Five Pitfalls You Need to Avoid During Tax Season
Pitfalls of Tax Season
Tax season is rough simply of its nature, and so the last thing most people need is any additional sources of headache during this time of the year. There are a number of pitfalls, unfortunately, which you need to work hard to avoid during tax season so that your stress level doesn’t go through the roof. Here are five things you want to avoid in order to make tax season as easy and painless as possible:
Writing Off Personal Expenses as Business Expenses
Writing off personal expenses as business expenses could be a slick way for individuals to save a little extra money during tax season; however, this sends a huge red flag to the IRS and could ultimately lead to you being audited by Uncle Sam.
IRS Form Errors
Not sure if you’re filling out your tax forms correctly? It’s important that you go the extra mile and be certain of the accuracy of your forms. If you’re not sure about an item on your IRS form, consult a CPA or a tax preparer so that he or she can help you navigate the tax process.
Not Reporting Cash Businesses
Cash businesses are often watched closely by the IRS. Cash businesses are often places like restaurants, car washes and hair salons. If you are reporting your business to the IRS, make sure you’re also tracking the cash you receive to ensure that you’re not underestimating your earnings each year.
Missing Tax Deadlines
Do you miss tax deadlines year after year? This may cause the IRS to wonder what you may have to hide year after year and could ultimately lead to you being audited by the IRS. Missing tax deadlines shows not only inconsistency but it also signals that perhaps you don’t know what you’re doing. Hiring a CPA could be what helps you stay on track with deadlines in the future.
Misclassifying Workers
Classifying your full-time workers as part-time or contract workers is a major “no,” especially when dealing with the IRS. By misclassifying workers you may not only be putting your employees at risk for being audited but also your business which could ultimately lead to major repercussions.
What tax season pitfalls have you seen or heard of? Leave your comments below.
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Four Areas Which Could Use the Help of an Accountant
Accountants Can Assist Your Business
It’s 2017 and what are you doing? Are you still making excuses on why you still haven’t hired that accountant that you know you have so desperately needed for the last several years? Are you still talking to your employees about how you’re unable to afford an accountant and you will look at hiring one once you get some extra money? It’s time to dismiss all those excuses and hire an accountant.
Here are four areas of your business which could be significantly improved with the assistance of an accountant:
Business Planning
Business planning is critically important to the growth and success of any company. There are several things which business planning has to account for, including: market trends, the goals of the CEO, development and more. Because of this, there is no one more qualified to handle all of your business planning needs than your accountant. If you allow someone on your staff who is not qualified to handle your business planning, you could risk losing money or even opportunities to make money.
Investments
Investing can be a tricky topic, especially if you have no prior experience in the investment industry. Investing is mainly tricky because it requires so much knowledge, such as knowledge of stock market trends, knowing how much to invest, when to invest and when not to invest. This is where your accountant comes in. He or she can make sure you are investing the right amount and investing at the proper time.
Sales Revenue
Making sure you are selling the items for your business at the right price is essential. If you’re constantly analyzing internal and external factors of your business, and constantly feeling like you’re not making ends meet, it’s time to hire an accountant. An accountant can make sure your pricing structure is accurate for whatever you’re selling.
Compliance
Tax law can be confusing. It is expressed in difficult language and it is constantly evolving. If you want to make sure you are able to navigate through the applicable compliance rules, your accountant can help you. A properly trained accountant can help you decipher between laws regarding your taxes, investments, future planning and more.
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Why Your Business is Never Too Small to Hire an Accountant
Small Businesses Should Hire an Accountant
“I would love to hire an accountant but my business is too small,” is an excuse many business owners often use when asked why they have yet to hire an accountant for their company. The idea that small businesses shouldn’t hire an accountant may seem sensible at first, but in reality it’s not. In fact, hiring an accountant could actually prove to be a great step for businesses which are very small.
Here are two reasons why your business is never too small to hire an accountant:
You Want To Grow
Every business owner dreams of growing their business, and if you truly want to grow as a business owner you’ll want to hurry up and hire an accountant. Not only can an accountant help you see where you are financially, they can also help you reach those goals that you’re hoping to reach sooner rather than later.
You Want To Hire Talent
You have to prepare for the things you plan for even if it’s 5 or 10 years down the road. Hiring new talent is no different. Many accountants believe that many companies are forced to deal with unfortunate layoffs because they hire talent prematurely. If you want to make sure you don’t hire talent before you can afford them, your accountant can help you determine when and when not to hire new talent. Best part of all: you don’t have to worry about spending money on new employees that you may not really have in the bank.
