Blue Slate Accounting

IRS Found Squandering Inflation Reduction Act Funds

Sat, 31 Aug 2024 17:00:19 GMT

Some tax changes are welcome.

Others promise but deliver far less than originally pledged.

Those with the potential to affect your daily operations are sometimes concealed within a fog of questions. One such measure hit the newsstands in 2022.

The Inflation Reduction Act (IRA), a reduced version of Biden’s “Build Back Better” plan, deserves an unbiased review.

As a small business owner myself, I want to help you sift through the legalese. And “government-speak.”

By the time that we wrap up, I’ll have illuminated the impact of this legislation.

IRS Use of Inflation Reduction Act Funds Questioned

The Internal Revenue Service (IRS) has sought to improve their image.

Obviously, something like this takes time. While grace can be extended in certain areas, it shouldn’t be applied too liberally.

Along those lines. Treasury Inspector General for Tax Administration (TIGTA) issued a report on its use of Inflation Reduction Act funds.

Their stated goal was to review the IRS’s methodology. And their stewardship, or lack thereof, of funds designated for the agency.

They found that taxpayers making less than $400,000 are still being audited.

Despite Secretary of the Treasury Janet Yellen seeking to limit the application for small business owners 2 years ago.

Talk about government efficiency.

Mandates around Coronavirus ravaged small business America . Even supposed government bailouts like Small Business Administration (SBA) funds couldn’t keep it above water.

Partly because non-qualifiers appropriated funds in actions deserving of fraud charges. But more because the reaction from health regulators was so extreme.

Those who did survive now have to deal with this news.

Last month the White House issued an official statement which contradicts the TIGTA findings.

They stated that, “the IRS is adhering to Yellen’s commitment to not increase audit rates relative to current levels for small businesses and Americans making less than $400,000 a year.”

TIGTA does have more on the line than Biden’s administration for making any false claims.

As an intelligent reader, I’ll simply let you decide which party is more believable.

But just remember one thing. Applying critical thinking requires the acceptance of evidence-based statements over non-evidence-based ones.

Next, it’s worth breaking down the pieces that make up the act.

Inflation Reduction Act Explained

Legislation isn’t written in layman’s terms. Nor is it ever a short read.

So, I’ll only pull out the information you need to know.

Back in August 2022, the IRS was earmarked $80 billion. $45.6 billion going towards enforcement .

Key details:

Clean energy support
Climate action
Tax incentives
Production and infrastructure
Economic growth and job creation

Breaks on taxes apply to several of the particulars listed above. Supporting the overall marketing message coming from the White House.

For our purposes, let’s zero in on a specific tax enticement:

Implementation and compliance

Yellen had specifically directed the IRS that, “enforcement resources will focus on high-end noncompliance.”

Once again, that statement aligned with the professed goal of “taking from the rich and giving to the poor.” To borrow a line from Robin Hood.

Which allowed the Act to quickly pass through the halls of our law-crafting bodies.

Targets:

Large corporations
High-net-worth individuals
Complex pass-throughs

The IRS apparently wouldn’t make it in marketing. Because they missed their target market. And as stated earlier, continued to audit smaller operations.

Beyond poor targeting efforts, this has led to decreased efficiency in relation to overall tax investigation. Which Yellen shared in her 2022 letter was 7,500 annual audits out of more than 4 million returns. Or a dismal .2%!

Around family tables and office water coolers swirls discussion around responsibility. After all, inflation doesn’t magically appear out of thin air.

Now is the time to put that debate to rest.

Who is Responsible for Inflation?

First, I need to define the term.

One way to describe it is “the value of your cash in relation to services and goods you can purchase with it.” Supply and demand factor in.

Currently, with demand greater than supply, prices have significantly risen.

Now I can move into where responsibility for it lies.

The answer to this question may depend on a few variables:

Your source of news
Your understanding of economics
Your level of government trust

Because this is fluid, I’ll focus on what we know for sure about the Inflation Reduction Act 2024.

Main contributors:

Federal Reserve
Federal policies

The latter involves all houses of the government. House of Representatives, Senate, and President.

Process:

President presents his budget to Congress
House and Senate decide on funding bills
President signs those into law

Tariffs, trade policy, and deficit spending are other contributors. Not all of them are squarely decided by the executive branch.

Although his power to influence extends deep into each area.

According to the Congressional Budget Office, deficit spending was 6.3% of our GDP in 2023. Eyebrows understandably raise at this number because over the last 50 years, the average was less than 4%.

Why is this bad?

Artificial demand is created as the government borrows from the future. To pay for today’s expenses. Imagine applying this concept to your personal finances.

Say you have debt. You incur more to make payments on what you owe currently. Creating more debt and compounding the original problem.

Doesn’t make much sense. But hey, the government normally just does what it wants.

I want to close by giving you an advocate should the IRS come knocking.

Blue Slate Accounting Tax Resolution Specialist

Something is missing from the accounting field.

A human approach to personalized tax resolution services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

Advocacy Seeks to Extend Your Qualified Business Deduction

Thu, 15 Aug 2024 15:37:12 GMT

Running a small business is exciting.

It's full of twists and turns. Guaranteeing that dullness stays far away from your workday.

However, it does present its own set of challenges. Both from outside and inside the business.

An external hazard has recently presented itself and I want to address it. So, you can prepare and plan accordingly.

Read on my fellow small business practitioner.

Qualified Business Income Deduction Meaning

The qualified business deduction (QBI) applies to the final value of items from business income, loss, gain, and deduction.

Examples:

Individual health insurance
IRA contributions

Non-examples:

Dividends from non-business investments
Capital gains or losses

Not every company can adopt the QBI, although I'm sure everyone would like to.

Applicable businesses:

S-Corporations
Sole proprietors
LLCs
Partnerships

Most, if not all, have paid staff. The one exception is sole proprietors who aren't quite ready to outsource.

Within those structures, there is an additional financial qualification.

Filing Individually

Income less than $182,100

Filing Jointly

Income less than $364,200

Data from ZipRecruiter shows that the average small business operator falls into this range. The highest paid live in New York ($143,878), while the lowest paid in Florida still make out well ($96,936).

Other variables like cost of living and income tax laws may equate to tight family budgets despite this solid earning. As such, every possible break is welcome.

One major benefit of the qualified business expense deduction stands out. Enabling small businesses to enjoy tax savings which can then be reinvested. Either into the business or employees.

Possible reinvestment areas:

Strengthening your professional development
Adding to your internal or outsourced staff
Opening new channels for digital and traditional marketing
General improvements to your venture

My guess is that you aren't in business simply to say you are. But rather to become a well-respected market leader. You can achieve this gradually. Or you can reach this coveted position sooner by using every possible advantage .

Next, I want to briefly identify a few components of this allowance.

Deduction Characteristics

Without dragging you into the "tax weeds, there are two attributes worth noting.

More than one 20% figure
Itemization isn't a prerequisite

Taxable business income isn't the main recipient of this reduction. Total taxable income can also experience a positive net effect.

Here's how. Using your Schedule C, list income and expenses per your usual. Then calculate adjusted gross income via Form 1040. After those steps are complete, figure out your pass-through deduction.

Should you adopt the standard deduction, you can still claim the QBI.

My purpose in sharing these points? It's hopefully to show that you shouldn't rule out this tax write-off if the qualifications cited earlier don't apply.

Your best way to confirm this and any other abatements is through a professional review .

Reasons to work with an accountant:

Support during an IRS dispute or audit
Provide effective tax planning strategies
Multiply available credits/deductions

Family and friends can encourage you through the adversity from IRS scrutiny. Couple that with an advocate to work on your behalf in resolving an open case.

Your strategy for taxes should evolve with any updates to tax laws. A well thought out attack plan saves money and increases the likelihood of breaking even. Translating to more cash flow, the fuel for your operation.

Accuracy, compliance, and significantly less stress are a few more arguments in favor of these folks.

The breaks you have access to will depend on your geographical location. Rather than having to devote extra time to research, your accountant will present an applicable list that your state grants.

Unfortunately, this valuable aid to longevity and growth may be ending.

Qualified Business Deduction Phase Out

Set to expire in 2025, the removal of your qualified business tax deduction will ultimately hurt the overall economy.

But not if the National Federation of Independent Business (NFIB) has anything to say about it. Their advocacy seeks to make it permanent.

Via the Main Street Certainty Act (H.R. 4721 / S. 1796).

Backers:

Lloyd Smucker (R-MO)
Henry Cuellar (D-TX)
Steve Daines (R-MT)

Their opinion on the importance of this legislation is something I share.

COVID devastated our peers. According to a combined project from two top universities, almost 30% of small businesses closed in 2020 alone.

A new threat to the survival of the remaining 70% exists in the end of this tax break.

Rural areas will see the most immediate impact. Because local economies lack the extra cushion that larger ones in cities enjoy. Namely, in the greater number of businesses present in urban environments.

But metropolitan centers won't be immune from the negative effects.

Critics of the proposed Act inaccurately claim that the QBI is a tool of the wealthy. Or those making over $400,000 annually.

Lots of small business owners would love to make that much each year. But they simply don't.

Their contributions don't stop at boosts to regional economies. Adding local jobs. Supporting youth sports teams.

Without tax savings, these same ventures might have to let go of employees.

NFIB also found that 81% of owners see the QBI as integral to their business health.

Before you go, know that there's a way to protect your business from ever-changing tax laws.

Blue Slate Accounting Managing Your Qualified Business Expenses

Something is missing from the field.

A human approach to business tax services. Zelienople, PA is our home, but we’ve worked with SMBs across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your business tax needs today. And take the first step towards reclaiming your joy and happiness!

Crowdstrike Outage Minimized via Manual Accounting

Wed, 31 Jul 2024 18:22:51 GMT

"Steve, did you verify that the update is free of bugs?"

Slowly glancing up from his video game, Steve noticed the irritation on his boss' face.

He thought about munching the Cheetos in his hand but decided against it.

"Umm, of course Ralph. Just call me the Exterminator. You know because any bugs ran for the hills."

Shaking his head, the frazzled leader exited. Not knowing the chaos he could have averted if he'd verified Steve's assertion.

Keep reading to find out what IT updates has to do with accounting.

Fallout From the Crowdstrike Outage

Our over reliance on technology finally caught up with us. Courtesy of the Crowdstrike debacle.

Affected industries:

Airlines
Healthcare
Financial services
Government
Media
IT

Direct losses are estimated to be $5.4 billion for Fortune 500 companies. Delta Airlines alone lost $500 million. The loss in consumer confidence is much harder, if not impossible to quantify.

Whether you believe it was intentional or not, one fact remains. It rocked our world.

Thankfully, our IT specialists had previously chosen not to use Crowdstrike. Preventing full reliance on Big Tech infrastructure.

And allowing us to serve our clients with minor interruption during the global outage.

Which leads me to the crux of this article.

Traditional ways of conducting business still have a place. And a valuable one.

Confirming taxes or accounting by hand for example.

Of course, accounting software is a great support for this task. Xero is our personal favorite.

But it should never be a substitute for good old-fashioned number crunching to authenticate everything.

Let's say your accountant fully depends on technological solutions.

How an extended downtime could affect your business:

Revenue and productivity decline
Unable to pull up files or data
Interruption to your financial dashboard

That only matters if your meeting with potential investors is later today. And you don't have access to the figures you need.

Or several other scenarios.

Continuing on, I'll explain why "old fashioned" is better than whatever is popular at the moment.

Traditional Accounting Benefits

Let me introduce you to the concept of manual accounting.

Where transactions are recorded with a greater purpose in mind. Displaying and backing up the financial health presentation you give to key stakeholders.

Prior to the advent of accounting software like QuickBooks Desktop, this type of work was done by hand. In our case, we keep multiple backups of all:

Documents
Reports
Accounting files

It's methodical. And having another set of eyes double check everything safeguards against major blunders. You know, the expensive kind.

Advantages:

Error correction through double entry accounting
Extra confidence that data is indeed valid
Access to accounts during internet or power outages

Through this system, avoidance of errors is a very real possibility. When debits and credits don't match, there was an error made. An experienced accountant can then go back and remedy the discrepancy.

By using human critical thinking, you cut down on errors from computer-based data. Such as mistakenly using an older version of a file. Or coming across a digitally damaged file.

The top reason for partnering a longer-established method with its technology-based version? You will always have a way to glean insights from the financial activity of your business. Even when somebody "forgets" to do the right software update.

Time isn't always money. Unless customers choose your competitors, who have more reliable solutions. And aren't prone to service outages.

Now to address the elephant in the room. Or the fly on the wall.

Physical records are at risk from fire, flood, and other damage. That's an obvious fact. But this doesn't negate the reasons to have such a backup system in place.

Perks far outweigh any drawbacks.

As we start to land this delayed plane (too soon?), there's a topic we can't simply breeze past.

Responsibility to Protect Your Business

Fortune 500 companies will bounce back. Because they can afford to.

Of course, they'll be layoffs and upset board rooms. But eventually it'll get back to business as usual.

It's another story for small business America. Aka the lifeblood of our economy. And your main means of providing for yourself or a family.

Like what we saw during COVID, more shuttered doors will start popping up. Including that community fixture that you assumed would weather any storm. I wish it wasn't so.

The good news is that your venture can avoid this scenario. And not merely survive the next worldwide fiasco but thrive during it.

Taking off my accountant hat for a minute, I want to speak to you as another member of this fraternity.

My suggestion is to strike a balance between proven and unproven tools. I'll explain more.

Take artificial intelligence for example. There may be some use cases for it, but don't rush to fire your human content writer. Why?

Programmable machines speak best to programmable machines. And people speak best to people.

Since the latter buy your products or services, keep the flesh and blood writer.

In the same way, investors want assurance that your numbers are legit. Saying a machine believes so won't work.

Remember that these folks are ultimately investing in you. Not what you sell.

Give them confidence through accounting verified by hand.

To conclude, there's a way to ensure that your certainty is well placed.

Blue Slate Accounting Supporting Small to Mid-Sized Businesses

Something is missing from the accounting field.

A human approach to personalized business services. Zelienople, PA is our home, but we’ve worked with small to mid-sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

Expect tailored recording from your personal Blue Slate Accounting team member:

Inventory adjustments and COGS calculations
Posting and verifying all financial transactions
Pre-paid income/expense tracking and posting
Basic or customized financial reporting
Matching receipts to bank and credit card statements
Bank account, credit card, and loan reconciliations

We provide a quick, realistic weekly snapshot of your cash flow. Allowing you to make informed monetary decisions.

Outsource your accounting solutions today. And take the first step towards profitability and contentment in your business.

Small Business Bookkeeping Success Through a Profit Focus

Mon, 15 Jul 2024 23:57:45 GMT

Your profits are allowing you to provide for loved ones, pay staff, and save for retirement.

I applaud you for that. But I also have a challenge.

Stop listening to mentors and the culture saying, “It’s not enough!”

Trust that your hard work and sacrifice has paid off.

You don’t have to be Amazon for long-term success to mark your business. Besides, Amazon has plenty of issues which aren’t worth imitating.

Read on and I’ll explain a step to confirm that you’re doing a lot right.

How Often Do Small Businesses Get Audited?

Small business bookkeeping can unleash the floodgates of healthy cash flow .

However, an audit can put a Hoover Dam in the way. Nothing is getting past that beast of a barrier.

Various factors increase the likelihood of your books being scrutinized.

Triggers:

Returns full of errors
Rounding all your numbers up
Too many vague expense categories
Misuse of home-office deduction
Failure to depreciate startup expenses
Intermingling personal and business accounts

Our federal tax agency likes inaccuracy even less than your typical accountant does. When your return contains abundant mistakes, the eyes of their employees are drawn to them.

Remove all distractions (silence your phone!) when inputting figures. Please also remember to double check everything before hitting “submit.”

If you’re unclear in sharing your costs, it’s also a red flag.

A typical vague category for expenses is labeled “miscellaneous.” Without adding an explanation in your return, expect eyebrows to raise at the IRS.

Sometimes this classification is selected because it’s quicker than determining the proper category. But shortcuts are not recommended when filing.

In fact, the less work you can create for them, the better. I know from experience.

Another key trigger is blending two separate accounts.

One solution to avoid mixing funds is to use accounting software.

You and your team don’t need to be financial experts to understand the generated reports. Coordination in real-time also becomes smoother. And should your business grow, extra features can be added. Without a need to research and adopt another tool.

Because we all know how difficult it can be to get staff excited for new technology training. It’s right up there with reading the on-boarding manual.

Moving on, I want to make bookkeeping in small business a breeze for you.

How to Do Small Business Bookkeeping

I don’t intend to overwhelm you. After all, you have plenty on your plate already. So, I’ll simply offer beginner small business basic bookkeeping here.

But first, I want to share when handing off the books makes sense.

Reasons to outsource:

Early warning sign detection
Accurately judge marketing results
Remove the temptation for debt
Free up time for revenue generation
Determine your financial health quickly

Of these, two reasons stand out in terms of importance. Identifying problem areas and getting back more time for profitable efforts.

Here’s why you want to fill process gaps early. Letting them go unchecked could affect your bottom line. Cash flow. Or any number of other valuable metrics.

Lean Six Sigma is a system to remove these unnecessary variations in processes. Getting rid of waste and boosting your fiscal health. Offering staff training in this methodology is one option. The other is working with an accountant.

Entrepreneurs like yourself get in “the zone” when you’re able to focus on bringing cash into the business. There’s only one problem. You keep finding yourself adrift in an ocean of numbers.

Outsourcing throws you a lifesaver. Forget that. It delivers a boat.

Getting started:

Business banking
Accounting tools
Records safekeeping
Bookkeeping audit

These four basics will provide a nice launchpad for becoming the top business in the Milky Way. That’s right, in the entire galaxy. Why limit your dominance to your town or county? Aim higher!

As I start to wrap up, let me tell you a relatable story.

Accountant Swimming Upstream

You and I are in the same boat.

Well not literally. Open water and I don’t mix.

But figuratively in a surprising way.

Former advisors offered me the following plan:

Open multiple offices
Create extra divisions
Hire staff like crazy
Then you’ll have “made it”

Traditional business wisdom would call this guidance solid and worth following.

There was just one problem with that advice. Okay, three problems.

No mention of profit, personal happiness, or helping my clients succeed. That’s where our definitions of accomplishment diverged.

In a big way.

After all, it was my conscious that would have to be seared. Not theirs.

I couldn’t even comprehend neglecting the most important asset for my business. Customers.

Does this sound like what others have told you?

The picture of a self-made entrepreneur has been drilled into our psyche. We’re told the customer is there to pay your salary. You don’t need any help to reach the boardroom in a soaring skyscraper.

That is complete rubbish.

To be totally honest, it’s a recipe for losing your identity as servant to your community. And bettering society.

You don’t need an IPO or billions in revenue. Your business is growing at the right pace. And here’s something else. You are already successful.

Stop believing the lie.

This isn’t meant as some sort of self-help, touchy-feely support from an accountant. It’s encouragement from a fellow believer in true capitalism. And the American Dream.

Now it’s time to cover a resource for verifying what you know deep down inside. But aren’t being told by the so-called experts.

Blue Slate Accounting Small Business Bookkeeping Help

Something is missing from the bookkeeping field.

A human approach to personalized business services. Zelienople, PA is our home, but we’ve worked with small to mid-sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

Expect tailored recording from your personal Blue Slate Accounting team member:

Matching receipts to bank and credit card statements
Bank account, credit card, and loan reconciliations
Applying customer payments to in-house generated invoices
Accounts Receivable tracking and invoicing services, including reminder letters
Accounts Payable tracking and bill payment services

We provide a quick, realistic weekly snapshot of your cash flow. Allowing you to make informed monetary decisions.

Outsource your bookkeeping solutions today. And take the first step towards profitability and contentment in your business.

Tax Help for Small Business That Actually Fulfills Its Promises

Sun, 30 Jun 2024 23:09:18 GMT

Imagine that your house was towed away.

Goodbye home sweet home.

Okay, it’s obviously a made-up picture. But bear with me.

Just like defaulting on a car loan leads to repossession, owing the Internal Revenue Service (IRS) can end with a similar outcome.

Online ad-targeting may be presenting you with alleged solutions. If so, tap the brakes for a second.

Before you finish reading, I hope to convince you of a better path forward.

What is Tax Resolution?

When you have a debt with the IRS, it’s the process of reducing your obligation. A complicated procedure for sure.

But one that a tax resolution specialist handles every year.

Experience may vary, but there are general steps that they guide you through:

Initial examination for determining the ideal response
Necessary documentation is organized and your tax status is relayed
Negotiations take place between the IRS and your counsel
Services are paid for once your case is brought to a favorable end

People don’t just wake up one day and find themselves duty-bound to the government. There are decisions that add up over time. Or several indecisions.

Sometimes, life just happens. A death in the family. Financial struggles in a business.

Regardless, there are obligations to meet. But simply getting started can feel like an imposing mountain. A Mt. Everest of liability.

Stress that you’re likely dealing with:

Back taxes
Tax lien
Bank levy

Add to that high inflation. Plus, a lack of affordable housing. And you get a recipe for gloom.

The IRS is notorious for inefficiency. Except when it comes to getting paid.

And with a massive influx of funding for new agents, expect collections to accelerate.

Bummer.

But I encourage you to keep your head high. In the following sections, I’ll explain why.

Tax Help for Small Business

Direct File is the pet project of the IRS. The Treasury Department estimated that $5.6 million would be saved in 2024 tax prep fees.

The agency used findings from its pilot program to forecast into the future.

2025 tax season and beyond:

Cover additional filing situations
Extend invitations to 38 more states

Commissioner Danny Werfel is asking Secretary of the Treasury Janet Yellen to make it permanent. Although he stated that it’s not a complete substitute for professional tax aid.

This method for tax help with IRS returns was criticized in January.

13 Republican attorney generals sent a letter to Yellen with their concerns. Especially looking out for vulnerable citizens.

Specifically saying that there was an “obvious conflict of interest when the IRS acts as tax preparer, filer, and auditor.”

To pull a related example from the technology field, allow me to present Google. Antitrust cases and lawsuits seem to follow them everywhere they go.

It’s because they control online advertising, search, and news. Their position is extremely profitable but questioned as favoring their own self-interest. Not that of the individual internet user.

Replace Google with the IRS and you can see the attorneys issue.

There are situations where “free” options don’t make sense. And an expert touch is beneficial.

Cases:

Audit representation
Tax penalties
Unfiled returns
Paying back taxes

As a tax specialist, I normally recommend payment plans and installment agreements. Over Offers in Compromise (OIC).

Types of installments:

Guaranteed
Streamlined
Partial payment
Non-streamlined

Next, I’ll explore why your case should be handled by a pro.

Why Outside Tax Resolution Services Are Needed

Misleading marketing can lead you to believe that tax software is the answer to all your woes.

TurboTax is one example. Found to have violated the Federal Trade Commission (FTC) Act, their parent company Intuit is in hot water.

Don’t forget about their main competitor H&R Block. Since February, the pending case has been marinating before FTC regulators.

Because of this controversy, count the costs before adopting these applications.

Now let’s look at some meaningful statistics directly from the IRS:

It can be expected that almost 5% of Americans won’t file each year
In 2020, the total number of tax liens was 291,081

A tax lien is a claim on both assets and property at the federal level.

Two ways to remove this obstacle:

Fully pay the money you owe to the agency
Reduce your long-term payment plan in a timely manner

Other tax specialists and I normally are called on after notice is received. But as with most tax resolution situations, timely action is advised.

Dealing with the IRS is super low on most people’s order of enjoyable activities. Working with an outside party removes this anxiety.

Through a power of attorney (POA), we advocate on your behalf.

Beyond representation, other rights granted to us:

Dispute application of the law and facts
Accept delivery of notices and communications
Collect specified tax documents/information

Wrapping up, it’s time to finally rid yourself of this burden.

Blue Slate Accounting Tax Resolution Specialist

Something is missing from the accounting field. And no, it isn’t incomplete records.

It’s a human approach to personalized tax resolution services. In the age of artificial intelligence, it’s even more needed.

If you want to know the truth, it’s one of the reasons we opened in the first place. To re-insert humanity into the industry.

Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments. A highly prized state to be in.

We’ll never do anything illegal, just whatever we can to save you money!

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

Basically, anything unamazing hanging over your head. In terms of taxes at least.

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Our concern for you even trickles into our off-work hours.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

How to Face IRS Collections With Confidence

Sat, 15 Jun 2024 16:38:05 GMT

Most of the mail you receive immediately ends up in the trash.

Then there’s some that you’d love to dispose of. But I’d advise against it. An example being post-Coronavirus collection letters.

I want to shed light on their arrival in droves. And whether you should be concerned.

Keep reading to learn why the IRS temporary collection delay resolved. Plus, how to deal with it.

IRS Stay of Collections Ends

IRS collections were put on hold in March 2020 via the People First initiative.

At the time, former Commissioner Chuck Rettig stated, “We are temporarily adjusting our processes to help people and businesses during these uncertain times. We are facing this together, and we want to be part of the solution to improve the lives of all people in our country.”

Top areas of tax relief:

Installment agreements
Offers in Compromise

Specific methods for redress experienced a dip in usage.

Halted services:

Audits
Field collection
Automated compliance notices

Mainly, the agency chose to focus on sending out stimulus payments. But other reasons factored in.

Among them:

Remote work caused disruptions
Record number of phone calls
35 million unprocessed returns (2023)

Between 2019 and 2022, business and individual tax debtors increased by nearly 11% . At the same time, IRS revenue field officers held off on many new lien and levy penalties.

Officials attempted to resume this process in summer 2021. However, growing service needs put a stop to that.

Although we saw IRS collections suspended, work in the field began once more in 2022. Expect some of the 87,000 officers Biden hired to direct their energy towards this effort.

The maligned agency wants to change their image. One step in this direction is the creation of the Alternative Dispute Resolution Management Office ( ADR ).

Goals:

Conclude disputes sooner
Clarify current guidance

By improving internal collaboration, they believe overall program use will see a notable boost. Taxpayers can expect this move to enhance the IRS’s ability to demand repayment.

Next, I’ll address weapons in their arsenal.

Power of the IRS Collections Division

Enforcement is something the IRS is proficient in. Just ask Microsoft .

They compel action through certain tactics. Such as mushrooming interest and penalties. It doesn’t stop there.

IRS collection options:

Liens
Levies

Allow me to break them down a bit.

Tax Liens

A federal legal claim on both assets and property, tax liens place the IRS at the front of the line. In terms of creditors. The other guys must wait for a chance at restitution.

Should you seek additional financing, expect a barrier. Whether for a home loan or another type of funding.

It’s true that they are difficult to lift. Even a Currently Not Collectible (CNC) status won’t alleviate this debt.

But it’s not impossible.

Ways to annul your lien:

Money owed is paid in full
Prompt reduction on a long-term payment plan

Over time, consistency in payments will provide a way out.

Tax Levies

Instead of a legal right, as with liens, tax levies are an actual claim on your possessions.

Prior to enforcement, you should receive a collection notice stream. Including an initial payment request, several reminder letters, and a notice to levy.

A final notice of intent to levy puts you in the “penalty box.” You then have 30 days to pay in full or sign an agreement.

Possible next steps from the IRS:

Zero out your bank account, effectively closing it
Deduct a specific amount from your paychecks
Acquire and sell any owned property (non-primary)

If a balance still isn’t met, wage reduction may continue. Worst case scenario is another levy showing up in your mailbox.

Here’s some semi-good news.

The best-case scenario is an amount over the sale of your property being credited to your bank account. A small victory is better than no victory, right?

Passport Revocation

For all you world travelers out there, 2021 saw the authorization of passport revocation. Courtesy of the Department of State (DOS).

Another option is denial of your renewal request for various travel documents.

You must have a seriously delinquent tax debt to experience this unfavorable outcome.

Even if you prefer to remain stateside, the fact of this power being granted to the government is slightly unnerving.

Moving on, I want to offer a healthy dose of encouragement.

Ward Off IRS Tax Collections

At our firm, I’m seeing collection letters from 2-3 years ago. And now for the promised optimism.

I’m finding that some are either:

Incorrect
Already paid

So, seeking professional tax resolution might provide the peace of mind you long for.

Here’s another fact.

When the 2023 tax season ended, average refunds were down by more than 7%. The cutback of tax benefits tied to the Coronavirus are a root cause.

Odds are, this is news to you.

Use this to your advantage. The right adjustments to your tax strategy can remove you from the balance-due filer group.

Plan ahead while being the first to hear of new changes to the Tax Code coming from Washington.

Other perks of tax help:

Avoid an audit in the first place
Quickly spot IRS errors
Internal Revenue Manual (IRM) and Internal Revenue Code (IRC) knowledge

Add an advocate before the IRS. Someone fluent in “taxspeak.”

Since we’re on the subject, I’d like to throw my hat in the ring.

Blue Slate Accounting Tax Resolution Specialist

Something is missing from the accounting field.

A human approach to personalized tax resolution services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

Tax Resolution Unit Suffers From Unpopularity

Fri, 31 May 2024 19:23:30 GMT

It’s a popularity contest.

But not the type you’re thinking of.

This one involves a three-letter agency. And regular folks like you.

The Internal Revenue Service is aware of its status among taxpayers. Regardless, they are looking for ways to improve their image.

Let’s see if they’ll make the cut.

IRS Process Experiencing Dwindling Usage

Earlier in the month, the IRS’s National Public Liaison meeting took place in Washington D.C.

Among the topics was the alternative dispute resolution (ADR) process.

I previously touched on this subject. More specifically, the creation of a new branch under the agency’s Office of Appeals.

The tax resolution unit focuses on closing accounts which want to avoid costly litigation. From settlement to mediation, they are incentivized to satisfy both parties.

But there’s a problem. At least from the perspective of the IRS.

There aren’t enough takers who want to engage with this method of dispute conclusion. And officials have seen usage continue to plummet.

So, federal decision makers assembled to encourage use of the system. Hoping that a cross-functional team could generate unique solutions.

Businesses across this nation have found success with this approach.

However, there needs to be an established culture of collaboration. Before this team can solve problems.

Traditionally this has been harder in the government sector. Mainly due to red tape and competing priorities.

Why they want it to work:

Studies reveal mutual compliance
Cases finalized sooner

Perhaps non-adoption of this tool is tied to something deeper. A misalignment with the values of everyday Americans.

Next, I’ll cover reasons for this discrepancy.

Barriers to ADR Use Might Be Self-inflicted

The National Taxpayer Advocate’s 2023 report to Congress highlighted a relevant fact.

Trust in the IRS Independent Office of Appeals is low. One of the complaints lies in their lack of independence. Go figure!

Appeals Officers (AOs) lack autonomy for decisions
Absence of transparency for settlement standards
System applies broad view on individual cases

Decision Maker Complication

Through observations and data, they found that AOs have reduced independent authority. Leading to confusion around their intended role in the settlement process.

A second player may be to blame. Appeals specialists.

Examples:

Technical guidance coordinators
Subject matter experts

Working just out of view, they take a different approach than their peers. Involving them can restrict the authority of AOs to settle.

Defeating the original purpose for their hiring and frustrating taxpayers.

A similar example I can think of is “independent” fact-checkers on social media. Users can’t appeal to these individuals. And the platforms themselves must trust the determination.

Muddled Standards for Settlement

Another point of contention deals once again with Appeals specialists.

This time, it’s their refusal to approve a settlement. But the decision, although unwelcome, isn’t the main source of grievance. Their reasoning is.

The report found that these individuals denied cases when they, “deviated from undisclosed, nationwide settlement parameters.”

Zoom in on the word “undisclosed.” And you’ll understand why taxpayers and tax professionals cite a lack of transparency.

Systems Missing Personal Touch

A final problem rears its head when settlements involve coordinated issues.

Plenty of practitioners see taxpayers reluctantly choose litigation over an IRS appeal. Why?

They believe impartiality is more likely to occur in court.

A tax court must consider facts and circumstances unique to that case. An approach that some tax professionals suspect isn’t happening at the Office of Appeals.

Regulations may constrain their ability to deliver a custom approach. But without the IRS dispelling this speculation, we’re left wondering.

Let’s set aside this issue for now. Because you’re here for solutions.

With any negotiation, compromise is key. Which leads me to a lesson from another field.

Perspective-taking is a sales tactic. The aim is to determine what the other party is thinking. Having accomplished this, you boost the odds of walking away feeling good.

Good in terms of not sacrificing your own interest for that of the other party.

Should you decide to engage with the IRS for your outstanding tax balance, wise counsel is essential.

I’ll explore this more next.

Professional Help Smooths Out Tax Resolutions

Beyond helping you avoid an audit , a tax resolution specialist can stand in for you. Think of them as part of your team in a wrestling match. Tag them as needed.

You won’t have to deal with the collectors directly. Freeing you to reinvest that time “currency” into earning the capital needed to fulfill your debts.

Extra perks:

Helps you wade through confusing IRS practices
Advocates for a fair deal
Applies Tax Code expertise to your situation

Non-industry folks normally find the language of taxes perplexing. Your ally acts as an interpreter. Because they deal with both the IRS and public.

Having participated in numerous tax resolution disputes, their negotiation skills are invaluable. Because the amount you are responsible for isn’t fixed.

That’s right.

Top options at their disposal:

Installment agreement
Offer in Compromise (OIC)
Delayed collection

The first two are more advisable as they offer a bit more flexibility. I want to unpack an OIC for a minute.

It’s an agreement that settles your debt for less than you owe. The IRS website relays that you should entertain this choice after expending all others.

Say that’s the case. A lump sum or periodic payments with an initial amount down will be part of the agreement.

Factors they consider:

Income
Expenses
Assets
Capacity to pay

Tax help relief is real and attainable. As is that “debt-free” feeling of joy.

You’re now ready for an important first step.

Blue Slate Accounting Tax Resolution Specialist

Something is missing from the accounting field.

A human approach to personalized tax resolution services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

IRS Office of Appeals Sets Sights on Efficiency

Thu, 16 May 2024 05:03:30 GMT

Some taxpayers can relate to a scene in Disney’s “Zootopia.”

It features sloths manning a DMV office. These folks would simply swap it out with the Internal Revenue Service (IRS).

But its commissioner Danny Werfel is on a mission to change that. With a new branch in their Office of Appeals.

Allow me to translate this news for your tax resolution purposes.

New IRS Tax Resolution Unit Aims for Speed

The main goal of this Alternative Dispute Resolution Management Office (ADR) is to accelerate tax resolutions .

They are “committed to providing taxpayers who wish to resolve their issues without litigation a choice of early resolution options,” stated Werfel, and “ensure taxpayers are aware of these options.”

Why it’s advantageous:

IRS can reinvest time elsewhere
You can get on with your life

It operates outside of the usual litigation process. Administrating and managing cases before they create more headaches for both parties.

Operating closely with stakeholders, legal professionals, dispute parties, and others, the office ensures fairness and efficiency. At least that’s the aim.

General methods:

Negotiation
Conciliation
Arbitration
Mediation

There’s a difference between negotiation and conciliation. The former is direct communication between parties, while the latter is handled through a third-party.

Specific offerings:

Fast-track settlement
Post-appeals mediation
Fast-track mediation
Rapid appeals process

Updates to the first couple include removing barriers to access and piloting other changes.

Such as:

Clean up current guidance
Wrapping up disputes earlier

IRS Sees Dip in Use of Programs

Collaboration is planned between this new department and their business operating divisions:

Outreach and education
Mediator support and training
Data collection

However, these improvements won’t replace the established appeal process.

This move comes as a declining number of people are using their programs. One could infer that is a good sign for taxpayers.

Perhaps less are finding themselves at odds with the agency.

Or more are locating reputable experts to guide them. Namely, tax professionals who specialize in wrapping up these types of situations.

Statistics on the exact number of people requiring these services are tough to find.

But the IRS reported that at the end of fiscal year 2022, there were close to 11.4 million delinquent filers. An increase of almost 18% from 2021.

So, there is still very much a need.

We are in the digital age. Leading to a large disparity between available tax resolution services.

As we continue, I’ll contrast the two present selections.

Comparing Tax Help Online and in Person

During a March speech at American University, the IRS commissioner identified the whale in the room. That the federal revenue service is unpopular.

Inefficient return and refund processes. Drawn out wait times.

He didn’t deny the difficulty in changing this perception of the public. His hope is that a more digitized agency will shift the needle.

Werfel stated, “We’re catalyzing this transformation because a digital-first IRS is a generational imperative. It’s how most taxpayers want to interact with us in the 21 ^st century.”

He added that the eventual goal is to allow someone to complete all their interactions without speaking to a human.

The Inflation Reduction Act of 2022 is funding this evolution.

In case you missed its passage, the government took aim at three areas:

Decreasing inflation
Reducing family costs
Fighting climate change

Okay, the last one makes no sense. But the other two seem like relevant issues.

Whether the massive investment helps as stated is to be determined. I’m not holding my breath though.

Computerized benefits per the federal agency:

Improve effectiveness of in-person assistance
Hold the wealthy more accountable

They are unsurprisingly motivated to collect $520 million from millionaires who owe them.

Digital Tools Aren't a Replacement for Humans

Don’t be surprised if the IRS’s foray into digital includes AI. Scratch that. Count on it.

I’m not a fan of artificial intelligence because it’s error prone. For our purposes, let’s imagine a scenario.

Taxpayer Bob is incorrectly flagged as being delinquent. Courtesy of the machine speeding through masses of data.

One of the thousands of newly hired IRS agents knocks, or better yet, breaks down his door. Should the agency determine a blunder was made, an apology won’t exactly cut it.

You may be saying this sequence of events is implausible.

Maybe thirty years ago. Not in today’s America.

Chatbots and other supposed time savers might be okay for simple tax issues. Unfortunately, money owed to the IRS doesn’t fit into that category.

It needs the human touch.

Without it, the odds of misunderstandings abound. And for your average citizen, this creates unnecessary stress and anxiety.

Just as a tax professional should double check every return by hand, the IRS shouldn’t outsource sensitive collection to AI.

Increased online interactions does free up IRS employees to focus on other encounters. In theory making them more available for your call or visit.

Either way, it won’t happen immediately. Going back to Werfel, he compared the effort involved to be a “large mountain to climb.”

When tax help relief is needed, you’re assailed with promises from various sources:

Targeted advertising
Email marketing
Social media posts
Spam calls/texts

All you want is peace of mind . Being inundated with unprompted messages has the opposite effect.

As should be true in other areas of your life, I encourage you to seek wise counsel .

Rather than spending untold hours searching, I’ve made your exploration a bit easier.

Blue Slate Accounting Tax Resolution Specialist

Something is missing from the accounting field.

A human approach to personalized tax resolution services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

Threat of Tax Advice for Free on Social Media

Wed, 01 May 2024 03:39:39 GMT

“This one click will release torrents of cash flow today!”

Filing season can be confusing. Without social media posts and hashtags providing another layer of mental clutter.

Solution? Pay attention to warnings from the IRS about bogus help.

Shield your business through education. Which begins right now!

Dangers of Social Media Tax Advice for Free

For many conservative small to mid-sized business owners, false information on TikTok isn’t new. But other Big Tech platforms are just as guilty.

Normally, it won’t cause significant harm if followed.

Unless the advice leads to a need for tax resolution services.

Beyond owing the Internal Revenue Service (IRS) cash, large civil and criminal penalties are also possible. Tarnishing your hard-earned reputation.

Also consider that the average first-year failure rate of small businesses is 21.9 %. This avoidable situation only increases the likelihood of shuttering your doors.

Two suppliers of inaccurate tax tips:

Scammers
Attention-seekers

Cyber-literate criminals are ultimately seeking to steal your identity. An increasingly likely outcome for many Americans.

How common? In 2022, the FTC saw over 1.43 million cases of this theft.

If you or someone you know has been a victim, describing it as frustrating is an understatement.

But not every misleading information spreader is nefarious.

Some marketers use what’s called “clickbait” to draw your eyes to their content. Cutting through all the online noise.

However, its widespread use doesn’t equate to clear-cut unethical behavior. I see this falling into the “bit exaggerated” category.

I never like having to tell clients that their excitement is misplaced. Seeing the shift from smile to frown is difficult.

Schemes to avoid:

Form W-2
Form 8944

Let’s zero in more closely for a minute.

W-2

Scammers will tell you to falsify:

Income
Withholding
Employer

They claim the e-file withholdings will generate up to five figures. A bold claim. Resist it.

Here’s why. The IRS will verify your W-2 figures.

Variations:

Fraudulent Form 7202

Credits for Sick Leave and Family Leave for Certain Self-Employed Individuals. Here, a credit is promised based upon status as an employee. Instead of your actual status as self-employed.

One major detail rules this one out. It was only available for 2020 and 2021 tax years.

Moving on.

Fraudulent Schedule H

Household Employment Taxes. Also disregard this ploy. It deals with a refund sought from sick and family medical leave wages. For made up employees. Yikes!

