Understanding Estimated Tax Payments The U.S. operates on a “pay as you go” tax system. This requires you to pay taxes throughout the year. You can do this through payroll withholding, by making estimated tax payments or both. Not paying the IRS enough taxes during the year triggers an estimated tax penalty. The IRS charges this non-deductible interest penalty on the amount you underpaid each quarter. The penalty rate equals… Read more
Nobody wants to spend their whole life looking over their shoulder, wondering if the IRS will audit them. Luckily, there is a statute of limitations on IRS audits and tax assessments. Once the limitations period expires, the IRS can’t audit your return or assess any additional tax. You may have heard that the statute of limitations on audits is three years. That’s generally the case, but not always. Depending on… Read more
Tax law often discriminates against company owners, granting them no or fewer fringe benefits. But you, the owner, are not discriminated against when it comes to supper money. It works like this: The supper money fringe benefit is for defined employees. The IRS supper money rule states that the term “employee” for this purpose means anyone who receives supper money. That means you can take this benefit for yourself, even… Read more
If you own your own business and operate as a proprietorship or partnership (wherein your spouse is not a partner), one of the smartest tax moves you can make is hiring your spouse to work as your employee. But the tax savings may be a mirage if you don’t pay your spouse the right way. And the arrangement is subject to attack by the IRS if your spouse is not… Read more
At the most basic level, tax strategies are ways to reduce taxes. In reality, implementing tax strategies requires thorough tax planning while taking into account a business owner’s financial goals and personal needs. The tax strategies we recommend are for profitable businesses whose owners have taxable income. If a business is experiencing losses, it is unlikely to benefit from or be able to utilize the tax strategies that profitable businesses… Read more
Can I treat someone as a subcontractor instead of an employee? This is a top 10 question we get asked. We understand why some business owners would like to classify someone they “hired” as a subcontractor. Several of the reasons we have heard over the years are: If the person isn’t a good fit, it’s easy to fire them. I don’t want to pay payroll taxes. They don’t work full-time… Read more
What do you do if you can’t efile your tax return because a tax return has already been filed with your social security number? If you have tried to efile your tax return and it’s rejected because of an error message that says there is a duplicate tax filing with your social security number, you might be a victim of tax-related identity theft. Finding this out can cause a lot… Read more
Tax planning is a crucial aspect of financial management for small businesses. While many entrepreneurs focus on preparing their taxes at the end of the fiscal year, year-round tax planning is a smarter and more strategic approach. By proactively managing your tax liabilities throughout the year, you can maximize your savings and ensure compliance with tax regulations. In this blog post, we will explore the benefits of year-round tax planning… Read more
Few business owners enjoy breaking the news of an upcoming price increase. However, when you own a business you have to deal with ever-increasing costs. Although inflation is an unpleasant part of life, it is still part of life. Price increases are inevitable for a sustainable business. If you want to stay afloat, you’ll have to do them – and regularly. Read on for some tips on how to determine… Read more
There comes a time for every small business to raise their prices. While it may seem scary, remember that it’s your job to keep prices fair, both for you and your customers. That means you have to charge prices that work for you and allow you to remain in business. Read on for six reasons to raise your prices. Your costs have grown The thing about inflation is that everyone… Read more
With the potential for business life to return to something resembling normal, it’s a good idea to take a look at your budget and see where you may need to shift some of your priorities. Pay attention to how your spending over the past few years affected your business and either helped you achieve, or took you away from, your overall goals. Considering how your business and your employees functioned… Read more
Your business needs cash. Cash is what keeps your company in operation and enables it to grow, so you should know how much cash your business needs to survive. Although many people think the answer is linked solely to operating expenses, this isn’t the case. There is no single factor that determines how much cash every business needs to have on hand. Somewhere between 3-6 months of operating expenses is… Read more
These days, businesses have plenty of options when it comes to choosing software. There are hundreds of developers creating and perfecting new products designed to help you more effectively and efficiently run your business. With so many options available, it’s important to focus so you know where to start looking and how to make the best decision. Here are some factors to keep in mind when you choose software for… Read more
Bookkeepers can be highly beneficial for businesses of any size. They offer expertise and insight into areas that you may not have experience in. They can also take some tasks off your to-do list, freeing up your time and energy to focus on other matters. Here are 4 benefits to hiring bookkeepers to help you manage your business. Expertise A bookkeeper is an expert at managing, sorting and recording your… Read more
The unfortunate reality is most business owners don’t take proper holidays. Usually, this is because their business relies on them and they don’t have the support to keep the business running without them. As a business owner, have you ever considered what would happen to the business if you had to take a six months break because of a serious illness or injury? Would the business survive? How would the… Read more
Running a successful business requires you to make smart decisions about everything from who you hire to how you spend your money. There are many legitimate expenses to cover, but it’s easy to overspend in areas that aren’t helping you or your business. Spending wisely is key to owning a sustainable business. Here are four practical money saving tips for business owners. 1. Have a list of all your subscriptions,… Read more
Every business needs a financial plan. Your financial plan gives you a way to monitor and review your cash flow, make adjustments to your spending, and anticipate any upcoming financial issues. It can also make you more prepared to request funding or find investors so you can bring more money into your business. Although many business owners are aware that financial planning is important, it is often overlooked. Without a… Read more
Nobody wants their business to fail. Although it’s impossible to predict the future with 100% accuracy, a cash flow forecast is a tool that will help you prepare for different possible scenarios in the future. In a nutshell, cash flow forecasting involves estimating how much cash will be coming in and out of your business within a certain period and gives you a clearer picture of your business’s financial health… Read more
Help for small businesses The CARES Act has many helpful provisions for small businesses, which the Senate Committee on Small Business and Entrepreneurship details in this helpful guide. Here’s an overview of the most important provisions: Loans for small businesses The CARES Act also expanded eligibility requirements for disaster relief loans from the SBA to make it easier for small businesses to access the funds they need to stay afloat.… Read more
When you own a business, it’s vital you understand how money flows into and out of it. At a basic level, you need to know where your income comes from and what your expenses are. At a deeper level, knowing how money moves through your business can help you make strategic decisions about growth, invoicing, and debt management. The consequences of not understanding money can be drastic—poor financial management is… Read more