unemployment taxes. Talk to your accounting professional to learn more.
Pay Promptly
Pay the employment taxes that you collect from the wages of your employees and staff for federal income tax and FICA (Social Security and Medicare) taxes promptly. The IRS is not tolerant of delayed payment and noncompliance penalties can be severe.
Industry experts offer tax tips for small businesses, including that you need to be careful and cautious when making tax deductions. This may look suspicious and trigger an audit, further reinforcing the need for organized documentation. The IRS frequently assesses business tax deductions, like vehicle use and travel expenses, to ensure you are sticking to their guidelines and limits.
Consider Hiring Help
Take the worry out of your business taxes with some professional help from BMH Accounting. If you own or operate a company or brand, outsourcing your financials and tax reports to a certified accountant makes good business sense. Don’t risk penalties and fines by going it alone; hire a tax professional today.
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Saturday, January 15th, 2022
When it comes to employee reimbursements, you must be careful that they comply with current tax law and IRS tax regulations. If not documented and posted correctly, expense reimbursements may get confused for income, which can create a mess. Furthermore, when your staff struggles for prompt and accurate reimbursements, it can create hostility and angst at the workplace; make things a lot easier with the services of a tax or accounting professional and a solid accountable plan.
Employee Reimbursements
Using an accountable plan to document and pay employee expense reimbursements means that the payment is not part of your employees’ wages which makes them exempt from taxation, like federal income or employment taxes. This has benefits for both the employee and your company, as well. If you choose not to use an accountable plan for reimbursements, the payments are subject to taxes and considered part of your staff’s taxable income.
Business Connections
Remember and remind employees as needed that each reimbursed expense under your accountable plan needs to be connected to business; the definition of a business connection is that it is a legitimate expense- allowable as a deduction- and covered or incurred by your employee while they are performing services, tasks, or work for your company. Some examples might be hotel accommodations during a business trip, meals during work-related events, or gas driving to job sites or to visit clients. These expenses should be easily documented with receipts, bills, or statements.
Employee Accountability
Depending on the accountability system that you have in place for your Employee Reimbursements, it is key that a paper-trail documents the expenses and that any excesses are accounted for and paid-back. There are some IRS guidelines that can be adapted and adopted to your workplace- or you can set your own parameters for reimbursing employees quickly and also tracking expenses accurately. It is key to keep these matters clear and concise for when tax time rolls around.
Prompt Payment
Just as it is important for your employees to substantiate expenses promptly, it is important that you do what you can to expedite reimbursements, too. A reasonable time frame for substantiation of expenses is within 60 days, and any overage should be paid within 120 days, in most cases.
Tax Tips
- Your employees may deduct their work-related expenses, but it requires itemization.
- The deduction for these expenditures is limited to the amount that is more than 2% of their adjusted gross income.
- Make sure that your reimbursement arrangements meet IRS requirements for an accountable plan, which may have potential tax advantages for you.
The safest way to deal with employee reimbursements is with a reputable and reliable tax or accounting professional. Talk to the experts at BMH Accounting to learn more and escape the worry surrounding employee reimbursements.
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Wednesday, December 1st, 2021
If you own a small business, you know the importance of tracking your finances and expenditures. This provides a clear view of your cash flow, while also increasing your ability to make efficient and cost-effective business decisions. One way to do this is with QuickBooks; QuickBooks is the most common accounting software program among small businesses for several reasons:
Time
QuickBooks is a program that connects and syncs with your bank and business accounts to help track the flow of money in – and out – of your company. It eliminates the rigorous job of entering data and updating ledgers that can take time away from other important tasks, like managing your business. QuickBooks provides the ability to itemize and categorize, making it easy to use and implement.
Intuition
It is fascinating how intuitive QuickBooks is; the program gleans which categories are most used and automatically categorizes your popular entries. Pay your bills, compile mileage, manage any contractors from the comfort of your keyboard with the QuickBooks accounting program. You may also be able to garner ways to save money by assessing where your revenues are going, which can put more money back in your company.
Reports
What good is the information gained when tracking if you can’t read or understand it? Don’t worry; QuickBooks offers various reports for businesses to gain a new insight and garner control over their finances. You will be able to review profit and loss statements, customer history and invoices, outstanding bills or accounts, stock and inventory reports. This puts you back in control of your company’s money, which can prove invaluable as you prepare and plan your operating budget and project your business revenues. Even better, you have the option of readable, summarized reports with as much detail, graphics, and information as you choose, which may help when comprehending the information that you see.
Taxes
Stressed about trying to complete your company’s taxes? QuickBooks can make this necessary process a whole lot simpler and more streamlined. Since you are tracking daily sales, invoices, and expenses, it is easy to transfer this information to tax forms and vital documentation. QuickBooks offers options and products that serve to solve tax time dilemmas for consumers, from small businesses that are struggling to gain traction to established brands with a loyal consumer audience and following.
The most important data in a new company is likely the flow of finances; make sure that you are tracking these expenditures accurately, using a program that is user-friendly. Regardless of what you do, your revenues and profits are paramount in daily operations as well as in long-term growth and success.
Ready to start tracking your company’s finances? Start with QuickBooks and reach out to BMH Accounting if you find yourself in need of any of our extensive QuickBooks services!
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