Resist the temptation. And keep a clear conscience.

Form 8944

Preparer e-file Hardship Waiver Request. Unless you’re a tax pro, this form shouldn’t be in your return. It allows professionals to file by paper.

It won’t magically deliver a refund in the mail.

Prevent a $5000 penalty and criminal prosecution by resisting any urge for dishonesty.

I know our economic times aren’t the best. But don’t risk your family’s future.

There’s a better way.

Business Tax Services Are a Better Path Forward

A tip for tax advice online. Free doesn’t always equate to “correct or helpful.”

That’s what I’ll quickly cover before sharing authentic solutions to maintain good standing with the IRS.

A Final Word of Caution

Sometimes you’ll see tax suggestions that are accurate at the federal level. But what’s missing is funds owed to the state.

I’ve seen some cases where these unmentioned state taxes negate any federal savings.

Suspicious omissions. Which usually means that your best interest isn’t being factored in.

Now we can get into reputable sources of tax guidance.

Trusted Aid for Your SMB

IRS Commissioner Danny Werfel states, “There are many ways to get good tax information, including @irsnews on social media and from trusted tax professionals. But people should be careful who they’re following on social media for tax advice.”

The government agency suggests their online hub of IRS.gov for verifying what you come across.

Specifically:

Double-checking facts
Filling out forms correctly
Locating other federal websites

Going directly to the source is always warranted.

They furnish good advice. But still not the best.

Your safest bet will involve a financial investment. Handing off tax preparation to a pro .

The top reason to do so is scalability. Insulating your operation through expansion.

Furthering your practical legacy to children and grandchildren. Practical in terms of financial stability.

Since the goal every tax season is to break even, not loan the government money, outsourcing is effective.

Extra Evidence for Adding Expertise

Beyond growth, you can enjoy other perks.

Additional ways their protective umbrella helps your business:

Decrease risk of errors or penalties
Increase deductions/credits
Ensure compliance with complex tax laws
Provide direction for future filings

Tax prep software isn’t perfect. Neither are the companies that provide it.

Despite these true statements, it still offers benefits. Particularly in the hands of a tax professional. Because they should be double checking everything by hand.

Your state has credits and deductions it chooses not to advertise. A hired expert can find out if you qualify. Reducing any tax burden.

Neither the Internal Revenue Code (IRC) or Internal Revenue Manual (IRM) are considered light reading. You can rest easy knowing that you may never need to crack them open.

That’s something your outsourced help is responsible for. They are intimately familiar with the specifics.

Even if you owe this year, it doesn’t mean you always will. An expert guide assists in the creation and exercise of your strategic plan.

Speaking of those proficient in this area, allow me to wrap up.

Blue Slate Accounting Tax Advice for Small and Mid-Sized Businesses

Something is missing from the field.

A human approach to business tax services. Zelienople, PA is our home, but we’ve worked with SMBs across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your business tax needs today. And take the first step towards reclaiming your joy and happiness!

Outsourced Bookkeeping Unstops Small Business Cash Flow

Tue, 16 Apr 2024 04:01:43 GMT

You probably don’t have a “Going Out of Business” sign on your storefront or website.

But you might as well.

Poor management of cash flow is like a slow bleed of your capital. That could spell doom for your operation.

Unless you take a purposeful approach to its financial health.

That’s why you’re here, to learn the basics.

I’ll be your guide as we shore up any vulnerability right now.

Effects of Small Business Cash Flow Problems

You need a handle on small business cash flow .

Confusion reigns when processes are disconnected. Lean Six Sigma exists because of the abundance of gaps in established systems.

A term you’ll hear when you learn about this technique is the “swiss-cheese effect.”

In simple terms, it says that an incomplete process will continue to cause problems until someone addresses it. Closing the “hole” in the cheese.

The trend towards digital contributes another wrinkle. Because your business has various online tools, uniform processes are even harder to build. And follow.

Take invoicing for example.

A difference between sales and what you invoice has undesirable consequences:

Bill disputes
Payment delays
Discount requests

Outstanding debt compounds as the months and years go by. And without realizing it, your business is now teetering on the edge of a cliff.

One shove from a hit to the economy could be enough to have you free falling.

Payroll can also take a hit. In a time where staff loyalty is low among certain age demographics, you don’t want this.

The fact that you’re a wonderful boss won’t be enough to keep them around. Because they have mouths to feed too.

Possible Scenarios When Cash Flow is Restricted

Consider your business as a river for a minute. A steady flow of cash allows you to reinvest. When it gets stopped up, the different areas of your operation experience a barrenness.

And to take the analogy further, a desert forms where previously there was lush vegetation.

Outcomes when it’s lacking:

Inability to make informed financial decisions moving forward
Higher likelihood of your business closing down

Unpredictability in the long-term prevents you from adapting to market changes. Making it more difficult to achieve a competitive advantage.

Your business and marketing plans may be solid. But they aren’t enough to compensate for unwise decision-making. When your picture of financial vitality is blurred, risk grows. Add those two together and you have a toxic recipe.

If you sell services, invoicing and identifying revenue becomes harder over product-based ventures.

When you’re the main provider for your family, budgeting also becomes difficult. Leading to overspending.

Businesses are more likely to fold because of low liquidity. Poor management or a flawed model aren’t normally to blame.

Factoring in the incalculable hours you invest in your operation; this outcome is painful.

Here’s the good news. It can be avoided.

That’s where we’re headed next.

Become a Small Business With High Cash Flow

Now, I’ll show what having an accurate forecast of cash flow looks like.

Your leadership team will have a better grasp of margin. Leading to a higher level of precision in predicting the flow of cash. Resulting in a boost for both short and long-term choices.

There’s another perk as well.

Satisfaction among your customers will rise due to their self-sufficiency. Namely in resolving their own inquiries.

Which leads me to some essentials you’ll need in your toolbox. Whether you’re hearing this for the first time or 10 ^th , it’s worth hearing again.

Accounting basics:

Open a separate business bank account
Purchase accounting software
Set up backup records
Schedule a review every month

Commingling funds will attract unwanted attention from the Internal Revenue Service. Even though it’s a common mistake new business owners make.

Unless you started an accounting firm, numbers may not be your forte. Aid your success by not allowing yourself to dip into personal funds when revenue slows.

Your spouse will thank you. As will your children when it’s time to feed their every growing bodies.

Purchasing technology to streamline your record keeping is smart. Even if you hire a professional to manage it, the benefits far outweigh the cost.

Compensation for Handing Off Management of Your Books

I understand that you’re busy. But gaining insights from periodic review of your financials will return value to your workday.

Plus, you’ll feel better about the direction you’re headed. Because you’ll no longer be wandering aimlessly. Making uninformed decisions which increase risk to your longevity.

Reasons to hand off bookkeeping:

Provides clear snapshot of your fiscal health
Gives back more time for revenue generation
Helps clean up past financial recording disasters
Allows you to sample outsourcing for your business

You need to eventually move away from working in your business. And shift to working on it.

There’s no shortage of tasks on your calendar. Have you audited them to find out which make you money and which ones don’t?

You may be surprised once you do. Focus on CEO tasks and stagnation will stay far away.

“Outsourcing” unfairly receives criticism. Everyone has been disappointed by offshore call centers that can’t solve your issue. I’ll give you that.

But don’t write it off completely.

Start in your home by hiring the local neighborhood kid to mow your lawn. Then consider a house cleaning service.

Before you know it, you’ll enjoy the rewards in your family. Then apply this same logic to your venture.

To conclude, I’ll give you an opportunity to put this into practice today.

Blue Slate Accounting Outsourced Bookkeeper

Something is missing from the bookkeeping field.

A human approach to personalized business services. Zelienople, PA is our home, but we’ve worked with small to mid-sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

Expect tailored recording from your personal Blue Slate Accounting team member:

Matching receipts to bank and credit card statements
Bank account, credit card, and loan reconciliations
Applying customer payments to in-house generated invoices
Accounts Receivable tracking and invoicing services, including reminder letters
Accounts Payable tracking and bill payment services

We provide a quick, realistic weekly snapshot of your cash flow. Allowing you to make informed monetary decisions.

Outsource your bookkeeping solutions today. And take the first step towards profitability and contentment in your business.

Are Your Alternative Revenue Streams a Trade or Business?

Sun, 31 Mar 2024 19:51:05 GMT

A dollar doesn’t stretch as well nowadays.

Our economy has room for improvement. I know, that’s an understatement.

But you can weather the ups and downs by using strategic thinking and embracing change.

Alternative revenue streams may be the golden ticket. Determining how to list them during tax season will make their value more apparent.

I hope to simplify your proper filing. Let’s begin.

What is a Qualified Trade or Business?

The qualified trade or business definition can’t be found in the Tax Code.

But the standard used by courts comes from Groetzinger, 480 U.S. 23. This determination was made 37 years ago. Dealing with a deduction from a professional gambler.

Highlights:

Continuous and regular
Income or profit focus

So, one aspect is the frequency.

For example, an on and off foray into the commodities market wouldn’t count. Even though it potentially adds money in your pocket.

Another condition deals with profit. Sec. 183 basically says that activity marked by higher revenue than deductions can qualify. If this ratio happens at least three out of five successive years.

When the IRS challenges this claim, they use a loss conclusion. Should you find yourself being questioned in this area, nine comprehensive related factors are considered.

The IRS website relays how they define the entity.

Activity conducted to produce income from either goods or services

Your trade or business likely has a main source of revenue. Next, I’ll cover secondary sources.

Dealing with Alternate Revenue Streams

A revenue stream is taking advantage of a potential or adopting a creative way to produce income.

As a business owner, you likely have multiple.

Extra income sources for your active trade or business:

Expanding your service line
Community outreach
Membership website
Crowdfunding

There’s something to be said for specializing in a certain product or service. However, you can tap into new customer bases by broadening what they can buy.

Sponsoring local events or a booth at the county fair double as wonderful promotions too. More importantly, you can directly tie new business to these happenings.

Once you’re an expert in your field, consider charging for your knowledge in the digital realm. You can provide free advice via a blog or social media. But offer exclusive content to members.

Companies like Angel Studios have successfully used crowdfunding as a model. Depending on your industry, it might make sense to test it out.

Reasons for Expansion

Whether you are self-employed or an SMB owner, having excess capital in 2024 is valuable. It allows you to invest elsewhere or reinvest in your operation.

Additional benefits:

Greater stability in the market
Adapt to changing conditions quicker
Unique differentiation from competitors
Drives innovation through creative thinking

Occasionally the demand for your service may wane. Diversifying your offerings helps balance your overall business health. In the age of AI, this step is important.

Switching out your core product in this situation also becomes easier. You won’t have to start from scratch because marketing is already running.

The number of solopreneurs multiplied from 2020 to present day. Some were let go, but many left good jobs of their own fruition. Finding the freedom and potential enticing.

Standing out in the crowd becomes possible through market research. Find a product or service that your closest competitors are lacking and launch it!

Any business owner can become stagnant and face “writer’s block.” Inject fresh thinking and learning through professional development.

Your qualified trade or business should include these streams in one tax return. Except when they are under a different registered venture or DBA name.

If the latter situation applies, consult a tax professional. They will make sure that you remain in good standing with the IRS.

Okay, you’re now clearer on the categorization of your pursuit. Next, I’ll help you when it comes time to file.

Filing Requirements for Your Business or Trade

Accountants like myself don’t exactly jump for joy when tax reason rolls around. My guess is that you can relate.

But understanding your business composition helps when it’s time.

Various options:

Sole proprietorship/qualified joint venture with your spouse
Partnership
Corporation

Solopreneurs fill out a Schedule C and IRS Form 1040. Filing jointly with a spouse only adds one document to what you’d normally submit to state and federal.

Schedule C will list your profits or loss from the applicable tax year. Expect to pay the self-employment tax (15.3%) also.

Finally, estimated quarterly payments will need to be sent.

Both Form 1065 and Publication 541 detail the constitution of a partnership. It must have two or more members. Plus divide its profits from a “business, financial operation, or venture.”

Three types are limited liability, general, and limited. All of them must go beyond splitting expenses.

A two person LLC is automatically considered a partnership. As such you’d be expected to file a partnership return.

Unless you elected to be taxed as a corporation. If so, file Form 1120 or 1120-S. Your corporation classification will determine the correct one to use.

Taxes don’t need to be confusing or create anxiety. All you need is the right guide.

Keep reading for the introduction.

Blue Slate Accounting Tax Services Company

Something is missing from the field.

A human approach to personalized tax services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your personal tax needs today. And take the first step towards reclaiming your joy and happiness!

Relying on an AI Tax Assistant Creates More Work

Fri, 15 Mar 2024 16:52:15 GMT

The latest and greatest.

Our society is programmed to desire the “new.” Artificial intelligence (AI) is simply the current installment.

And it won’t be the last.

But does it make sense in the tax field? Two popular software providers seem to think so.

Come along as I break down how realistic this technology is for your filing needs.

Issues With TurboTax and H&R Block AI Tax Assist

This past December, H&R Block released a generative AI tax assistant. It’s backed by Microsoft’s Azure OpenAI service.

The target market is small business owners, self-employed entrepreneurs, and individuals.

Tax areas it helps with:

Information
Preparation
Knowledge

It won’t fill out or file your forms, answering questions instead. And apparently your personal tax information won’t be shared with the tool.

TechRadar was asked to try it out and found that the prompts it generated were reasonable.

Other commercial AI products have been knocked for biased and inaccurate information. This is because the technology has been trained on search information from sources like Google.

H&R Block says this isn’t applicable in their case. Using data from The Tax Institute and its 60,000 tax professionals, they aim to present more relevant answers.

According to the company’s press release, it’s “backed by H&R Block’s 100% accuracy and maximum refund guarantees.” Only one issue.

Both it and TurboTax’s AI product are off to a rocky start. They both have been critiqued for accuracy.

Cue the dramatic music.

Lawsuit Raises More Concerns Around Tax AI

What normally happens if the artificial intelligence can’t find the correct answer? Responses are simply invented. A common problem among current offerings.

Experts in the field are concerned that this obstacle may never be solved.

Aditya Thadani, VP of Artificial Intelligence Platforms for H&R Block, commented on this topic. “We’re sitting on a lot of really personal, private information. As much as we want to use that to answer questions effectively, we have to continue to find the balance.”

Their main competitor TurboTax also launched an AI-powered tool around the same time. It didn’t take long for conflict.

In January, Intuit (owner of TurboTax) sued for “misleading marketing.” Charging that H&R Block made false statements on pricing for AI help.

Specifically, that TurboTax was significantly more expensive. The company has refuted this claim and is seeking restitution.

It’s interesting because both H&R Block and Intuit are currently dealing with the Federal Trade Commission (FTC) surrounding their marketing messaging.

It reminds me of two siblings pointing the finger at the other when one knocked over a vase.

Next, I’ll share about the outlook of AI’s integration into the tax world.

Tax AI is Still Here to Stay

Love it or hate it, AI isn’t going anywhere.

But that doesn’t mean human tax professionals are obsolete. Far from it.

Job security concerns are natural in the case of advanced large language models (LLMs). However, there’s a reason to be hopeful. Namely because most available options are chained.

Providers are more worried about lawsuits and negative publicity. Gab AI is one exception.

Limitations of the technology:

Lacks creativity
High costs
Amplifies biases
Context confusion

Whatever guardrails a company sets up for their AI prevent original solutions to problems. When a taxpayer has a unique issue, they can find themselves frustrated. Like the irritation that consumers experience with an outsourced call center who goes off a script.

Despite H&R Block’s stated target customer, self-employed individuals may find their AI assistant out of reach. As inflation increases, they must decrease expenses. Seeing this tool as a luxury and thereby unnecessary.

Artificial intelligence learns from historical data. And uses inputs from the programmers. ChatGPT is one example, as there are certain prompts it won’t deliver. Namely those of a more conservative worldview.

Humans can quickly pick up on the broader context of a situation. AI can miss these subtleties. An unwelcome limitation in decision-making situations. In the fast-paced business landscape, it can slow progress and growth.

Constraints of Tax Software and How It Relates to AI

Tax software is another example of tech that people trust too much. Expecting it to accurately generate a flawless return the first time.

Be careful not to rely too heavily on programmed machinery.

Simple returns are best handled by this software. Which doesn’t apply to businesses.

The technology also struggles with more involved returns.

Examples:

Investments
Dependents
Mortgage
Home-based business

Even when our customers use these tools, we double check everything to verify correctness . Compliance with the IRS is the reason behind this attention to detail.

Tax experts stay up with the evolving U.S. Tax Code. Pivoting and offering the most up-to-date advice.

Something lacking from computer models. That’s because it must be entered manually into the algorithm or computer code.

With software, you must assume the information includes these updates. But there’s nobody to verify that for you.

A tax professional will explain it in real-time while you sit in front of them.

Like AI, it doesn’t give you custom solutions either. Once again, chalk it up to a general lack of creativity.

Your business is different from a competitor down the street. A cookie cutter output doesn’t help you. But that’s what you get when paying for “value.”

In the same vein, tax benefit maximization is another missing piece. Breaks aren’t advertised by the IRS. Same for H&R Block and TurboTax’s products.

I want to close by suggesting another course you can take.

Blue Slate Accounting Tax Services Company

Something is missing from the field.

A human approach to personalized tax services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your personal tax needs today. And take the first step towards reclaiming your joy and happiness!

H&R Block Software Deceived Customers Per FTC

Fri, 01 Mar 2024 01:31:45 GMT

For years, H&R Block has been identified with tax season.

Spending a ton on advertising hasn’t hurt.

Recent headlines have placed a stain on this association. I’ll show how this news was a long time coming.

Hopefully my professional insights will assist your filing decision for 2024. And beyond.

If you’re ready, continue scrolling.

H&R Block Software in Hot Water With FTC

Per the Federal Trade Commission (FTC), H&R Block planned to, “present an obstacle course of tedious challenges to consumers, pressuring them into overpaying for its products.”

They allege an intentional disincentivizing of more affordable options. That’s not all.

As a large operation, hurdles to the customer should be uncommon.

Making you go through H&R Block customer service seems a bit unnecessary. Downgrading should be a non-contact step. As is the case when you want to upgrade.

If you decide to move forward with a lower-priced plan, expect frustration. The system deletes all the tax preparation data you’ve already entered. Really.

Time to redo your return. Yahoo!

Private companies are free to use legal loopholes. Employing deception puts them in another category, however.

Joining TurboTax maker Intuit in scrutiny from the government agency, the company’s response was interesting.

Their chief legal officer Dara Redler had the following to say. The service “allows consumers to downgrade to a less-expensive DIY Product via multiple mechanisms while ensuring the preparation of accurate tax returns.”

But it’s what they didn’t say that stands out. Namely, a non-attempt to deny the assertions.

Potential Outcome Based Off Finding Against Intuit

The FTC hasn’t charged H&R Block. Yet.

My guess is that those findings will come. And it’s informed by the recent ruling against Intuit.

A complaint of this nature follows a certain process. What you’ll see next is a formal hearing in front of a judge.

Possible results:

Requirement to disclose actual percentage of qualified taxpayers
Prohibition against claims of “free” unless everyone qualifies

Violation of the FTC Act can lead to a tarnished public image. Couple that with the power of a negative review and you have a formula for disaster.

Most companies the size of H&R Block recover. But not all.

The marketing departments of corporate America have given the industry a bad name. Disenfranchising countless individuals and families.

As was applied to this business unit of Intuit, another outcome is likely.

A restriction on misleading facts in relation to:

Price
Refund
Credits/Deductions
Accuracy of free service

Like my statement on Intuit, just because H&R Block says so, doesn’t make it true.

Unfortunately, our society relies too heavily on technology. And the convenience that it breeds.

That’s why I educate new clients. Helping them balance its usefulness as a tool without falling victim to its worship.

Next, I’d like to touch on additional findings related to H&R Block.

Filing H&R Block Taxes Isn't for Everyone

2019 reporting from ProPublica touched on additional trickery.

H&R Block free was hidden from online organic searches. Instead directing them to paid tax services for ultimate profit generation.

In fact, four of the other twelve Free File Alliance members joined in. Adopting a coding device to keep them out of queries.

Telling Google and other search engines not to show the page isn’t illegal. In fact, it’s a step that many websites use to prioritize certain pages.

Visitors already on the site could find it. So, what’s the big deal?

Here’s why it makes H&R Block look bad.

They’d signed a deal to assist lower-income Americans with free options. Outlined terms meant that the IRS wouldn’t create a competing, free online filing tool.

From an ethical standpoint, it leaves more to be desired.

The company later said that they updated their practices to make discovery easier.

And in the same year, legal trouble arrived for the tax preparation giant. In the form of a lawsuit from plaintiffs in California.

LA City Attorney Mike Feuer wrote that for years, they were “actively undermining public access to the IRS’s ‘Free File’ program.”

COVID Smokescreen or Totally Unrelated?

Potentially tied together, H&R Block discreetly left the Alliance during the 2020 pandemic. This was confirmed by the IRS.

According to leaders, the decision was merely in the company’s best interests.

Fellow tax software provider Intuit departed over the same period. Coincidence?

The timing is interesting either way. With the pandemic now behind us, an improved image is still elusive.

Taking a zoomed-out look at the company, worrisome trends arise:

Fine print contains the detail that only simple returns qualify for free help
Questionable advertising doesn’t detail what a simple return looks like
Criteria for a straightforward filing is somewhat fluid

Instead of transparency and learning from mistakes, their focus appears to be more of the same.

Perhaps you’re ready for a change with this year’s filing.

An answer for your family lies in personal tax services.

Benefits:

Accuracy and compliance
Maximize your tax benefit
Reduce stress and save time

Business used to be conducted via a face-to-face interaction. Followed by a handshake.

Times have changed. However, there’s no reason why this personal touch can’t make a comeback.

With decreasing consumer trust in corporations, it’s probably long overdue.

Rediscover trust in the companies you work with. And watch it translate to contentment as you receive value for your loyalty.

To conclude, I’ll provide detail on this alternative.

Blue Slate Accounting Tax Services Company

Something is missing from the field.

A human approach to personalized tax services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your personal tax needs today. And take the first step towards reclaiming your joy and happiness!

Counsel Helps You Dodge a Tax Audit

Fri, 16 Feb 2024 00:59:40 GMT

On the surface, working with a tax professional may appear tedious.

But there’s a purpose behind their requests. Namely, decreasing the risk of an audit.

“This is why we make you do it our way.” That’s the unspoken statement I want to explain.

Keep moving those eyes down the page. And discover the “why” behind their process.

Your business will appreciate it.

What Triggers Tax Audit?

In the business world, the biggest stressor is a tax audit. IRS scrutiny keeps many owners up at night.

Just ask Microsoft executives. How they distributed income and expenses globally caught the attention of our government.

And the Y.O.U. (You Owe Me) totals $28.9 billion! They’ve appealed, but there’s no guarantee of mercy.

I don’t want your day-to-day being disrupted. Because drawing the ire of IRS agents can put your family’s economic future in limbo.

There are certain events that trigger an audit:

Failure to report all income
Substantial cash deposits
Large percentage of foreign assets
Running a cash business
Commingling funds
Audit of investor/business partner

Should one be initiated, the tax audit process kicks in.

The first document to expect is an “Information Document Request (IDR).” This formal request to examine your records shouldn’t be ignored.

Paperwork sought:

Books
Files
Financial papers
Electronic records

Thanks to the Supreme Court case United States v. Powell, the authorities have limits on their summoning power after issuing an IDR. Checks and balances in action.

Here’s the good news. With the IRS now acting as a political weapon, they can’t use this summons to intimidate or punish indiscriminately.

Take a moment to celebrate if you’d like.

As mentioned before, an answer to their request is still advised. Because the District Court can compel your appearance.

Major fines or imprisonment are a possibility with a non-response.

I’ve touched on what launches an audit. Next, let’s look at when they occur.

How Often Does the IRS Audit?

Before a need to search “ tax audit help near me” arises, it’s worth understanding the odds.

According to the IRS website, taxpayers with higher income face a greater likelihood of examination.

Between 2010 and 2015, those who earned $10 million or more experienced a larger percentage of audit rates. But if you earn less, a random review is still possible.

From when you file, they have three years to determine that inspection is warranted.

Recent news may equate to an increased risk, however.

Tax compliance technology provider Avalara released a report at the end of January. It touches on the Inflation Reduction Act of 2022, which earmarked $80 billion to fund the IRS.

With a stated goal to hire 20,000 more agents, including data scientists, you can bet enforcement will only expand.

The company’s VP of tax policy states, “Because state budgets aren’t experiencing the same windfalls as they were in the immediate impacts of the pandemic, legislatures will encourage an increase in audits to make up for any lost revenue. Businesses and consumers should all prepare for an uptick in audits in 2024.”

Moving on, there are measures you can take to guard against needless analysis.

Tax Audit Protection

The best tax audit defense is a good offense.

And it starts with honesty. That tried and tested attribute your parents raised you to demonstrate.

A reputable tax audit accountant will further reinforce this.

Resist the urge to speed through or be less than truthful. You are candid with your customers and staff. Maintain this pattern with our own government.

It’ll help you sleep better at night.

But if you’re preparing them yourself, consider the following:

Recheck your math
Focus on the details
Claim legit deductions

Tax software is good for an initial organizing of relevant information. It also allows easy comparison from year to year.

Pay attention to the math on capital gains and losses. Double check that the totals in your columns add up correctly.

You’d be surprised how many people forget to sign their return. This simple miss can lead to a closer survey by IRS agents.

My challenge is to think like an editor.

Their attention to detail during review catches typos and other small mistakes. Leading to a better finished product.

And in this case, acceptance by federal and state government.

Be Meticulous with Your Write Offs

You may be a small to mid-sized business owner. Or self-employed.

If the latter describes you, listen up.

What you write off will likely be scrutinized. Especially the home office expense.

Calculation = percentage of your work area in relation to overall square footage.

Let’s say it comes to 10%. Now you can deduct that percent of the following:

Cell phone dedicated to business
Utilities
Rent/Mortgage payment
Internet
And more

Along with supplies and advertising, these deductions can aid your bottom line. Especially nice for startups, it still rewards more tenured owners.

Should you also use a coworking or office space, talk to your tax professional. For two reasons.

Home office must be main place of business
Space should exclusively be for business

Entrepreneurs need to invest in paid tax services. Not simply thinking like a CEO, but also acting like one.

Outsourcing non-revenue generating activities allows them to focus on what they do best. Like scaling the business. Or seeking out investors.

Wrapping up, I’ll share your optimum bet for dodging a tax audit penalty.

Blue Slate Accounting Tax Resolution Services Company

Something is missing from the accounting field.

A human approach to business tax services. Zelienople, PA is our home, but we’ve worked with companies and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

FTC Intuit Finding Highlights Need for Human Touch

Thu, 01 Feb 2024 04:55:31 GMT

When does free cost you money? Allow me to answer the riddle for you.

After you find out that a paid assistant is necessary to achieve the advertised results.

During tax season, this is a situation worth avoiding. My goal is to help you discover another way.

Join me for news on a major brand.

And learn about a better way to file taxes.

FTC Intuit TurboTax Opinion

Digital marketing isn’t helping the industry recover its already stained image.

Of course, this doesn’t mean all advertising and marketing folks are untrustworthy. Far from it.

Nevertheless, I need to highlight a recent case.

Specifically, a company in hot water with the Federal Trade Commission (FTC). Intuit was found to have deceived consumers with ads that promised free to those who didn’t qualify.

The popular maker of TurboTax software violated the FTC Act.

Outcome of the finding :

Prohibited from claiming “free” unless all consumers qualify

Must disclose the actual percentage of taxpayers that qualify

Additionally, they can’t misrepresent facts on products and services:

Price
Refund
Credits/Deductions
Accuracy of unpaid service

Here’s what it means for your filing. Just because TurboTax says so, doesn’t make it true.

Or another way to say it, “technology is a tool, not a god.”

What is advertised as effortless and simple can potentially lead to a need for tax resolution . You don’t want that.

Especially considering our current economy.

Software can still be helpful during this season though.

I’ll touch on perks in the following section.

Software Has Its Use Cases

Perhaps you’re someone who normally starts your return well in advance. And has plenty of time to collect tax documents.

A piece of technology like TurboTax may be sufficient.

Advantages:

Cost
Speed
Simplicity
Convenience
Record-keeping
Fast refund

Instead of paying for an expert’s time, your only cost is for the software package.

Flexibility is another reward for doing it yourself.

You can scan and store documents as the year goes on. And file in an hour or less if your return is considered uncomplicated.

Choosing the right tool grants you access to support. Plus walks you through the process.

Instead of travelling to a physical office, your home becomes the filing center. Allowing you to be more productive in other areas.

Such as your family. Or business venture.

Comparing year to year returns is a breeze as well. Access is available on your mobile, desktop, or laptop.

Giving you an on-the-go reference tool.

Set up notifications to track the status of your coveted refund check.

As everything is done electronically, you know where you stand. No need to wonder aloud when the government will pay you back.

For anyone with a more complex situation, your better bet is personalized tax services .

Which I’ll talk about next.

A More Accurate Picture via the Personal Touch

Technology isn’t bad.

It can enhance our ability to thrive as human beings. Be more productive. Cut costs in our businesses.

Just don’t rely on it exclusively.

Because it doesn’t make up for quality done-by-hand attention. And when you’re dealing with the IRS, details matter.

Make tax season a stress-free time with the right professional help .

I want to help you compare software to the human variety.

Factors to consider when choosing:

Complexity of your financial situation
Your general tax knowledge
Amount of time you want to devote

I’ll unpack each one a bit more.

Complexity

TurboTax is more tailored towards those who have straightforward returns.

But as life goes on, relationships are added. Spouse. Children.

You might buy a house. Add investments. Start an online business.

Reasons for human intervention:

Need to itemize
Major life events
Business owner

A divorce. Renting out your home. Either of these situations presents certain rules and tax breaks. If you know about them.

When you start a business, you gain access to new deductions. Even during the startup stage, the benefit of expert advice is valuable.

Doing so can increase the likelihood of success. Because you’ll have more capital to reinvest elsewhere.

Proficiency

Those with a gift for numbers aren’t intimidated by what the IRS asks for. But the rest of the population feels otherwise.

Don’t take my word for it.

Just poll a group of your friends on the subject. Odds are, most of them wish they could fast forward through tax season.

Unfortunately, a remote with that ability doesn’t exist.

Tax laws also change. Staying current requires following relevant publications.

The average American prefers more entertaining reading.

One note on available benefits in working with a pro.

An IRS Enrolled Agent has passed a comprehensive exam. On the more than 70,000-page federal tax code!

No small feat, the government has their stamp of approval on these folks. Giving you confidence in two areas:

Reduced chance of an audit
Increased likelihood of an accepted return

Schedule

According to the IRS, it will take you about 13 hours to complete a return.

Unless you’re retired, devoting half a day might not be feasible.

Especially if you’re a new parent. In which case even finding an extra hour is almost comical.

How you spend your most precious asset is up to you.

Wrapping up, I’ll provide an alternative to TurboTax and its misleading marketing.

Blue Slate Accounting Tax Services Company

Something is missing from the field.

A human approach to personalized tax services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your personal tax needs today. And take the first step towards reclaiming your joy and happiness!

Adopting Personalized Tax Services Keeps the IRS Happy

Tue, 16 Jan 2024 04:55:52 GMT

Your New Year’s celebration has come and gone.

And now you’re facing an annual reality. Tax season.

Running between January 1 ^st and April 15 ^th , this period can create a bit of anxiety. But it doesn’t need to.

Join us as we reveal the benefits of custom tax services. Let’s begin!

Understanding Personalized Tax Services

Tax preparation software may be useful when you’re single. And young.

Simple returns can be handled through this medium. Note that we said simple.

But once you start “adulting,” their usefulness can wane. Necessitating another course of action.

One that involves trusting another human to manage the required steps. With the ease of internet research and trusted review sites, you are equipped to choose the right partner.

Examples of a more complicated tax return:

Home-based business
Mortgage
Dependents
Investments

Because you want to get all the deductions you can, personalized tax services are a better option.

Adding expertise and one-on-one attention gives you greater confidence and security.

Both are beneficial, whether you’re the main breadwinner or not.

Time is given back. To distribute to your children or spouse.

And we all know how invaluable that is.

Since you have a better understanding of its relevance, let’s move on to perks.

Unlock Rewards with Tailored Tax Solutions

Before you can justify outsourcing tax preparation, the opportunity cost must be factored in.

We’ll make it much easier by laying out the benefits for you. No need to thank us.

Compliance and Accuracy

There’s a reason you don’t perform surgery on yourself and pay someone else to. Stick with us on this analogy.

It’s because the operation can be delicate or require special training.

This same thinking is applicable when dealing with the federal government. The language of compliance is foreign to the uninitiated. And familiar to your IRS Enrolled Agent.

Confirmation of this fact comes from the comprehensive test they pass to earn that title.

You can bet that the IRS is paying attention to detail. Don’t let them be the only ones.

Speaking of checking off proper boxes, professionals support this effort:

Decrease risk of errors or penalties
Meet tax deadlines and comply with laws

The best tax advisors will incorporate technology and double check the work by hand. This combination ensures that your return is truly complete. Every time.

Besides relaying assurance as you move on to all your other responsibilities. As an employee, business owner , or family man.

Filing correctly the first time will make the rest of 2024 more pleasant.

Trust us on that point.

Tax Benefit Maximization

We have news for you. The government won’t advertise tax breaks that you can use.

Unsurprisingly, they aren’t looking to save you money. But that’s okay.

You can discover them through a certified tax professional.

Ways that they lend a hand:

Increase deductions/credits
Utilize tax planning strategies
Assistance with an audit or dispute

Each state has credits and deductions available to taxpayers. Quickly determining whether you qualify is a hallmark of these authorities in their field.

The goal is to break even or get a small amount back each year. But with an evolving tax code, it’s not a straightforward process.

Change that.

Create a plan of attack with experts in this area of government and watch savings grow.

Tax resolution services can alleviate the burden you feel while indebted to the IRS. And competence during an audit is also reassuring.

Save Time and Reduce Stress

Time comes in a limited quantity. And stress is something we always want less of.

Combing through filing cabinets and email to find relevant documents decreases the first while increasing the second.

Not a great trade off.

You can flip that equation in your favor, however.

Outsourcing provides the following:

Tap into professional knowledge of complex tax laws
Guidance through the filing process
Peace of mind with the IRS

Life happens. Like an adoption. Or other major life change.

Noting them when you file could require additional forms. Odds are you don’t have extra time to locate them. And properly fill them out.

Not a problem with your industry guide.

There’s two calls no person wants to receive. First, that they’re due for an invasive procedure. Second, that the IRS has questions for them.

The last benefit nearly justifies the entire expense of personalized tax help.

Remove that anxiety once and for all by bringing on an advocate between you and the government.

Peace is possible.

Custom Results

Tax software applies a one-size-fits-all approach. The only problem is that your situation is completely different from your neighbor down the street.

Sure, there may be some similarities. But your life isn’t a line of computer code.

It includes subtleties and particulars. Programs can’t factor those in.

A human being can though.

Which leads to reasons for investing in assistance:

Advice is specific and based on your financial situation
Direction for future tax years

Americans love personalization. We expect it at our coffee shop. For online shopping.

So, why settle for anything less when you’re filing taxes?

Earlier we mentioned how strategy can help decrease the odds of owing next year. And the following year.

It won’t happen randomly. But taking a focused look at your tax situation allows experts to get you there.

To conclude, we have a final suggestion for making tax season a breeze.

Blue Slate Accounting Tax Services Company

Something is missing from the accounting field.

A human approach to personalized tax services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money that you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your personal tax needs today. And take the first step towards reclaiming your joy and happiness!

Why Commingling Business and Personal Funds is a Bad Idea

Fri, 29 Dec 2023 17:55:11 GMT

“Will you be paying for this computer with cash or card?” asked the cashier.

“I’ll be charging my personal credit card until I find clients. Thanks for asking!” responded no solopreneur ever.

Well, maybe it’s been unspoken by a few.

Either way, it brings up a topic that you should be aware of. Mixing funds between your personal and business accounts.

Discover how you can shield your small business from any legal repercussions.

What is Commingling of Funds?

Many first-time entrepreneurs end up commingling business and personal funds.

Some business books warn against it. But not enough of them do.

An example would be purchasing a new office chair using a personal credit card. It may seem innocent, but it can create issues as you grow.

Namely, in the form of IRS scrutiny.

During the startup stage, you’re taking major leaps. From employee to employer. Shifting your mindset to that of an entrepreneur. And more.

This is where a bad habit can form.

Common reasons behind this practice:

Rapid pace of business affects decision-making
Limited cash flow early on
Lack of a dedicated business bank account
Gap in education for new business owners

The move towards a cashless society appears to be accelerating. Creating a greater need for patience in your purchasing.

It might look like ensuring that you grabbed the right card from your wallet before buying marketing software.

Opening a separate checking account for your operation provides you with a business checking card. Having a visual reminder to keep funds distinct helps.

Plus, it breaks the habit whether expenses are deducted automatically or manually.

In the next section we’ll alleviate a concern you may have after reading this far.

Is It Illegal to Use Business Funds for Personal Use?

Commingling business funds may have occurred innocently. And in most cases, it does.

But there are exceptions. Let’s look at an example.

Solopreneur Steve took out a loan which he defaults on after a year in business. Over that period, he made various purchases from a personal account.

Should the creditor take him to court, a judge could be swayed to rule against him. Even if fraud or embezzlement wasn’t the driver behind his actions.

In this case, Steve might have to close shop. Or lose personal assets to pay off his debts.

An LLC normally protects your home and car from repossession, but not your venture. Unless the corporate veil is pierced. Again, this determination is left up to the judge’s discretion.

Although an extreme case, it’s obviously better to avoid this scenario.

Creditors may also view it as a breach of trust, which is hard to get back. And makes getting another loan difficult.

Why that matters:

Growth is stunted when investors stay away
Partnerships may not materialize
Major changes in the economy have a greater impact

Finally, if your business gets audited and you have personal funds intertwined it opens you up for a personal audit as well.

Tax resolution services can assist if that happens. But it’s better not to need them.

Next, we’ll give you steps to guarantee that commingling won’t affect your bottom line.

Solutions to Commingling Funds

There’s no need to be alarmed if your business transactions are muddled right now. It’s part of learning.

And unites you with many others who’ve already walked the path you’re on.

Ways to draw clear lines between your business and personal life:

Open a business checking account right away
Keep your receipts
Outsource your bookkeeping to a professional
Use reputable funding sources

We encourage you to record transactions in a timely manner. This does take time but saves you from confusion later.

It can be done weekly or monthly.

A recurring task within your project management tool can remind you. Keeping a running total of expenses in the same task helps with budgeting as well.

It’ll also hamper the notorious “shiny object syndrome.” A snapshot of spending can make a difference on your balance sheet.

Physical receipts can be scanned into accounting software like Xero. It’s also a good idea to keep a backup copy.

Make an investment and hand off this responsibility once cash starts coming in. Because revenue-generating activities should be your focus.

Establish a relationship with credit sources before taking out a loan. If you’re having issues meeting payments, they’ll be more inclined to give you grace.

Additional Reason to Keep Accurate Records

Another benefit presents itself once tax season comes around.

Organized books make the job easier for your CPA or accountant. Leading to an expedited filing of your return.

Your bank statement is good, but accounting software is better. Because the professional you hire can access it for more accurate numbers.

It centralizes the flow of cash in one place. Ultimately allowing you to minimize taxes and maximize deductions.

This system helps you pay only what the law requires. Not a cent more.

Extra perks of using technology:

Ability to keep reporting simple or expand as you grow
Better insights into the overall financial state of your operation
Tutorial for new solopreneurs in metrics that matter

From our experience, Xero performs better than QuickBooks. Despite it being a lesser-known option.

Pros:

Receive clear and easy to understand reports
Real-time collaboration between your team is possible
Simplify your inventory management
More affordable for small businesses and solopreneurs

Reduce delays or other issues by taking necessary steps now.

It’s time to make commingling funds a distant memory.

Keep reading to discover why your peace of mind is closer than you think.

Blue Slate Accounting Tax Services Company

Something is missing from the accounting field.

A human approach to personalized tax services. Zelienople, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your small business tax needs today. And take the first steps towards reclaiming your joy and happiness!

Unrealized Gain on Trial at the U.S. Supreme Court

Fri, 15 Dec 2023 16:00:01 GMT

Strategic decisions today influence your tomorrow.

This is no less true when it comes to your small business tax planning. But when future payments are hard to determine, this task becomes difficult.

Our aim is to remove this obstacle. And it starts with sharing pertinent news.

Learn about a pivotal case before the highest court in our land. And what its tax implications mean for your small business.