What reasons have you heard business owners say they can’t hire an accountant? Leave your comments below.
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How to Hire the Right Tax Accountant for You
Hiring the right accountant for your tax needs may be necessary, but isn’t the easiest job in the world. In fact, hiring someone that you not only trust, but that you trust to execute the filing of your taxes correctly can be a very stressful process. Here are just a few questions to ask when hiring a tax accountant:
Hiring the Right Tax Accountant
What’s Your Experience with the IRS?
While being certified by the IRS is not a necessity, it can play a pivotal role in your tax filing, especially in cases in which you need an extension on certain deadlines. What’s more, some accountants may have bad reputations with the IRS for falsifying information, and these accountants might be more likely to put your taxes in danger of being audited.
Are You an Aggressive Accountant?
When it comes to tax accounting, you want to make sure you hire someone who is aggressive and knows all the tips and tricks about what items to write off and what items to deduct. A passive accountant won’t always look for the best tax breaks for you, but an aggressive accountant can identify legitimate tax breaks to help ensure that you are taking full advantage of the tax opportunities available to you.
What Types of Clients Do You Generally Work With?
Knowing what types of clients are in your tax accountant’s portfolio can let you know from the beginning if he or she is equipped to work with you and your business. While an accountant does not necessarily need to have experience in your industry, having previous knowledge does make things a bit easier.
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Four Ways Waiting to Hire a CPA Could Cost You Money
Don’t Wait to Hire a CPA
Hiring a CPA is typically a very big financial decision for any business. For this reason, many companies are apprehensive when it comes to considering a new candidate. If you’re apprehensive, it may be wise to remind yourself that failing to hire a CPA when you need one can be very detrimental to your business. Here’s a list of ways that show why waiting too long to hire a CPA could backfire for your company:
You May Be Understaffed
Being understaffed could actually cost you money, because you don’t have time to do all the things you can do with a full staff. Hiring a CPA can help you with your understaffing issues.
You May End Up Filing Bankruptcy
If you’re not an individual who is adequately acquainted with finances, you may find yourself making a lot of bad decisions in your business, and unfortunately sometimes making those bad decisions may require your company to file bankruptcy.
Your Business May Miss Opportunities for Growth
Business growth comes about through seizing opportunities, and if you’re not adequately prepared to handle growth you risk the chance of losing out on the opportunities of a lifetime. Not only are CPAs able to prepare you for growth, but they can make sure you’re able to navigate that growth step by step.
Your Business Could Miss Out on New Opportunities
New opportunities are waiting to be seized, and if you’re finances aren’t in order you may not always see those new opportunities for what they are. Hiring a CPA helps you not only see new opportunities but also helps you seize them when they appear.
In what ways do you think that not hiring a CPA could cost your company money? We want to hear all about it. Leave your comments below.
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Three Questions You Should Ask Your CPA to Grow Your Business
Business Growth
Every small business owner dreams of growing their business from small to large. That transition is not always as easy as it sounds, however. Growing a business is tough, and while hiring a CPA is a huge step in the right direction, there are several things you must first ask your CPA before working toward financial growth.
What Is Your Current Financial Status?
In order to know where you are going financially, you must first know where you are. A business can never possibly know how to grow without knowing where to begin.
How Will We Grow?
Once your CPA has determined the current financial state of your business, the next question is: how will the business grow? A qualified CPA will show you where to cut back and where to spend effectively.
Will We Have to Freeze Our Spending?
When many businesses anticipate growth, they instantly have the desire to freeze spending in several areas of the business. While this is completely normal, it’s not always necessary. Finding out from your CPA if your business will have to freeze expenses is an easy way to predict how financial growth planning may impact the short-term finances of your business.
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Three Signs You Need To Stop DIY Accounting and Hire a CPA
There are several types of software available on the market now which have literally turned everyone who owns a business into a DIY (do-it-yourself) accountant. Though accounting software can save you a ton of money, it can also cost you thousands if you make one or two wrong missteps as it relates to your accounting records. Before you end up costing yourself thousands of dollars, here are three signs that you need to stop doing it yourself and hire a CPA.
DIY Accounting
You Are Spending More Money Than You Are Making
Are you spending more money than you are making? You probably have a problem with financial literacy. In order for any business to grow, you must manage not only what’s coming in but what’s coming out and if you can’t seem to gain control of your spending, it’s time to call a professional.
