Proactive Tax Planning is Key to Avoiding Tax Liabilities

Friday, November 15th, 2019

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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Tracking your Finances? Try QuickBooks

Wednesday, July 31st, 2019

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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