What is Unrealized Gain?

We don’t profess to be investment gurus. That title is reserved for financial advisors.

But we do know taxes.

Your small business’ investment portfolio may include an unrealized gain.

This term has become the focus of a major case before the U.S. Supreme Court. But before we discuss its possible effect on your business, let’s define it.

Unrealized Gains Definition

According to Investopedia , it describes a “theoretical profit that exists on paper, resulting from an investment that has not yet been sold for cash.”

An example would be stock in a social media company:

You purchase 50 shares during a recent round of funding
Fair value of your investment increases by $2 per share
The difference between the current and original value is your profit

From a tax perspective, these gains won’t influence your IRS filing until the investment is sold. Which is why many choose to hold on to them for the long-term.

Next, we’ll review details of a legal battle that small business America should be following.

SCOTUS Ruling May Affect Unrealized Gain Accounting

The court recently heard oral arguments for the case Moore v United States. It is questioning a certain provision in the Mandatory Repatriation Tax.

One that taxes undistributed profits for U.S. shareholders invested in foreign corporations. Americans should own at least 50% of the stock. And the earnings must be from after 1986.

The law applies in two cases:

Company earnings were distributed to shareholders
Corporate earnings weren’t distributed to shareholders

Back in 2005, Charles and Kathleen Moore purchased 13% of an Indian corporation’s stock. To the tune of $40,000.

In this instance, the Moore’s were taxed $15,000 even though the company reinvested their unrealized gains. They took issue with this bill and brought litigation against the federal government.

Their lawyer is arguing that the Constitution was violated as they were taxed on personal property. Instead of income. Which they never received from the corporation to begin with.

Small Businesses Weigh in

Anne Zimmerman, co-chair of Small Business for America’s Future is one of the authors of a brief to the highest court. The Main Street Alliance and Small Business Majority have joined in as well.

Her vote is to uphold the constitutionality of this 2017 corporate tax reform law.

Reasons:

Potential of more lawsuits
Adverse ruling would favor the wealthy
Inability to understand tax burdens
Stunted growth from decreased investment

Confident decisions are needed in the highly competitive digital landscape owners find themselves in.

Purchasing technology and tools allows them to outpace their peers. But only if they can forecast taxes that will be due.

She states that these individuals may skip opportunities when faced with uncertainty. In her opinion, no changes should occur to the Tax Code.

As a small business owner herself, she had the following to say.

“We rely on a stable tax system to plan ahead and grow. Any major change in taxes can throw off our balance, making it even tougher to succeed.”

Moving on, we want to tackle a subject of ongoing debate.

Should Unrealized Gains Be Taxed?

Federal lawyers in the Moore case cite a massive change to the Tax Code as a possible outcome. Should the ruling go against them.

But what we’re really looking at here is the definition of income. And whether an unrealized gains tax has any merit.

Instead of answering directly, we’ll educate you on a benefit and let you decide. Because what works for your small business may not work for another.

Unrealized gain tax treatment:

Holding on to the assets spreads out your financial burden

Of course, there’s no guarantees in the stock market. But from your perspective, being able to reinvest funds into your business today is ideal.

Or investing in a likeminded company that shows real promise.

Another option is reinvesting your gains.

This can be done automatically on a tax-free basis for mutual funds or stocks in a retirement account. Removing a need to report them to the IRS.

We have one more piece of information to share. Know the difference between short- and long-term gains.

Short-term Gains

Earnings on assets which you’ve owned for a year or less

Long-term Gains

Earnings on assets which you’ve owned for more than a year

To enjoy lower tax rates, you’ll want to hold them for a longer period. This does require fortitude during periods of economic uncertainty.

But financial advisors will tell you to be patient. Investors who started early and stayed strong are the ones who end up in a better situation. And can retire on time.

Sitting down with a tax professional at the beginning of the year can further illuminate this subject.

To conclude, this case is worth following as the Supreme Court moves towards a final decision.

Which reminds us, your tax burden doesn’t need to weigh you down. You can hand it off.

Blue Slate Accounting Tax Services Company

Something is missing from the accounting field.

A human approach to personalized tax services. Pittsburgh, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your small business tax needs today. And take the first steps towards reclaiming your joy and happiness!

Charitable Deductions Are Down but Don't Need to Stay Down

Fri, 01 Dec 2023 00:47:44 GMT

The American Dream carries with it a challenge. To give back after finding the potential success it offers.

In your business and at home, there are organizations that you already support.

What would it look like if the federal government repaid your good deeds? Unless you’re earning a certain income right now, they aren’t.

But that could change with the Charitable Act.

Continue reading for a beneficial tax lesson.

History of Charitable Deductions

In 1917, the charitable deduction came about. With the goal of protecting donations.

Guarded corporations or associations:

Religious
Charitable
Scientific
Educational

1944 saw the introduction of a standard deduction. Which reduced the number of Americans who could itemize their giving.

And a change in 2017 increased the standard deduction. At the time it was estimated that even less taxpayers would be able to itemize. 10% of them to be exact.

Here in the United States, we export more charity that any other nation. Incentivizing more citizens isn’t a bad idea.

Enter H.R. 3435: Charitable Act.

Charitable Giving Deduction Boost

It came before Congress in May with a clearly stated goal.

“To amend the Internal Revenue Code of 1986 to modify and extend the deduction for charitable contributions for individuals not itemizing deductions.”

Receiving bipartisan backing, it’s an interesting piece of legislation.

Regardless of their bank account size, it would reward self-employed individuals for generosity.

If enacted, it’d increase deductions to $4,600 for individuals and $9,200 for joint filers.

The Charitable Giving Coalition (CGC), representing thousands of faith-based and charitable organizations supports it .

They believe it would encourage middle-income solopreneurs to increase giving. With tight profit margins due to current inflation, their assessment makes sense.

It has a long path to adoption, but we’ll be watching it closely.

Next, we’ll address what tax deduction looks like in practice.

How Does Charitable Tax Deduction Work?

Tax-exempt organizations like churches and nonprofits do plenty of good domestically and abroad. But they rely on donations to continue serving those in need.

Qualifying operations are grateful that taxpayers receive a deduction on their taxes.

It delivers two outcomes:

Self-employed entrepreneurs support their mission
Organizations can broaden their reach to newer areas

Most solopreneurs are still of working age. But the booming gig economy is bringing some experts out of retirement.

They are using the rise of remote work and online tools to their advantage.

So, we want to share an exciting option for these folks.

Individuals who are 70 ½ can use the IRA Charitable Rollover.

Applies to contributions from:

Roth IRA
Traditional IRA

It allows directly donating from your IRA up to $100,000 for charity. And the amount isn’t counted as taxable income!

Too bad this perk doesn’t apply to younger solopreneurs with means. Perhaps that will change.

After all, H.R. 3435 seeks to create a universal incentive for generosity. Should it pass, we may see other legislation coming before Congress.

Moving on, we’ll address a common question that we hear.

Can Charitable Contributions Be Deducted Without Itemizing?

Well, not according to the IRS .

“Generally, you can only deduct charitable contributions if you itemize deductions on Schedule A (Form 1040), Itemized Deductions.”

If you qualify for the 2023 tax year, your reduction is limited to 60% of adjusted gross income.

One important note.

Ensure total deductions exceed the standard deduction. Avoid itemizing if they don’t.

Making this determination becomes easier when working with a certified tax professional. Even better is an IRS Enrolled Agent.

The latter distinction is earned in one of two ways:

Passing a three-part test covering individual and business tax returns
Having enough experience as a former IRS employee

Every three years they must also complete continuing education courses.

Advice for Middle-income Self-employed Individuals

And now for non-itemizers.

Because your conviction to give likely stems from a moral source, this won’t dissuade you from donating. Good for you.

There’s a proper process to follow in this case.

Make sure you maintain a record of your solopreneur contributions:

Cash
Check
Other monetary gifts

You probably already receive an end of year statement from organizations and causes that you support. It should have their name, total amount, and state that “no goods or services were exchanged for the gifts.”

Physical copies are nice. But with the popularity of online tax services, you’ll need to scan and upload them as well.

A simple manilla folder or box helps for the actual giving statements. And an easy to find folder on your desktop secures the digital copies.

Exceptions to Note

There are special rules for:

Inventory
Automobiles
Other readily valued property

Donating a car worth more than $500, you can only subtract what the charity receives from its eventual sale.

Please know that the IRS will look at these deductions carefully. A law passed in 2005 aimed at catching those who overvalue vehicle donations is evidence.

Avoid using the listed Kelly Blue Book value unless the charity:

Keeps the car for use
Makes improvements before a sale
The car is worth less than $500
Vehicle sold at discount to a low-income individual

Now for donated property that you’ve owned for more than a year.

The deduction typically equals its fair market value. Appreciated property is ideal for this scenario.

As appreciation isn’t taxed, you’ll benefit from the full fair market value on your property.

Because you’re likely too busy to comb through the tax code, we have a suggestion.

Talk to a tax professional for advice on your charitable deductions.

Wrapping up, we’ll talk a bit more about that.

Blue Slate Accounting Tax Services Company

Something is missing from the accounting field.

A human approach to personalized tax services. Pittsburgh, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money that you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your self-employed tax needs today. And take the first step towards reclaiming your joy and happiness!

IRS Provides Way to Avoid an Employee Retention Credit Audit

Wed, 15 Nov 2023 23:41:09 GMT

The words “great news” and “IRS” aren’t commonly used together.

But there are exceptions.

One such case occurred last month and it’s worth sharing.

It involves a way for your small business to retract an employee retention credit (ERC) claim. See, we told you it was great news!

Read on to maintain your solid standing with the Internal Revenue Service.

Employee Retention Credit IRS News

Back in July, the IRS increased scrutiny of claims using the infamous employee retention credit audit.

For perspective, 252 ERC fraud cases dealing with more than $2.8 billion were active as of July 31. 15 had federal charges and 6 led to convictions. This information comes directly from the IRS.

Since then, thousands of audits have been opened by the agency. Leading to hundreds of new criminal cases.

What this ultimately means is that the problem isn’t going away anytime soon. And accurate information is needed for the businesses under close examination.

You may have already received correspondence asking you to provide further details on your financial assistance request.

Stay positive though.

Renewed Hope for ERC Claimants

We feel for you. Having sacrificed so much to launch and grow your business, uncertainty may be crowding in.

But understanding that some honest business owners were deceived by third-parties, the IRS has provided an “out.” Allowing you to withdraw a claim. Having done so, they will look on your business as never having filed.

Take a second to exhale and enjoy that sense of relief.

Now you can avoid:

Repayment
Interest
Penalties

And the news comes from a pretty reputable source.

"The IRS is committed to helping small businesses and others caught up in this onslaught of employee retention credit marketing," said agency head Danny Werfel.

Unethical individuals commonly take advantage of government announcements on credits. But only in 100% of cases.

This isn’t new.

So, it’s nice to see the IRS exhibiting reprieve for small business America. Because COVID restrictions adversely affected it the most.

Other Relevant ERC News

In September, the IRS unveiled additional steps to combat the large amount of false claims reaching their offices.

Including:

Moratorium on new claims being processed
Settlement program for mistakenly filed claims

Effective as of their announcement, the moratorium extends until the end of 2023.

Believing new claims would start to decrease, the IRS appears to have been caught off guard. The ongoing push of greedy promoters seems to be a factor.

Ads across the internet and social media continue to attract hard-hit small businesses. It’s hard to blame their owners as they look for ways to stay in business.

Beyond the moratorium, an update on a settlement initiative will be released soon. It is for small business owners who were duped into claiming and receiving funds.

From the little we presently know, it will allow these individuals to pay back claims. Thus dodging penalties or action related to compliance.

Now, let’s shift back to the best available option as of today. Withdrawing the claim.

Please know that this process isn’t open to every business. We’ll help you determine eligibility next.

Employee Retention Credit Eligibility to Withdraw a Claim

Aggressive sales tactics may have prevented you from initially verifying ERC eligibility.

Don’t concern yourself with what already happened. Look at it as a learning opportunity and be more shrewd in the future.

Here, we’re concerned about your present . Your employee retention credit status will determine if you qualify to recall your claim.

Allow us to explain further.

Applicable situations:

Withdrawing entire amount
Claim hasn’t been paid
Claim paid, but check isn’t cashed
Adjusted return filed solely for ERC claim
Claim made on adjusted employment return

Make sure to discuss your specific situation with a tax professional. Because it’s not always clear where you stand from the viewpoint of our federal government.

And you’ll want a definitive answer on your actual status. Before going through the steps to rectify any issues.

After all, your business demands your full attention. An unclear tax situation can heavily distract from serving your customers. Your employees. And providing for your family.

Please note. Even if none of these conditions describe your situation, you have an option.

Filing an amended return can decrease or erase your ERC submittal.

Help With Your Claim

According to the IRS Commissioner Danny Werfel, “We continue to urge taxpayers to consult with a trusted tax professional rather than a marketing company about this complex tax credit."

With their expertise in tax resolution , this advice is solid.

Steps your hired professional can take:

Mail back the voided refund check with proper documentation
Provide documentation to an assigned examiner
(If accepted) amend your income tax return

Maybe you received a check but haven’t deposited it into your bank account yet. Continue to hold off as sending it back can help your situation.

Perhaps you’re already experiencing the pressure from an audit. As your advocate before the IRS, a tax resolution specialist will follow up with the agency. Whether you have an assigned examiner or not.

If adjustments need to be made, they will take care of the filing side for you.

Regardless of its acceptance or denial, you’ll get a letter from the IRS regarding your withdrawal request. Should you be accepted, the letter will be your proof of approval.

Going through the proper channels is your best chance of success.

With that in mind, we’ll conclude by highlighting your guide to peace of mind for an ERC claim.

Blue Slate Accounting and Employee Retention Credit Claims

Something is missing from the accounting field.

A human approach to personalized tax services. Pittsburgh, PA is our home, but we’ve worked with businesses across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

Microsoft in Need of Tax Resolution Services

Mon, 30 Oct 2023 19:22:21 GMT

Corporations aren’t exactly known for honesty. Which probably isn’t news to you.

One present-day example is Microsoft, the well-known software company. This month they find themselves in hot water with the federal government.

Namely the Internal Revenue Service.

The story ties into tax resolution, something your business may be presently experiencing.

Learn from their mistake and re-discover hope for your business’ longevity.

Microsoft News and Tax Resolution Services

Recently, the IRS has found issue with Microsoft taxes. To the tune of $28.9 billion owed.

Specifically, the case centers around how they distributed income and expenses among global branches.

Back in 2012, the agency took a closer look at the practice of transfer pricing. This term refers to using tax havens for offshoring their profits. Thus avoiding U.S. corporate taxes.

During the period in question, Microsoft sent billions of dollars to countries like Puerto Rico.

The company is currently appealing the IRS decision. Should this petition be denied, they’ll need exceptional tax resolution help.

And perhaps the word ‘exceptional’ isn’t strong enough.

Granted, Microsoft would recover from such a loss. For example, they reported revenue of $51.9 billion in Q4 of last year.

But as a small or midsize business owner, you don’t have the margin of these corporate giants. Having to close your doors is a real possibility without the right assistance.

That coming in the form of professional help. Bringing any situation with the IRS to a swift conclusion. And one that allows you to continue serving customers.

Before addressing your present situation, let’s explore potential ramifications.

Consequences of Back Taxes

The federal government holds power over business. A tremendous amount.

But their exact methods of exerting that authority may be unknown.

We want to share some options at their disposal:

Garnish wages
Levy bank accounts
Seize assets
Place liens on property

Business revenue won’t stay in your bank account for long if taxes are owed. Preventing your growth. And possibly causing you to close the business.

After working so hard to launch and develop your operation, this outcome is the toughest.

A federal tax lien tells other creditors of their right to your assets.

Such as:

Property
Cars
Investments
Furniture
Smart TVs

You’ve likely seen this scenario play out in movies. But having it happen to you in real life can make you wish it was a bad dream.

Before this situation transpires, take heart that it is preventable in the first place.

Strategies to remove the lien:

Installment Agreements
Offer in Compromise
Payment plan
Appealing the lien

None of these are guaranteed. Knowing your options generates at least a measure of optimism, however.

Moving on, it’s beneficial to look at the perks of handing off the negotiations.

Tax Resolution Specialist Justification

Contained within the IRS’ Taxpayer Bill of Rights is the right to representation. Making your investment in personalized business services a wise one.

Additional benefits:

Negotiation skills could equate to a more manageable deal
Correction of errors such as mingling of personal and business income
Knowledge of realistic payment plans when a large amount is owed

You’re the expert in your industry. But dealing with the legal world may be overwhelming. Don’t worry, it is for most entrepreneurs.

Having an advocate who recognizes a fair compromise provides you with hope.

A common mistake for newly self-employed individuals is combining funds. We’ve seen it occur mainly during the startup stage.

Until you learn about opening a dedicated business bank account, this can throw off your tax filings. Which leads to an inaccurate outstanding amount.

In the eyes of the IRS, this is a minor error. As such, guidance can present restitution into good-standing.

Especially when back taxes are very high, the weight of interest can make a payoff appear unlikely. Until reassurance comes your way.

In the form of an attainable recurring payment. Allowing you to slowly bring down the balance. While at the same time running your business.

If you don’t owe very much or have a legal background, you may consider being your own representative.

We’ll offer some advice on that method next.

Paying Back Taxes on Your Own

To begin, request your tax transcripts.

This documentation will give you a better picture of previous filings. Call the IRS or submit Form 4506-T.

What to request:

Account transcript
Record of account transcript

The first will show if there’s been any updates to your tax account. And original filings.

Next, the record of account transcript allows you to glean why you owe.

Your second step in the process is to establish a positive track record with the debt collector. This is accomplished by filing on time.

As a sole-proprietorship, there is a form and deadline for submitting it:

Form 1040 (Schedule C)
Tax deadline is April 15th

You’ll find the form on the IRS website or via an online search.

When you miss a return filing or submit it late, you also have two possible relief options:

Reasonable cause
First-time penalty abatement

Examples of reasonable cause may be natural disasters, serious illness, or death.

If your historical record of tax compliance is solid, first-time penalty abatement could also be a possibility.

Following these general guidelines supports the elimination or reduction of back taxes. But your best bet is still to work alongside an IRS Enrolled Agent.

Perhaps you’re ready to learn more about how a tax resolution specialist can lighten your load.

Wrapping up, let’s start the burden removal process!

Blue Slate Accounting Tax Resolution Services Company

Something is missing from the accounting field.

A human approach to tax resolution. Pittsburgh, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

Self-Employed Tax Perks You Need to Be Aware of

Sun, 15 Oct 2023 17:08:59 GMT

“Here’s what I wish I’d known before launching a business.”

There’s been countless books, podcasts, and articles with this title or variations of it.

When it comes to taxes, being in the know literally pays off. That’s why we want to share what you can expect as a self-employed individual.

To help you avoid ever having to utter the above statement.

Read on for benefits even beyond prospective profits for your startup venture.

Determining if You Are Responsible for a Self-Employed Tax

There’s a necessary step to cover before discussing your self-employed tax status. Whether your activity is a business or hobby.

Stay with us here, we promise that it’s worthwhile. And it can save you from unnecessary headaches.

Now, you may have your own thoughts. But from a legal perspective, it’s good to be certain.

Because some hobbies generate revenue, making the distinction is your first order of business. The best definition comes from a 1987 ruling made by the highest court in our land.

According to the U.S. Supreme Court, “the taxpayers primary purpose for engaging in the activity must be for income or profit. A sporadic activity, a hobby, or an amusement diversion does not qualify.”

In the eyes of the IRS there’s another litmus test for cementing if you’re for profit. If at least 3 of 5 consecutive years ending with the current tax year yielded more revenue than deductions, it’s a business.

But the best way to finalize the answer is talking it over with an expert tax professional. Investing in their knowledge will remove any doubt you may have about whether or not your operation meets the definition.

Do My Real Estate Holdings Qualify for Business Status?

Some entrepreneurs include properties in their investment portfolio. But qualifying it for tax deductions isn’t as clear cut.

It deals with the IRS definition of partnerships.

Should you and a co-landlord or apartment owner provide services to tenants, it constitutes a partnership. That would mean you split the costs of repairs and maintenance.

But not if you and a friend go in on a property simply to share expenses. It’d be nice if it was, but the government views it differently.

For the latter case, each of you would report your portion of expenses as a hobby or investment.

This example shows that your situation may include nuances that appear confusing on the surface. However, there’s always an answer if you connect with the right expert advice.

Another example of a partnership would be creating a Limited Liability Company (LLC) to flip houses. For this specific endeavor, making it official with an LLC does provide tax savings.

Hopefully now you have the answer for your particular case. Moving on, let’s get to the benefits that kept you reading up this point.

Self-Employed Tax Benefits

People don’t go into business for the self-employed tax write offs. But they enjoy the fruits after learning about them.

It can be encouraging to know that your first small business is supported. Help from any source is most welcome during those early years.

Deductions:

Startup costs
Home office
Advertising
Education
Business insurance
Internet
Phone

The year you launch the business typically incurs the most costs. You’re able to deduct software fees and much more. Take advantage of this break during your startup stage.

Working from home, you’re also able to deduct a portion of utility, internet, rent, and cell phone bills. With a fully online business, assistance to balance your extra output is nice.

One way to calculate the home office expense is to measure the square footage of your dedicated space. If it’s 10% of your total square footage, you can deduct 10% of each aforementioned bill.

Some examples of advertising might be a website build or business cards. These are in addition to the traditional online and print ads.

Lifelong learning normally marks an entrepreneur like yourself. Take note of expenses for online or in-person courses. They are deductible as well.

Talk with a tax professional to learn about additional write-offs.

And one more item we’d like to share. You can deduct half of your self-employment tax from net income when you file. A small but valuable win!

Reasons for Self-employed Tax Help

Raise your hand if you stay on top of emerging tax regulations.

Since we can’t see you, we’ll just assume your hand didn’t move. And you’d be like most self-employed individuals.

There is a solution which we’ve alluded to earlier. Hiring someone who studies up on the ever-changing “rules.”

Where a tax professional shines:

Stays up on tax regulations at the federal, state, and local level
Works to decrease any penalties you may be responsible for
Ensures you’re receiving every possible benefit of running your business
Reduces errors to prevent a need for tax resolution
Deep understanding of the IRS tax code

Organizing 1099s and Schedule Cs can be tedious. More so when you hire independent contractors and have to send them out.

As your business grows, so will overall responsibilities. Client work, pitching prospects, and dozens of other tasks.

Your time is better suited for the above. Not handling the non-revenue generating tax side of your operation.

When you want to be compliant and decrease your tax burden, outsource to a professional. It’s really never too early to delegate.

And to wrap up, we’ll show how that handoff just got smoother.

Blue Slate Accounting Tax Services Company

Something is missing from the accounting field.

A human approach to personalized tax services. Pittsburgh, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Whether that’s aiding their successful filing or dealing with an IRS audit.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Federal, state, and local taxes
Navigating tax regulations
Increasing money you’re legally entitled to
Limiting any tax burden
Quarterly filings

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Your return will be double-checked by hand for ultimate accuracy. Because we strive for excellence just like you do.

Offload your tax self-employed tax needs today. And take the first step towards reclaiming your joy and happiness!

4 Small Business Bookkeeping Basics to Further Longevity

Sat, 30 Sep 2023 16:25:14 GMT

Staring at the disorganized box of financial records, Steve decided to take a nap. But when he awoke, the box was still sitting there.

Taking a deep breath, he silently wished he’d taken his books more seriously.

Details are important, even if they aren’t your favorite as a small business owner. View them as the stepping stones to achieving your long-term vision.

We want to help you identify these stones for increased confidence and sure footing.

Read on and move one step closer to a secure financial tomorrow.

Why is Bookkeeping Important for a Small Business?

As the doors of businesses shut for good during COVID, staff were faced with a stark reality. Some joined new companies. But others went a different route.

Entrepreneurial-minded employees like yourself chose to become your own boss.

Over 5 million new U.S. businesses were formed in 2022

Less than the record year of 2021, this number is nonetheless a positive sign.

Before we cover small business bookkeeping basics, it’s necessary to address why you should record financial data.

20% of small businesses will fail in their first year

Lack of funding and market conditions do factor into this statistic. But another major contributor is poor bookkeeping.

Monetary decisions you make early on either hinder or help future growth. Because profitability takes time, create an organized system before your website is even up.

Don’t wait until that first customer takes a chance on you. Start once money begins to flow out.

Small business online bookkeeping is going to reinforce your venture during the startup stage. And other activities like marketing and sales will build upon that foundation.

The source of funding isn’t as important as how you steward that capital.

You likely have a budget for your family. Bookkeeping is similar because it leads to wiser spending decisions.

Now let’s get to the 4 basics that will support your business structure.

How to Keep Small Business Books Up to Date

Don’t worry if math isn’t a strength of yours.

Small business bookkeeping help is out there.

Technology will be your friend in balancing your books. A professional accountant is another great option. Even in your early years of entrepreneurship.

We want to provide a few pieces of advice to get you going.

Recording basics:

Create a dedicated business bank account
Use accounting software
Establish backup records
Schedule a monthly review

Let’s unpack each fundamental a bit more.

Business Banking

After filing a Fictitious Business Name (FBN) and acquiring an Employer Identification Number (EIN), open a business checking account. Consider credit unions as they are typically geared towards businesses of your size.

Set up recurring and one-time payments to go through this source.

Mixing personal and business expenses creates extra work during tax season. Plus the IRS prefers that you don’t. Avoid this temptation from day one.

Because business expenses are tax-deductible, you can increase your savings by separating cash outflow. A small win early on is nice.

Your first year in operation will yield the highest tax break. But amortization will allow a portion of future spending to also apply.

Another perk of your dedicated account is that it negates the need to sift through personal checking for individual purchases. Preventing a headache and decreased productivity.

Accounting Tools

Bookkeeping software should be factored into your startup expenses.

Benefits:

Informed awareness of your venture’s financial health
Flexibility to expand reporting as you scale up
Helps you focus on the most important metrics

Xero and Quickbooks are popular selections. Compare them to see which meets your needs most effectively.

Our favorite is Xero, but we’re certified with both tools.

Their capabilities for your purposes include:

Scanning receipts
Integrating with your bank accounts
On-demand reports for analysis
Dashboard of cash flow, profitability, etc.

Since many small business owners run their operations from a smartphone, app access is another helpful addition. Giving a quick overview as you purchase equipment, inventory, and other assets.

One word of caution. As with any technology, it’s no substitute for due diligence and attention to detail. Don’t rely on it for the answers, it’s simply a guide for more informed judgments.

Records Safekeeping

Having a “downtime” system in place allows you to weather any online issues. For example, bugs or other problems on the developer side of your bookkeeping software.

In the event that the technology goes down, your financial reporting can keep plugging away. Efficiency at its finest.

Offline backups:

Physical receipts
Files on your desktop or laptop
Flash drive
External hard drive

You may see this as double work. But you’ll be happy if the technology is having extensive issues. Or the software company goes under.

Consistent records will also decrease the risk of an IRS audit in your business’ future.

They’re becoming less common than electronic transactions, but you might have printed receipts. Keep them in a file folder with tabs for specific categories. Such as advertising, equipment, and software.

Bookkeeping Audit

Ideally, you should be reviewing business finances every month. If that’s not possible, do it every quarter.

With software, this process is accelerated.

Possible steps:

Upload previous month’s receipts
Attribute income from various bank accounts
Look at cash flow, revenue, expenses, profitability
Download the report of above metrics

Don’t spend hours and hours on this ongoing task. The main goal is to ensure accuracy come tax season. Plus provide benchmarks for financial forecasting.

Initially, these bookkeeping basics are within your power to handle. But post-launch, and especially after revenue starts coming in, think about outsourcing to a pro.

To conclude, we’ll help you hand off this non-revenue generating side of your business.

Blue Slate Accounting Small Business Bookkeeping

Something is missing from the bookkeeping field.

A human approach to personalized business services. Pittsburgh, PA is our home, but we’ve worked with small to mid sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

Expect tailored recording from your personal Blue Slate Accounting team member:

Matching receipts to bank and credit card statements
Bank account, credit card, and loan reconciliations
Applying customer payments to in-house generated invoices
Accounts Receivable tracking and invoicing services, including reminder letters
Accounts Payable tracking and bill payment services

We provide a quick, realistic weekly snapshot of your cash flow. Allowing you to make informed monetary decisions.

Outsource your bookkeeping solutions today. And take the first step towards profitability and contentment in your business!

Best Payroll Management Software for Busy Entrepreneurs

Fri, 15 Sep 2023 15:43:08 GMT

Marketers do something really well. Promise the moon.

This is true for messaging you see on payroll software. But don’t be quick to take their word for it.

We want to empower you as a business consumer. And our guide will make your final selection that much easier.

Keep reading to see how these tools benefit your small to mid sized business.

How to Determine the Best Payroll Software

Before you invest a cent, step one is finding the best payroll management software.

Normally this takes hours of research. But we’ll make it easy on you.

We’ve done the comparisons and have found the top solutions. Before sharing them, let’s look at selection criteria relevant to your business.

Considerations:

Reporting capabilities
Compliance with current legislation
Complete features stack
Meets your established budget
Reviews from similar businesses

Mobile access is a nice feature, but reporting is a more important variable than this and other “frills.” The reason is that analysis of accurate reports reinforces your overall business vision.

Helpful documents:

W-2 summary
Deductions and contributions
Payroll summary
Wage and tax summary

Ease of use is another determining factor.

Software developers shouldn’t be the only ones who can figure out how to use a product. Look for a simple and clear user experience.

Online videos can provide this picture for you. If you will get frustrated trying to print a report for example, maybe try a less stressful option.

Although many market themselves as do-it-yourself, a professional accountant can wield this tool most effectively.

Limitations of Popular Payroll Software

Any tool can be used incorrectly. In the case of a home improvement project, this can hurt the structural integrity over time.

This is no less true for your payroll needs.

Possible outcomes of misuse:

Going over budget to clean up a mess
Non-compliance with state regulations
Making decisions with inaccurate data

Let’s move away from payroll for one second.

When a restaurant redesigns their kitchen, many steps are involved. Say a step is missed early on. Backtracking can be tough because the gap isn’t always easy to identify.

Back to our topic.

If you’re staring at an inaccurate payroll report, you may be at a loss on where you went wrong. It could be because of a gap in your process.

But the more likely cause is an incorrect use of certain features.

We’ll illustrate this point with well known payroll software. Quickbooks can help with certain aspects of bookkeeping, but its payroll processing could improve. In our humble opinion.

Now, it’s time to move you closer to investing in a time-saving payroll solution.

Straightforward Payroll Accounting Software for Small Business

Review sites are good. Sometimes.

But there may be inherent biases for their “best of the best” lists. However, the assessment from payroll service professionals carries more authority.

Because we are in there weekly. Learning the good, the bad, and the downright frustrating. So you don’t have to.

Which brings us to one of our personal favorites in terms of payroll software. ADP Run to be exact.

There’s a second product we are proficient in, but let’s focus on ADP for now.

Perks:

Scalability matches your growth
Stellar features on basic plans
Key add ons to aid HR

Whether you add staff or downsize, they have additional choices for meeting your demands. Roll by ADP fits businesses with 10 or fewer employees. While their Workforce Now accommodates 50 or more staff members.

Pricing also adjusts accordingly. Giving you the best value for your expenditure.

Secondly, Run boasts a nice package of features with their most affordable plan. We won’t bore you with an extensive list, but instead offer a sample.

Examples:

Tax filing services
New hire onboarding
Multiple ways to pay employees
Mobile or desktop management

Lastly, as you experience greater profitability, you can expand into insurance benefits and retirement services. Centralizing HR tasks within the platform.

And if you’re like many solopreneurs, you may be the HR department initially. Know that it also helps you pay freelancers and other independent contractors.

Benefits of Payroll Software for Restaurants

We often like to use the example of restaurants because they operate in a fast-paced and highly competitive industry. It’s a great case study in software’s effectiveness, or lack thereof.

If your product isn’t food, picture your specific business. Consider how your own needs match up with that of an eatery as we go.

Reasons to adopt payroll software:

Time savings
Fewer errors
Easy customization

Beyond automating recurring tasks, the right tool also helps with employee retention. Consistently prompt payment in their checking account strengthens the business relationship!

Now for you as the business owner. Less time at the office means more free time doing what you love. Plus confidence that your workers are receiving their due.

Manual data entry leaves room for mistakes. Reducing these gives accountants more reliable information. And after double-checking the numbers, their insights guide your decisions.

Internal safeguards within the tool itself can also ensure compliance with tax laws. Decreasing the chance of an IRS visit. Or audit.

Finally, software that is cloud-based allows yourself or cleared employees to make necessary changes. Even from the comfort of their couch.

By now, you should have a bit more direction on selecting the ideal payroll software. But maybe when it comes to the “doing,” you’d prefer to hand it off.

We’ll provide that opportunity below.

Blue Slate Accounting Payroll Service Solutions

Something is missing from payroll services for small businesses. A human approach.

Pittsburgh, PA is our home, but we’ve worked with small to mid sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

With a highly personal approach, you enjoy extra peace of mind that your concerns were heard. That’s a guarantee.

We don’t offer this service as a standalone. But current clients can bundle it into their overall accounting package.

Expect the following from your personal Blue Slate Accounting team member:

Data entry
Tax filings and reporting
1099 preparation
Time tracking and payroll integration
Payroll processing

Tailored to your specific needs, we’ll help you choose between two payroll software platforms.

Both have proven themselves across many industries.

Outsource your payroll solutions today. And take the first step towards profitability and contentment in your business!

Comparing Top Accounting Software for Small Business

Fri, 01 Sep 2023 01:04:27 GMT

“Now where did I put that all-important document which is so needed right now?”

Running a business generates plenty of documentation. If it’s all sitting somewhere in a box collecting dust, know that there’s a better way.

Online accounting tools to your much needed rescue!

Using our extensive experience, we want to share two quality time-savers. Hopefully making your final decision painless.

That journey starts now.

Benefits of Accounting Software for Self-Employed Individuals

Accounting software for small business owners keeps finances in order. And structure promotes a healthier business.

Especially for those newly self-employed, it’s a nice introduction to the world of accounting. If math wasn’t your favorite subject, it also makes your business numbers less intimidating.

Plus who doesn’t get excited when they learn that their hard work is generating a profit?

Rewards of this technology:

Better insights into the overall financial state of your operation
Ability to keep reporting simple or expand as you grow
Tutorial for new solopreneurs in metrics that actually matter

When you’re first starting out, these tools aid your business operations. And can be managed by you.

But hopefully your venture will scale and present you with new opportunities. Thus justifying handing off this responsibility to a professional.

Working from home, you don’t need to deal with complicated accounting principles. All you want is a surface level idea of what’s working and what isn’t.

That’s actionable intelligence to inform your decision making.

But maybe you have everything on paper still. That’s okay, we’ll help with the shift.

Why You Should Transfer Physical Books to Accounting Software Online

There’s nothing wrong with traditional methods of tracking cash going in and out. Despite that, it may be holding you back.

Let us explain.

In our personal lives, physical bills and receipts usually end up in a filing cabinet. To be sorted out when tax season pops up. However, this system isn’t efficient.

When it comes to your business, productivity is something you want to increase over time. Whether it’s with credit card reconciliation . Or any other number of important bookkeeping tasks.

Results of software implementation:

Better organization of income, expenses, and cash flow
Dashboard provides a quick snapshot on the go
Calculations are done automatically within the platform
Streamlines records for an accountant working outside of your area

The initial logging in of previous records will take some time. But after that, future reporting will be smooth. And more effective.

Please note that we actually double check all client numbers by hand at our firm. As will any accountant worth their salt.

So there’s still benefits to pen, paper, and calculator.

Next, we’ll compare two common options for your business.

What is the Most Commonly Used Accounting Software?

There is a popular choice for accounting software. QuickBooks.

However, it’s not the only quality option.

Xero is a favorite of ours. We’ll show how this New Zealand-based software company matches Quickbooks in many areas.

QuickBooks

Plenty of accountants are familiar with QuickBooks Online. Which is their cloud-based platform.

As it’s been around for some time, there is an abundance of resources to help with onboarding. This allows you to learn as you go. Instead of being overwhelmed with hours of training.

Besides a real-time picture of your financial health, it offers other pros. But as with all software, there are cons as well.

Positives:

Support available on all plans
Integrates with many third-party apps
Well established name in the industry
Scales nicely alongside your operation

Negatives:

Syncing with banks can run into security issues
Plans can get pricey as you add-on more features
To increase user amount, upgrading is required

Overall, QuickBooks is good if your business tool’s budget is a little higher. But there’s a viable alternative for younger businesses.

Xero

If you’re in a niche market, this is a good option. Because it integrates with over 700 apps.

Visually, QuickBooks can appear too busy for some users. They might have trouble initially determining what numbers matter most. This isn’t the case with Xero.

Boasting a simple and clear interface, it is a nice piece of accounting software. Restaurants will like its straightforward way of managing inventory.

They can even collect payments through a Stripe integration.

In our opinion, the pros of this tool outweigh the cons.

Positives:

Inventory management is simplified
Allows real-time collaboration between your team
Affordable for self-employed or small businesses
Reports are clear and easy to understand

Negatives:

More established businesses have limited features
Customer service could be improved
Must pay fees for ACH payments

You’ll make the right decision for your particular business needs. Review both options and see which one checks off the most boxes.

Your goal should be finding a cost-effective tool. And user-friendly as you handle the financial side of your venture.

What Software Do Accountants Use?

Accountants like us deal with various industries and business sizes. Plenty in the United States choose QuickBooks in order to serve their clients.

Not a bad choice.

Personally, we prefer Xero. But we’re certified in both Quickbooks and Xero management.

Either way, there are bonuses for transitioning from paper records to the electronic variety.

Perks for the small business owner:

Given more time back for revenue-generating activities
Receives weekly report of cash flow with advice

In competitive industries like food service, these up-to-date numbers matter. Accounts receivable (AR) and Accounts payable (AP) are another area you won’t have to worry about.

Wrapping up, you have a second option over managing the finances yourself.

Blue Slate Accounting Outsourced Bookkeeping Company

Something is missing from the bookkeeping field.

A human approach to personalized business services. Pittsburgh, PA is our home, but we’ve worked with small to mid sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

Expect tailored recording from your personal Blue Slate Accounting team member:

Matching receipts to bank and credit card statements
Bank account, credit card, and loan reconciliations
Applying customer payments to in-house generated invoices
Accounts Receivable tracking and invoicing services, including reminder letters
Accounts Payable tracking and bill payment services

We provide a quick, realistic weekly snapshot of your cash flow. Allowing you to make informed monetary decisions.

Outsource your bookkeeping solutions today. And take the first step towards profitability and contentment in your business!

IRS Scrutinizing Employee Retention Credit Claims

Tue, 15 Aug 2023 19:33:57 GMT

Everyone loves receiving a letter from the Internal Revenue Service (IRS). Or is it nobody?

Okay, we’ll go with option two.

Making an improper employee retention credit may lead to such a letter. Our government is making a concerted effort to crack down on this.

We want to increase your chances of avoiding unpleasant interruptions.

Keep reading and retain your business assets.

IRS Combating False Employee Retention Credit Eligibility

Because of debatable employee retention credit claims, the IRS is stepping up their efforts. Even possibly getting Congress involved.

As of July 25th, the IRS Commissioner Danny Werfel wants their help in 2 specific areas :

Move up the filing deadline
Increased oversight of tax preparers

“The further we get from the pandemic, we believe the percentage of legitimate claims coming in is declining," he is quoted as saying.

Yours may be valid, but shady ones will be mixed in with it. Making it harder for a timely response and return, if warranted.

The IRS puts out a “Dirty Dozen” list annually, and this fraud is included.

Audit and criminal investigation is aimed at both businesses and promoters. The latter being those making wild promises to anyone that will listen.

You have until April 15, 2025 to file a claim. But with bad actors overrunning the system, it’s becoming harder to receive an employee retention credit. IRS gatekeepers are seeing to that.

This is due to their belief that the percentage of accurate claims is fading.

Be Wary of Certain Promoters

Misleading marketing is the main culprit behind their vigilance. As we spoke about previously , advertisements are deceiving small and mid sized business owners.

Solicitation channels:

Television
Email
Print
Social media

More than likely, they won’t ensure that you’re eligible for this credit in the first place. And if it feels like “high pressure sales,” it likely is.

Watch for these signs:

Demand for fees upfront before any services are provided
Statement of qualification prior to reviewing your taxes

When the government offers any relief to businesses, opportunists always seem to pop up. This COVID relief is simply another example.

As the IRS goes through applications with a fine-toothed comb, it’s even more important to follow the proper steps. Because they will be doing their own due diligence. You should too.