You Always End Up With Back Taxes
Back taxes are a nightmare for anyone. If you find yourself always owing back taxes every single year, perhaps a CPA can help you with sorting through your taxes every single year. This could include helping you identify deductions or helping you make better financial reporting decisions throughout the year.
You Don’t Know What You’re Doing
Do you find yourself constantly spinning wheels as it relates to your accounting because you have no idea what you’re doing? Stop right now and hire a professional. Instead of spinning your wheels on accounting, you could be spinning your wheels elsewhere.
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Two Ways Your Accountant Can Help You Increase Productivity
Business Growth & Productivity
When most people think about accountants, the first thing that comes to their mind is finances. While your accountant is primarily responsible for making sure your finances stay on track, this is not the only thing your accountant can do. In fact, your accountant actually holds the keys to help you increase your productivity.
Here’s two ways that they can help you do this:
Your Accountant Frees Up Your Time
Many business owners spend lots of time worrying about financing, and believe it or not, once you hire an accountant, that worry is suddenly non-existent. No longer do you have to worry about money, that’s now your accountant’s responsibility, and now all that extra time you have can actually be used in other places.
Your Accountant Can Help You Add New Employees to Payroll
Your accountant is literally the one who holds the key to whether or not you can afford to hire new full time or part time employees. Once your accountant has done everything necessary to help your company prosper financially, they can become an even greater asset to you by helping you hire new employees. As new employees are hired, not only do you suddenly free up even more time, but now you can effectively manage your part of the business without worrying about areas you have no knowledge in.
Has your accountant helped you increase productivity? We want to hear all about it. Do us a favor and leave your comments below.
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The Differences between CPAs & Accountants
CPAs & Accountants
Accountants and CPAs are two titles which are often thrown around the business world. These are the two titles which have the power to make or break your company. Any company which continues to stand strong over the years is probably able to do so thanks to a great CPA or accountant.
In order to be an accountant all you need to do is be good with numbers, know how to use bookkeeping software, and be good with analytical reasoning. Normally, these are the people who work within an accounting department and don’t necessarily have the education or the certifications in order to do the job. Additionally, these people are not forced to have certain certifications. Many accountants also have the ability to prepare taxes as long as they pass the IRS test to receive a PTIN.
A CPA (or Certified Public Accountant) stands out above all other accountants. Most CPAs fulfill the following:
- Earn an accounting degree from an accredited college or university.
- Pass all four parts of the CPA Examination, which includes: auditing and attestation, financial accounting and reporting, regulation, and business environment and concepts. (Beginning July 1, 2015, students in Colorado must earn 150 hours of education prior to sitting for the Exam.)
- Pass the Professional Ethics Exam from the American Institute of CPAs.
- Obtain 1,800 work hours (usually one year) under the direct supervision of an actively licensed CPA.
So while both CPAs and accountants are very vital to practically any business, knowing how to differentiate the two is what will help your business as it relates to knowing what your accountant is legally and not legally able to do.
Did you know there was a difference between CPAs and accountants? What did you think the difference was? We want to hear your thoughts. Please leave your comments below.
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What Should Small Business Owner Expect From Their CPA?
CPA Expectations
Expectations, expectations, expectations.
We all have expectations for our employees, employers, customer and clients. Sometimes these expectations can be incredibly high, and other times they can be incredibly low.
As a small business owner, you probably wonder what you should expect from your CPA once you finally make the big step to hire one. Though expectations will always vary to some degree from person to person, there are a few things you should be able to expect from all CPAs across the board.
Here are three things you should be able to expect from every CPA:
Responsiveness
A good CPA not only responds to all of your requests, he or she responds in a timely manner. Responsiveness in any client-employee relationship is important because it keeps the communication intact.
Pro-activeness
CPAs tend to be fairly proactive by nature. They know what financial statements need to be compiled, what needs to be reconciled, and what needs to be reported. This level of pro-activeness gives CPAs the opportunity to flourish in their role as CPAs.
Communicativeness
You should expect that your CPA be highly communicative to your needs and concerns. Communicating means that, as the client, you should always share your accounting and financial records with your CPA. It also means that, if you are interested in making a large business purchase, your CPA should be one of the first people to know about it. Being able to communicate at a high level will keep your CPA from being shocked by your money decisions later on down the road. The more the two of you communicate, the more your business will receive as a result of having a CPA.
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