We’ll touch on that shortly.

How to Record Employee Retention Credit

More than 2.5 millions claims have been received by the IRS already.

But our goal is to focus on yours. In particular, recording revenue and a receivable for this financial support.

At what point should you perform this task?

Once you determine that the credit will likely be received

That’s right. You can update your books even before the event happens. This gives you the best financial picture of your business.

Deciding on the particular accounting method may be a bit tricker.

Couple of choices:

Generally Accepted Accounting Principles (GAAP)
International Accounting Standards (IAS) 20

Neither is perfect, but adding disclosures can provide evidence to the IRS. You’ll also want to have these in accompanying financial statements.

It’s always better to offer more information to help the reviewers than less.

Options for Recording

Assuming you met the employee retention credit requirements, your claim does need to be recorded.

Your best option for precise completion is:

Professional accountants

Employee retention credit isn’t taxable income for your staff. And for you, it’s treated as a business expense. Which you can apply to offset any owed taxes.

Prior to 2021, accounting software like Xero or Quickbooks were an option for claiming these funds. Not anymore.

Current two-step process:

Perform the calculations manually
File amended payroll tax returns

When you’re finished, the IRS will review and update your tax status. If you actually qualified for the credit.

Next, we want to offer a further word of caution.

Avoiding an Employee Retention Credit Audit

Wild overstatements from unethical marketers and scammers are causing clients to leave legitimate accounting providers. It’s hard for us to see.

Because we know it can cause major headaches if they weren’t eligible in the first place. Including an audit from the IRS.

Nobody wants that!

The IRS isn't’ fond of that either. In fact, their official recommendation is for small businesses to work with a tax professional. That’s got to count for something.

These individuals are highly experienced and trained to address your case. Plus they are up on industry trends and scams. You’ll want this knowledge in your corner.

We all need advocates. Especially helpful are people who speak the language of legality. Even if you have a basic understanding of our legal system, the time savings is another perk.

In the event of an audit, tax resolution services are a wise choice.

Tax Resolution Assistance

Should the IRS charge you for the full employee retention credit amount plus penalties, an accountant can help. It’s one of their specialties.

Options available to you:

Innocent Spouse Relief
Penalty Abatement
Currently Not Collectible (CNC)
Installment Agreement (IA)
Offer in Compromise (OIC)

Partnering with an IRS Enrolled Agent provides an expert on the Internal Revenue Code.

Their job is to negotiate with the federal government. Allowing you to get back to business.

Your desire for relief from the pressure can be strong. But make sure your selection is vetted. That entails patience.

We promise, it will be worth it. Use the power of interviews to find the best fit.

Review a half-dozen or so of the ones who check off the most boxes.

Employee Retention Credit and Blue Slate Accounting

Something is missing from the accounting field.

A human approach to personalized tax services. Pittsburgh, PA is our home, but we’ve worked with businesses across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

Properly Verify Employee Retention Credit Eligibility

Mon, 31 Jul 2023 17:07:38 GMT

“Your government owes you money. It’s about time you collect what’s due!”

The advertisement droned on about how everyone qualified. Blah, blah, blah.

Third-parties are pushing a credit for businesses affected by COVID restrictions. But only a percentage will actually meet the standard.

Which they conveniently forget to mention.

See if you’re eligible and cut through the fake promises of low-integrity marketers.

What is the Employee Retention Credit?

First, know that it isn’t for individuals. Sorry guys!

The employee retention credit (ERC) is for tax-exempt organizations and businesses. This refundable balance helps cover the losses from paying employees. Even when mandates closed the doors.

It covers the date range from March 13, 2020 through December 31, 2021. And deals with eligible wages you paid a portion or the entirety of your workers.

Although certain restrictions lasted past the end of 2021, the ERC is meant to help you recover a portion of losses.

Focus on that positive.

Your venture may have struggled during this time. But we commend you for putting your people ahead of profits.

And if you meet the qualifications, you can earn more than our respect.

Who Qualifies for the Employee Retention Tax Credit?

Although it’s available regardless of company size, small businesses are more common recipients. They were hit hardest, so we’re happy that this is the case.

Qualifying factors:

Limited, partial, or full closure of operations due to federal or state order
Substantial decrease in your gross receipts

Restaurants who ceased indoor dining would fall under the “partial” category. Just as an example.

The final consideration is for a recovery startup business. Employee retention credit isn’t for everyone, as we’ve shown. Despite what scams are saying.

Mediums to expect them on:

Social media
Print
Television

Aggressive tactics are used to pressure unqualified business owners. We know because it’s happened to us!

Talk to an accountant first to confirm whether or not you should apply.

Doing so can help you avoid tax resolution services when the IRS audits your claim. And wants the funds plus penalties back.

Moving on, it’s our aim to educate you on warning signs of a scam.

What to Watch Out for With Third Parties

Everyone has caved to hard sales tactics before.

Possibly for a cheap product. That can be written off because it didn’t cost much.

However, giving in to the pressure in this case has real consequences. We genuinely want you to avoid any hit to your tax reputation.

With our clients, we’ve been spreading the word. This is our chance to make you aware as well.

Read on for possible red flags:

Messages from companies you’ve never connected with
A requirement for upfront fees
Promise of a speedy review and determination
Fees that fluctuate based on the amount of your ERC
Confidence that you qualify before they know your tax status
Guarantee of risk-free submission regardless of actual eligibility

If it sounds like a rush job, hang up, delete the email, or ignore the advertisement. Why? Every process involving paperwork for the government takes time. And an extensive review for accuracy.

None of which can be completed during the course of a single phone call.

Reasons to Be Skeptical

Convenience isn’t always good.

For example, Google offers us instant answers but at a cost of our data. Facebook provides a free profile in exchange for selling your interests to advertisers.

As we engage in more daily activities online, further diligence is needed.

Caution applies to banking, using public Wi-Fi, and giving out private identifiers. Like your social security number.

Data breaches of tools like TurboTax are reminders to be vigilant. Regarding our topic, there are potential risks.

Falling for this deception presents two possible outcomes:

Repaying the funds plus interest and penalties
Identity theft and damage to financial standing

The first isn’t ideal, but it’s easier to offset by adding additional customers or revenue streams. But the second takes longer to recover from.

We’re not shedding light on this scenario to create worry. No, our goal is to help you prevent it from occurring.

Once you get the all clear, you can move forward with the process. We’ll address that next.

How to Claim Employee Retention Credit

An informed approach is favored over rushing a claim that’s rejected. Or worse, accepted and questioned later by the IRS.

Besides, you probably still have specific questions. Such as “are part-time employees eligible for employee retention credit?”

Accounting companies provide answers and filing services :

Confirm if you’re eligible for this monetary respite
Submit an accurate claim for compensation

Seek out an IRS enrolled agent because they know the tax code extensively. Attention to detail should be another box they check off.

It seems like common sense, but not all accountants have typo-free websites. Just a piece of advice.

The specific form you’ll need to fill out is a 941-X. Working with this expert maximizes your credit and simplifies the “legalese.”

Wages and Other Covid Relief

We do need to point something out.

If you received COVID relief from a PPP loan or elsewhere, you can’t include those wages. But it doesn’t mean you’re automatically excluded from ERC funds.

And here’s a tip. You can still apply for forgiveness of the PPP loan, helping your bottom line.

Problem solved.

Be sure to mention any of these loans or grants during your professional review. After all, you don’t want to waste valuable time if you’re ineligible.

Speaking of outsourcing this task, let’s make that step simple for you.

Employee Retention Credit and Blue Slate Accounting

Something is missing from the accounting field.

A human approach to personalized tax services. Pittsburgh, PA is our home, but we’ve worked with businesses across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

Master Credit Card Reconciliation by Delegating It

Sat, 15 Jul 2023 15:00:00 GMT

Searching through the pile of receipts, Steve’s anxiety grew.

How could the numbers be so off this quarter?

Unless you have a love for math, harmony in your financials may be elusive. And tedious.

However, the health of your business can improve with the right effort.

But you don’t need to manage expenses yourself.

Keep reading for why outsourcing this process is in your best interest.

What is Credit Card Reconciliation?

Under the umbrella of bookkeeping services , credit card reconciliation is necessary.

Simplified, it’s where an accountant compares your businesses’ ledger with credit card statements. Although it involves much more.

There’s a conflict though.

Most small business owners simply go through the motions when addressing it. How come?

Reasons given:

Takes too much time
Trust that the card issuer will catch errors

Okay, we made up the last one. Guilty.

But trying to squeeze more out of available work hours is normal for entrepreneurs. Despite that, we’ll soon show why it isn’t necessary in our case.

Back to our topic.

The entire goal is for financial reporting that is both accurate and organized.

Achieving both used to be less certain.

Before software made everything easier, manual settling of the books was time-intensive. And it could delay paychecks.

Two reasons it wasn’t a highly desired activity.

Times have changed, however. With cash becoming less common, any justification for skipping this step is now gone.

Staying current each month:

Prepares you for each tax season
Speeds up payroll to staff

Keeping your employees and the IRS happy also leads to your general happiness.

Furthermore, it translates to satisfied customers because of the positive culture you’ve established.

Credit Card Reconciliation Process

Balancing your books doesn’t need to be handled internally. We’ll cover that more later, just make a mental note.

Stages of the process:

Arranging receipts from all parties
Pairing transactions with expenses
Resolving any inaccuracies

The first two seem straightforward enough. At least on the surface.

Factors like a sales team may add a wrinkle though. Unless your system for tracking their expenses is solid.

Another factor may be how reliant your venture is on paper receipts. As you’ll eventually see, electronic receipts are ideal.

Let’s look at the final stage.

Should the payments not match up, coordinate with your employees first. If it’s still off, contact your bank for further investigation.

Common root causes of incorrect amounts:

Failed transaction fee
Duplicate charge
Canceled purchase refund

Normally, this routine takes place at the end of the month. Providing you and any other owner with an overview for future spending decisions.

It’s smart to do an in-depth analysis each quarter. And prior to tax season.

Because your concrete picture of expenditures instills greater confidence. Plus an organized accounting system aids taxes.

Helping you avoid any delays or a need for tax resolution services.

Next, we’ll speak to its value for your small business.

Is It Necessary to Do a Reconciliation for Credit Cards?

With full schedules, you might place more emphasis on direct-revenue activities.

Those areas are important. But so is precision in your financials.

And with credit card reconciliation software such as QuickBooks, excuses are removed.

Features of this tool:

Sync your account with banking and other financial entities
Take a picture of a receipt and upload it
Automatically sort expenses by categories

There are other options, but just be aware of what an asset they are for the accounting side of your operation.

Benefits of technology:

Identifies errors quickly
Saves your accountant time
Produces digital records for an audit or tax filing

Of course, your outsourced expert still needs to double check everything. And the really good ones will offer insights from generated reports as well.

Receipts can be scanned into the platform manually. However, automating this action is the simplest option.

Key transaction data is then pulled and only requires a quick visual review prior to approval.

Say you want to get a snapshot of expenses before purchasing new equipment. The dashboard within the phone app delivers that almost instantly.

Pretty cool.

An up-to-date picture of your business helps you pursue profitability.

Extra Motivation to Reconcile Credit Card Records

Earlier we talked about how staying current allows you to respond to an IRS audit.

Perhaps you’re seeking a more compelling reason to invest time and resources. We hear you.

You can strengthen your business by adjusting to economic trends in America. Better?

Current issues:

Increase in digital payments
Future move to cashless society
Decreased risk of credit card fraud

Supporting data from Zippia :

60% of U.S. citizens see cash eventually being removed from circulation
Within the last 5 years 47% of Americans fell victim to this form of fraud

Since 2020, many of your customers have been using their credit or debit card to make purchases. As have most Americans.

A rise in these electronic sales requires that you track them more efficiently.

Despite valid privacy concerns, our nation is also testing a central bank digital currency (CBDC). It’s likely that cash will become more rare over the coming years.

Giving you more rationale for solid digital record keeping.

Finally, extend the longevity of your small business by looking out for suspicious credit card activity.

Cyber criminals were especially active during Covid. And we’re seeing more incidents of hacked financial data.

Cover yourself with an extra set of eyes looking over digital payments.

Wrapping up, handing off the entire affair is your best bet for stress relief.

Blue Slate Accounting Handling Credit Card Reconciliations

Something is missing from the bookkeeping field.

A human approach to personalized business services. Pittsburgh, PA is our home, but we’ve worked with small to mid sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

Expect tailored recording from your personal Blue Slate Accounting team member:

Matching receipts to bank and credit card statements
Bank account, credit card, and loan reconciliations
Applying customer payments to in-house generated invoices
Accounts Receivable tracking and invoicing services, including reminder letters
Accounts Payable tracking and bill payment services

We provide a quick, realistic weekly snapshot of your cash flow. Allowing you to make informed monetary decisions.

Outsource your bookkeeping solutions today. And take the first step towards profitability and contentment in your business!

Payroll Services That Return Money to Your Business

Sat, 01 Jul 2023 00:40:54 GMT

Your people matter.

Beyond telling them so, there are other ways to confirm that you value employees.

One is compensating them for their hard work.

On time. And consistently.

Even unintentionally, disorganized payroll services can hurt your business.

We intend to decrease the risk of that ever happening.

And it starts right now.

What Does Payroll Services Include?

The best small business payroll services streamline your accounting and business processes.

Doubling as consultants, their advice can:

Increase cash flow
Generate new opportunities

Doing “just enough” doesn’t equate to excellent customer service. And today that is all too common.

Expend more effort to bring on someone who takes your operation personally.

Help profitability by using:

Direct deposit
Pay employees monthly

Over time, lower costs with electronic checks will add up. Plus you’ll have a clearer picture of the outflow when you aren’t waiting for the checks to clear.

Versus bi-weekly payments, doing it once a month simplifies the process. Especially when an extra pay period has to occasionally be factored in.

You can run your business more efficiently when you know where to allocate resources.

Decisions can deliver favorable or unfavorable results. Depending on how informed they are.

These perks may be secondary. But they are valuable.

When you find the right one, their services will be outstanding.

Where They Excel

They likely have experience in other parts of the financial world. But each must have evidence supporting key tasks.

Main areas they cover:

Time tracking and payroll integration
Payroll processing
Accurate reporting
Regulatory compliance
Full support for employees and contractors

Paying your employees generates a payroll tax. The amounts and process varies depending on the state you operate in.

If you’re feeling ambitious, you can seek the correct rate by visiting the IRS website. Or giving them a call.

Which takes time.

Or you can get an accurate answer from your eventual payroll person. Especially if they are an IRS enrolled agent.

Note that as a desired quality once you’re interviewing candidates.

Overall, expect extra confidence. That bills will be paid and your employees will receive their wages on time.

Maybe you spend 30 minutes each week dealing with expenses. It might not seem like much.

Until you return 25 plus hours a year back into your calendar.

Those could be devoted to generating revenue. Or an extra day of vacation.

And that only covers the bare minimum of a payroll provider.

Next, we’ll review an industry which runs on a tight schedule and budget.

What Do Restaurant Owners Look for in a Payroll Service?

According to IBIS World, there were 156,715 single-location restaurants in 2023 across our nation.

Each one operates at a fast pace in a competitive industry. With a change in consumer spending habits from Covid, time is even more prized.

We unfortunately saw many close their doors during that time period. But the industry is slowly reviving.

As is a renewed spotlight on contracting out. Going lean is in.

Keep that in mind as we progress.

Factors that matter to a restaurant owner:

Legally required paperwork
Consistent payment schedule
Payroll taxes
Quality software
Records and documentation

Along with most small to mid sized businesses, there is a strong desire for accuracy and consistency. But fulfilling that need isn’t easy.

Except with a vetted payroll specialist.

Having an IRS enrolled agent oversee Accounts Receivable and Accounts Payable helps. Why? Because they understand the Internal Revenue Code (IRC) well.

They’ll adopt legal methods for saving you money. Combined with time-savings, this extra qualification carries weight.

So, it’s worth doing your research on a potential partner for your restaurant.

Now let’s move you closer to landing the perfect wage manager.

Selecting the Best Payroll Service for Small Business

You have options for locating the ideal fit:

Internet research
Personal referrals
Social networking

Visit the website of accounting, bookkeeping , and payroll companies that work with businesses of your size.

Review their past clients. Read the testimonials. Look for accuracy in their copy. This last one will reveal if they pay attention to detail.

Typos are a red flag.

In 2023, more payroll companies are working remotely.

With the option of virtual appointments, your search area can expand. Beyond your town to anywhere in the United States.

Your best source will be trusted partners, suppliers, and others you regularly deal with. Because you’ve previously established trust, their recommendation counts.

Additionally, it could save you hours in needless interviews and narrow down your list.

Social media is also great for research.

Visit their company page. Make a post inquiring about the providers others have worked with. Send a direct message to your industry connections.

One note for social networks.

Measure suggestions against how much interaction you’ve had.

Intuition helps in the virtual space, but in-person opinions should prevail.

How Much Does Payroll Services Cost?

Zippia.com found that an average cost of $30 to $200 per month is to be expected.

Included variables:

Base account fees
Payroll processing fees

Some providers will charge $10 to $25 per employee. So, small to mid sized operations are better off than their larger counterparts.

There could be a set up fee and additional costs. Depending on if they offer basic or full-service assistance.

Before committing, interview a short list of top candidates.

And certify that they are up front with pricing.

Hopefully, this information has been beneficial for you. Wrapping up, we’ll further thin out the pool of candidates.

Blue Slate Accounting Payroll Service Solutions

Something is missing from payroll services for small businesses. A human approach.

Pittsburgh, PA is our home, but we’ve worked with small to mid sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

With a highly personal approach, you enjoy extra peace of mind that your concerns were heard. That’s a guarantee.

We don’t offer this service as a standalone. But current clients can bundle it into their overall accounting package.

Expect the following from your personal Blue Slate Accounting team member:

Data entry
Tax filings and reporting
1099 preparation
Time tracking and payroll integration
Payroll processing

Tailored to your specific needs, we’ll help you choose between two payroll software platforms.

Both have proven themselves across many industries.

Outsource your payroll solutions today. And take the first step towards profitability and contentment in your business!

Reasons Outsourced Bookkeeping Makes Long-term Sense

Thu, 15 Jun 2023 15:36:44 GMT

You know your business better than anyone else.

But as it grows, there is a need to hand off certain day-to-day tasks. Like bookkeeping.

Hitting a critical mass of customers will stunt its growth. Unless you already delegated to another expert.

Along those lines, we want to give you practical reasons to take this action.

Sit back, relax, and read on!

How Does Outsourced Bookkeeping Work?

Don’t let the term “outsourcing” intimidate you.

It’s true that some customers are hesitant to work with businesses that use non-U.S. based help. As a result, more are choosing small business America over corporations.

That’s great news for you!

But that doesn’t mean you should throw out the idea. In fact, outsourced bookkeeping allows you to scale sooner.

And who doesn’t want that?

Example of the process:

You grant access to the business’ financial activity
The professional records and manages these daily transactions
They send you weekly or monthly reports with graphs and insights

Once you have these simple overviews in hand, you can brainstorm ways to increase cash flow. And make good investments in areas such as technology and digital marketing.

Advice from your contracted expert ultimately aids in streamlining your processes.

Seasoned entrepreneurs have realized that they aren’t the best at everything. And it’s better to pay someone.

Seeing its value, many even add it into their personal lives. Like outsourcing the lawn mowing!

Paying someone $20 an hour is a better use of their resources. Especially if they make $100 each hour in their business.

What Businesses Outsource Bookkeeping?

Various small to mid sized operations choose external bookkeeping services.

But there is a more narrow pool who reap the greatest benefits:

Restaurants
Law firms
Education
Healthcare
Marketing agencies
Retail

Restrictions on local restaurants during Covid mandates created a need for leaner systems. Staying afloat and weathering the uncertainty was key.

Lawyers spend countless hours researching their cases. Leaving little time for additional detail-oriented analysis of their books.

Montessori schools highlight hand- on learning. Plus teaching real world skills. That involves a consistent time investment. Making them great candidates for delegating financial tasks.

Private practice doctors main goal is educating patients on improving their health. And their schedules don’t allow for uploading every receipt to accounting software.

Creative types don’t normally want to use brain power on numbers and math in general. Their talents are better applied elsewhere.

Working with a pro in the field of bookkeeping gives each of these industries a way to compete effectively.

You’re likely handling financial operations internally right now. By you or a trusted employee.

Next, we’ll look at reasons to make a change.

In House Bookkeeping Vs Outsourcing

Perhaps you had an employee leave, only to discover a mess of transaction records. Or maybe it’s your least favorite task of the week.

Either scenario justifies altering your current method.

Instead of getting frustrated by taking on this job yourself, pass it off.

Benefits of outsourced bookkeeping:

Permits you to sample outsourcing in your business
Gives you more time for revenue generating activities
Offloads cleaning up a previous financial recording disaster
Supplies an easy to digest snapshot of your fiscal health

Delegating is hard for small business owners. But once they do it, the practice becomes easier. And more beneficial.

Start by contracting out smaller tasks. You can test if it makes sense to entrust your entire accounting to this firm. Eventually.

Many business owners are big picture thinkers. A numbers ace assists them with actionable guidance on daily inputs and outputs. Returning time to their busy schedules.

All businesses want to be profitable. A positive cash flow removes the need for an in-depth study of their financial documents.

Every week, you can receive this graph with basic insights from your bookkeeper.

Improving Overall Business Health

With long days and varying demands, quickly viewing your business vitals leads to wise decision making.

How this happens:

You can identify warning signs before they become a bigger problem
You can determine if marketing strategies are delivering results
You can reduce the temptation to collect needless debt

Let’s unpack these a bit.

A model created by British psychologist James Reason used what’s called the “Swiss cheese effect.” It helps businesses find gaps in processes and close them.

Bear with us on this analogy.

A regular report delivered to your email inbox might expose a breakdown in your Accounts Receivable. Going a bit deeper could show that customers are late in paying invoices.

Your solution could be incentivizing prompt payment to increase available cash.

Besides online ads, your return on digital marketing is hard to quantify. Unless you ran multiple campaigns recently and have an unexplained boost in revenue.

Then you can assume the expense was worth it.

Entrepreneurs are notorious for what’s called “shiny object syndrome.” They spend more than they bring in by purchasing every new tool that peaks their interest.

Ongoing checks of how much cash you have on hand decreases this attraction.

Outsourced Bookkeeping Services for Small Businesses

Without large budgets, small to mid sized businesses like yours can find a happy medium. Between hiring internally or overseeing the books yourself.

Granting a bookkeeper access to back-office operations delivers more freedom.

To brainstorm a strategy for growing the venture. Get on more sales calls. Or spend time with your family.

America was built by solopreneurs. Whether you’re still a one man operation or team, locating a quality bookkeeping service provider just got easier.

We’ll explain more as we wrap up.

Blue Slate Accounting Outsourced Bookkeeping Company

Something is missing from the bookkeeping field.

A human approach to personalized business services. Pittsburgh, PA is our home, but we’ve worked with small to mid sized businesses across this great nation.

Aiding their pursuit of a financially healthy venture.

Expect tailored recording from your personal Blue Slate Accounting team member:

Matching receipts to bank and credit card statements
Bank account, credit card, and loan reconciliations
Applying customer payments to in-house generated invoices
Accounts Receivable tracking and invoicing services, including reminder letters
Accounts Payable tracking and bill payment services

We provide a quick, realistic weekly snapshot of your cash flow. Allowing you to make informed monetary decisions.

Outsource your bookkeeping solutions today. And take the first step towards profitability and contentment in your business!

Peace of Mind Through a Reputable Tax Resolution Specialist

Wed, 31 May 2023 18:11:59 GMT

Someone who is drowning isn’t particular about the person who rescues them.

It may feel like you’re struggling to tread water with your tax debt. But don’t latch on to the first “lifesaver” that appears.

Because unfortunately, scams and poor business practices are out there.

We want to encourage you with more than relief. To ensure your situation never repeats itself again.

Stick with us, it’ll be worth it.

The Process for a Reputable Tax Resolution Specialist

Rather than start with red flags to watch for, we’ll help you recognize the trustworthy professionals.

Personalized business services of this nature should ideally be handled in-office. With a local accounting firm.

Doing so remotely is okay, but presenting your supporting documents for in-person review is better.

Here’s the proper steps a tax resolution specialist will follow:

Provide you with a free consultation
Conduct a financial analysis of your tax case
Help you work through options for the right fit
Negotiate with the IRS on your behalf

Breaking Down the Steps

After meeting with you, expect a search for a clear picture of your financial background. Including performing their due diligence in asking why you owe the IRS money.

This information will be required for the appeal stage.

A word of caution. If they promise a numerical reduction before this step is completed, seek assistance elsewhere. Scams usually promise the moon and deliver a cardboard cutout of it.

Good ones will save you lots of time in researching options. Plus, have you ever tried reading through the IRS website? Let’s just say, nobody does it for the enjoyment of doing so.

Afterwards, you’ll receive a realistic, customized plan of attack.

The authority they carry into any negotiation is invaluable. As you offload the task of talking with the IRS, you’ll finally be able to breathe. More in the sense of relief.

Or from our earlier analogy, in the form of a lifesaver.

In addition, they’ll translate any “legalese” into language you can understand.

Moving on, allow us to make the case for a certified individual to take up your situation.

Why You Should Work With an IRS Enrolled Agent

Before highlighting the reasons to work with an IRS enrolled agent, it’s worth discussing how tax software falls short.

Don’t get us wrong. These tools do help with simple tax preparation.

But you need good old fashioned human critical-thinking for your case. Trust us on this one.

Qualified tax resolution services contribute:

Familiarity with the Internal Revenue Code (IRC) and Internal Revenue Manual (IRM)
Finding the most effective solution tailored to your personal situation
Ability to spot when the state or IRS made a mistake
Seamlessly move you from one strategy to another
Education to prevent future issues with the IRS

TurboTax and H&R Block also have dealt with data breaches in the past. Leading to identity theft and a loss of public trust.

Your local accountant likely invests in cybersecurity and isn’t a prime target for hackers.

In our digital age, this is an important distinction.

Now, let’s look at why a certified agent is your best bet.

Qualifications of Your Professional Advocate

According to the federal website, there are currently over 60,000 IRS enrolled agents. Achieving this status carries with it the highest credential from the agency.

Steps they follow for certification:

Passing a three-part comprehensive exam
Proving ethical standards at their firm
Completing ongoing education

To begin, the 300 question test covers both business and individual tax returns.

Next, a background check is done to double check that the accountant has compliant personal and business returns.

Finally, every three years they must finish 72 hours of continuing education.

Similar to CPAs and attorneys, this grants them certain exclusive rights. And opens the doors to represent your specific case.

Next, it’s time to clear up any misconceptions you may have.

Set Yourself Up for Success With Realistic Expectations

Marketers for the less reputable firms may be to blame for your confusion.

For example, supposed evidence of a former client’s tax liability being reduced by thousands of dollars. Amazing right?

Almost too good to be true. Likely because it is.

Our point isn’t that the process won’t yield results. We simply want you to have a clear understanding of the facts.

And there’s a reason behind this.

Even if the IRS rejects your Offer in Compromise (OIC), there’s no need to fret. Most tax resolution clients find a remedy.

Each situation is different, but there are some general solutions that apply to most circumstances.

Moving Towards Resolution of Your Issues

What it might look like:

Fair payment plan to pay off your balances over time
Chance to retain your valuable assets
Keeping your dignity intact

Removing the pressure from IRS collection calls will present a fresh outlook on your case. One that’s more manageable.

And your new tax advisor can assist with accountability on the repayment plan.

If a levy has been placed on your property or bank account, there’s an opportunity to remove it. Freeing you to make reasonable payments.

Taking chunks out of the total until it reaches a zero balance.

Lastly, your self-respect will get a major boost from the resolution of what you owe. With that comes the confidence you need to succeed in business and life.

It’s extremely hard to put a price on that.

Which brings us to the end of our discussion on selecting the best expert.

Since you are better equipped for the decision, we need to cover one final area.

Blue Slate Accounting Tax Resolution Services Company

Something is missing from the accounting field.

A human approach to personalized tax services. Pittsburgh, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

Not All Tax Resolution Services Are Created Equal

Mon, 15 May 2023 21:47:46 GMT

“You’ve got a friend in me. When the road looks rough ahead.”

These lyrics to Randy Newman’s popular song from the movie Toy Story may resonate with you.

If you have unpaid money to the Internal Revenue Service hanging over your head, you’d probably like one.

And good news. They’re out there.

Before you’re done reading, we hope to reveal that ally.

Let’s start you down the path to relief!

How Do Tax Resolution Services Work?

You may be a W-2 employee who owes the IRS a lot of money.

Or a small business trying to recover from the disaster your former employee left you. If so, tax resolution services are likely necessary.

Because we’re yet to find someone that loves regular calls from the government. Just like it sounds, reprieve from your tax burden comes in the form of an advocate.

That friend we spoke about earlier.

And despite what your brain may be telling you, options do exist. In a program properly named.

A New Beginning

Choices through the Fresh Start Program:

Offer in Compromise (OIC)
Installment Agreement (IA)
Currently Not Collectible (CNC)
Penalty Abatement
Innocent Spouse Relief

Each has guidelines in order to qualify, which an IRS enrolled agent can clearly explain.

Being unable to fulfill your tax obligation in the required time frame may require an OIC. With this, you can settle the debt for less than you owe.

An IA prevents the agency from levying your assets. Like your home or bank account.

CNC means the IRS agrees that you can’t meet your total owed and afford living expenses. It puts collection on hold, but not the interest.

Penalty abatement is comprised of:

First-time
Reasonable cause

You can call these “rare acts of government grace.” You must be in good standing in order to receive the help.

The final form of pardon comes if an honest error occurred on your joint tax return.

Moving on, it’s time to find out why they’re a valuable partner.

Benefits of Personalized Tax Help

People adopt personalized business services for various reasons. But the perks are universal.

Rewards:

Legal representation before the IRS
Translate the “legalese” to simple English
Save time on researching solutions
Receive a realistic, customized plan
Removal of tax liens

A major benefit of professional aid is that you no longer need to deal with your collectors. At least not directly.

Enjoy some distance and watch how your demeanor changes. If you don’t notice it right away, loved ones likely will.

You may have wondered if the federal government purposely tries to confuse its citizens. And if you’ve ever read through a bill that Congress proposed? Then it’s been confirmed.

Tax resolution experts can describe correspondence in plain language. That’s the next strongest argument for hiring a representative.

Other Reasons to Invest in the Pros

A “hidden talent” of your tax professional may be their ability to negotiate.

While you deal with the pressing matter of unpaid taxes, it’s easy to take the first deal that comes your way. But it might not be in your favor.

We’ll tell you an insider secret. The amount you owe isn’t always rigid.

Hear us out.

Having worked with the three-letter agency for years, a great accountant will know this as well. As your spokesperson, they’ll mediate for the best terms. And a deal that is less intimidating.

The Internal Revenue Code (IRC) likely isn't at the top of your reading list.

After all, it contained thousands of sections with specific:

Levies
Rules
Definitions

The average American doesn’t need to study the fine details it contains. Until they must resolve a tax issue with the IRS.

Understanding it then could mean the difference between a drawn out process, or a speedy release.

Handing this research off to a professional means:

In-depth knowledge of the code and how it works
Navigation through IRS procedures and practices for an ideal solution

You’re now convinced about their worth. Next, we’ll help narrow your search down.

Determine the Right Tax Resolution Specialist

We’ve provided an overview of what they do and how they can help.

Now it’s time to screen out the wrong choices. And find your ideal expert.

Areas to focus on:

Experience
Reviews
Success rate
Communication method
Process

Previous customers should mention an attention to detail.

A red flag will be typos across the firm’s website. Because this will probably translate to their services.

Ask about how often they’ve brought tax relief in cases like yours. You’ll learn a lot about the individual from their response.

Transparency strengthens trust. And you only want to work with high-integrity accountants.

Discover whether they’re accessible should urgent questions arise. You shouldn’t simply be a number to them, but rather an important team member.

Finally, learn about the steps they’ll follow to lighten your load. It should be clear and organized.

Cement Your Decision Through Interviews

Once you’ve put together a list of a half-dozen or so, schedule a phone call with each.

Come up with a few remaining questions that you want answered.

Remember, you’re in control. Conduct this initial call as if you’re the interviewer.

One suggestion from us to you. Trust your intuition during this step.

Because a business relationship built on trust will increase the chance of success. In the form of your financial burden being removed!

And that’s ultimately why you’ve invested time and resources in this search.

Wrapping up, let’s put a face to your selection.

Blue Slate Accounting Tax Resolution Services Company

Something is missing from the accounting field.

A human approach to personalized tax services. Pittsburgh, PA is our home, but we’ve worked with businesses and individuals across this great nation.

Aiding their arrival back to good standing with the federal and state governments.

Our small, but dedicated team of certified tax professionals and an IRS Enrolled Agent assist with:

Preparation of unfiled income tax returns
Penalty reduction
Offers in compromise
Payment plans
Financial hardship plans
Wage garnishment/bank levy releases
Audits
IRS appeals

We can clean up the debacle of that unorganized box of tax documents. For a monthly fee, we can counsel you on deductions and breaks to use next time.

Offload your tax resolution needs today. And take the first step towards reclaiming your joy and happiness!

The Right Stuff

Tue, 16 May 2017 18:40:00 GMT

As summer approaches, you are either the type of business that thrives or pulls back for the slowdown of summer. Summer is a very hit or miss time for businesses depending on what industry you are in, and where you are located.

As a business owner, having the right amount of inventory can help to make or break your company. The summer months may be a time where business slows due to vacations and summer travel. However, if your business is in a tourist area, you may thrive on the extra money many spend while they are vacationing.

Whether you own a retail store or are a restaurant owner, inventory control is a vital part of your survival. Consistently having too much or too little inventory can eat into your profits. Without a solid understanding of your financials, it is difficult to make buying adjustments. Knowing your clientele can help to determine the inventory that you need to have on hand for summer planning.

Do you know when your peak season is and when your slow times are? Are you reviewing and adjusting inventory on hand? How do you find that happy balance? Taking the time to do an analysis will help you to identify your peaks and valleys so you know how to plan. That’s where a bookkeeping service that takes ownership of your account comes into play. They can actively help you to determine buying cycles and when to make adjustments.

After you have identified your selling season, determining the proper inventory can help to reduce your overhead and upfront costs. Rotating new inventory throughout the year will help your business stay on top. For restaurants, it could be new menus for summer. For retail stores it may be bringing in summer red white and blue items for Memorial Day and Fourth of July. Customers enjoy variety and business owners that deliver are the winners. Don’t forget the use of social media to promote these efforts.

Improperly managing inventory requires you to provide the upfront cash for the product. The longer it sits on the shelves the longer it takes you to recoup the money that you spent. Customers are fickle and markets change. What this can mean for you, is that the product may not be as desired as it once was resulting in having to discount it to move it. This not only reduces the amount of revenue you are able to generate off of the product, but also increases the likelihood that you may struggle to sell the product all together. If you don’t have a firm grasp on buying trends, you may very well be left holding the bag as fall runs around and there’s a vast amount of summer inventory left.

Restaurant owners know that food waste can be a huge cut into your profits. If you over order or order the wrong foods, you can wind up throwing away much of what you purchased to sell. On the other hand if you run out of food, you will find yourself struggling to keep loyal customers coming in the door.

Whether you are a retail store or restaurant owner, knowing when to buy to coincide with a business cycle can help you be more profitable. Paxton Bookkeeping and Tax Services provides monthly reporting to our clients so they know how their buying cycles occur. Remember, customers want to see something new. By staying on top of changing inventory, allows you to deliver. The proper amount of merchandise can make all the difference when it comes to YOUR profit and loss.

Want to learn more, give our office a call at 724-359-5022.

Quarterly Tax Planning

Mon, 15 May 2017 10:10:00 GMT

The American taxes are a pay as you go system. This means that taxes are to be paid throughout the year. Many employees do not realize this, because as an employee, your employer is withholding taxes from your pay check to continuously pay your taxes for you throughout the year.

However, if you are like many business owners and you enjoy being your own boss, you also must pay your quarterly tax estimates. It is important to understand the rules as they determine what you owe and which penalties may be assessed for not being paid on time.

Except if you’re tax exempt, most small business owners who operate their business as an LLC, an S Corp., a partnership, or sole proprietorship will need to file quarterly taxes . Keep in mind that tax law does have exemptions for every rule, so doing your homework or working with an accountant or bookkeeper can help to determine if you fall under that exception.

<h6> <b> A few questions can help to answer if you are tax exempt or not. </b> </h6>

Another option when filing joint tax returns is, you may have the ability to use withholdings from a spouse’s job to avoid owing estimated taxes or worse, receiving a penalty. This is possible due to how taxes are collected from your spouse’s employer. Because taxes are continuously collected throughout the year, it eliminates the need to pay quarterly tax estimates. If you have planned to have enough sufficiently taken out of your spouse’s income you may be able to avoid the necessity to pay quarterly tax estimates.

In any scenario, if you are unsure on whether you need to be paying quarterly taxes, or if you are ok to just pay your taxes year end, contact your accountant or bookkeeper. They will be able to help you along the way making sure to avoid any penalties or late fees that can be received. While paying taxes can be a hassle, doing it the right way can help to keep you on the road to success.

Retirement Account Mistakes

Tue, 11 Apr 2017 07:25:00 GMT

Like many Americans, you most likely have been squirreling money away for years to prepare for the day that you will be able to retire. We always tell people that you are never too young to start to save for retirement.

As you get ready to retire make sure that you don’t make a mistake that can cost you penalties. Actively managing your retirement assets is essential to your retirement planning. Being proactive in asset allocation will allow you to have the best possible nest egg to sustain you upon retirement.

Perhaps you’ve been given the golden parachute and an early out of a senior level position. Now may be the time to take a step back and plan your next chapter. It could be travel, spend time with family or perhaps you may decide to become a consultant or open your own business.

Many employer-provided retirement accounts, such as 401(K)s, often allow you to borrow money from the account. Where you can get into trouble is if you leave the company. If you have borrowed money and leave you must repay it immediately. If you do not repay the money immediately it will be considered a withdrawal of funds, leaving you with a hefty tax bill and an early withdrawal penalty.

As you invest and age it is always a smart idea to review your investment mix with a trusted financial advisor. Aggressive growth Investments that you made as you were younger were a good choice at the time, but may not be your best performers now. Be sure to review your investments and don’t be afraid to replace poorly preforming funds as needed. Based on your age, financial advisors can help you to determine which investments and levels of risk are right for you.

If you’re employed and your employer offers a contribution toward your retirement, be sure to maximize your employer’s contributions. Most employer-provided retirement accounts include an employer contribution amount. Often employers will match from 50-100% of your contributions up to a certain percentage. This is free money that your employer is offering to give to you, so take advantage of this benefit.

When employees are young in their careers, it’s great to receive that nice paycheck. We all enjoy living in the moment, going on trips, and buying what we want without a thought of retirement. Failure to plan when you begin your career can lead to longer working years and a less than desirable quality of life after retirement.

Even if you save 1%, start saving something for retirement. One of the worst mistakes that you can make as you grow in your career is to not participate in employer offered retirement plans. These retirement plans help you to build the financial stability that you will need once you decide to retire. Remember that you are never too young or too old to start saving for a retirement. If you are unsure about how to proceed with saving for your retirement, schedule an appointment with a trusted financial advisor.

Need More Time?

Mon, 10 Apr 2017 10:16:00 GMT

Are you one of those who are quickly approaching the deadline to file your taxes on April 18 ^th ? Don’t panic because you are not the only one. If you are avoiding filing your taxes based on not being able to pay the full amount you owe, you may want to rethink your strategy.

For many people, being your own boss is a great freedom. That freedom does however come with added responsibilities. Responsibilities such as having to pay your own taxes, which can often tend to be overwhelming.

Failing to pay quarterly estimates can lead to a large tax bill come April and potential fines. For new business owners having money in the bank throughout the year may seem great, but the taxable amount on your profits adds up. Preparing and filing quarterly estimates are some of the planning services we help small business owners with throughout the year. This helps a business owner plan throughout the year to avoid paying a large lump sum tax bill in April.

If you end up with a large amount money to pay, there are some things to consider. Filing your taxes on time can save you from having to potentially pay a failure to pay penalty. Here are a few tips for those who aren’t able to pay their full taxes by the April 18 ^th deadline!

The best practice is to file on time. By paying as much as possible on the April 18, 2017 deadline, you reduce the amount of interest and penalties you could face. To find our more information you can contact our office or visit the IRS website at www.irs.gov .

An Unknown Number

Thu, 16 Mar 2017 14:43:00 GMT

The phone rings. You see a number that you don’t recognize, but pick up the call anyway. An agent claiming to be from the IRS says that you owe back taxes and threatens to arrest you or file a law suit against you if you don’t make an immediate payment over the phone. Thousands of Americans faced this exact situation in 2016. This is a prime example of an IRS scam.

This scam is responsible for collecting nearly $150,000 a day from tax payers. Thieves were from Mumbai, India, where police helped to shut down these call centers. Other scams involve emails where you are promised a large refund after you prepay the tax on the refund simply to have the agent and your money disappear. So how can you protect yourself?

There are a few guidelines that you can follow to help prevent you from becoming victim to the ever-increasing amount of scams thieves are using to steal your identity and money.

Remember that the government will never demand an immediate payment over the phone or by email. There will always be a paper trail with the IRS and they are never threatening. If you do receive one of these phone calls or emails don’t panic, take a breath and remember that the IRS does not operate in that manner, that it is a scam. If you feel the need to verify that it wasn’t the IRS call the help desk and allow them to verify that you are doing everything correctly! Be vigilant. Protect your identity and your money.

Tax Tips for Uber, Lyft Or Other Ride Share Drivers

Wed, 15 Mar 2017 10:30:00 GMT

If you are one of the thousands of people who started to drive for ride share companies such as Uber or Lyft, then this may be the first year that you are filing your taxes as self-employed. You have enjoyed the ability to make your own schedule, work when you want, and make decisions to help improve your income. But what does all of this mean for your taxes?

As far as the ride share companies are concerned you are an independent contractor who is not considered an employee, but rather a contractor who provides a service. This is why when you get your check from these companies they do not withhold any taxes like a typical employer would. This is the reason that you will receive a 1099 form rather than a W-2 for your taxes.

<h4> As a driver, you will receive two 1099s. </h4>

You will most likely report your 1099 on Schedule C, profit or loss from business. You can also use Schedule C to list your business-related expenses.

The ride share companies also will provide you with a tax summary that breaks down the totals for both your 1099 forms.

You are also required to have a smartphone for your business so keep in mind you can deduct its expenses. These expenses may include:

<h4> Some other items that you may also be able to deduct are: </h4>

While all of this may seem a little overwhelming, talking to your bookkeeper or accountant can help to lower the stress that is often experienced when preparing your taxes. These professionals may also be able to help you find more deductions reducing the total amount that you owe the IRS when it comes tax time.

Know Your Business’s Vitals

Mon, 13 Feb 2017 15:51:00 GMT

When you go to your doctor there is a baseline where your medical team will start to determine if you are healthy or if you are in need of medical attention. Vitals such as blood pressure, temperature, weight, cholesterol etc. are monitored regularly.

As a small business owner it is important to know and check the vitals of your business regularl y. Understanding and monitoring these key factors will help you to clearly see the early warning signs that something is going wrong, or sales are skyrocketing. Doing monthly or even weekly checks of your company’s vitals can help to identify a small problem before it becomes too big.

You may be curious as to what vital signs a company holds. Keeping tabs on things such as:

As a business owner when you keep track of these categories, you will be able to quickly see when things simply don’t look right. By maintaining monthly checks and balances you are able to see problems and take immediate action to correct them.

As your business continues to grow, you may find that there are additional areas in which you also wish to monitor. Keep in mind the more areas you put on your monthly check up, the more accurate the financial picture for you to make informed business decisions.

Additional check points may include:

In looking at revenue year-to-date, especially if you are a brick and mortar store, take into account such things as weather, significant snow storms and sporting teams in the playoffs, etc. If you have clients taking more than 30 days to pay, you may offer incentives such as a % off for payment within 15 days.

Perhaps you launched a new product line and/or are considering cutting back in a particular division. Knowing your revenue by chart of accounts or a given product sale, is helpful to determine the direction you should take.

Creating a range or forecast where numbers should fall offers a quicker way to look at a snapshot of your numbers. As long as the information each month falls within the range there is no need to further investigate. Leave that for a 6 month audit or annual audit. If the numbers are outside that range, it tells you that something is not as you expected and needs to be immediately addressed.

Whichever vitals you choose to monitor, pay attention to them. Checking your company’s vitals monthly will help to make sound financial decisions and quickly react when things aren’t as they should be.

Prepare to Grow

Fri, 10 Feb 2017 15:44:00 GMT

As the New Year has gotten underway and you finish your tax preparation, it is time to look ahead to the remainder of 2017 and beyond. While all of your company’s financial information is fresh in your head, it is a good time to look back at how far you have come and plan for the next few years.

Does this road involve expansion, hiring new employees? If so it will more than likely require capital to fund this expansion. If you simply don’t have overflowing bank accounts to fund the expansion, it’s time to consider financing.

The first step to securing financing is to set a clear path as to how you will use the money to generate more profit. No matter how much you “feel” you need the money, no bank, lending agency or credit union will lend you money unless you have a clearly defined plan. You can do this by identifying your goals, stating how the additional cash flow will help you meet your goals and grow your business.

There are a couple of financial options, a secured line of credit – where you have an amount approved that you can write checks against. Or…a fixed loan amount where you borrow a sum of money. Identify the amount you need. But, particularly with a fixed loan, be cautious that you will be able to reasonably pay the monthly amount back. Establish a relationship with a business banker before you need to ask for a loan. They will help you find that combination works best for your business.

Time management is key . This being said, be sure to give yourself plenty of time. Don’t wait until you need the money yesterday to make payroll to apply for a loan. This process often takes weeks to a few months depending on the size of the loan. You may find that you are able to secure lending in shorter time frames with some non-traditional lending agencies, however be aware of the interest rates will probably be higher than a traditional bank.

Documentation is vital . When you go to the lender with a well-documented payment history of your company, you have made it that much easier for them to see that you have done your homework and are prepared for the financial commitment in the loan you are asking for.

As a small business owner it is important to build relationships with other local businesses. Having an advocate on your side that supports your loan will help the process to go a little easier. Find those you do business with and use them as third party credit references.

In Summary . 2017 is underway. It won’t be long until the first quarter is complete. Are you looking down the road towards growth? Now is the time to establish a strong financial position for you to ensure you can adequately fund your growth. Identify your business banker and spend some time talking with them about your plans. Don’t wait until you’re in crisis to borrow money. Wishing you continued business growth and success.

Make The Most Out Of Your Business Trip

Fri, 20 Jan 2017 12:03:00 GMT

As an entrepreneur you have probably found that traveling is an inevitable part of growing and running your business. How you spend your time traveling can have an impact on your productivity. Whether you are running down the street to a meeting or traveling across the country to work with a client, smart and efficient traveling can help to better use your time and keep your company growing.

Before leaving plan ahead, set up a schedule and establish an agenda of what you want to accomplish while you are away. Here are several tips that you can use to help get the most out of every day travel!

Mode of Transportation . If it’s a meeting close by, the obvious choice is to drive yourself. If you have other members of your team going with you, give up the driver’s seat and work while others drive. You can return phone calls, check emails, etc. Uber may be another mode of transportation if you’re going by yourself and are up against a tight deadline.

However, if you are required to travel to a different city, it is often tempting to drive. Something to consider is the value of the time that you spend traveling. If you are going to be traveling in the car for several hours, could you have flown? While that does cost more money it allows you work time while you travel. Also don’t neglect travel methods such as trains, taxi’s, busses etc.

Choose the right accommodations. No matter what city you go to, there are plenty of places to stay. Be sure that you choose somewhere that is not only cost efficient but also fits all of you needs. Things such as conference rooms, business centers, room sizes, location, and internet availability are all things to take into account. Cheaper is not always better.

Have a work agenda and stay connected . Be focused on why you took the trip, but also follow meetings and respond to emails and calls. The agenda is also extremely important. It helps to keep you moving and get everything done that you traveled there to accomplish. If there are new connections you’re trying to make – tell them you’re in town, or call before you leave to set your appointments. Remember you are only there for a limited amount of time so make the most out of it.

Travel Light. The more that you take, the more you have to keep track of. If you are out of town for multiple days, use coordinating outfits that can be interchanged. Only take the files you need and if you have all your documents stored in the cloud, it may eliminate the need to pack extra paperwork. Packing light also gives you the ability to be more mobile.

Planning smart as you travel can help you to be more efficient and productive. Look at all of your travel options and remember that cheaper is not always better. Establish your agenda. Keep yourself organized and have a set schedule and maintain your receipts for a business expense write off. Here’s to your next successful business trip!

Freelancing and Taxes

Thu, 19 Jan 2017 10:59:00 GMT

Are you one of the 55 million people in the United States that freelance for a living or freelance as a side job? According to the Monthly Labor Review, the freelance surge is the Industrial Revolution of our time. Some common freelance jobs include technical jobs, professional services, graphic design and professional writing. If you are one of those people who work for themselves, do you consider yourself a business owner or do you consider your side job a hobby?

As a freelancer or independent contractor you are considered self-employed. This means that you are not only responsible for paying the taxes that you would normally pay as an employee but also must contribute to things such as social security, Medicare, and withholding taxes that your employer would normally pay. The catch that many people miss is that as an independent contractor, you are also required to pay all of the taxes that your employer also pays. When you are an employee your employer pays half of your total Social Security and Medicare taxes.

Many independent contractors often find it difficult to set your hourly or project rates. A particular amount may seem fair, but once taxes you must pay are factored in, your hourly rate may be reduced by a third. Consider all those factors when setting your rates and you may want to add to the rate or project cost. Research what an employee of a company makes in a similar position and calculate a rate. Then add the employer’s tax responsibilities to obtain the true rate.

Employers benefit from using independent contractors because, they can obtain the service for a given project or function without adding employees. This often eliminates the need for office space, office equipment and the need to provide health insurance. Using independent contractors allows companies to contract and expand without the need to lay off permanent employees.

As an employer, if you outsource to a freelancer, a good rule to follow is that you don’t begin working with someone until you have their W9 form. Information on this form is needed for you to issue a 1099 to anyone who performed a service for your business during the year whom you paid $600 or more.

These 1099s need to be mailed to both the IRS and freelance person by January 31st. The IRS has increased fines for unissued 1099s to $250 and to $250 for 1099’s filed late. Therefore you could face a total fine of up to $500 per occurrence.

As an independent contractor, you may think that you can hold onto the money you make until tax time. This however, may not be true if you owe more than $1,000 in taxes at the end of the year. You are required to make quarterly estimated tax payments. Depending on your business structure, you may need to file additional taxes and tax forms.

Business owners who use independent contractors, be careful of using the word employees unless they are truly an employee. As an employer, you are responsible for paying some of the burden with social security, Medicare and worker’s comp taxes.

Your bookkeeper or accountant can help to prepare your quarterly estimates and issue the appropriate 1099’s. Know the rules and avoid potential fines because…it all adds up!

The post Freelancing and Taxes appeared first on Paxton Bookkeeping & Tax Services Online | .

Money Tips for Small Business

Thu, 10 Nov 2016 15:11:00 GMT

If you are like millions of taxpayers trying to make a living running a small business, you know it is tough out there. Here are some money tips to help your business survive and thrive.

You need to know and understand your sales cycle. If you’re a business-to-consumer retailer that sells $20 items, your sales cycle is likely fast enough that having a cash buffer on hand is less of a concern. But if you’re a business-to-business company whose sales cycles last months, or even years, having extra capital in the bank can mean the difference between open for business and closed.

Understand your cash flow. One of the biggest causes of business failure is the lack of understanding cash flow. At the end of the day, you need enough money to pay your vendors and your employees. If you run a seasonal business, you understand this challenge. As we move into the last quarter of the year, many retail businesses use this time to make or break their year.

Keep track of sales and how customers find you. When looking at your business, there are a few big items and/or events that drive your business success. Do you know the key factors of your financial success or failure? By keeping track of day-to-day operations, seasonal staffing and trends, it helps in budgeting for 2017.

Manage your inventory. In the restaurant business – over buying can mean spoilage and lost profits. If your business sells a physical product, you need a good inventory management system. This “system” does not have to be complex; it just needs to help you keep control of your inventory. Unmanaged inventory can deplete your cash quickly. Sell off old inventory even if it is just above cost. At least you recoup your investment.

Do you know your customers? What is an ideal customer? Can you provide additional services or products? They already know you and are purchasing a product or service, ask them if there are things you can do better or differently. Will they recommend you to others?

How are you different than the competition? What makes people buy from you? Once you know who your customer is (your target audience), understand why they buy your product or service. Can you add value to your product or service?

Don’t go it alone! Successful small business owners know they cannot do it all themselves. Do you have a good group of support professionals helping you? With all the consultants in the market place, you can build your own virtual team. You will need accounting, tax, legal, insurance, marketing services and employment help along with your traditional suppliers.

Have questions, we can help. Give us a call at 724-359-5022 or email lauri@paxtonbookkeeping.net.

Loss Leaders

Mon, 07 Nov 2016 09:59:00 GMT

We’ve all gone to the grocery store in search of that one item that’s on sale – a deal too good to be true, but how often do we go into a store and come out with exactly that one item? Almost never! You may think that’s great for a retail establishment, but I have a restaurant or a professional service.

Placement of sale items within the stores can be strategically merchandised at the back of the store, or throughout the shelving locations causing customers to have to move throughout the store. Ever wonder why stores often reset their items? Or a grocery store remodels and moves things around and now a familiar candy isle no longer is in isle 3.

<h4> Loss Leaders can apply to almost any type of business. </h4>

For example, restaurants may serve a free appetizer with the purchase of an entrée, or a free beverage with the purchase of a sandwich. Restaurant staff should be trained on how to ask for the combo or loss leader to create a multi-item purchase.

Retail stores can bundle like accessories around the loss leader or in many cases limit quantities of the sale item – in some cases offering rain checks. Why do they do that? To bring customers back into the store again to pick up the loss leader item. And…while they are there – don’t you think they will be checking out the sale flyer?

If you have a professional service business , you may offer a complimentary meeting to review a customer’s needs or current situation.

As the holidays approach, we are already hearing about “ Early Black Friday Sales .” Consumers may choose to jump on the shopping frenzy bandwagon early. With the increased use of online shopping – brick and mortar stores must be creative in bringing customers into their stores.

As a small business owner – take advantage of Black Friday, Small Business Saturday and Cyber Monday. Plan your sales, manage your inventory and group accessories together for larger purchase. Identify those loss leaders that will bring people into your store to shop.

The most important thing is to measure your success! If you don’t write it down, you may be hard pressed to know what worked last holiday season. How many customers did that event or ad drive into your store. Let Loss Leaders help increase your profits this holiday season and into 2017.

Managing Your Paper Trail

Mon, 17 Oct 2016 11:10:00 GMT

If you have been in business for more than the last few years, you have most certainly seen a change in how receipts are kept track of. The days of having a shoebox full of receipts that you hand to your bookkeeper are slipping away. However, if you don’t scan and file the receipts you have in a few months, they can’t be read and will provide no proof of purchase in the event of an audit.

Many invoices are now being sent electronically, and credit card statements are showing up in your email rather than in your mailbox. These shifts in service are how the industry is successfully forcing you to adjust to new policies.

<h3> <b> Receipts: </b> </h3>

Today’s online systems allow you or your bookkeeper to scan receipts in either through computer scanners or by simply taking a picture of a receipt with your cell phone. You can then select to read them and record the transaction within your financial program. This system cuts down on the administrative work of matching receipts with what they were purchased for as you can enter notes when you submit the receipt electronically. This significantly cuts down on the mundane work for your bookkeeper and allows them to focus on the finances of your business.

Some companies will email you receipts so you can just drop them into your QuickBooks application or forward them along to your bookkeeper.

While the days of the shoebox receipts are not completely over, the hardest part of electronically submitting receipts is simply remembering to take a picture of them and submitting them to your accounting application such as QuickBooks.

<h3> <b> Vendor invoices: </b> </h3>

Most invoices today are sent electronically. This practice can help to speed up the payment process as it is delivered directly to the receiver when sent. Some accounting systems allow for the invoice documents to be attached to the transaction in the accounting system. This documents everything and makes it easier to get quick answers to vendor questions or provide documentation in case of an audit.

Some of the newer systems are smart enough to read the invoice and produce a check with little or no data entry. Others can match purchase order, packing slips, and invoices together to reduce time spent in the accounts payable function.

By switching over from the shoebox method of keeping track of your receipts to automated applications, you will find that you cut down on time and expenses. When it comes to keeping track of your profits and loss these efficiencies can add money to your bottom line. While many people have a hard time relying on automation, it has proven to be a more efficient way to better keep track of your company’s revenue and expenses. Have questions on the best system to use, give us a call at 724-359-5022.

Early Out?

Mon, 17 Oct 2016 08:10:00 GMT

Have you ever thought about early retirement? Many of us have, but the question is – how do we get there? Just like planning for your business goals, finances run true in your personal lives as well. There are a few things that you can do to help accelerate your savings to the point in which you feel that you could comfortably retire.

Have a plan, start early, and know what you want to do when you retire. These things can dictate how and when you are able to retire. Having the answer to these questions may change how you live your life before retirement, and change the spending practices that you currently have.

The first step is to start early. Be sure to communicate intentions with your spouse and loved ones and agree on when you want to retire. It is often a struggle as one of you is ready to retire while the other one is not. Set a retirement goals and reach targeted savings goals together to help ensure that you will meet your retirement date.

What do you want to do when you retire? Having a plan on how much “fun” money you want to have, how much you want to travel or if there are any large purchases you want to make all can affect the amount of money you need to have set aside for retirement.

Pay yourself first. Usually people who retire sooner are able to do so because they saved more during their working years throughout their career. This may mean taking less extravagant vacations, or holding off on renovations to your house until you can save and pay cash. These are all decisions that you need to make with your spouse to ensure that everyone is in agreement on day-to-day spending.

Paying off your debt. Retirement is usually more stressful if you have a mortgage payment to worry about or large outstanding credit card debt. Eliminating these monthly debts can help to reduce the amount of outflow of cash needed each month, making your retirement less stressful.

If you are one of those people who want to get out of the workforce early, be sure to start saving early. Knowing what you want to do with your retirement can greatly affect the amount of time that you have to work in order to retire. Paying off your debts and saving as much as you can early on will all help to make your retirement enjoyable and stress free.

Accounting Mistakes to Avoid In Business

Thu, 22 Sep 2016 16:24:00 GMT

As a small business owner you are often forced to wear many different hats. This makes becoming an expert in every aspect of your business nearly impossible. While some mistakes are inevitable, there are few that you should try to avoid when it comes to accounting.

Have you ever swiped the company card for personal expenses? What about adding more receipts to your files without taking the time to look at them and make sure everything is adding up? These mistakes, while seeming insignificant, may lead to turmoil down the road.

<h4> There are three big mistakes to avoid that could wind up costing you more than you think. </h4>

By keeping up with all of your expenditures and reviewing your accounting reports you stand a much better chance of seeing success as your business grows! Keep up with your accounting reports and work with your bookkeeper and accountant to help to accurately measure your levels of success!

Keep Track of Your Personal Information

Tue, 20 Sep 2016 10:07:00 GMT

If you are like most other Americans, the beginning of the year often means a new start or a chance to start fresh. With the first of the year it also becomes time to prepare for tax season. As breaches have occurred at an increasing rate over the last few years there could never be a better time to protect your personal information.

If you, like most American’s, filed you taxes last year you are at risk. Thieves are becoming more creative than ever in order to get your information and money. Take the steps now to help protect yourself against fraud.

Last year the IRS admitted to a large breach into the taxpayer records. This breach, was not a hacking breach like many are. The thieves would log into the IRS site using valid names, addresses, social security numbers and more. The IRS believes that the thieves will use this stolen information to file for fake tax returns.

Now you may be asking how you can protect yourself from fraud and identity theft. There are several things that you can do to help prevent yourself from falling victim.

<h3> Three Ways to Avoid Identity Theft: </h3>

Take the time to protect yourself. Once you have had your personal information stolen it is too late and can be extremely difficult to get everything straightened out.

Is Franchising For You?

Tue, 16 Aug 2016 10:00:00 GMT

You’ve always dreamed of owning your own business but don’t have a clue where to start. Franchising could be a way into becoming a business owner without having to figure out all the operational procedures, business and marketing strategies and while receiving the use of a known brand such as Subway or Burger King.

A relationship is established with a successful business so you can use its systems and capitalize on its existing brand awareness in order to receive a quicker return on your own investment. You are using a proven system and name, and running it by its rules – a tried and tested business model.

A licensing fee is paid to purchase the given territory and the name. Based on the brand name, this could be thousands of dollars. Ongoing royalties are also paid based on sales. Franchisees are put through training to learn how the franchise system works. Depending on the franchise, there could be vendors that you are required to purchase supplies from, advertising you need to pay into and strict guidelines as to how you are to run your business.

Look at McDonalds, it doesn’t matter where you go in the country you have the same food experience, milkshakes and hamburgers are made the same. However, if you buy into a younger less established franchise, they may not have all their processes or vendors fully established. There may be more flexibility in how you can run your business.

A good franchisor will provide ongoing training on new products and upgrades in processes. Are you still your own boss? In some respects, no. You still have to answer to someone else and follow his or her direction. You don’t really own the business; you own the assets you’ve purchased in order to establish the business. If you are a headstrong person who wants to run a business your way, then it may be time to rethink purchasing a franchise.

Although some people think they are buying a business in a box with a franchise, it still takes work to become known in the community and to establish business relationships with those that can support your business.

Do your homework on a franchise before taking the leap into business ownership. Determine if you are the type of person who can follow the rules and procedures associated with the franchise. Understand all associated costs before pulling the trigger on buying a franchise. Once those questions are answered, there are thousands of different franchises out there. If you’re buying a business, be sure it is something you are passionate about and step into business ownership.

It Will Never Happen Here

Mon, 25 Jul 2016 15:37:00 GMT

Do you have a disaster plan? Whether your business sits in an area subject to flooding or on a hill top it is always important to have that plan in place for when disaster strikes, the weather turns and the “it will never happen here” happens.

As a business owner you already are responsible for keeping all of the balls in the air. At times it becomes difficult to see all that you are juggling. What happens when a fire, flood or other form of disaster strikes? Will you be prepared to rebuild and reopen your business?

Having a plan is essential to being able to weather the storm. Without one you may find yourself struggling to stay afloat or knowing what steps to take to reopen your business. Share your plan with key employees to help rebuild and reestablish your business following a disaster. Because…sometimes things just happen. When they do, are you going to be a statistic or be ready to reopen for business?

Too Much of a Good Thing?

Fri, 22 Jul 2016 10:00:00 GMT

To every business owner, the goal is to grow the business and be successful while increasing profitability. These are all good goals to have as your start your business. When business owners decide to expand, it is important to plan for growth and be cautious to not grow too fast.

As a new business owner it is often very exciting and exhilarating to watch your company grow and succeed. The best phrase that I preach to new owners is, you have to walk before you can run. With business owners juggling so many things, it’s challenging to slow down to make sure that your bases are covered before you move on either to a larger space or a second location.

When a business grows it often becomes time to purchases that, “2nd location” or the “bigger office”, however many owners fail to look at what that really means. If these steps are taken too quickly or without a plan, these decisions could wind up being the cement shoes that drag you and your company to the bottom resulting in lost profits or closing your business.

It is important to have the right people around you as you begin to slide the chess pieces across the board, to establish a new location. Take your time to properly interview and hire staff that have the same drive and direction as you do. Now more than ever it is important to remember that you CANNOT do it all. When expanding to a new location often business owners must move out of office manager position and into the role of a CEO. Having the right personnel in place to run your current location, while you focus on expansion is a key component to success.

What sparked your idea for expanding to a new location was more than likely the fact that your business was doing extremely well with just one location. The thought of “double locations double profits” often is what people believe as they begin to look for the next big expansion. Is that really the case though?

Be sure to do your homework in the new geographic area where you are expanding. Take the time to do your research. Just because your company is extremely profitable in one location does not mean that it will do the exact same business in another location. Having a financial reserve that can sustain the expansion for several months may be the difference between success or failure of the new expansion.

During any business growth, owners will experience growing pains. Planned growth will allow for business expansion at a slower pace with a well-executed plan. Hiring the right staff to execute the plan can help to make your expansions more successful. Most of all remember, you have to walk before you can run. As you grow, take time to celebrate. Thank your employees and others that have helped along the way.

Time for Growth

Wed, 22 Jun 2016 17:25:00 GMT

In business, you will find that there always will inevitably come a time as a business owner, you are faced with the decision to remain steady, shrink or grow. It usually comes about when you are ready to rip your hair out, from becoming increasingly busy and find it difficult to juggle the amount of business you are bringing in. At this point you will have to make the decision, whether to scale back or forge ahead growing your business.

If at this point you choose the latter, you will soon find that it takes not only the will to move your business forward, but also a financial investment. You may even find that the investment is more cash than you have on hand, or it may force you to dip into your reserves more than your comfortable with, which leaves you asking, what next? A financial loan may be the solution to your problems. There are a few considerations however, before you contact your local bank or lending institution and ask for a loan.

The first step to obtaining a loan is to have a plan. When you go to ask for the loan most lending agencies are going to want to see that you have a well thought out plan of how you will be investing the money that they are lending you. They do after all want to be confident that you will be successful, which ensures them that they will see a return on their money. Your plan should resemble the business plan you had when you started your business, in the sense that you should have a direction, goals and strategies to reach those goals.

After you have created a plan you need to take a look at your financial status. This is where you must run the numbers and come up with figure you are comfortable borrowing, as well as a payment you are capable of paying back per month. This is also a time to take a look at your credit score, fix any errors that may hurt your chances of securing the loan.

Now that the prep work is done, it’s time to find a lending institution that fits your needs. Shop around, different institutions and/or credit unions have various rates and programs. Do not be discouraged if you are turned down by the first agency that you go to. Today there are many institutions that are specifically designed to lend money to businesses. I emphasize institutions, as banks are becoming more stringent on loaning money to companies, and you may find it easier to secure your loan through a credit union or online companies such as, Kabbage, OnDeck, LendingClub, Fundbox, or Bluevine.

When you make the decision to grow, be sure to do your homework and be comfortable with the amount you are planning to ask for. Have a plan and be ready to stick to it, giving your growth structure and stability, keeping you moving forward.

Inventory Stacking Up?

Wed, 11 May 2016 12:12:00 GMT

For many companies, part of being successful is having the ability to properly manage their inventory. It is extremely difficult if not impossible to end the year with the perfect amount of inventory. But proper planning throughout the year can help you manage inventory resulting in higher profits.

Having the proper amount of inventory is largely dependent on your ability to preplan for the upcoming seasons by using industry trends and data from previous years. For example, if you are a restaurant, you know Mother’s Day will typically be a busy day. Extra food and special menus will be needed to reap the benefits. Training your employees to help with keeping track of what is currently in your inventory prior to just ordering more of a given item, is vital to your success.

There are a few steps that you can take to help keep your current inventory accurate and help preplan for the upcoming seasons:

By watching the trends of what is selling, what’s new, and what the hot ticket items are, you will better be able to plan ahead and adjust your close out sales accordingly. Being proactive throughout the year will leave your inventory lean at year end and improve your bottom line.

Vacation Season!

Tue, 10 May 2016 10:07:00 GMT

Vacation season for a business owner can be a time of great stress. It becomes a juggling act of trying to make sure that all of the shifts for your company are covered all while allowing your employees their much needed time away.

As a business owner it is ultimately your responsibility to make sure that everything runs smoothly and that shifts are covered, while keeping your business running as smoothly as possible. This often becomes difficult managing multiple employee requests for time away as the summer season rolls around and the annual family vacations take place. There are steps you can take to help prevent strife between employees from happening this summer as vacations come and go .

The first step to keep everyone happy is to have an approval process by which vacations are granted. Whether your company operates on a seniority basis or a first come first serve basis is up to you. If you do not have a process in which employees can request time off, whether it be paid or unpaid, your employees don’t know what the expectations are. When employees know the company policies and procedures it helps to reduce confusion and frustrations when they are trying to get their time off.

The next step is to staff accordingly . Be sure to adjust the schedule to verify that you can cover the shifts or position of the employee that is on vacation. It may mean that you need to hire a temporary worker to fill your employee’s shoes while they are gone. If this is the case be sure to hire someone that is properly qualified for the position they will be working. Many temp agencies will work with you to assure that you get a properly qualified individual.

Prep work. Create a checklist for your employees so you understand where they are with their projects prior to leaving for vacation. This is especially important if your employee interacts with clients regularly. Having them leave for vacation for a week or more without knowing where that client’s project work stands, can and will result in an unhappy client.

Take the time to say thank you . As we all know when you are short employees over the summer, it adds to the stress of everyone else who is working. In order for things to run as normally as possible it means added responsibilities for many employees. It never hurts to grab popsicles or other cold treats or even lunch on your way back to the office to reward them for their hard work. Don’t forget to plan time for your vacation as well and enjoy the summer!

Tired of Late Paying Clients?

Mon, 18 Apr 2016 21:00:00 GMT

Cash flow is an important part of keeping the doors open for any size business. With many small businesses running on tighter budgets, it is more important than ever to have a handle on your accounts receivable. There are techniques you can use to help better manage your cash flow

Consistency in invoicing can help a small business owner maintain a steady stream of income. Think about the clients who only write checks monthly or twice a month. When bills come due do you write out a check the second you open it up and send it, or like most people do you prioritize which checks get sent out when? These things all play into when a small business may pay their invoice.

Ease of payment is often a factor when companies are paying an invoice. Electronic payment is often easier than writing a check and putting it in the mail. In the fast paced world we live, many consumers want ease of access. If they can log in and make a payment or send an electronic payment they are often more willing to do it on the spot. Collecting electronic payments and credit card payments does mean that you will incur a small fee. These fees are usually minimal but you may see a decrease in outstanding invoices. As a business owner, you need to make a decision if the cost of the fees is worth having quicker payment.

The terms on the invoice can also affect when you receive payment. Are invoices due on receipt, net-15, net-30 or net-45? As a business owner you cannot expect someone to make a payment before it is due. When paying your own bills you prioritize ones that need paid immediately with ones that may not need paid for a few weeks. By making your invoice term net-15 or net-30 you ensure that you get the quickest response. Larger clients typically won’t pay on receipt, so each client may be different in their payment term negotiation.

When sending an invoice, are you catching clients in the middle of their payment cycle? Often companies have set dates or days in which they pay current invoices. If they receive your invoice after their processing cycle, it may be put on the pile for the next payment cycle and this will delay your payment. Consider asking companies if they have a desired date they wish to receive invoices so that you can be sure to hit their payment cycle correctly.

If you notice that a particular client is consistently late with payments, or is always running one or two invoices behind, it may be time to look at your options. Maybe the client is going through a difficult time and make a decision to still work with that client. Perhaps offering an early pay discount may help to expedite payment. Or, you may find it is simply time to move on, collect past due monies and choose not to work with them anymore.

When waiting to receive payment for the work you have done, keep in mind deciding factors that you use when paying your own bills. Ease of access, invoicing at the right time in a client’s payment cycle, and having the right invoice term length are all actions you as a business owner can take that may help to improve your cash flow.

Are You at the Tipping Point?

Thu, 14 Apr 2016 10:10:00 GMT

As a small business owner you are pulled in many different directions, consistently wearing a lot of hats. There are many decisions you make every day. What can be delegated, what you need to handle personally, and how to run the day-to-day operations and how to plan for business growth.

There comes a tipping point where business owners must decide if they should hire or outsource. If you think about who sits around the senior management table at larger companies, you will discover, the president, chief information officer, human resources, chief financial officer and marketing director. But as a small business owner, you may not be able to afford the salaries of these types of positions. When you hit that point you need to make the decisions of what you can outsource and what is still manageable in house. There are a number of consultants out there that allow you to create a virtual management team at a fraction of the cost of hiring employees until the company can sustain growth to support the salaries of senior management.

When working with small business owners, one of the first things I do is to remind them what business they are in. They are in business because they offer a service or product that consumers want to have or buy. They focus on that product or service and it helps to excel them in their field. As your business grows, trying to continue to handle all aspects of the business that are not their field of expertise could end up hurting them financially.

As a business owner you have realized the different hats that you wear. While you have to adjust and adapt to the tasks that must be completed you cannot expect to be proficient at running your company alone. Know when to ask for help and outsource areas of business to help you to become more efficient and more profitable.

Unless you are an accountant, you most likely do not enjoy the job of going over the company’s books, balancing credit card statements, preparing invoices and entering receipts into the appropriate categories . This is where outsourcing that task to a bookkeeping company comes in handy. It IS their area of expertise, and what they do well. Utilizing this type of service gives you an accurate picture of where your financials stand at any given time, allowing you to make sound business decisions. With internet based software it is becoming easier and easier for companies to work with virtual bookkeepers. Having the ability to recognize your strengths and weaknesses will allow you to be more efficient in growing your business. To learn more about outsourced bookkeeping services, contact our office at 724-359-5022 or email lauri@paxtonbookkeeping.net .

WHY CREATE A BUDGET FOR YOUR BUSINESS?

Fri, 18 Mar 2016 16:10:00 GMT

Does the thought of creating a budget for your small business make you cringe? Many business owners feel that it is a difficult process to create a budget, but it is necessary to be able to make informed decisions and to steer your company onto a strong financial path.

Many companies use a product called Xero or QuickBooks to keep track of their financials. If this is a product that you use, making a budget may be a lot easier than you imagined!

The first step in creating a budget is having organized accounting records. If your records are a mess, then it can be very difficult. If this task is overwhelming, work with a bookkeeper to get your online chart of accounts set up accurately to begin with. Now is the time to clean up those records and start moving forward.

There are some easy steps to keep in mind as you create your budget.

Look at your budget as a measurement tool. Regular review of your budget allows you to adjust for variances and provides the opportunity to fix a problem before significant losses are realized. Set a budget, track your expenses and review the return on investment regarding the various marketing initiatives. This helps business owners set a strong foundation for success.

QUARTERLY REVIEWS!

Wed, 16 Mar 2016 11:59:00 GMT

As the first quarter wraps up for the 2016, it is time to go back and evaluate your results. Regular reviews allow you to adjust your growth strategy and shift resources where necessary. Questions like, “ Do you like what you see? ”, or “ Where did we fall short? ” are questions to ask senior staff or business advisors as you begin your review process.

Many small businesses think of a quarterly business review as a skim through of just looking at the overall numbers to see if they are making a profit. While that is important, it is just as important to dig deeper into those financials so that you don’t miss out on opportunities to make the most out of the 2nd quarter. Perhaps margins on a given product line are higher than another. By regularly looking at the numbers, you might shift more marketing dollars and personnel resources to market the more profitable product.

When evaluating your quarter, remember that every company has their own strategy for completing their evaluation. There are a few things you can do to help you reach and exceed those goals:

By taking the time to do this you can easily adjust your yearly budget, keep realistic goals and adjust accordingly to grow your business.

Credit Check

Thu, 18 Feb 2016 11:13:00 GMT

Tax fraud is always on the rise this time of the year. A breach in the IRS last year allowed the thieves to steal names, addresses, Social Security numbers and more from thousands of individuals. It is possible these crooks will use the information to file fake tax returns in 2016. In an effort to prevent fraud, the IRS has changed their efile system so that tax preparers can enter driver’s license information (or other state ID) along with the tax return. By actively monitoring your credit reports, it allows you to be proactive in stopping thieves from using your information.

Your credit score is one of the most important factors of your financial life. Banks use it to decide whether to give you a credit card or loan. Some service providers use it to determine whether you should pay a security deposit. Car insurance providers consider your credit score when setting your insurance rate.

There are credit monitoring services such as Life Lock, Experian Credit Tracker, The Simple Dollar and Identity Shield to name a few. There are also free credit monitoring services. These services examine online sources and alert you when a change has occurred that will affect your credit, such as the opening of a new credit card or the purchase of a vehicle. Particularly if your job involves travel, this may be well worth considering the service.

In addition to monitoring your credit with a credit monitoring service, each of the major consumer credit reporting agencies is required by law to provide you with a free report once a year. Your free report is available from the three major credit reporting agencies; Experian, Equifax, and TransUnion.

If you find problems or think your identity has been compromised work through the credit bureau’s process to correct the error. Place fraud alerts on your credit agency account should you be subject to any kind of identity fraud. Be vigilant and monitor your credit.

Business Ownership – Is It Right For You?

Wed, 17 Feb 2016 10:32:00 GMT

An idea and a dream of owning your own business. That’s how many small business owners began their journey. For some people owning a business may be a second career, or a result of being downsized. Whatever the reason, owning a business is hard work and not for the faint of heart. Be prepared to work hard, wear a lot of hats and stretch yourself out of your comfort zone quite regularly.

Like any big goal, if you start by breaking it down into smaller tasks, you’ll be able to tackle enough of the actions necessary to get started. SCORE, a nonprofit organization of volunteer executives, is a great place to get free business advice and guidance.

Writing a simplistic business plan, particularly in the startup phase, will help you to test the idea first before investing a lot of time and money. If you are seeking financing to start your business, a more detailed business plan will be needed. A simple, one-page business plan that is a high-level overview of the small business you’re about to start will help you to think through why you want to own a business.

Define what your business will do, who it will help, and how you will achieve your objects. Know who your competition is, and how your business will be different. Decide on a budget to determine what you will need to get started. If you’re self-funding, be realistic and then an additional 20 percent for incidentals.

Determine a legal entity, sole proprietor, limited liability corporation or S Corp. Filing paperwork to start a business costs money. Often, depending on your state, it can be a lot of money. You’ll need to account for city or municipality licensing, state incorporation or business entity fees and more. Do a thorough search ahead of time to determine what the filing fees are for your city, county and state before starting any business.

Many small businesses start as a sole proprietor, as it means less paperwork and up-front expenses. That can save you money while you determine the viability of your business. Do be aware, that acting as a sole proprietor can put you at personal risk, so you’ll want to weigh the benefits vs. risks and then speak with a local attorney or tax professional to decide which is smarter for your short-term vs. long-term goals.

Business funds should be kept separate from your personal funds to avoid comingling. This is a big mistake that makes tax time and financials so confusing. Set up a business checking account with your local credit union or bank. All you’ll need is your filing paperwork, sole proprietor licensing information and an initial deposit to get set up from most financial institutions.

If you have a service-based business, get involved with your local chamber of commerce and ask what resources are available for you to speak, present or share information about your business. If you have a product-based business, test the viability of your product at local swap meets, farmers markets or other community events to test what the public really thinks (and if they’ll purchase) from you. Take the plunge into business ownership and enjoy the ride.

There’s An App for That!

Fri, 15 Jan 2016 12:10:00 GMT

Does keeping track of your mileage have you struggling to log the places you’ve been, and who you were there to meet? Well, there is new technology that is making this easier than ever. Most people traditionally would keep some sort of paper mileage log. They would then have to input it into a spreadsheet after getting back to the office and at tax time add the miles up.

With tax season rapidly approaching we want to show you that there is a different way. Many people are now keeping track of their mileage on different smart phone apps and they can use those apps to export their mileage, and client details.

As smart phones become a larger part of everyday life, we are always looking for ways to utilize them to help make our lives easier and more efficient. As I explain to clients, it is important to keep track of your mileage that you travel for work so that you are able to write off the mileage at the end of the year for a tax deduction.

Some of the most popular mileage apps include:

The allowed amount to claim for mileage in 2016 dropped to .54 cents per mile. This makes it all that much more important to keep track of your mileage efficiently to receive the most tax benefit from your work related travels. When it comes to tax season, the more that you have kept track of these types of expenses throughout the year, the better we are able to claim as deductions to maximize for your benefit when preparing your tax returns. Something as simple as running down the road to meet a client at the local eatery, or driving downtown for a trade show or education can add up. So, take a few minutes to look at some of the available smart phone apps and try one out today. Let technology do the heavy lifting when it comes to business expenses. Come next tax season, you’ll be glad you did.

Tax Preparation Expertise

Thu, 14 Jan 2016 10:20:00 GMT

As tax season approaches I am always faced with the same question, can’t I just file my taxes on my own? The answer to this is yes, you can. The problem comes when you start to complicate the tax return with company expenses, 1099 forms, employee expenses, write offs, travel, etc. As a business owner, and in some cases, an individual with capital gains from stock sale, a house purchase or sale, or the first time your child may be in higher education, the returns become more involved. The more you understand all the deductions, the better off you may be on filing your tax return.

For those of you who choose to go it alone, are you aware of all the tax law changes? Do you study the IRS updates and releases?

As a business owner you specialize in the type of business you own. Education has been key to your success – either through personal experience, or continuing to study your craft. You know the inner workings of your particular business, what makes you successful and how to handle employees.

As a tax expert and tax preparer I treat my business as you do yours. Part of being successful is continually educating myself and my staff as we stay up to date on the latest trends, rules and changes in the tax code and accounting industry.

Did you know:

By keeping up with the latest changes in the tax laws we know how to protect your best interest in order to get you the highest returns possible. Why spend your time trying to figure out all the deductions you’re entitled to?

Paxton Bookkeeping and Tax Service provides both individual and business tax return services. Call our office at 724-359-5002 today to schedule your 2016 tax filing appointment.

Do You Have The Right Inventory?

Mon, 16 Nov 2015 14:44:00 GMT

Have you ever gone to a store looking for their “hot” item of the season to find out that they just sold the last one? Part of being successful is making sure that you have enough of the right product on hand. In a perfect world you would sell out of an item to the last customer walking through the door. We all know this rarely happens. The key is to find the “magic number” of how much inventory to carry so you have just a little of a product left over as the season rush comes to an end.

This is easier said than done you may say. But there are ways to help make sure that you optimize your merchandise for the season, and to do your best to have sufficient options for your customers to keep them coming back.

First and foremost, you want to be sure that you have a steady supply of merchandise from your supplier. It may be wise to use multiple suppliers. Split your delivery schedule and avoid ordering a large amount of a particular item upfront. If you find a particular product simply isn’t flying off the shelf like you anticipated, a split delivery schedule may allow you to adjust your order for upcoming deliveries. If you find that you are running out of an item, it may be beneficial to add more to your next shipment. Or vice versa, if you find you have too much of a given product, you may reduce your next shipment.

Online ordering can be key to keeping up with demand when you find yourself running low on a product. By allowing your customers to purchase the item they desire online, you reduce the amount of inventory that you need to have on hand. This allows you to lower your operational expense and still deliver the desired goods to your customers in a timely fashion.

Having a backup plan may be the key part to being successful at dealing with out of stock items as they arise with insufficient inventory. By backup plan, I am referring to having a similar item in stock. While this item may not be the exact item desired by the customer, it may be one that is similar enough to peak their interest. Your customer may be motivated to purchase the similar item in substitute of the one that they desired. Train employees on how to offer up alternative product options to provide strong customer service.

Keeping the proper inventory on hand is imperative to having a successful holiday season. To do this you need to be sure and schedule out your deliveries, allow for online ordering, and have a backup plan. By doing this you help to insure that you will have a successful holiday season! Ultimately, controlling inventory will help your bottom line come tax time next year.

Saving The Holidays!

Wed, 11 Nov 2015 10:30:00 GMT

It’s that wonderful time of the year. Seems like after August we skip Halloween and Thanksgiving and go right into retail Christmas mode. Do you have enough gifts for those you care about? This is the question that many people are forced to answer when it comes time to shop for the holidays. With the season of giving fast approaching, it’s time to think about what you will get for others and how you will be able to afford the gifts.

Yes, budgeting throughout the year can help but what if you never got around to it? It’s all too easy to get caught up in everyday life and forget about the holiday season when spring and summer roll around. Next thing you know September and October have passed, November is knocking at your door and you have not even started to think about what you will get everyone let alone where the money will come from. Don’t fall into the trap of charge it today and you’ll pay for it after the holidays. See how even a little change can make a difference in your holiday spending.

While financial planning for the holidays is something that is not always easy, saving with cash can be done even with just a little bit of time left. By putting aside $50-$75 a week you may find that you have more than enough to buy the gifts you want for the people that matter most in your life.

If you start to save $75 a week starting in mid-November, you will have $375 the week prior to Christmas to purchase gifts. Yes $75 a week does sound like a lot, however there are ways to cut back on your personal spending to be able to afford $75 a week or even more.

The best way to start is watching how much you go out to eat. You can substantially save by preparing meals and eating at home rather than going out to eat. Turning the thermostat down a little in the cooler months can help to save on heating expenses. You may also find that carpooling to and from work is a great way to reduce the everyday travel expenses.

Even though it is late in the year, there is always time to save for holiday gifts allowing you to be able to be generous during the giving season without experiencing the holiday blues in January. Remember that being creative on cutting your personal spending allows for more that you can spend on others.

Lastly, gift giving isn’t always about buying presents, but can be about giving the gift of your time. Time spent with family and friends. A family dinner and laughter around the table is something money can’t buy. Don’t break the bank giving stuff when there can be something much more valuable – yourself.

FSA Medical Spending Account

Tue, 20 Oct 2015 23:50:00 GMT

I t’s getting to be that time of the year. A time where flexible spending accounts for medical expenditures that are taken pre-tax will need to be spent, or in many cases forfeited by the end of the year. Why not take a few minutes to check your balance in your account? If you’ve had a really healthy year and an excess balance – CONGRATULATIONS! You may have some monies that you need to spend on such things as eye glasses, contact lenses, or prescription sun glasses.

A Flexible Spending Account (also known as a flexible spending arrangement) is a pre-tax special account available to those with job-based health plans. This type of account allows you and your employer to contribute pre-tax creating a fund for you use to pay for certain out-of-pocket health care costs. The contribution limit for 2015 rose to $2,550.

With some of the higher deductible and company self-insured medical programs, many employees are turning to Health Savings Accounts (HSAs) or Flexible Spending Accounts (FSAs) to help employees offset the cost of higher deductibles.

Funds in your FSA can be used to pay for certain medical and dental expenses, including copayments and deductibles. FSA funds on prescription medications, as well as over-the-counter medicines with a doctor’s prescription. Reimbursements for insulin are allowed without a prescription. FSAs may also be used to cover costs of medical equipment like crutches, supplies like bandages, and diagnostic devices like blood sugar test kits. However, you can’t spend FSA funds on insurance premiums.

Although the US Treasury offered a two and a half month grace period at the end of the year for amounts left in the account up to $500, employers don’t have to agree to carry over the monies in the account. At the end of the year or grace period, you lose any money left over in your FSA. So it’s important to plan carefully and not put more money in your FSA than you think you’ll spend within a year on things like copayments, coinsurance, drugs, and other allowed health care costs.

Since many employers are presenting their health care benefit for 2016, now may be the time to review your health spending history and how FSA’s and HSA’s can play a role in pre-tax planning. For those of you that have monies left in your FSA accounts, perhaps it’s time to schedule that dental or eye doctor appointment to spend down those funds.

For a complete list of guidelines visit the IRS website on Flexible Spending Accounts.

Xero Certified Means Something!

Mon, 19 Oct 2015 10:51:00 GMT

No – it’s not a play on words – X ero Certifie d means that the staff at Paxton Bookkeeping and Tax services are certified in XERO online accounting software . An alternative to QuickBooks online, Xero’s target users are small businesses, meeting their needs to run the day-to-day operations across multiple industries.

Xero’s cloud application currently serves the accounting needs of some 370,000 companies worldwide and numerous individual users. The customer feedback and reviews found on the web about Xero are positively overwhelming.

Being Xero Certified means the staff at Paxton Bookkeeping and Tax Services has achieved competency ratings indicating they are proficient in utilizing the software and integrating the platform into small businesses.

<h3> These are the top 3 reasons to consider making a switch to Xero: </h3>

Bill.com, a leading business payments network, and Xero, a global leader in cloud accounting software for small businesses, offer a Direct Sync integration for small and medium-sized businesses. Business owners can now seamlessly sync their Xero and Bill.com accounts to integrate bill pay with online accounting—providing small business owners with a real-time snapshot of their financials.

Because of this integration, it eliminates the need for double data entry and enables paperless accounts payable, accounts receivable and bill payment workflows, thus saving time and money.

<h3> Additional benefits of Xero include: </h3>

There is no fee to switch over from another platform and for new business owners , you may find the bill.com and Xero platforms to be a more cost effective, user friendly, cloud based option. To learn more about Xero Online Accounting software and Bill.com and how these services could benefit your business, email or contact us directly at 724-359-5022.

Are You Making These Business Mistakes?

Wed, 16 Sep 2015 14:54:00 GMT

As a small business owner, we wear many hats. With those various tasks we are responsible for, we are bound to make some mistakes along the way. Big mistakes often equal expensive mistakes. A small business cannot afford to make expensive mistakes. Does any of this sound familiar?

<h5> Gut vs Facts </h5>

Do you rely on your gut rather than the facts? If you want to avoid making the same mistakes, then stop relying solely on your gut to make decisions. Make decisions based upon facts, not your gut feelings. Accurate recordkeeping will help a business owner know and understand the facts. This not only is important in making current day to day business decisions, but also is vital in making future marketing decisions.

<h5> Where is Your Budget? </h5>

Is your budget like your business plan? If it is created, do you look at it regularly? Each year, it is important to take the time to create an annual budget broken down by month. This allows you to make actual versus budget comparisons at the close of each month.

A good budget blends actual historical financial information with your educated guess about the future of your business. It is important to keep your budget consistent throughout the year and compare your actual results to your budgeted hypothesis. Your budget doesn’t change.

<h5> Do You Forecast? </h5>

There is difference between a budget and a forecast. A budget is an educated guess about the future that remains the same. A forecast is an educated guess about the future that is constantly changing. When reviewing the budget versus the actual performance, identify fluctuations and opportunities and use that information to forecast the next several months.

In your forecast, take into consideration major changes that you know are coming. If you are about to release a new product or service, then you know the anticipated sales and costs associated with that. Additionally, you know the seasonal swings (if any) associated with your business and what expenses you are likely to incur.

As a landscaper, it may be gearing up with seasonal help at the start of spring. A restaurant or retail store may see an increase in sales as the holidays approach that may affect inventory.

Business owners become obsessed with their past financial performance. However, they fail to look out into the future. Don’t worry so much about what happened in the past. What’s done is done. Take what happened and use it to forecast out into the future.

<h5> Are You Pivoting When It Is Necessary? </h5>

Don’t’ focus on past mistakes and become frozen in fear. Use past performance to make an educated financial forecast. Make critical business pivots to keep your business on the path to achieving your goals.

Smart business owners can take the good and bad aspects of their business decisions and predict what may happen while making strategic moves to ensure their business is a success.

401 Ks and Job Changes

Mon, 14 Sep 2015 14:55:00 GMT

Have you recently made a job change or perhaps you have been part of a corporate reorganization or downsize? One of the most important questions you face when changing jobs is what to do with the money in your 401(k). Making the wrong move could cost you thousands of dollars or more in taxes and lower returns.

Now that you’re leaving, what should you do? The first rule of thumb is to leave it alone because you have at least 60 days to decide whether to roll it over or leave it in the account.

Resist the temptation to cash out; because in addition to a 10% penalty for early withdrawal if you’re younger than 59 ½, the plan administrator will withhold 20% of the total in your account for federal income taxes. The worst thing an employee can do when leaving a job is to withdraw the money from their 401(k) plan and put it in his or her bank account.

Also, because distributions are taxed as ordinary income, at the end of the year, you’ll have to pay the difference between your tax bracket and the 20 percent already taken out. You might also have to pay state and local taxes. Between taxes and penalties, you could end up with little over half of what you had saved up, short-changing your retirement savings significantly.

<h5> <b> You Do Have Options…. </b> </h5>

If your new job offers a retirement plan, then the easiest course of action is to roll your account into the new plan before the 60-day period ends. Referred to as a “ rollover ” it is relatively painless to do. The 401(k) plan administrator at your previous job should have all of the forms you need. Check with your new employer to see if there is a minimum period of time you need to work to be eligible for their 401K plan.

The best way to roll funds over from an old 401(k) plan to a new one is to use a direct transfer. With the direct transfer, you never receive a check, and you avoid all of the taxes and penalties mentioned above, and your savings will continue to grow tax-deferred until you retire.

If your vested account balance in your 401(k) is more than $5,000, sometimes you can leave it with your former employer’s retirement plan. Your lump sum will keep growing tax-deferred until you retire.

If you can’t leave the money in your former employer’s 401(k) and your new job doesn’t have a 401(k), your best bet is a direct rollover into an IRA. The same applies if you’ve decided to go into business for yourself.

Once you turn 59 1/2, you can begin withdrawals from your 401(k) plan or IRA without penalty and your withdrawals are taxed as ordinary income. You don’t have to start taking withdrawals from your 401(k) unless you retire after age 70 1/2. With an IRA you must begin a schedule of taxable withdrawals based on your life expectancy when you reach 70 1/2, whether you’re working or not.

It’s important to take scope and plan today in order to be able to have a quality of life when you retire.

Tax Law Changes

Thu, 10 Sep 2015 10:00:00 GMT

Part of the value of utilizing a bookkeeping service is that we stay abreast of current changes in tax laws. Did you know there were 55 tax benefits extended in the American Taxpayer Relief Act of 2012 that expired on December 31, 2013 that affected this year’s tax filing?

The tax codes are constantly changing and these changes can easily be missed if you aren’t utilizing a professional service. What it could mean to you as a taxpayer is that you could be leaving money on the table when you file your tax return come next year.

If you’re a business owner these changes in Business Due Date Tax liability may apply to you.

On July 31, 2015, the President signed the Surface Transportation and Veterans Health Care Choice Improvement Act of 2015 (Highway Act). In the Highway Act, there are several critical changes to current tax law. Some provisions are effective immediately while others are delayed for future years. The due dates for business tax returns have changed.

These due dates are for tax years beginning after December 31, 2015. The first tax return impacted by these changes will be the 2016 tax returns.

Obamacare will play a significant role in next year’s returns. The penalty for failure to maintain minimum essential coverage for individuals in 2015 will be the greater of $325 or 2 percent of income. This is a 300%+ jump from the 2014 penalty of $95, or 1 percent of income. For families, the penalty is the greater of $975 or 2 percent of income. This compares to the $285 in 2014.

These are only a few of the changes that may affect businesses in the upcoming tax year, so it’s best to be aware and plan ahead.

Step Inside My Business!

Thu, 13 Aug 2015 16:00:00 GMT

In recent blogs we have talked about having a clearance sale to move end of season merchandise and drive traffic to your store. We’d like you to step inside a virtual experience to see what this store has to offer.

ENGAGE your customers with a Google Maps Business View. The power is in their mouse and a click of the button. Customers can walk around, explore, and interact with your business like never before. Showcase all the details that you know your customers love. They will be able to truly experience your business – just like being there!

Using a smart device or home computer, potential customers can experience the ambiance and decor of your business before they even step out their front door. Open your doors into their virtual world showcasing what products, services and ambiance your business has to offer. Highlight what you do and how your business differs from your competitors. You can creatively inform and educate your visitors about your business, and convince them that a visit to your business is worthwhile.

With Google Maps Business View Virtual Tours, your online visitors will love being in control of an incredible 360 degree interactive experience, that lets them connect with your business in a unique, vibrant, fun and engaging way.

Google Maps Business View was established in January 2012. Using Street View Technology, Google Maps Business View provides a 360°, Interactive, Panoramic Virtual Tour of your business. There are no holidays with the Google Maps Business View. The virtual tour brings the cutting edge street view experience, and your online customers inside your business, 24 hours a day, 365 days a year

See how ProFromGo Internet Marketing , a Certified Google Photographer, brought two companies to life and increased their business with a Google Maps Business View Virtual Tour.

Take your virtual tour a step further and enhance the experience with social media. You are free to embed your Google Maps Business View virtual tour into your own website and Facebook business page by using a short snippet of html code. You can also link directly to your tour in email or via social networks such as Twitter.

Drive more traffic into your business with a Google Maps Business View virtual tour.

Xero Certified Advisor

Tue, 11 Aug 2015 14:00:00 GMT

Paxton Bookkeeping is pleased to announce we are now a Certified Xero Advisor. In addition to being certified with other online software, we have found Xero to be an easy-to-use but powerful online accounting system for small business owners and their advisors.

Xero gives you access to your financial information anytime, anywhere and updates your financial information in real-time. Backups are stored on Xero’s secure servers.

Why Paxton Bookkeeping has Partnered with Xero

We believe Xero offers a compelling alternative in the marketplace for many small business clients. Because we have already been using Xero in our own office environment and found it to be so effective, we’ve invested our time in developing our expertise and certifications in Xero.

These are reasons we are excited about Xero:

To learn how Xero online accounting software may benefit your business, give us a call at (724) 359-5022.

Summer Clearance Sale – Part II

Wed, 08 Jul 2015 21:25:00 GMT

In Part 1 of the Summer Clearance Sale we talked about Inventory Management. In addition to having a Summer Clearance or Summer Blowout Sale, there are things you can also do to create customer loyalty throughout the year. A loyal customer will always come back to see what’s new and tell others about their recent purchases.

As a business owner, you want to stand apart from the big box stores. So we’ve put together some suggestions on ways to do that. It boils down to the planning. Take a few hours and sit down with your calendar and plan out the next several months of merchandise promotions. By writing it down, you give yourself and your staff a guide to what’s being planned for both in-store and social media promotions.

Take control of your own destiny and have some fun with different types of sales to create buzz. Remember to pull social media into the mix and let your customers know what these promotions are. This can be done with text message programming, regular electronic newsletters and/or sale announcements and social media. Your customers will remember and think of you first and that’s good for business !

Summer Clearance Sale – Part I

Wed, 08 Jul 2015 21:20:00 GMT

July marks mid-summer. With the rainy weather we have had, it doesn’t seem much like summer. If you are a retail establishment, perhaps you’re overrun with summer gear, clothing, furniture or toys. What’s the best way to move inventory – why having a sale of course!

A sale not only helps to reduce inventory, but also can bring in a flux of cash to purchase needed merchandise for the upcoming fall season. The key to having a successful sale is to still make a profit margin on inventory as you begin to clear out your merchandise. As the season progresses, those margins will decrease, but so will your inventory.

Unsold inventory on hand at the end of the year must be taken into account when it is time to calculate your taxes. That unsold inventory has a direct impact on the amount you will pay in taxes.

Understanding where you are in regard to inventory begins with accurate recordkeeping. Without knowing how much product you have on hand, you don’t know how aggressive to be in your sales discounts.

Business owners don’t have a crystal ball to see what items will sell and which ones will sit on the shelf when going to trade shows and commercial marketplaces to purchase merchandise for the upcoming season. But, they take a risk based on past experience and order items they think their clients will purchase. However, during this process – they always don’t hit the mark. Identify which items may not be selling as well and create a special section with deeper discounts.

Review your order system and processes for ordering and reordering merchandise. If a summer item sells out by the end of June, it may not be in your best interest to reorder that particular piece of summer merchandise. Many distributors have minimum order amounts to place an order and reordering may cause the business owner to order more than they will sell or need. Customers will learn to shop early in the season for the best selection.

Be careful of bulk purchases. It doesn’t matter if the inventory is stocked in-house or at a supplier’s warehouse, once you purchase items they show up on your balance sheet.

Evaluate multiple suppliers. In order to keep your business, existing suppliers may be willing to negotiate purchasing terms or lower minimum order thresholds. By not relying on only one supplier, if a hard to obtain item is sold out, the business owner has additional options to keep those in demand items in stock.

So as you create your next sale we recommend these steps:

Remember…inventory left in stock affects your bottom line at tax time . Be sure to read Part II of this blog for creative ways to move inventory at the end of the season and throughout the year.

Expanding Business Through Teamwork

Thu, 11 Jun 2015 15:04:00 GMT

There is a saying… “Two heads are better than one.” That’s the foundation of building a strong team to grow your business. Either through outsourcing services or building your own internal team, it’s important for everyone to be on the same page. Being able to work productively with a team is one of the most crucial aspects of achieving success in a business setting. A solid team will increase creativity in the workplace, improve the quality of work, and also foster healthy and productive employee relationships.

Teams can accomplish work more quickly and effectively than people taking on projects on their own and collaborative work also keeps employees accountable to each other, which increases motivation.

Let’s look at how effective teams function.

<h3> Set Clearly Defined Goals for the Team </h3>

As a team member, it’s important to feel a part of some larger purpose. But to convey that to everyone, communication is one of the biggest hurdles in accomplishing the team’s overall goals and objectives. Sometimes the distribution of work isn’t clear and certain objectives can fall through the cracks. It’s important to organize the workload prior to distribution to the team. That way, everyone involved will feel like they have something important to contribute. By clearly delineated roles with tangible directives and goals, it provides a way for team members to be held accountable to their individual roles within the team.

<h3> Don’t Micromanage </h3>

How often have you been asked to do something and then told in steps how to accomplish the project? Does that give you the feeling of autonomy to approach the project and complete it? The number one factor associated with happiness in the workplace is autonomy, and a happy employee is a productive one! Give team members the benefit of the doubt and see what they can do without strict supervision. You will likely be impressed! You’ve put this team together – give them roots within the company culture and the wings to fly to new heights.

<h3> Have Meetings Often </h3>

Meet regularly, but not every day. One of the best parts of working on a team is that you get to receive feedback and insight from other people, not to mention that it can be really fun! Schedule weekly or bi-weekly meetings to let the team get together and talk about what they’re doing – this gives people the opportunity to ask questions or ask for help if they need to. They can also share their experience and progress of the project so far – things that might be working well or not working at all, and a team leader can make adjustments accordingly.

<h3> Give Positive Feedback </h3>

Communication is key. Employees want to hear from you and need positive feedback on their work. No one likes to slave away on a project only to have their work ignored. This is something to be especially aware of with a team project where the hard work of certain members is more likely to be overlooked. By holding regular meetings, it provides the opportunity to keep track of what each member is contributing and allows you to maintain a real-time pulse on the project. Be sure to recognize individual team members for their contribution to the objective and encourage those team members who may not be holding up to their responsibilities if you’re unhappy with their performance. Be certain to deliver the message in a constructive way that will make them eager to work harder.

Whether in-house or through the use of outside consultants, teamwork is based on building trust, respecting others, and providing open communication toward an optimal result.

A/R – Fast Track to Payment

Tue, 09 Jun 2015 10:06:00 GMT

Are you using technology to increase your cash flow from invoicing to money in the bank? If “I’ve always done it that way” is leading to longer A/R payment terms, now may be the time to revisit your policies and procedures regarding accounts receivable.

With the use of online billing, direct transfer of funds and services such as PayPal, technology has allowed businesses to make substantial improvements in their customer invoicing processes.

Here are six tips you can use to review your own invoicing process.

<h4> 1. Invoice Creation </h4>

Time and billing, project management, or point of sale are the top methods of billing. The best way to create all of your invoices is by the push of a button. Eliminate duplicate data entries and automate as much of the process as possible. By keeping your invoice data in real-time you are able to benefit from electronic invoice delivery.

<h4> 2. Invoice Delivery </h4>

Electronic Invoicing helps to ensure that the invoice is quickly approved. No more waiting for snail mail and losing time between invoice creation and the customer processing the invoice. Change that by using email or delivering the invoice electronically.

<h4> 3. Invoice Terms </h4>

What does 30 days mean to you? When do you want to get paid? Chances are, if you set your payment terms to Net 30, you’re more likely to get paid in 45 days, not 30, according to recent research by Xero, where over 12 million small business invoices were reviewed. Consider setting your terms to 13 days or less, Xero suggests, because most small business debtors pay two weeks late.

<h4> 4. Payment Method </h4>

Checks, credit cards, PayPal and debit cards are all methods of payment for invoicing. How does your business rate when it comes to payment options? If all you take is checks, this practice could delay your payment. Before making payment practice adjustments, take into account fees lost to receiving credit card payments.

Your industry may even have more options. For example, in accounting, Intuit has their Intuit Payment Network (IPN) where small businesses can receive money electronically and send and receive requests for money. IPN is far cheaper than PayPal fees, too.

<h4> 5. Receipt </h4>

Consider time spent going to the bank with the receipt of a hard check. When you get paid electronically, it’s in your bank (or your merchant account) within minutes. If you bank online, you can see things in real time. With multiple of paper checks, based on the bank you use, you also have additional bank fees incurred from processing the checks. In addition, depending on if deposits contain out of state checks, additional time might be required for all checks to clear and monies to be available in your account.

<h4> 6. Following up on overdue invoices </h4>

Very few business owners like to follow-up on overdue accounts. But… you’ve done the work and deserve payment for performance. After all, you’ve already paid your employees, so it’s important to remain vigilant on collection of past due accounts. Those clients that are habitually late payers should be considered for prepay or COD terms.

How did your A/R process rate on the 6-point checklist? Hopefully this gave you some ideas for improvement? As always, please reach out if you have A/R questions or if we can help you implement your best practice invoicing system.

How to Add a New Product or Service to Your Business!

Thu, 14 May 2015 14:17:00 GMT

If you are a business owner you already realize some of the benefits of being your own boss. But with those benefits also come the large responsibilities of being profitable and successful. It is often a fun and exciting feeling when you come up with a new idea for a product to sell or a service to offer, knowing and feeling that it could be the next great thing that sets you apart from other businesses. Now before you go and launch a new line, or provide a new service it’s time to be a business owner, take a step back and analyze this hip new idea and decide if it is really the direction in which you want to move.

It all starts with a solid plan. Now your new idea may in fact be the next step for your business, but you need to evaluate it from all sides. Doing this will help to prevent your new idea from potentially damaging your reputation or simply moving forward with an idea that you will soon look back on and realize that it might not have been the right step. So once you have found the next best thing for you and your business, take some time to step back, put on the owners hat and evaluate the idea answering the following questions to help ensure your success.

Being able to answer these questions will not guarantee success, as it is impossible to know exactly how your new idea will be accepted across your client base. It will however help you to step out of the shoes of the excited inventor and into the shoes of a more objective owner who is looking at the costs, ability to take it to market and the financial success to your business.

How Did You Spend Your Tax Return?

Mon, 11 May 2015 13:52:00 GMT

If you were among many Americans this year who received a tax refund, the receipt of your refund check may have been one of your highlights of spring. Now that tax season is over, we’re taking a breath, but have decided to list some of the top things people do with their refunds.

Not everyone receives a tax refund. Some individuals we work with choose to not let the government use their money all year long, but plan to just about break even with their tax planning. Business owners who pay quarterly estimates help to minimize tax liability at tax season. Do you get the key phrase in this process? It’s in the planning.

So…if the planning for 2014 tax wasn’t to your liking – perhaps it may be time to look at the plan for 2015 before the end of the year. The first quarter is already over, but there is still time to adjust. Give our office a call at (724) 359-5022.

Bartering For Dollars

Tue, 21 Apr 2015 20:14:00 GMT

Have you ever traded services in exchange for a product or service? A professional service may trade for such things as a cleaning service, landscaping or plumbing. This is called Bartering and the IRS considers this income. If you barter, you should be aware that the value of products or services from bartering is taxable income.

A direct barter is negotiated between two people for exchange of a particular service. A barter exchange such as Green Apple Services requires a membership, but offers a variety of services to choose from such as: vacations, office supplies, professional services and restaurant meals. There is an agreement or process in place to value goods and services exchanged. The organization becomes the organizer of a marketplace where members buy and sell products and services among themselves and the service facilitates the barter in exchange for a fee.

<h4> The IRS states the following about bartering: </h4>

Did you receive a 1099 for your bartering services? Remember, the IRS matches all those 1099s with your tax return. So if bartering services resulted in you receiving a Form 1099-B, don’t ignore it.

Regardless if you’re using a direct barter service or a barter exchange, as a business owner you need to be mindful that you don’t barter too many of these types of services. Becoming out of balance through the use of too much bartering or couponing can cause a cash flow crunch in available money to run your day-to-day operations. Bartering is a great way to receive additional products or services, but just like a Groupon or any other type of sale, it’s important to limit your business liability to insure continued profitability.

If You Missed The Tax Deadline These Tips Can Help

Thu, 16 Apr 2015 09:06:00 GMT

April 15 has come and gone. If you are among those procrastinators that didn’t file, it doesn’t excuse your tax obligation. Every American taxpayer is eligible for an automatic extension, only if they ask. Asking allows you to extend the deadline, but doesn’t excuse you from any taxes owed. IRS charges a combined penalty of 5% for each month that your return is late — 4.5% for late filing, and 0.5% for late payment.

Here are some tips for taxpayers who missed the tax filing deadline:

Although the push for tax season is officially over, if you didn’t file a tax return or an extension but should have, you need to take action now. After all, your bill isn’t going to go away, and delaying payment will simply result in interest charges or other penalties.

Planning for next season begins now. We work with our clients monthly to help them stay on track with tax obligations and/or adjustments. When 2015 tax reporting season rolls around, our clients already know if they’ll be due a refund or need to make a payment. To learn more about how Paxton Bookkeeping and Tax Services can help take the worry out of your next tax season, contact our office at 724-359-5022.

Are You Throwing Food and Cash Away?

Fri, 20 Mar 2015 10:30:00 GMT

The restaurant industry can be one of the more challenging industries to manage your costs. With majority of your product having a very short shelf life makes it a necessity to get a grasp on your food waste. Even the strongest restaurants can fall victim to mismanagement of food which leads to loss of revenue and can result in the doors closing for good.

<h4> Properly trained employees </h4>

A big part of managing your food inventory is having a properly trained employee who is responsible for ordering food, keeping inventory and minimizing food loss. Often this person does not have enough experience, is not properly trained, or is even neglectful. This can lead to large waste costs for restaurants and is a relatively easy fix.

<h4> Shortage in inventory </h4>

It happens all too often. A customer orders their favorite dish just to find out that the restaurant is out of it. There are many things that can lead to running out of inventory and it is a fine line to walk of keeping enough inventory while not carrying so much that you end up with spoilage. It is important to be aware of what is in inventory and the trends of how fast the particular food sells. While doing this will not guarantee that you will never run out of something, it is imperative to know what is in your coolers to help better manage orders and supply. After all, a restaurant cannot make money if they don’t have product to sell.

<h4> Kneejerk reaction </h4>

Constant change is part of staying in business. Restaurants have to be willing to adapt to market and industry changes. As seasonal menus change brings about change in demand. Ordering an overabundance of product without first seeing the menu trends can cause large excess of overstock with no way to get rid of it.

<h4> Organization is key </h4>

While it is important to know what is in stock, it is equally important to know where everything is. There is nothing worse than ordering goods just to find out when the shipment arrives that you already had what you needed. Being organized and keeping everything in its place will eliminate double ordering helping to manage the goods that you do keep in stock!

<h4> Raising cost of food </h4>

While many restaurants try to keep their prices competitive, they often overlook the cost of what they are purchasing. Failing to raise your prices as the cost of the goods you’re purchasing increases will reduce the amount of revenue that you gain and can even lead to selling food for the same prices or less that you are purchasing it as a raw good.

Inventory management is key to a solid bottom line.

Change in IRS Tangible Property Regulations

Mon, 16 Mar 2015 15:05:00 GMT

The IRS has changed its Tangible Property regulations. The final regulations apply to anyone who pays or incurs amounts to acquire, produce, or improve tangible real or personal property. According to the IRS Regulations , “You may elect to apply a de minimis safe harbor to amounts paid to acquire or produce tangible property to the extent such amounts are deducted by you for financial accounting purposes or in keeping your books and records. If you have an applicable financial statement (AFS), you may use this safe harbor to deduct amounts paid for tangible property up to $5,000 per invoice or item. If you don’t have an AFS, you may use the safe harbor to deduct amounts up to $500 per item or invoice.

How do the final regulations governing deductions for materials and supplies differ from previous rules?

In most cases, the final regulations don’t change the general rules for deducting materials and supplies. The final regulations merely incorporate pre-existing precedents on the definition and treatment of materials and supplies and add some safe harbors to provide you with additional certainty. The final regulations also provide additional elections and methods for those using rotable spare parts.

What is included in the definition of materials and supplies?

Materials and supplies are tangible, non-inventory property used and consumed in your operations including:

The property need only fit into one of the above categories to qualify as a material or supply.”

IRS regulations are complex and ever changing. Rely on the experts at Paxton Bookkeeping and Tax services to guide you through the process.

IRS Scams

Mon, 09 Feb 2015 17:07:00 GMT

Scams and Identity Theft are on the rise. Every day we hear of another data breach. With the 2015 tax season fast approaching, police warn of tax scams and increased calls from the ‘IRS’ that prey on the elderly and those whose first language is not English.

These are threatening calls by scam artists using fake names and IRS badge numbers and phone numbers that appear to be from the IRS. The calls are high pressure indicating arrest, prosecution and jail time if immediate payment isn’t made. Don’t be fooled ~ this is a scam!

State Police provide some tips on how to protect yourself against these telephone scam artists.

According to police, the IRS will never:

The Treasury Inspector General states if you feel you are a target for a potential phone scam , know your rights and take the following steps:

Be vigilant, be alert and don’t fall prey to scammers!

Money Saving Tips To Prepare For Your Tax Appointment

Tue, 03 Feb 2015 16:45:00 GMT

It’s getting to be that wonderful time of the year – Tax Time! Are there ways you can save time and money when filing your taxes? Absolutely!

Organization is the key to success. If you’ve scheduled an appointment with a tax professional, being prepared when you come to your appointment, having all your information with you, will save you time and money in the long run. Shuffling through papers and realizing you’ve left W2s at home while at your appointment prevents the tax preparer from completing your return.

As a business owner, reconciling bank statements, credit card statements and having your QuickBooks up to date are critical in finalizing your taxes for the upcoming year. Paxton Bookkeeping and Tax Services works with many small businesses throughout the year in preparing them for tax season.

With monthly financial reconciliations and regular reviews, business clients know where their tax obligations may stand. But more importantly, accurate financial information allows them to make sound business decisions throughout the year.

This is a short list of things to have with you when visiting your tax professional:

If you go to your appointment with a year’s worth of receipts stuffed into a shoe box or missing information, the tax preparer must wait to receive the remainder of the information needed to complete your tax return. Your return goes back into the pile of returns to be completed, you lose your spot in production, which will also delay your return. In addition, the preparer must reacquaint themselves with your file to plug in the one or two pieces of information that was missing. This equates to additional time spent by the tax preparer and perhaps additional costs incurred by the tax payer.

Although some taxpayers are anxious for a refund, be sure you don’t file too early and not have all your information. A missing W2 or stock investment statement can be cause for having to file an amendment to your return resulting in additional filing fees. Being prepared for the upcoming tax season will save time, speed up the tax return process and save money in the long run.

Business Use of Your Home

Mon, 12 Jan 2015 19:18:00 GMT

An office with a view – right down the hall and to the right. Only the hallway may be in your home. With changes in technology, cloud computing and the ability to work virtually, our workforce and workplaces are changing. Home offices are becoming a standard practice in both corporate America, boutique consulting firms and with entrepreneurs.

So you’ve identified a space for a home office, but does it really qualify as a home office complete with the deductible business expenses? Click here to watch the video on how the IRS has created a simplified home office deduction and determine if your office passes these tests:

<h4> Business Use of Home Tests: </h4>

Trade or business use test. Often a business will start as a side business or hobby but mature into something much more. To qualify for business use of your home you must use part of your home for a qualified trade or business.

Exclusive use test. Is your office used exclusively for business activity, or are you blending the space with activity for personal use? A home office must be used exclusively for your business activity, however, there does not need to be a permanent barrier between this space and the rest of the house.

Regular use test. Do you use this space regularly for qualified business activity? Utilizing this space once every few months probably isn’t considered regular use.

Principal place of business test. To deduct your home office expenses, the home location must also be your principal place of business. You may have multiple business activities, and more than one location for said activity, but the home office must be your primary location.

Why bother? Sound confusing? Perhaps. But with the recent introduction of a simplified home office deduction calculation more small businesses will have the opportunity to reduce their tax bill and still deduct expenses such as advertising, payroll and office supplies. For questions to these and other tax related issues, contact us at 724-359-5022.

Tax Changes for 2015

Mon, 12 Jan 2015 18:53:00 GMT

The standard mileage rate rises to 57.5¢ a mile for business driving, up 1.5¢ . The rate falls to 23¢ a mile for medical travel and moving and remains at 14¢ for charitable driving. Standard rate users can also deduct the cost of parking and tolls.

This is the year that the Affordable Care Act (ACA) kicks in and affects your taxes. The IRS is warning consumers this may be one of the most confusing areas for individuals and companies alike. From employer mandates and fines to noncompliance to individual mandates for not having coverage, tax season should prove to be interesting this year.

The ACA requires a taxpayer and each member of his/her family to have qualifying health insurance known as Minimum Essential Coverage (MEC), OR have an exemption at the time a return is filed OR make a Shared Responsibility Payment (SRP) when the taxpayer files his/her federal income tax return.

More small firms that offer health coverage can get a tax credit for doing so. The full credit is available only to firms with 10 or fewer full-time-equivalent employees and average wages of $25,800 or less, up by $400. The credit diminishes rapidly for companies with more employees and higher average pay, phasing out completely for businesses with more than 25 workers or average pay in excess of $51,600.

Read on to learn more about how the IRS’s Affordable Care Act Tax Provisions can affect you and your business.

The post Tax Changes for 2015 appeared first on Paxton Bookkeeping & Tax Services Online | .

Commingling Funds Can Create Costly Mistakes

Mon, 12 Jan 2015 18:36:00 GMT

Although most business owners know to keep their business assets separate from their personal assets for many small business owners the urge to blend or commingle personal and business funds is a bad idea both legally, as well as financially.

Particularly, if you are an LLC or Corporation and have set up a business entity, it’s important to avoid administrative problem and issues with bank accounts and assets. The “corporate veil” refers to the limited liability of your company. When business and personal funds commingle, creditors can “pierce the corporate veil,” and access your personal assets for liability through your business.

Some of the most common ways to commingle are:

How To Avoid Commingling.

Create a separate bank account and business credit card. Be sure to document all expenses, withdrawals, and deposits. Documenting allows you to become a better bookkeeper for your business, and/or keep better records for taxes. By utilizing a business account and business credit card allows you to enter appropriate receipts and expenses in the proper QuickBooks category.

These transactions can help you see how your business is performing, and seeing where you need improvement, what business lines may be performing well and those areas that might need reevaluated.

Reducing Taxes .

The IRS does not allow you to deduct business expenses that you cannot document. By having a separate account, it provides clear documentation to help minimize taxes and maximize deductions. When you have one business account for personal and business expenses, it is hard to explain to the IRS what you need to deduct and for what purpose.

Many small business owners pay more in taxes than they are required to because they do not have an organized system of keeping records and recording expenses. By simply creating a separate business account, and avoid commingling funds by using business money for personal expenses, you can create a more organized and efficient way to reduce liability and taxes.

If you have questions about setting up separate accounts, or establishing a Quickbooks accounting system in your office, Paxton Bookkeeping and Tax Services can help.

Have You Spent Down Your Flexible Spending Account?

Tue, 18 Nov 2014 16:16:00 GMT

A Flexible Spending Account (FSA) is a tax-favored program offered by employers that allows their employees to pay for eligible out-of-pocket health care and dependent care expenses with pre-tax dollars . By using pre-tax dollars to pay for eligible health care and dependent care expenses, an FSA gives you an immediate discount on these expenses that equals the taxes you would otherwise pay on that money.

In other words, with an FSA, you can both reduce your taxes and get more for your money by saving from 20% to more than 40% from what you would normally pay for out-of-pocket health care and dependent care expenses with after-tax (as opposed to taxed) dollars.

Your participation in any FSA is completely voluntary, and it’s important to remember that unlike other Federal benefits, your FSA election is only effective for one Benefit Period. In other words, you must enroll each year that you choose to participate. If you do not enroll during Open Enrollment in November and December each year, you will not be able to participate in the next Benefit Period, unless you experience a Qualifying Life Event that allows you to make an election outside of Open Enrollment.

The most common type of FSA is used to pay for medical, vision and dental expenses not paid for by insurance, usually deductibles, copayments, and coinsurance for the employee’s health plan. Over-the-counter medical devices, such as bandages, crutches, and eyeglass repair kits are allowable. Generally, allowable items are the same as those allowable for the medical tax deduction, as outlined in IRS publication 502.

Some employers choose to issue a debit card to their employees who participate in the FSA. Participants may use the debit card to pay for their FSA-eligible expenses at the point of sale. Pharmacies and grocery stores who choose to accept the debit card as payment must disallow transactions at point of sale if the participant attempts to pay for items that are not eligible under an FSA. In addition, employers still must require employees to provide itemized receipts for all expenses charged to the debit card.

The key in budgeting and using the FSA account is unless you employer approves carrying monies forward into the next year, these pretax dollars must be spent in the current calendar year. So as the year comes to a close, if you have monies left in your account, consider purchasing a new pair of eye glasses or some other type of approved medical deduction so you don’t lose monies you’ve put into your account.

Tax Planning Time Is Closing In On 2015

Tue, 18 Nov 2014 15:20:00 GMT

The key to end-of-year tax planning is simple: you have to think about both 2014 and 2015 as you weigh your options. You want to cut your tax bill over both years, not just one. Most filers will save by accelerating write-offs into 2014 and deferring income to 2015.

But what if this year brought a job change and added income? Or, for a small business owner a windfall of sales can significantly impact your tax liability. If you’ll be in a higher bracket next year, consider doing the opposite…accelerating income and delaying your deductions. State and local income taxes are one of the easiest write-offs to manipulate. Mailing your Jan. 2015 estimate in late Dec. allows you to claim the deduction this year.

We all have our favorite charities we support. Use this time to consider an additional contribution to support your favorite cause. You can accelerate contributions planned for 2015 into 2014, but you must charge them or mail the checks by Dec. 31 to ensure a 2014 write-off.

For those planning to contribute to an IRA, based on the type of IRA you fund, be sure to set aside the amount you can contribute before April 15th to receive the maximum deduction allowed. For 2014, the maximum IRA contribution you can make is $5,500 ($6,500 if you are age 50 or older by the end of the year). For self-employed persons, the maximum annual addition to SEPs and Keoghs for 2014 is $52,000.

Although choosing to contribute to a Roth IRA instead of a traditional IRA will not cut your 2014 tax bill— Roth contributions are not deductible— it could be the better choice because all withdrawals from a Roth can be tax-free in retirement. Withdrawals from a traditional IRA are fully taxable in retirement. To contribute the full $5,500 ($6,500 if you are age 50 or older by the end of 2014) to a Roth IRA, you must earn $114,000 or less a year if you are single or $181,000 if you’re married and file a joint return.

If you’ve used a software program to keep your expenses organized during the course of the year, you may be ahead of the game. Especially if you’re a small business owner, deductible receipts and expense categories are important. If you don’t currently use some type of software or are behind, consider a New Year’s resolution to make a change for 2015. It will pay off in the long run.

Taking some time to look at these types of deductions and write offs before the end of the year may save writing a big check to Uncle Sam come next spring . Feel free to contact us directly for these and other tax questions.

Are Cash Receipts Bleeding You Dry?

Mon, 13 Oct 2014 15:12:00 GMT

It’s easy to do – open the petty cash box or the cash drawer and pull out a couple of twenty dollar bills. A quick trip to office supply store, the Strip District or Restaurant Depot to pick up a few things and it’s back to business.

The IRS does not require a receipt for purchases under $75 – so it’s an OK practice if you don’t always have a receipt – right? Petty cash funds are not a way to get around cash disbursement controls. They enhance efficiency by providing cash quickly. Although not required by the IRS, making a practice of not keeping receipts for small purchases can add up and deductions may be missed.

As your business grows, you may find it necessary to make those stops more often. Without the receipts cash goes out the door and you may forget where cash was spent. Even small receipts should be recorded as they can be deducted.

Looking at a pattern of spending may lead to exploration of new vendors for services, shopping for office supplies online and other time saving tasks that cost a business owner more than the amount on the receipt. Think about your hourly wage in the time away from the business to make these purchases.

Although amounts may vary, for this example … twice a week cash is pulled from petty cash or the cash drawer totaling $110 per week. The first expense was for $50 the second expense was $60 – both under the $75 required by the IRS for a deduction. If you did that every week the monthly amount could total $440 and a yearly amount of cash would be as high as $5,280. Without documentation as to what these expenses are for, it is easy to miss these business deductions. As you can see, over time they can add up.

Failure to keep and record all cash receipts may leave you with an incorrect or incomplete picture of your company’s financial situation . It can also lead to faulty accounting , frivolous or wasteful spending , or theft by unscrupulous employees.

The best rule of thumb….. Cash is King – if cash goes out, a receipt must come back.

Top Bookkeeping Mistakes in Small Business

Thu, 09 Oct 2014 10:59:00 GMT

Small business owners wear a lot of hats. Ever wonder why some business owners are successful while others fail within the first five years of operation? This failure often is attributed to poor financial management.

These are some of the most common challenges faced when setting up your bookkeeping system. If not done properly, business owners could be paying more taxes, open themselves up for an IRS audit, or end up closing their doors.

Build your business on a strong financial foundation with a solid understanding of how to read your financial reporting. Seek professional help from a bookkeeping service if you have questions on any of the above.

Paxton Bookkeeping and Tax Services works with a number of small business owners in establishing and implementing sound bookkeeping policies and procedures. Outsourcing bookkeeping services can enable a business owner to focus on what they do best….grow their business.

Online Bank Balance…A False Sense of Security?

Wed, 17 Sep 2014 14:29:00 GMT

Business seems to flow 24/7. With social media and hundreds of emails flowing daily, we are being hit from all sides. It’s easy to pop on line in the middle of the night and pay bills. But could that practice be leading to unnecessary overdraft fees that can impact your budget?

Looking at an online balance can leave you thinking there’s more in your account than there actually is. Why does this happen? When deposits are made against other banks or that involve out of state checks, it may take a few days for all the checks to clear. Until then, that balance is not available for you to spend.

Debit cards will leave a trail of receipts in their wake. Many people use their debit card in lieu of cash. But all those swipes with some “do you want cash back” here and there can add up and can hit a checking account balance at one time. Without writing down debit card purchases, this practice can lead to less than desirable results. That $3.99 latte can end up costing you $40 with overdraft fees.

Keep in mind, that while electronic bill paying may be easier and more convenient, it isn’t always faster or cheaper. In fact, for those payees who aren’t set up to accept electronic payments, it may take considerably longer than if you were to send a check yourself. Because the check the bank sends to the payee on your behalf is not accompanied by your remittance slip, the payee typically treats the payment as an exception item, which can require several extra days to post. That means you need to plan your payments well in advance to avoid late fees.

If you write a hard check and mail it to a payee, the payee may not cash the check immediately and you need to account for time in the mail. Making sure your check register is balanced and up to date is a safer option than logging online multiple times a week to see what your balance is.

Overdraft fees vary according to your banking institution, but we’ve seen them range from $36 to $74 per bounced check. Not only does that subtract unnecessary monies from your account, but ultimately bounced checks can affect your credit score.

If you pay bills online, don’t use a public or shared computer such as a work computer. The smartest thing to do is to use a personal computer with your own password protected account. Also, it is recommended that you close your browser after doing any sort of banking online and log out of your computer.

Our best advice for consumers and business owners alike is to keep a balance in your check register of transactions including debit card purchases, hard checks, deposits and withdrawals. Review this balance against your bank’s online balance to ensure accuracy. Lastly, once a month balance your check book statement to catch any items that were missed.

Is Your Restaurant Changing To Fall Menus?

Wed, 17 Sep 2014 14:16:00 GMT

As we approach fall and there is a chill in the air, many restaurants shift from the lighter fare of fresh salads, fruits and vegetables of summer to fall comfort foods of hearty soups, heavier dishes and chili. From Oktoberfest to “ Our New Fall Menu” , restaurants switch it up to keep clients coming back for more. But can the change in season also impact your bottom line?

Since we work with so many restaurants, we’ve invited Restaurant Consultants, Sofranko Advisory Group as our guest blogger to share tips on how to control food costs when menus change. Sofranko advises restaurants to evaluate menu costs on a regular basis. Restaurants typically will lose money if they fail to do this every three months. Knowing what the product costs are will help price the product accordingly.

Food costs are the largest expense item on your profit and loss statement. When creating new menus portion control and developing a standard cost per ingredient will help restaurants maintain a solid profit margin.

Here are some things to consider as your supply costs increase:

Profitability . You must know what your costs are to price your product to maintain a profit margin. Over time supply costs can fluctuate so it’s important to fluctuate your menu prices with them, if necessary.

Competition . Your profit margin is consumed as costs increase forcing you to possibly raise your prices. While raising your prices is an option, customers will only tolerate so much before deciding to go elsewhere. Knowing where your competition is positioned can help you make better decisions on what adjustments you need to make.

Recipe changes: Instead of increasing prices or reducing portions perhaps a recipe change can help you control costs while still delivering a high quality product. Ask yourself can you replace a higher cost ingredient with a lower cost ingredient as an alternative.

Product sourcing: Where you choose to source your ingredients is another important factor in product costs. Avoid putting all of your eggs in one basket and seek out various purveyors so you can compare costs and possibly negotiate discounts.

Regular and thorough inventory counts will help you stay in control of your usage and the costs associated with particular dishes.

The bottom line for restaurant owners is this….check menus and costs every three months, understand the unit cost for each ingredient in a recipe, use measurements to ensure portion control and have an inventory system in place to prevent loss or theft. Controlling food costs can make or break your business.

Guest Blog by Restaurant Consultants, Sofranko Advisory Group:

About the Sofranko Group : The hospitality industry is a major part of the Sofranko Advisory Group. During the last couple of decades, the Sofranko Advisory Group has been involved in more than 90 restaurant openings. The CEO, Ron Sofranko, has been personally involved as principal owner in 19 facilities. He has employed more than five-thousand workers in three states, over 320 managers, has overseen annual advertising budgets of nearly a million dollars.

Cash Countdown

Mon, 18 Aug 2014 20:54:00 GMT

Is your cash drawer bleeding money? At the end of a day or a shift change, does your cash drawer balance? Petty cash and cash drawers that are intermingled often lead to a loss of cash for your business.

It’s easy to pull a $20 here or there to run and pick up a few office supplies, or some produce, but often those little incidental trips without receipts can leave you short on cash. This practice will translate into an owner’s draw or shareholder loan used for personal use resulting in income versus a deductible expense.

<h4> POS SYSTEM: </h4>

A good POS system will help keep your cash drawer in check, but like your bookkeeping files, the key to success is setting up the system properly. It’s important to train staff on proper procedures in order to accurately reconcile the cash drawer at the end of the shift. A good POS system will tell you what your credit card receipts should be and how much cash should be in the drawer. Many of our restaurant clients use “Aloha” and it serves their needs well. We’ve also had clients that weren’t happy with the “Vivonet” system.

<h4> COUNT CASH: </h4>

Counting down a cash drawer begins with a preset amount of cash at the beginning of the day, or shift. A typical start up amount can range between $100 and $150. Be sure to have extra amounts of change on hand particularly going into busy days. For restaurants and retail in particular, this can be Friday nights and weekends.

Print off your earnings statement from the POS system before the close of the day or shift. Subtract the preset amount of cash you started with and the difference should be the cash in your drawer.

<h4> RECONCILIATION FORM: </h4>

A reconciliation form can be used to record the cash. Start with the highest denominations first and work your way down to lower denominations and change. Close out the day’s credit card transactions and record that total as well. The difference between the credit card totals and the amount of the day’s earnings should be the cash that is in your drawer.

If you have a separate Petty Cash Box – no cash should leave that box without a returning receipt. But the countdown process is the same. Start with a set amount of cash and have a set time each week or month that you balance the cash box out.

It’s easy to get busy and not reconcile regularly, but not balancing your cash as shifts change or at the end of the day can open the door to employee theft and/or carelessness with receipts that will count as income at tax time.

Avoid Tax Surprises with a Summer Review

Fri, 15 Aug 2014 10:42:00 GMT

Life happens and when changes in your circumstances occur do you also consider what tax implications that can mean for your 2014 tax return? Why hold to chance what you may owe when there’s time to take control over the estimated tax you might pay during the latter part of 2014.

According to the IRS, these types of changes can affect your tax responsibility.

<h4> New Job. </h4>

When you start a new job, you must fill out a Form W-4, Employee’s Withholding Allowance Certificate. Your employer will use the form to figure the amount of federal income tax to withhold from your pay. Use the IRS Withholding Calculator to help you fill out the form. This tool is easy to use and it’s available 24/7.

<h4> Estimated Tax. </h4>

If you get income that’s not subject to withholding you may need to pay estimated tax. As a small business owner, it’s important to review income at least quarterly with your bookkeeper to make the appropriate adjustments as the year progresses. This will help to avoid a large tax liability in the spring. This may include income such as self-employment, interest, dividends or rent. If you expect to owe a thousand dollars or more in tax, and meet other conditions, you may need to pay this tax. You normally pay it four times a year. Use the worksheet in Form 1040-ES, Estimated Tax for Individuals, to figure the tax.

<h4> Life Events. </h4>

Make sure you change your Form W-4 or change the amount of estimated tax you pay when certain life events take place. A change in your marital status, the birth of a child or buying a new home can change the amount of taxes you owe. You can usually submit a new Form W–4 anytime.

<h4> Changes in Circumstances. </h4>

If you receive advance payment of the premium tax credit in 2014 it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit provide financial assistance to help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advance.

<h4> Healthcare Flexible Spending Account. </h4>

If you have a pretax Healthcare Flexible Spending Account, now is a good time to see what balance you have left for the year. The Health Care Flexible Spending Account is a tax-free account that allows you to pay for essential health care expenses that are not covered, or are partially covered, by your medical, dental and vision insurance plans. By contributing a portion of your payroll dollars into your Flexible Spending Account on a pre-tax basis, you can save from 25% to 40% on the cost of eligible expenses you are already incurring. However, monies in this account typically must be used during the calendar year. Some companies make exception allowing for expenses to be submitted up through the first quarter of the following year, but that can be on a case-by-case basis. Play it safe if you participate in this type of program and spend down your balance before the end of the year. The bottom line comes down to this, take a few minutes to review tax liabilities to avoid costly surprises next tax season.

Don’t Fall Victim to IRS Scams

Tue, 22 Jul 2014 20:47:00 GMT

The IRS compiles a Dirty Dozen list of scams taxpayers may encounter during the year. It’s no surprise that Identity Theft tops the list. Every day businesses and retailers are being targeted by hackers located in the United States as well as countries such as China and Russia. Success to these hackers means access to your personal information. Information that can be used to gain access your identity and to file a return in your name during next year’s tax season.

The IRS isn’t immune to these scams either. According to IRS Commissioner John Koskinem, “These schemes jump every year at tax time. Scams can be sophisticated and take many different forms. We urge people to protect themselves and use caution when viewing e-mails, receiving telephone calls or getting advice on tax issues.”

These are the top 5 schemes that target taxpayers:

The bottom line, remain vigilant in protecting yourself against anyone or anything trying to gain access to you information. Monitor your bank and credit card accounts and consider enrolling in some type of identity theft protection program.

Paxton Bookkeeping and Tax Services Team Expansion

Sun, 20 Jul 2014 18:09:00 GMT

Over the past few years Paxton Bookkeeping and Tax Services has grown in both service offerings and clients. Our best sources of referrals are the businesses we have come to know and do business with and we are thankful for the trust you have shown in referring us.

Growth is the goal for any business or nonprofit organization. Just as it is rewarding to watch our clients grow, I’m also pleased to announce our growth and expansion of our staff.

Desiree May is the newest addition to Paxton’s bookkeeping staff .
Desiree holds an associate’s degree in accounting and has experience working in various bookkeeping roles. She has also worked in the medical field. Desiree is excited to be part of the Paxton Bookkeeping Team and looks forward to working with their clients.

We have taken great steps to select the best individuals to fit the culture and standards that our clients have come to expect from Paxton Bookkeeping and Tax Service. I’m sure you will enjoy working with our new staff.

How Are Your Priorities Stacking Up?

Mon, 23 Jun 2014 02:16:00 GMT

<h3> Priorities…..Where Do I begin? </h3>

We all have a “to do” list that is longer than our arm. So how do you begin to sort through the ones that are most important? It starts with a comprehensive list.

Step 1: List each idea, task, “to do’,” project, and even items you need to do on a daily basis by row on a spread sheet. By using a spread sheet you’ll be able to sort your list for later use. Don’t be discouraged by the size of the list. Part of the process is putting it down in the first place so you can identify the types of tasks that need done.

Step 2: There are two distinct categories for business owners – are you working IN your business or ON your business? Working IN your business means you’re completing tasks to keep the business function going, i.e. landscaping yards, cooking for Friday night dinners, etc. Working ON your business means you put on the CEO hat and are strategically developing new products or new services, creating operational procedures, hiring more staff, marketing and nurturing new partnerships.

As you go through your list ask yourself these questions:

Step 3: Choice is a wonderful thing and as a business owner, you have the power to choose. Separate tasks that are working ON vs. IN your business. The day-to-day operations of your business will always be waiting to suck you in – so don’t worry about not having something to fall back on.

There is never enough time to work ON your business, so force it by blocking out a few hours or a half-day a week and do it, no matter what. The deliberate choice to work ON your business for a dedicated time each week will lead to new opportunities for business growth. Take this time to calculate ROI for new ideas and products to see how it will fit into your overall business offerings. Not sure how to do this? We can help.

Take a look at what you marked “not able to delegate,” and ask “why not?” Does a procedure need to be written? Do you need more staff? Does your staff need training? Or do you need to learn to let go? Whatever it is, and especially if there are a lot of these items, remove these roadblocks. If you don’t do this, you will become the bottleneck in your own business and it will prevent your business from growing.

Identify the market value for the tasks you’re still doing. Ask yourself what your hourly rate is? How many tasks are you doing that are below your hourly rate? Could you be more productive if you hired or outsourced that task at a lower hourly rate? You’re doing yourself and your business a disservice when you continually do a task yourself that’s at a low market rate.

Step 4: Prioritize with confidence. By organizing the information in a single document, it will provide clarity for strong business decisions about working IN or ON your business.

Electronic Bill Paying Made Simple

Wed, 18 Jun 2014 10:04:00 GMT

Going green has never been easier than with Paxton Bookkeeping’s new Electronic Bill Paying Service . The process is simple and synchs with your QuickBooks program. Business owners, as well as individuals who wish to outsource this task can save time and money, as well as maintain up-to-date financial information at the tip of your fingers.

Why use Paxton Bookkeeping’s Electronic Bill Paying services? Imagine paying all your bills with a few clicks of a mouse. Kiss stamps, envelopes and trips to the post office goodbye. These services are available twenty–four hours a day so you can pay your bills on your own time.

Online bill pay also saves you the hassle of paying late fees. You receive alerts that let you know when your bills have arrived, when they’re due and when they have been paid. Your payments are guaranteed to arrive on the date you set every time.

It’s a simple process. Enter your bill manually, scan or email it to us. We process the payment and send checks to you for approval to be released. We release approved checks and synch the information with your QuickBooks file. You send us the information and approve the processed checks….we do the rest!

Benefits of using Electronic Bill Payment include:

Online bill payment services with Paxton Bookkeeping and Tax Services is fast, secure and convenient. Want to learn more, give us a call at 724-359-5022.

Identity Theft and Your Business

Thu, 15 May 2014 14:55:00 GMT

Our guest blogger, Kandy McCool, owner of her own Legal Shield business, has been involved with identify theft services for over 8 years. We hear about stolen identities through credit cards, medical records and computer breaches and think it can’t happen to you. But, she has seen firsthand how identity theft can impact business.

There are 2 ways that Identity Theft can affect your business: Destroy your reputation as a business owner if your identity is stolen and disrupt your flow of business if your employee’s identity is stolen. Identity theft affects millions of Americans each year. And while it can take just minutes to happen to you, recovering from the financial damage and emotional toll it inflicts often takes years!

How does it affect your company when you have your identity stolen?

How does it affect your company when an employee has their identity stolen?

There are a variety of identity theft programs available so it’s important to compare components of the various programs carefully as not all programs are alike. Some things to look for when shopping for identify theft programs include:

From computer breeches to credit card fraud, identity theft happens every day. Are you taking steps to protect your business and offer your employees protection as well? If you have questions or concerns about this issue, please feel free to contact us directly at info@jkmccool.com .

About our guest blogger: Kandy McCool is the owner of Legal Shield and has been working with businesses and individuals for the past 8 years helping to protect them from cyber-crime. Legal Shield is a full service identity theft program offering 24 hour protection to individuals and businesses. A speaker and community leader, Kandy educates others on the dangers and impact of identity theft. For more information on identity theft visit our website www.jkmccool.com , email Kandy at info@jkmccool.com .

Go Green and Save

Wed, 14 May 2014 18:44:00 GMT

Going green can put cash back on the balance sheet . Not only is it good for the environment, but going green saves time and money. From business receipts to online banking and online accounting software such as QuickBooks, going green has its benefits. Many software programs allow for online purchases directly from your computer versus going to the store to purchase the software. Imagine the time and gas you’ll save when you can purchase and upload right from your computer.

With the proper login and password information, online electronic banking is accessible from any computer . When paying bills, group them according to due date and schedule time on your calendar to make these payments. By grouping bills together and paying a lump sum at one time, you save staff time needed to prepare checks and money on stamps and checks.

Likewise, with credit card statements, if there’s a questionable charge or a dispute, the ability to access charges online 24/7 will allow for quick action and resolution.

Invoicing sent via email versus snail mail not only saves on postage and office supplies such as stationary and envelopes, but allows for quicker payment than waiting for an invoice to arrive via snail mail.

When purchasing a product or service or spending money on your business, ask for an emailed receipt rather than a paper one if you have an option. Electronic receipts are easily forwarded to your bookkeeper and/or uploaded into your accounting system. No electronic receipt: take a picture of the receipt with your cell phone and share via an upload, or email.

Paxton Bookkeeping and Tax Services offer clients an opportunity to go green with virtual accounting software, opportunities to upload receipts and invoicing into a dropbox and reconcile credit card and banking statements online. These practices save a business owner time and allow for quicker turnaround of up-to-date financial statements and reporting.

By following the simple tips above you can put monies back on your bottom line and make yourself more attractive to Eco-conscious consumers. No matter which of these steps you have taken, make sure to tell clients about what you are doing by creating an environmental mission statement or green practices section of your website, and by including any badges or certificates you earn on your site as well. Going green….good for your business and the environment!

Tips for Creating a Smoother Cash Flow

Thu, 10 Apr 2014 19:39:00 GMT

Money in and out of your business is like a continuous ebb and flow. But sometimes the tricky little things crop up that can cause the ebb and flow to stop. The stress from ensuring you have enough cash for payroll, bills and yes taxes can be overwhelming. Here are some tips to keep the river of cash flowing freely.

<h4> <b> Tip #1: Go Digital </b> </h4>

Online banking is an efficient way to pay bills. It saves time, postage, office supplies and check stock. Bills are paid directly from your bank account.

The Intuit Payment Network (IPN) is an option when it comes to sending and receiving money. It’s free to set up your account, and it’s also free for your receiver to set up an account. All you do is add your bank account, and you can transfer funds between the two accounts just by knowing the receiver’s email address. Cost for the receiver is $.50 per transaction.

PayPal is the third digital option. The fees vary, and are usually paid by the receiver.

<h4> <b> Tip #2: Intermingling of Funds </b> </h4>

Open a separate bank account and credit card account to be used for business only. When it comes to finances, it’s never a good idea to mix business and personal accounts, especially when it’s coming out of the same bank account.

If you’re comfortable with credit cards and you can maintain control of your spending, it saves accounts-payable time when you can charge everything you spend on business to your credit card as long as you pay it off every month. Using your card is faster at checkout than writing a check these days, so you’ll save time on errands as well. Choosing a card with cash back or points toward purchases allows the added benefit of gift cards or promotional gifts that can be used for employee perks or client thank yous.

<h4> <b> Tip#3 Automate </b> </h4>

Autopay can be a great option for recurring expenses such as rent, utilities, or insurance. You can also be more accurate with the timing of the payment which will allow you to keep your money in the account for as long as possible until the due date arrives.

<h4> <b> Tip #4: Verify Expenses </b> </h4>

Time is of the essence when expenses come to verifying what you purchased is actually what is listed on the invoice. If employees have company credit cards, verifying those statements quickly will alert you to improper spending and/or budgeting. We hope you never pay bills that aren’t yours, but it can happen.

A three-way matching process on all your payables, especially those related to inventory as it refers to the three documents involved in accounts payable: purchase order, packing slip, and the invoice. These documents should match exactly to ensure your order and bill matches and you don’t pay for out-of-stock items that didn’t ship.

These are four ways you can improve office procedure efficiency and save time on accounts payable processing. For more tips on accounting efficiencies, give us a call.

What’s In A Business Structure?

Wed, 09 Apr 2014 00:49:00 GMT

<h4> <b> What’s in a business structure? </b> </h4>

Did you know:

Some business owners outgrow their original business structure. A business might have started as a sole proprietor, but over time has outgrown the business and it’s time to look at a new business structure, as well as the benefits and tax implications of each type of entity. If in doubt, contact a business attorney to discuss legal and financial implications of the various business entity structures.

Balancing Your Credit Card Statement

Sat, 15 Mar 2014 12:02:00 GMT

Credit card hacking is big business these days. It seems on a regular basis, Target and other retailers have had security breaches in their systems. You may have experienced a situation where you used a credit card and now your personal information may be in the hands of hackers. Regardless if it’s an individual account or a business account, it’s very important to check your statement each month for purchases.

Particularly business accounts with multiple card users, receipts and expense reports should be reconciled. By doing this on a monthly basis, any discrepancies in regard to employee expenditures can be resolved. Having sound financial policies and procedures in place will allow for appropriate disciplinary action if necessary.

What happens if you find unauthorized transactions on your account? Notify the credit card issuer immediately. Often credit card companies have monitoring in place that may detect unusual activity. If they suspect unauthorized charges they may place a hold on the account and/or contact you directly.

Visa, MasterCard and American Express have zero-liability policies meaning that if someone uses your credit card number to make unauthorized transactions you can usually be reimbursed. However, depending on your credit card company, it may exclude transactions made using a PIN such as a cash advance.

Balancing cards monthly help you to stay on track in regard to spending habits. Some credit cards offer point for purchases, but of what value are those points if you are carrying a balance with a high interest rate. Strive to pay cards off monthly to avoid interest charges. If payments are made late, in addition to a late fee, some credit card companies will also raise your interest rate.

Smart Chip is a credit card technology where cards are embedded with chips and a cardholder must put in their pin or sign for each transaction to be approved . With “chip & pin” especially, this is an ultra-secure method that makes it much harder for credit card hackers and fraudsters to steal from consumers since, rather than just stealing the information contained in a card’s magnetic strip, they’d have to know the carrier’s pin number as well.

Be proactive, understand your rights as a credit card holder and review and balance your statement monthly for any discrepancies.

New Rules Regarding FSA Accounts

Thu, 13 Mar 2014 11:53:00 GMT

Millions of Americans take advantage of their employer’s cafeteria plan that allows setting aside pre-tax dollars to be used to pay for qualified health care expenses. These pretax dollars are set aside for medical expenditures not covered by insurance. The problem with these plans has always been that if you do not use the funds in the account by the end of the year they are forfeited. So as the year progresses, it’s important to know where your balance is so you have an opportunity to make the appropriate purchases by before the end of the year.

New rules
The maximum annual amount that can be set-aside in Health FSA’s is now set at $2,500. Old rules allowed this account level to be set by employers offering the benefit (usually $5,000). By reducing funds available for this benefit, the government is hoping it will help pay for the new health care law. With this law change, the IRS agreed to reconsider the long-standing “use it or lose it” rules within FSA’s.

Grace Period vs Carry-Over Option…. Some employers have adopted a grace period of March 15th to use these funds in lieu of having to use the amount by December 31st. Effective in 2013, employers can opt to change their Health FSA plans to allow up to $500 in unused funds to be carried over into the following year. If an employer opts to do this, they need to forgo any allowable grace period rules currently within their FSA plan.

<h3> Important information: </h3>

Sound confusing? It can be. Because the new ruling was announced late in 2013, many employers did not have time to adopt the carry over provision. So it may change for the 2015 year. Until you receive definitive word your employer is changing their plan, it is best to use up your FSA funds prior to the end of your plan year.

Pennsylvania Sales Tax Compliance

Mon, 10 Feb 2014 13:59:00 GMT

Sales tax can be added into QuickBooks to calculate the appropriate tax for your business. With so many different municipality taxes and online sales it can be challenging to know what to tax and at what rate. These tax rates must be set up manually in QuickBooks for each tax. The challenge with Pennsylvania’s tax law is in knowing which rate to charge. The best way to do that if you’re unsure is to contact your local tax office.

Here’s an example. A car dealership in Butler sells a car to a buyer who lives in Allegheny County. The tax rate for Butler is 6%, but Allegheny is 7% and the car must be registered to the buyer with the Allegheny County address. Although the dealership is physically located in Butler they must charge the buyer 7% tax and remit that tax when filing their tax payment.

If you do business in multiple states, you must contend with the tax laws that differ for each state you do business in. So if someone living in Florida purchases from your ecommerce store, you must apply the Florida sales tax based on where that person lives.

According to Forbes the tax liability falls to the seller. Pennsylvania has one of the most confusing tax laws. Some convenience foods such as candy and gum aren’t taxed, however the tax applies to soft drinks. Although clothing is nontaxable, formal wear, bathing suits and fur coats are notable exceptions to the no-tax-on-clothing rule. Likewise, jewelry, purses and wallets also are taxable.

After weaving through the maze of information and it’s time to pay your sales tax, QuickBooks has a Pay Your Sales Tax window that will allow you to view your tax liability. A Sales Tax Liability Report will allow you to see any adjustments that were made and give you a snap shot of amount due. Still confused…give us a call and we can help you set up your appropriate taxable product items within your QuickBooks system.

IS IT TIME FOR A QUICKBOOKS CHART OF ACCOUNTS AUDIT?

Wed, 05 Feb 2014 13:53:00 GMT

Many business owners use QuickBooks to maintain their accounting records. However over the course of the past year, perhaps business structure and/or offerings have changed. Did you take the time to adjust your chart of accounts and add new entries into Cost of Goods Sold?

Perhaps you have packaged services differently or added new product lines. Have those offerings been grouped appropriately to review profitability? Your chart of accounts should be designed to fit your business.

The financial transactions should be grouped into similar categories. If your business model has changed – it may alter these groupings. Why is this important? By having an accurate picture of these groupings, it gives you good management reporting data. You can’t manage your business if you don’t know how you’re making money, which product lines may be more profitable than others, where you’re spending money, or what your various vendors are costing you. Second, it enables your tax preparer to prepare your tax return in such a way that you’re not either putting yourself at needless risk of audit, or submitting an incorrect return.

The key point in making good use of a chart of accounts in QuickBooks is to strike a healthy balance between having enough detail, but not too much. The detail may begin to lose its meaning if you get to where you have dozens, or even hundreds of accounts. Less is more. Break it down to a manageable detail, but use other features in QuickBooks – such as class tracking – for breakout out transactions by department or location.

It’s the first quarter of a new year. If you haven’t reviewed your chart of accounts and business offerings, now is a good time to get your information in order.

Choosing A Point of Sale System

Fri, 10 Jan 2014 17:03:00 GMT

Point of Sale (POS) Systems aren’t just for retail establishments. Restaurants are cashing in too. A POS system can help manage inventory, track customer’s interests, ring and track sales, accept credit cards, manage gift and rewards card processing, sync with mobile devices and provide sound reporting. But, not all POS Systems interface with QuickBooks.

POS Systems are available through banks, credit card processing companies and independent POS companies. With so many options, what steps do you take to choose the best system for your business?

The first step in choosing a POS System is to define your needs. These can include such things as multiple locations, ecommerce, credit card processing, rewards program and inventory. Ask customers and staff for feedback on important information.

Step two is to determine what hardware will be needed to support the new system. Hardware such as a terminal, printer, cash drawer, barcode scanner, and any mobile devices such as an Ipad may be needed to run the new system. In some cases, you may be able to use current equipment, however if in doubt, check with a technology consultant.

Step three is to set a budget. In addition to the hardware required, some POS Systems require a monthly maintenance fee or a yearly licensing fee. Additional considerations are number of locations, cloud based storage and scalability. Installing or upgrading your POS System can increase efficiencies and productivity, so it’s important to look at the overall picture.

Step four – research and compare systems. Look at such things as: customer service and support, how long the company has been in business, warranty with the product and determine if the product will meet the needs defined in step one. Ask for references and call them. Before buying see the POS System in action. Look for such things as speed functionality and user friendliness.

Step five – before setting up your system, create a backup file of inventory and customer data. Some POS Systems will help install your product, while others rely on IT consultants. Once your system is set up, schedule training for your staff so you will achieve the maximum productivity from the product. Review functionality with the representative in 3-6 months. There’s a lot to learn when a new system is installed and a post review will enable a business to achieve the maximum productivity from the product.

Investing in a POS system is a big decision. Try not to buy for your immediate needs, but consider what your needs may be in a year or two – or even longer. Purchase a system that is easily up-gradable, expandable and provides electronic upgrades either free or for a small fee.

January Business Review

Wed, 08 Jan 2014 16:56:00 GMT

January is a good time for a business review. The new year bring about a fresh start and a good time for business owners to look at what has worked in 2013 as well as things that could be improved. By taking the time to review the year end profit and loss, look at various business lines and sales processes, it gives a business owner a good snapshot of a year in review.

Perhaps your business has grown over the course of the past year and you were too busy building the business to really take a look at the numbers.

Making sound business decisions is dependent on good information. What resolutions are you setting for yourself to stay abreast of the day to day business activity, inventory, reconciling credit card and bank statements?

As you lay out your marketing plan for 2014, are you considering new service offerings or packaging services? If so, understanding your competition is a key element to setting your prices. But you also must know what your hard costs are to adequately account for the rising costs of such things as employee health care, increased fuel costs and rent or taxes.

For consultants, quarterly reviews of a profit and loss statement will allow for adjustments in tax estimates as the year progresses instead of waiting for surprises at tax time.

Restaurants owners, are you properly managing inventory or is food going bad because you overbought? Knowing your numbers and consumer history will help you better plan. As seasons and holidays come around, looking at the prior year’s history will help to anticipate buying patterns. When food vendors come into the restaurant with specials, you’ll be able to project upcoming trends and save by ordering ahead.

Set your business goals, identify those services that can be outsourced and start 2014 off with a solid road map to success. If you’re unsure of your numbers or need some help looking at trends, give us a call.

Tax Planning vs. Tax Preparation

Tue, 17 Dec 2013 19:13:00 GMT

The holidays are coming soon and the end of 2013 will be here before we can turn around twice. The magical date of December 31, 2013 marks the difference between tax planning and tax preparation! Business owners have between now and then to react and plan for end of year deductions for the upcoming tax season or resolve to put their tax receipts together and pay the amount of taxes that are due.

Having a solid financial understanding of your profit and loss statement will allow you to react before the year end or realize what your tax liability may be come April 15, 2014. If you have had a stellar year and your balance sheet is showing a significant profit, congratulations on a job well done!

Now is the time for planning to help offset a significant tax liability. But….don’t delay, except for the IRA contribution, these deductions will expire at the end of 2013.

The following are three areas to consider:

NOW is the time to plan. Take some time and review your financials to determine if any course of action should be taken to close out 2013.

Certified QuickBooks ProAdvisor Designation Achieved

Mon, 18 Nov 2013 01:26:00 GMT

We are excited to continue our strong relationship with Intuit in the QuickBooks ProAdvisor program where we receive outstanding access to higher-level software support, multiple software products including third-party add-ons, and additional training and certification options that help us increase our proficiency in the Intuit QuickBooks product line.

For you, the new certification means we’ve achieved a level of competence recognized by Intuit that demonstrates our knowledge of QuickBooks. With this knowledge, we will be able to answer your questions about QuickBooks, help you assess whether this product will better meet your business needs compared to other QuickBooks products, and provide you with productivity-boosting training filled with all the tips and tricks we’ve just learned.

If you’re interested in learning more about how QuickBooks can better serve your business’s needs or anything about QuickBooks, then please reach out and give us a call at 724-359-5022 or email us directly at lauri@paxtonbookkeeping.net .

SOMETHING IS MISSING…Part II

Mon, 18 Nov 2013 01:16:00 GMT

Part I of Safeguarding Your Business discussed how to set up controls to eliminate theft. As we move into Part II of this blog series, we will identify what to do if you suspect theft is occurring in your business.

Since the start of the recession, business crime has risen as people increasingly struggle to make ends meet. There is a risk that the difficult economic conditions will also increase incidents of staff theft. The signs that someone is stealing from you might include stock disappearing, a laptop going missing, your tills never seeming to reconcile or unaccountably high phone bills. But before taking any action you need to confirm your suspicions.

In the past three years, according to the Society for Certified Fraud Examiners, the average size of small business fraud has increased by nearly 17%. That should get your attention, because fraud and theft occurs in more than 35 % of all small businesses. One out of three business owners has theft occurring in their business.

If you choose to investigate, it’s wise not to tip your hand to let people know you are suspecting theft. Some investigative measures might range from keeping a closer eye on the workplace via security cameras to putting marked notes in a till, or carrying out computer audits. Whatever you do, ensure you are even-handed about it. Failure to do so could result in a discrimination claim against you.

One of the most common types of fraud is accounting fraud, and one of the simplest tactics internal accountant staff use to steal money is called “double checks.” This occurs when two checks are recorded paid to the same vendor, however they are actually written to separate payers.

Match up the checks with the bill and make sure the expense amount matches the expense on the P&L. Then make sure all of your balance sheet accounts are completely reconciled. If you are unsure on how to do this, or don’t have time, hire an independent outsider to verify that it was done. Repeat this process randomly at least three of four times per year.

Consider these tips to ensure you are protecting your business assets:

These few simple steps and added vigilance can help you prevent a potentially devastating and unnecessary hardship to the business you’ve worked so hard to build.

STEPS TO SAFEGUARD YOUR BUSINESS…Part I

Mon, 18 Nov 2013 01:05:00 GMT

This two part blog series discusses how to take steps to safeguard your business against theft and what to do if you suspect theft is occurring.

Cash is king. But what happens when cash walks right out the door through carelessness or dishonest employees? Internal controls and solid policies and procedures are necessary to protect your business assets. These assets go beyond just cash – inventory and supplies all cost a business owner money too.

Because cash is one of the most vulnerable assets to theft, internal controls should start with safeguarding cash. An effective way to protect this asset is to separate the duties of those who handle receipts and record accounts receivable. Have one person open the mail and record checks received, and another post the receipts on your books. A third person should reconcile the checking account. If you don’t have that large of a staff, a bookkeeper can be used to reconcile accounts or assume parts of this puzzle.

If you receive cash, have only one person operate the cash register and have a second person count the receipts after each shift. Start with a fresh cash drawer with a set amount of cash per shift. The more you separate these duties, the higher your chances of one employee detecting errors or improprieties made by another.

If your staff is so small that you cannot separate some of these tasks, sign all checks yourself and make sure you receive the bank statement each month before it is opened. Review the check copies returned with your bank statement to assure they weren’t altered or forged. Insist that bank statements are reconciled to your books immediately and any discrepancies are followed up on. If you don’t have time, outsource these duties.

Petty cash can be an easy way to lose small amounts of cash over an extended period of time. If petty cash replenishments occur often, check for missing receipts and perform an unannounced audit on a periodic basis.

And remember, the very best internal control is hiring people with integrity. Know your employees. Perform thorough background checks on all new hires, including credit checks for anyone who will be handling cash.

Consider asking your accountant to perform an internal control review of your business and make recommendations for improving safeguards.

Part II of this blog will identify signs that theft may be occurring in your business.

IRS SECTION 179 AND $500,000 EQUIPMENT UPGRADES

Mon, 14 Oct 2013 14:46:00 GMT

Section 179 of the United States Internal Revenue Code, allows companies to write off up to $500,000 worth of qualifying new or used equipment purchased or financed during the 2013 calendar year.

According to the IRS code, “The main benefit of a non-tax capital lease is that you can still take full advantage of the Section 179 Deduction, yet make smaller payments. With a non-tax capital lease you can acquire and write-off up to $500,000 worth of equipment this year, without actually spending $500,000 this year . A small business that is managing cash flow can leverage a non-tax capital lease to minimize out-of-pocket cash and still take the full Section 179 Deduction”.

Typically, depreciation deductions are spread out over time, but Section 179 allows business owners to write off the entire cost of a purchase the year that they buy it. Claiming the Section 179 deduction on your 2013 taxes is easy, although it’s not automatic: you or your tax preparer must fill out IRS Form 4562, the deduction must be taken on an item-by-item basis, and complete records of your business equipment purchasing or leasing must be maintained.

But remember: barring significant action by Congress, the Section 179 deduction will decrease from $500,000 to $25,000 as of January 1st. If you want to deduct up to half a million dollars from your 2013 taxes, you MUST purchase or lease qualifying equipment before December 31st.

Choosing A Credit Card Processor

Mon, 14 Oct 2013 14:42:00 GMT

Cash is King! But sometimes waiting for cash can put a dent in your bank account and accepting credit cards can provide a solution. Although credit card payments can help turn around your accounts receivable, those same credit card payments come with associated fees and a decrease in your profit. So how do you choose the best credit card company?

There are numerous companies that offer credit card processing services. Get quotes from more than one vendor and check customer and technical support at numerous times prior to signing an agreement. If the company lacks a strong customer support before you become a client, chances are that will not improve once they have your business signed up. Other things to consider are how long it takes for deposits, e-commerce capabilities and/or mobile features.

The amount of credit card transactions that are processed throughout the month can help to determine which credit card processor may be the best fit for your account. Some agreements limit transactions and frequency. Have a thorough understanding of your business transaction volume before beginning your search.

Leasing processing equipment versus an outright purchase can save a business owner thousands in monthly equipment fees. So do your research when it comes to equipment purchasing.

The average contract in the U.S. is 3 to 5 years, but that doesn’t mean some great providers don’t offer month-to-month contracts. Along with this contract term, most providers also have an early cancellation fee, which is usually based on your monthly fee. If you have the standard 3-year contract and cancel after 12 months, you have to pay the remaining 24 months on your agreement.

You can avoid cancellation fees by looking for a credit card processor with month-to-month contracts and absolutely no cancellation fees.

Check out the overall agreement. Sometimes credit card processors will display low rates up front but have high or hidden back end administration fees that can add up to higher overall rates. Be sure and mark your calendar when agreements are up because many agreements have an auto renew for another 3 years without a written 30-60 day notice.

When comparing credit card processing companies – shop around understand the terms of the agreement, compare apples to apples and negotiate.

IRS Audit Survival Tips

Mon, 14 Oct 2013 14:29:00 GMT

Despite your best efforts, you’re being audited – what do you do now? An IRS audit notice can strike fear in the hearts of the bravest of taxpayers. While the IRS allows taxpayers numerous opportunities to save on taxes, it is ultimately your responsibility to keep accurate records to prove your deductions. Collecting and organizing your records throughout the year will make it easier to prepare your return and reduce the likelihood of errors. It will also allow you to build your defense if the IRS chooses to dispute your return.

Don’t ignore an audit invitation. Call the phone number on the notice and discuss the arrangements, or hire a tax professional to do it for you. The best person to represent you is the one who prepared the tax return. They know what information was used to produce the numbers.

During an audit the IRS isn’t just looking for proof that you spent the money shown on the expense lines of your tax return. They are looking for two more major things:

* The expenses you reported really were business-related

* That you have actually reported all your income

There are three types of audits – a Correspondence Audit where everything is done by mail, an Office Audit held at a local IRS office and a Field Audit where the IRS comes to your home or business.

Know your rights, provide the documentation you are being asked for but don’t volunteer additional information, organize your paperwork so the audit may go quickly. If you have questions, talk with a professional tax preparer or an attorney to understand what the IRS is looking for and why. If you sense things aren’t going well, don’t hesitate to stop the audit to consult with a tax attorney or your tax preparer before continuing. Ask to speak with the audit agent’s supervisor if you think the auditor isn’t being fair. The IRS must complete an audit and give you an examination report within three years of the time you filed the return.

After the Audit

Most people owe something after an audit. Penalties range from: 20%, 75%, Interest Due and in some cases imprisonment. If you can’t afford to pay the entire tax bill all at once or if you don’t agree with the auditor’s decision, you can meet with the auditor to discuss the results, ask about a repayment plan that will fit your budget or appeal the audit results to the IRS Appeals Office.

Although audits are unpleasant, you don’t need to dread them if you’ve kept your financial records organized, up to date and above board. If you are chosen for an audit, make sure the examination is scheduled far enough in advance for you to get ready. Solid preparation should enable you to get through the audit with a minimal amount of stress.

Cash Basis Accounting vs. Accrual Accounting

Fri, 20 Sep 2013 01:13:00 GMT

You might have heard the terms “cash basis accounting” or “accrual accounting.” Your net income number can change depending on which method your books are set up for. Here’s a simple explanation of the difference.

It’s All in the Timing

Here’s how it would be done for a printer on cash basis : Cash basis recording a printing purchase both the sale and the receipt of cash would be recorded on the day it occurred. Companies on cash basis only record the transaction when the cash is received. But, if the printer’s books were on the accrual basis, it would be a different story:

Accrual basis recording of a printing purchase the printing sale would be recorded on the day the customer ordered the printing. The receipt would then be recorded on the day the customer agreed to pay for his printing.

You might be asking why a few days is such a big deal? It can be far more than a few days from the time you do the work to the time you get paid for it. And often, these dates span different months and even years, affecting the amount you have to pay in taxes to various agencies. Manipulating these dates (legally, of course) is one of many tax planning strategies that we can help you with.

Choosing for Your Business

In many cases, the government has chosen which method you must use when it comes to sales tax, payroll taxes, and income tax. That’s part of the reason we make the required adjustments to your books at year end.

To help you run your business in a forward-thinking way, the accrual method is best. You can record invoices for work you’ve done even though you haven’t received payment yet. You can enter bills you need to pay before you pay them to forecast cash requirements. Using accrual accounting, you can budget for cash flow needs as well as see more accurately what your revenue and income is looking like.

For clients who remain behind in their bookkeeping and just want to catch everything up once a year, the cash basis is adequate. However they lose out on all the good information they could have had throughout the year to run their business better.

For other businesses, a hybrid approach between cash and accrual accounting can be the most cost effective. Regular monitoring of the balance sheet and cash flow can help businesses make informed decisions on pricing, purchasing and other day to day operating decisions.

TIPS TO AVOID AN IRS AUDIT

Thu, 19 Sep 2013 23:35:00 GMT

Small businesses and self-employed persons are favorite targets of IRS audits. Here are five tips to keep your tax return from getting audited.

1. Be scrupulously honest.

Report all income, even when you don’t get a 1099 or W-2. Deposit all cash, religiously, into the business account. Don’t take cash, bypass depositing it into an account, and use it to pay expenses. If the agent sees a lot of this, it’ll make the case easier for unreported income. Remember: The burden of proof is on the taxpayer. Ignorance and sloppiness are not an adequate defense. Regarding deductions, don’t try to reach. Always ask yourself: Is this a defensible position? Am I clearly entitled to the deduction? Here’s an expression one hears often: “Pigs get fat, hogs get slaughtered.” I’m told it was first uttered by a judge — in a tax case.

2. Speaking of deductions, beware of “constructive dividends.”

This is a favorite of the IRS. Small business owners often use the corporate account to pay for personal goods or services, such a car used for the personal errands of the owner, non-business meals, vacations, home improvements, and so on. IRS and the state tax agents know it, and look for it. If it’s personal, report it in your personal income tax return or reimburse the company and make sure to give it only the correct tax treatment as compensation, or dividend, in consultation with your bookkeeper. This is often one of the charges in a tax criminal case.

3. Use a reputable tax preparer.

The Tax Code is very complicated. Furthermore, the law changes every year. The person preparing your return should have credentials (education and experience). Mistakes, including math errors, in one part of the tax return increase the odds that the whole return will be audited. Don’t pick someone because they promise to get you the biggest refund or the lowest tax bill. That’s a red flag signaling a fraudster. You don’t want to be questioned by the IRS when they investigate this tax preparer’s entire client list.

4. Keep good records.

Of course this is something you should have done throughout the year, but you can still heed this advice for the coming year. Keep your receipts, especially for expenses you deduct. You will be asked for them on audit. Remember: To deduct actual mileage you must keep a“contemporaneous” log, i.e. at the time of the trip, not a reconstruction weeks afterward. Likewise, you want to have invoices for an payments you make. (Otherwise, on audit, how do you prove the deduction you took for office supplies wasn’t just money you pocketed? Bring the paid bills from Staples.) Meticulously deposit all your income into an account and pay your bills out of that account or designated credit cards. If you’re self-employed, or have a side-line business in addition to your employment, DO NOT commingle income and expenses of your business with your personal. Keep and use separate accounts, ATM cards, and credit cards for your personal transactions and your business transactions. One of the biggest problems we face as tax practitioners working with small businesses is the lack of good record-keeping. Just keeping “books” makes such a difference for business planning and profits, as well as defending an IRS audit.

5. Keep regular books if you have a business.

It’s good business practice to keep books during the year. Many self employed individuals get into tax trouble because they didn’t pay estimated taxes during the year and so don’t have the cash (or available credit) to pay when they file the tax return for the year. Had they paid estimated taxes during the year, this would have been avoided. From a business point of view, they would also had a better idea of profitability had they taken into account tax “accrual” expenses building up during the year. So many contractors under-bid construction jobs because they don’t take taxes into account.

Being accurate during the course of the year can save heartache, time and money if the IRS should come knocking and want to audit your small businesses’ books.

IS IT TIME TO REVIEW YOUR CHART OF ACCOUNTS?

Fri, 16 Aug 2013 16:27:00 GMT

Perhaps when you set your business up, a friend or relative helped establish a chart of accounts and since then no one has reviewed the system. Almost all small businesses need to take the initial step in setting up their chart of accounts, but over time things change.

QuickBooks has different industry choices, but customization may not go far enough and that’s where the value of an experienced bookkeeper can really pay off by fully fitting the chart of accounts to your business.

Owner Equity And Start Up Costs

An Owner Equity Draw account is to track money that has been drawn out in lieu of payroll and this will come into play at year end. This contribution account will make sure that all expenses are showing up on the books and the owner is getting credit for contributing money to the company and again this will come into play at year end.

Perhaps a few years have gone by and business has transformed from a hobby or a lifestyle business to a booming company that has drawn the attention of investors that want to grow. Duplicating locations may be next to impossible if the initial startup costs are non-existent and documented. During the first year of business, all expense reimbursements and owner draws need to be detailed out and recorded with as much info as possible. The startup costs are a major piece of the puzzle and can be upwards of 5 or 6 figures. Without solid documentation – it’s difficult to reconstruct financial history down the road when your business is ready to expand. Having a system in place will allow you to prosper in the long run.

Cost Of Goods Sold And Break Even Analysis

By tracking all costs associated with items or services sold allows for some strong financial reporting. Your gross profit margin will tell you if your services are priced correctly, which product lines are profitable or perhaps those product offerings that need to be reexamined.

Mixing expenses with cost of goods sold is pretty common with small businesses early on. An example is shipping. Postage for mailing correspondence and shipping for customer product are two separate things. By separating these costs helps a business owner show fixed costs vs. variable costs. Knowing and understanding monthly fixed costs is one of the main components in determining your company’s monthly break even point. With these numbers, projected revenue can be established to keep the lights on, your employees paid and grow a profitable business.

Your numbers can also be tied to marketing efforts calculating the true ROI for monies spent on advertising, inbound marketing, coupons, trade shows, etc.

Over time businesses and their service offerings change. Packaged services can account for added revenue. However, there could be economies of scale for fixed costs that can factor into these packaged services that will affect QuickBooks entries.

Check your business’s financial health with a QuickBooks review performed by a professional.

COMMINGLING FUNDS CAN CREATE COSTLY MISTAKES

Thu, 15 Aug 2013 16:17:00 GMT

Most business owners know to keep their business assets separate from their personal assets. For many small business owners the urge to blend personal and business funds is a bad idea both legally, as well as financially.

Some of the most common ways to commingle are:

How To Avoid Commingling.

These transactions can help you see how your business is performing, and seeing where you need improvement, what business lines may be performing well and those areas that might need reevaluated.

Reducing Taxes .

If you have questions about setting up separate accounts, or establishing a Quickbooks accounting system in your office, Paxton Bookkeeping and Tax Services can help.

Importance of Bank Statement and Credit Card Reconciliation

Wed, 24 Jul 2013 16:08:00 GMT

Cash is King …or can also be the downfall of your company if improperly managed. Small business owners are tasked with wearing many hats in the day to day operation of their business and often can’t find the time to reconcile these accounts.

By reconciling monthly statements and reviewing general ledger accounts, business owners are able to make sound financial decisions about the growth of their company and identify particular product lines that may be non-profitable.

In Quickbooks, the bank and credit card reconciliation feature is accessed by going to the “Banking” drop-down menu at the top of your screen and selecting the “Reconcile” option. And, as with the bank register, your credit card accounts also have registers available where all charges and payments can be entered.

Monthly Bank Statement Reconciliations allow a business owner to:

Credit cards and business lines of credit have become substitute bank accounts in small business, so reconciling your business credit cards and lines of credit is as important as reconciling your bank accounts.

Reconciling your credit card accounts allows business owners to:

Putting the pieces together with a General Ledger

The general ledger is the core of your company’s financial records. These records constitute the central “books” of your accounting system. Since every transaction flows through the general ledger, a problem with your general ledger throws off all your account balances.

By reviewing the details of your general ledger each month, you’ll be able to identify any discrepancies such as double billings or any unrecorded payments. Fixing the discrepancies as soon as possible ensures your books accurate.

It All Add$ Up Newsletters

Tue, 02 Jul 2013 16:55:00 GMT

Enjoy our recent newsletters!

The post It All Add$ Up Newsletters appeared first on Paxton Bookkeeping & Tax Services Online | .

MID YEAR FINANCIAL REVIEW

Wed, 12 Jun 2013 15:57:00 GMT

We’re midway through 2013 and perhaps it’s time for a mid year financial review. Although the economy shows signs of recovery, many businesses are focusing on Obamacare and how it will affect them in 2014. Growth can also mean more tasks and work than a department or team can handle. Perhaps some of those tasks can be identified and outsourced.

Take some time to review your financials so there are no surprises at tax time next year. Making adjustments in pricing, personnel, accounts receivable and accounts payable processing can have a big impact on the balance sheet.

As new products and services are being developed for the latter half of 2013, it’s important to have a thorough understanding of the profitability for existing lines of business. Perhaps you’re a retail store and carry inventory. As sales and promotions come from vendors, it is important to have a clear picture of how quickly products are turning over in inventory.

Accounts payable and accounts receivable should also be monitored closely to ensure clients are paying on a timely basis and adjust terms if needed for slow paying clients. Because we review financials with our clients on a monthly basis, they have a solid understanding of their monthly cash flow as well as profit and loss. If you’re shooting in the dark and don’t know where you stand midyear, utilizing a bookkeeping service can help keep your business moving forward.

THERE’S A QUICKBOOKS APP FOR THAT!

Mon, 10 Jun 2013 16:07:00 GMT

Did you know that Intuit has an app center hosting nearly 25 apps that work with Quickbooks Online? Here are a few of them to check out because they integrate with the popular business accounting software to offer more features and functions and many apps offer a 30 day trial.

BodeTree

BodeTree gives business owners solid numbers in a visual way. Their one-click reports allow you to compare your businesses’ performance to the competition and learn how to set specific targets to reach your goals. Cost: $49.95 a month or $495 a year.

Mavenlink

This on-line collaboration app keeps project management and accounting teams on the same page and integrates with both QuickBooks Desktop and QuickBooks Online. Allowing users to work on projects remotely; share files; track budgets, time, and expenses; and send financial information to QuickBooks. You can choose to receive notifications about events, messages, and comments in real-time or bundled in a once-a-day email. Cost: $39 a month.

ProOnGo Expense

ProOnGo Expense lets you track, approve or deny employee expenses. It syncs with your QuickBooks credit card registers so that you and your employees can edit and categorize credit card transactions from mobile devices running iOS, Android, or BlackBerry. By activating online banking in QuickBooks, this program pulls credit card transactions from your bank. QuickBooks then pushes those transactions out to ProOnGo. You can use your mobile device to edit and categorize the expenses, which sync back to QuickBooks. It also records timesheet info and mileage data, and auto-extracts information from receipts snapped with a smartphone camera. This management tool is perfect for a sales force or construction crews. Cost: Plans start at $15 a month for one user and go up to $290 a month for up to 100 users.

SOS Inventory

SOS Inventory offers serious inventory, order management, and manufacturing features and is designed specifically to integrate with QuickBooks Online, which on its own doesn’t include sales orders. SOS Inventory lets you create sales orders, shipments, and invoices. The program will allow you you manage inventory throughout multiple locations, track items by serial number and cost history, track multiple stages of work-in-progress, and create pick tickets and packing slips. If you are a seasonal business, the program will provide a quick look at end of season inventory and help for future buying cycles, Cost: Plans start at $25 a month and go up to $200 a month.

Technology can be a very powerful tool. Efficiency realized by using these types of applications can result in higher productivity and increased profit.

TIPS TO INCREASE CASH FLOW

Fri, 07 Jun 2013 15:01:00 GMT

Does it seem like the busier you are, the slower payment is coming back in? Here are some tips to increase your cash flow in your business. Accounts Receivable Turnover (ART) is a measure of the frequency of payment on accounts receivable, the money owed to you by your customers you are waiting to “receive.” An imbalance of Accounts Payable and Accounts Receivable can create a cash flow crunch.

When extending terms – net 30 or net 15, your customer in all actuality receives a no interest loan from you. The lower the amount of time extended the quicker customers pay off loans you make to them. Often this misbalance of cash can lead to a trickle-down effect for small businesses. Not properly managed, this misbalance can ultimately lead to stunted business growth, the need for extra credit or in slow payment to the business owner’s creditors which will affect their credit score.

How fast are you getting paid?

If your customers purchase goods or services through a purchase order, or you send invoices, the money you are owed is considered a receivable. If you’re a consultant and you perform a service and bill the client later, the bill is a receivable–it is money you are owed but have not been paid.

But a credit card sale used by the customer to make the purchase, allows a business owner to receive payment right away and the credit card company extends the credit. Although there are credit card fees applied, having money for the sale may have its benefits.

Your payment terms and whether your customers meet those terms affect your cash flow. You may ask for payment on receipt, or within 15 days, or 30 days–whatever makes sense for your business. Larger organizations may negotiate 60 to 90 day terms. In essence a small business can float the loan for up to 4 months again they are invoiced. Sometimes gaining a large client can result in a disaster on the balance sheet.

These are some tips to improve cash flow:

Realize that credit card payments and fees can run 3% of sales; if you can receive check payments within seven days from the majority of your customers, building in an intentional receivable delay may more than offset the fees you would be charged by the credit card company.

For additional processes and methods to improve cash flow, contact your business banker and/or Paxton Bookkeeping and Tax Services.

Tips to Start Planning Next Year’s Tax Return

Mon, 20 May 2013 15:11:00 GMT

For most taxpayers, the tax deadline has passed. But planning for next year can start now. The IRS reminds taxpayers that being organized and planning ahead can save time and money in 2014. Here are four things you can do now to make next April 15 easier.

Adjust your withholding . Each year, millions of American workers have far more taxes withheld from their pay than is required. Now is a good time to review your withholding to make the taxes withheld from your pay closer to the taxes you’ll owe for this year. This is especially true if you normally get a large refund and you would like more money in your paycheck. If you owed tax when you filed, you may need to increase the federal income tax withheld from your wages. Use the IRS Withholding Calculator at IRS.gov to complete a new Form W-4, Employee’s Withholding Allowance Certificate.

Store your return in a safe place . Put your 2012 tax return and supporting documents somewhere safe. If you need to refer to your return in the future, you’ll know where to find it. For example, you may need a copy of your return when applying for a home loan or financial aid. You can also use it as a helpful guide for next year’s return.

Organize your records . Establish one location where everyone in your household can put tax-related records during the year. This will avoid a scramble for misplaced mileage logs or charity receipts come tax time.

Consider itemizing deductions . If you usually claim a standard deduction, you may be able to reduce your taxes if you itemize deductions instead. If your itemized deductions typically fall just below your standard deduction, you can ‘bundle’ your deductions. For example, an early or extra mortgage payment or property tax payment, or a planned donation to charity could equal some tax savings. See the Schedule A, Itemized Deductions, instructions for the list of items you can deduct. Planning an approach now that works best for you can pay off at tax time next year.

Remember, the best source to eliminating tax surprises is to plan ahead. Working with a tax professional or professional bookkeeper can help small business owners better plan for next year’s tax season. If you faced an unexpected surprise at tax season this year, take steps to avoid a similar situation in 2014.

Entrepreneurs Practice What They Preach by Sourcing and Shopping Small

Mon, 20 May 2013 14:46:00 GMT

When it comes to supporting their local communities, small business owners practice what they preach. According to the American Express OPEN® Small Business Monitor, 70 percent of entrepreneurs say they purchase and source goods and services from other small businesses.

Additionally, almost all (96%) small businesses are committed to supporting their local communities through a variety of activities. Some of these activities include donating to local causes (70%) and participating in community projects (49%). Additionally, 83 percent “shop small” (shop at independently-owned businesses in their neighborhoods) for non-business related purchases.

“We should all draw inspiration from small businesses that remain steadfast optimists and loyal contributors to local communities and causes despite an economic environment that remains uncertain,” said Susan Sobbott president, American Express OPEN. “Adversity is nothing new to the vast majority of entrepreneurs, and our research shows that while they have concerns about the near future, they have learned a great deal from recent trials and are better positioned to grow in the long term.”

Long-Term Optimism vs. Short-Term Realism

Small business owners are balancing their optimistic long-term views with realistic short-term decisions. While more than half (54%) of small business owners remain optimistic about their business prospects, the uncertain economy remains the top challenge to growth. As a result, there is a sense of trepidation in short-term plans and perspectives. Only half (50%) of small business owners plan to increase capital investments over the next six months, on par with six months ago.

The economic malaise is also having an impact on operations. For the first time in two years, cash flow concerns are on the rise (59%, up from 53% last fall).

Entrepreneurs Get Satisfaction

In spite of the current economic prospects, entrepreneurs are still strong in spirit. A large majority of business owners (92%) say they are happy with their lives. Of these, more than three quarters (76%) say their happiness is due somewhat or entirely to being an entrepreneur. An increasing number say they would recommend the entrepreneurship path to a friend or family member (66%, versus 55% in fall of 2009), a significant attitudinal shift from just three and a half years ago.

Hiring Remains Steady; Top Business Mantra is “You are Only as Good as Your People”

While many business owners’ hiring plans are tempered by the realities of the economy, 31 percent plan to hire in the next six months, on par with last fall (29%) and last spring (35%), however, 35 percent say they do not need to hire in order to grow their businesses, up from last fall (24%) and last spring (26%).

As a likely result of stagnant hiring, small businesses are looking for greater productivity from current employees. There is also evidence that they recognize great work and its connection to business growth. Nearly three-in-ten (29%) say their business mantra is “you are only as good as your people”. Those who adopt this mantra are more likely to reward their employees and benefit from a more productive workforce:

Nearly three quarters of business owners whose mantra is “you are only as good as your people,” (72%) say the productivity of their workforce has improved over the last year, versus 60% of the total survey population;

Small Businesses Tweet and Post to Foster Growth

After years of growth in the use of social media by small businesses, just 46 percent said they use a social media platform for their business, on par with this past fall (49%). Seventy percent say they use social media to attract new customers (up from 57% in the fall) and 44 percent use it to create a dialogue with customers (up from 31% in the fall).

So follow the lead of small business and support local businesses in your area.

Home Office Deduction Facts

Mon, 22 Apr 2013 13:52:00 GMT

<h1> <span style="font-size: 13px;"> Do you work from a home office? If so…you may qualify to deduct expenses for business use. Here are five facts from the IRS to help you determine if you quality for a home office deduction. </span> </h1>

Generally, in order to claim a deduction for a home office, you must use a part of your home exclusively and regularly for business purposes. In addition, the part of your home that you use for business purposes must also be:

For answers to these and other business related questions, contact Paxton Bookkeeping and Tax Services at 724-358-5022.

Self Employed Medical Tax Deduction

Wed, 17 Apr 2013 13:37:00 GMT

If you are self-employed, the IRS wants you to know about a tax deduction generally available to people who are self-employed. 2013 will be the year that many of the new health care laws under Obamacare will take effect, so stay informed to prevent surprises prior to next year’s tax season.

The deduction is for medical, dental or long-term care insurance premiums that self-employed people often pay for themselves, their spouse and their dependents. The insurance can also cover your child who was under age 27 at the end of 2012, even if the child was not your dependent.

You may be able to take this deduction if one of the following applies to you:

There are also some rules that apply to how the insurance plan is established. Follow these guidelines to make sure the plan qualifies:

Health Insurance under Obamacare will affect many business owners in 2013. Be sure to take advantage of any deductions that may be available to you.

10 Key Words When It Comes To Paying Taxes

Tue, 16 Apr 2013 13:29:00 GMT

<h1> <span style="font-size: 13px;"> Some small business owners think there’s only one word (or at least the only one that can be mentioned here) when it comes to filing federal taxes: Confusion! The truth is there are 10 words you need to know and understand to be sure you pay no more taxes than you’re legally required to pay. </span> </h1>

The key point is to plan for 2013. By keeping accurate records throughout the year helps to prevent costly surprises at tax time.

Tax Tip: Health Savings Accounts Offer Way to Save on Taxes and Health Care

Thu, 14 Mar 2013 16:38:00 GMT

For Americans facing increased taxes and rising health care costs, the tax advantages and cost-effectiveness of a health savings account (HSA) may be particularly appealing this year. Different plans require specific documentation, so be sure you understand how to file your medical claims to achieve the full benefit of pre-tax savings.

HSAs pair a tax-advantaged savings account with a qualified high-deductible health insurance plan, which typically costs less in monthly premiums when compared to more traditional health insurance. HSA savings are deposited into a tax-deferred account and can be withdrawn tax-free when used for qualified medical expenses, which include health insurance deductibles as well as dental, vision and other types of care often not covered by health insurance.

For 2012 tax purposes, deductible contribution limits are $3,100 for individuals and $6,250 for families. HSA holders 55 and older can contribute and deduct an additional $1,000. HSA contributions in 2013 are tax deductible up to $3,250 for individuals and up to $6,450 for families. Consumers with HSAs have until April 15 to contribute and maximize their 2012 deductions up to the legal limit.

“HSAs enable consumers to save on taxes and health costs today while saving for retirement health care,” said Patrick Carr, president of UnitedHealthcare’s Golden Rule Insurance Company.

Carr points to a recent study by Fidelity Benefits Consulting which estimates that a 65-year-old couple who retired in 2012 will need $240,000 just to cover their medical costs in retirement.

Insurance industry trade group America’s Health Insurance Plans (AHIP) reported in 2012 that more than 13.5 million Americans with individual or employer group coverage had an HSA-qualified plan, an increase of 18 percent from 2011.

Can Your Tax Refund Fall Prey to Identity Theft?

Thu, 14 Mar 2013 16:15:00 GMT

As tax identity theft impacts more and more consumers, a new survey from TrustedID – a leading identity protection and privacy service – indicates that more than half of consumers believe that the IRS is 100% responsible for ensuring that no one can file a return in their name and claim their tax refund.

According to the United States House Committee on Oversight & Government Reform, over 1.1 million tax returns were filed by identity thieves for the 2011 processing year, up more than 21 times from just 51,700 fraudulent returns in 2008. In addition, the Treasury Inspector General for Tax Administration believes that tax identity theft could cost the IRS approximately $21 billion in fraudulent returns in the next five years.

This fast growing problem has created new challenges that will require the IRS to confront the latest opportunity for identity thieves—stealing tax refunds. The National Taxpayer Advocate, Nina Olson, recently reviewed this growing problem, finding that the IRS has been ineffective in assisting tax identity theft victims, citing internal organizational as well as procedural issues. While the IRS is under fire, over 50% of consumers still believe that the IRS is trustworthy when it comes to protecting their Social Security number and other private information.

“Tax time is among the most vulnerable for consumers with all of their most valuable personal information being compiled and shared,” said Scott Mitic, Chief Executive Officer, TrustedID. “The IRS must find a way to protect consumers from falling victim to this growing threat and work to develop a swift resolution for victims. Additionally, while the IRS has some trust with consumers, the growing number of tax identity theft cases creates a serious and growing gap between perception and reality.”

The TrustedID survey also found that more than half of the consumers surveyed were unaware of and confused about what tax identity theft is and two-thirds of consumers did not have a good understanding of tax identity theft.

“Tax identity theft is a big problem that has grown exponentially over the course of a few short years. The IRS has an obligation to increase awareness of this threat and consumers need to better familiarize themselves with the issue and how to protect themselves, especially since effective assistance might not be available once their identity has been compromised,” added Mitic.

To help pro-actively safeguard information during tax season, TrustedID offers the following tips:

• Monitor your tax documents closely. Make a list of everyone who pays you, including employers, banks and brokerages, and make sure you receive hard copies in the mail of what they send to the IRS.

• Beware of IRS-related scams. If you receive an email or phone call asking for your personal or financial information, delete it or send it to the FTC at spam@uce.gov for investigation. The IRS will never email taxpayers about issues related to their accounts or ask for your Social Security number or financial details over the phone. If you have any doubt whether a contact from the IRS is authentic, call them directly to confirm it.

• Review carefully if filing with a 3rd Party. When using software, CPA or national tax agency to prepare your taxes, ensure you are reviewing all the information carefully and that all the original paperwork is returned to you.

• Be diligent if you are e-filing. With e-filing, evidence of fraud is difficult to find—there are no signed tax forms, envelopes, or fingerprints. It’s easy for criminals to e-file using a real name and SSN and a phony W-2 or Schedule C. If you’re filing your taxes online, be sure to use updated firewall, antivirus, and spyware software.

• Take precautions if mailing your filing. If filing by mail, walk the envelope inside of the post office and hand it to an employee. Too much mail is stolen out of the USPS and driveway mailboxes. Send your return by certified mail so that you know it has arrived safely. This also sends a message to each mail carrier that they had better provide extra protection to the document they are carrying.

Don’t fall prey to identify theft this tax season. Be alert, be aware and informed.

IRS Lists 2012 Dirty Dozen Identity Theft Scams

Wed, 13 Mar 2013 16:14:00 GMT

The Internal Revenue Service has issued several recent consumer warnings on the fraudulent use of the IRS name or logo by scamsters trying to gain access to consumers’ financial information in order to steal their identity and assets. When identity theft takes place over the Internet, it is called phishing.

Suspicious e-Mail/Phishing

Phishing (as in “fishing for information” and “hooking” victims) is a scam where Internet fraudsters send e-mail messages to trick unsuspecting victims into revealing personal and financial information that can be used to steal the victims’ identity. Current scams include phony e-mails which claim to come from the IRS and which lure the victims into the scam by telling them that they are due a tax refund.

Phishing and Other Schemes Using the IRS Name

The IRS periodically alerts taxpayers to, and maintains a list of, phishing schemes using the IRS name, logo or Web site clone. If you’ve received an e-mail, phone call or fax claiming to come from the IRS that seemed a little suspicious, you just may find it on the IRS Dirty Dozen Scam List.

You Can Help Shut Down Phishing Schemes

The agency advises recipients of e-mails claiming to be from the IRS that they should not:

• Reply to the message;

• Open attachments; or,

• Click on any links in a suspicious e-mail or phishing Web site or enter confidential information.

The good news is that you can help shut down these schemes and prevent others from being victimized. If you receive a suspicious e-mail that claims to come from the IRS, you can relay that e-mail to a new IRS mailbox, phishing@irs.gov.

The IRS can use the information, URLs and links in the suspicious e-mails you send to trace the hosting Web site and alert authorities to help shut down the fraudulent sites. Unfortunately, due to the expected volume, the IRS will not be able to acknowledge receipt or respond to you. For more information visit the IRS Identity Theft Page

When in doubt – DON’T offer any type of personal information.

EDUCATION DEDUCTIONS WILL HAVE TO WAIT

Mon, 11 Feb 2013 05:41:00 GMT

The American Opportunity Tax Credit is a refundable tax credit for undergraduate college education expenses and due to tax changes will have to wait until mid- February to file. This credit provides up to $2,500 in tax credits on the first $4,000 of qualifying educational expenses. The credit can be claimed by individuals or their dependents if the student is enrolled part or full time in post-secondary education. This credit is available for the first four years of post-secondary education.

In addition to tuition, under the American Opportunity credit, other course materials such as books, lab supplies, software and other class materials can qualify for the tax credit and can be filed under form 8863.

According to Kiplinger Tax Letter, “Filers claiming education credits will have to wait until mid-Feb. to file”, the Revenue Service says. The agency needs more time to reprogram its computers to reflect late changes made by Congress. This affects taxpayers who file Form 8863 to take the American Opportunity tax credit or the Lifetime Learning credit. People who claim the deductions for student loan interest or college tuition are not affected.

What this means for many taxpayers is that they will need to wait a bit longer until the IRS can update the 8863 Form.

BUSINESS DEDUCTION GUIDELINES

Mon, 11 Feb 2013 05:33:00 GMT

Building relationships through business entertainment is necessary. But, business owners should be aware as to the types of expenses that can be deducted and how to document those deductions. The IRS is clear on its rules for deductions for meals and entertainment. Although expenses for these types of activities can be deducted, it is also important to monitor these costs with the return on investment in mind. Without these checks and balances client entertainment can greatly impact your bottom line.

To claim expenses, you must prove two things: what the expense was for and the expense was paid. There should be a reasonable anticipation of a business benefit from the meal or entertainment and participants of the meeting should engage in some type of business discussion.

The IRS takes special attention to these types of records. Keeping accurate receipts throughout the year will ensure your expenses won’t be disallowed: The following types of expenses are often looked at by the IRS:

For anything in the list above you will need receipts for expenses over $75. For lodging you need receipts even if the cost was less than $75.

A good rule of thumb is to establish a system to document receipts and entertainment expense. For questions about business deductions contact us directly at 724-359-5022.

TAX SEASON OPENS JANUARY 30TH FOR 1040 FILERS

Wed, 16 Jan 2013 08:00:00 GMT

The IRS announced due to the tax law changes made by Congress under the American Taxpayer Relief Act (ATRA), the 2013 filing season to begin processing individual income tax returns will start January 30, 2013. Paxton Bookkeeping and Tax Services clients are already scheduling their tax appointments.

Because of the need for more extensive form changes and processing systems, the IRS estimates the remaining households will be able to start filing late February or March.

For those taxpayers requiring additional tax forms for such things as claiming residential energy credits, depreciation of property or general business credits, they will need to wait until closer to April 15th to file their taxes. These complex returns generally file close to the April 15th deadline or ask for an extension anyway.

The best option for taxpayers is to file electronically. There is no advantage to filing on paper before the opening date, and taxpayers will receive their tax refunds much faster by using e-file with direct deposit.

For updated information, contact Paxton Bookkeeping and Tax Services or visit www.IRS.gov .

WILL PAYROLL TAXES SPOIL THE TAX DEAL?

Mon, 14 Jan 2013 08:45:00 GMT

With the fiscal cliff behind us, many wonder what’s in store now. For most, it will mean smaller paychecks and less money to spend jump starting the economy. Here are a few highlights:

More changes are sure to come from the IRS. If you are uncertain about various code changes, feel free to contact Paxton Bookkeeping and Tax Services.

Top Priorities for Employer Sponsored Health Plans in 2013

Mon, 14 Jan 2013 04:27:00 GMT

Healthcare is a major expense for employers. With rising costs and changes in tax laws, employers and employees alike are taking ownership of their health. These costs will affect the overall financial picture of a small business. In addition to reviewing overall health plan benefits with insurance brokers, it may be wise to shop your company’s insurance program to other insurance brokers.

Many employers are asking employees to take a more active role in their health care by requiring blood work, verifying non-smoking habits and having employees and their spouse work with a health coach. Overall lifestyle changes can lead to lower medical costs and allow for a partnership between the employee and the employer.

These tips can help a business owner plan for the health reform 2014 requirements:

Where Are My Receipts?

Mon, 10 Dec 2012 01:45:00 GMT

Keeping accurate records of financial activity throughout the year and properly deducting business expenses will help small business owners succeed. Owners of small businesses typically have numerous issues and responsibilities monopolizing their time. Here are some tips to help keep you on the path to success.

To read the complete story sign up to receive our FREE newsletter – It All Add$ Up.

Secrets of High Achieving Small Businesses

Mon, 10 Dec 2012 01:44:00 GMT

How can you make your start-up or existing business a success? The newest American Express OPEN Small Business Monitor offers some clues. American Express identified a group of high achieving small business owners within its overall survey sample and drilled down into their behavior to figure out what business tactics truly help drive business growth

High achievers are an elite group, accounting for just 6 percent of the Small Business Monitor’s respondents. On average, these companies enjoyed business growth of 34 percent over the last three years, compared to an average of 10 percent for all survey respondents.

That’s an impressive growth rate at any time, but especially so in the tough economy of the last few years. So what are these high achievers doing differently? Whether you’re a start-up or an existing business owner, there were a few areas that really stood out.

* They ask for feedback. Three-fourths ask their customers for advice on how to better serve them, compared to 52 percent overall.

* They take more risks. Over two-thirds say they have increased their appetite for risk compared with one year ago (67 percent, compared to 35 percent overall).

* They plan for growth and make it a priority. – A whopping 93 percent of high achievers say they are planning to grow their businesses over the next six months (compared to 69 percent overall). More than half say growth is their top priority (compared to 31 percent overall).

* They invest in their businesses.-Putting their money where their mouths are, more than three-quarters (78 percent) plan to make capital investments in their businesses in the next 6 months (compared to 49 percent overall).

* They leverage social media: 70 percent use social media, compared to 49 percent overall. Almost 80 percent use it to attract new customers, compared to 57 percent overall.

* They think positive. Over three-quarters of high achievers describe themselves as having a positive outlook and business prospects (77 percent compared to 49 percent overall); 99 percent say they see the glass as half-full

What you’ll notice about these “success factors” is that there’s really no excuse for not doing them, because most of them don’t cost you anything. You may not be able to invest in your business right now, but you can ask customers for feedback, use social media or create a growth plan.

What’s one more thing high achievers have in common? They ask for advice. Almost six in 10 have a business mentor (59 percent, compared to 33 percent of all respondents).

If you don’t have a mentor and would like to have one, go to the SCORE website to get matched with a mentor and get free business advice, 24/7.

Historical VS Live Accounting Processes…..Are you Making Good Business Decisions?

Mon, 12 Nov 2012 13:33:00 GMT

On-line banking and real time accounting principals may be changing the way business owners are making financial decisions. Real-time money management is key to nimble adjustments in costs and services as they relate to the fluctuation of delivered goods and services. Progressive business owners are evolving with these new trends and services.

The historical accounting services provide a monthly reporting of revenue and expenditures. These monthly reports are prepared and although business owners have a pulse on their business, particularly small business owners may need to have an immediate understanding of where their business is heading.

Live accounting services allows business owners to see their cash flow in real time with everything handled in the cloud . With the use of current technology, business owners have access to their information 24/7. At home, on the beach or in the office, live accounting allows business owners to make quick adjustments to inventory, cash management and prepare for changes in the ebbs and flows of the business climate.

As companies have become leaner, cloud-based bookkeeping and accounting services can aide in providing accurate, up-to-date information. Put your numbers in the cloud and see real time results.

TAX FRAUD AND TAX-RELATED IDENTITY THEFT

Wed, 12 Sep 2012 13:32:00 GMT

The IRS blocked nearly one million additional refund claims using other means. While not all fraudulent returns involve identity theft, many do. The IRS recently reported an inventory of more than 450,000 identity theft cases.

IDENTITY THEFT Tax-related identity theft typically arises when an identify thief uses the Social Security number of another person to file a false tax return with the intent of obtaining an improper refund. Identity theft can impose a significant burden on its victims who often must spend months trying to convince the authorities and the IRS they are victims of fraud.

One of the fastest growing crimes in America today is identity theft; in fact, according to the Federal Trade Commission, an estimated 9 million Americans have their identities stolen each year There are a number of different identity theft programs available. We recommend finding the right program for you and your business. Protect yourself and your company.

DISASTERS CAN RUIN YOUR BUSINESS!

Mon, 20 Aug 2012 14:01:00 GMT

FIRES, FLOODS, TORNADOES and MOTHER NATURE can bring a business to a STOP! It’s never a good time to plan for a disaster, but businesses that are proactive have a blueprint in place that can mean the difference between a firm’s survival or failure.

These tips help set the framework for your business disaster plan:

Be proactive and plan for the unexpected.

Establishing a Chart of Accounts for Your Business

Mon, 16 Jul 2012 19:48:00 GMT

Every business needs a process to organize its financial transaction. The Chart of Accounts lists all the accounts for a business organized in a specific order. Think of a chart of accounts as a file cabinet, with a file for each type of accounting information you want to track. For example, if you need to know how much money you spend on advertising, you’ll set up a file (an account in the chart of accounts) for Advertising Expense. Each account will have a description that includes the type of account and the types of transactions that should be entered into that account.

As every business is unique, they will have their own specific Chart of Accounts based on how the business is operated, so you’re unlikely to find two businesses with the exact same Chart of Accounts.

However, some basic organizational and structural characteristics are common to all Charts of Accounts and are designed around two key financial reports: the balance sheet, which shows what your business owns and what it owes, and the income statement, which shows how much money your business took in from sales and how much money it spent to generate those sales.

The balance sheet accounts in your Chart of Accounts should include: Current Assets, Long-term Assets, Current Liabilities, Long-term Liabilities and Equity.

Income statement accounts complete the remainder of your Chart of Accounts and should include: Revenue, Cost of Goods Sold, and Expenses.

An account list should be developed that makes the most sense for how you’re operating your business and the financial information you want to track. The Chart of Accounts is a money management tool that helps you track your business transactions, so set it up in a way that provides you with the financial information you need to make smart business decisions.

Sound Business decisions are made with accurate financial information. If your Chart of Accounts isn’t adding up, Paxton Bookkeeping and Tax Services can help. Contact us at 724-359-3022 or lauri@paxtonbookkeeping.net .