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28 05, 2024

8 Accounting Challenges for Small Businesses

2024-05-28T09:51:38-05:00May 28, 2024|0 Comments

Managing a company often requires business owners to wear multiple hats in several roles, including customer service rep, marketing manager and accountant. Be prepared for all your roles by reviewing these common accounting challenges for small businesses and how to handle them.

Reporting finances

One of the biggest challenges a business faces is keeping up with the financial disclosures and reporting requirements that the United States Securities and Exchange Commission requires. But doing so ensures you document all your information correctly in case your company is audited.

Managing cash flow

A good way to help manage your business’s cash flow is to stay on top of billing and accounts receivable and regularly review your bills. Pay attention to your recurring monthly expenses to see if there are areas to downsize and cut costs where possible.

Remember to earmark funds for specific expenses to help keep cash flow steady and your small business thriving.

Covering unexpected expenses

A business can seem to be in perfect shape until an unexpected expense or emergency pops up. Setting certain funds aside for emergencies and using existing credit to help cover unexpected expenses can make a difference in your bottom line.

Updating expenses

Along with covering unexpected expenses, updating expenses is just as important. Keep track of receipts and recurring costs. Then claim them as small business deductions, as the IRS does require documentation.

Business deductions will lower your taxable income and give a better understanding of your company’s profits and losses.

Regulating payroll

Another one of the accounting challenges for small businesses to look out for is regulating payroll. Classifying employees, filing taxes correctly, paying employees and tracking employee time off are the tip of the iceberg when regulating payroll.

Analyzing finances

Track your finances by verifying all your business transactions regularly. Review your books at the end of each day with these steps in mind: interpreting, analyzing and advising.

Then ask yourself, “What do those numbers mean? How do we improve them?”

Filing taxes

Filing federal and state taxes can be stressful for business owners. Even though your business structure determines your tax obligations, most businesses must pay income, unemployment and payroll taxes.

In addition, businesses pay estimated quarterly taxes if they expect to owe $1,000 or more when filing. Failing to do this can result in fines and penalties.

Keeping up with policy changes

Tax laws are constantly changing. Stay current to reduce your chances of overpaying, underpaying and more.

Summary

Tackle these accounting challenges for small businesses with confidence by working with a trusted team of knowledgeable accountants, tax specialists and more. Contact Todd Greene, CPA, PLLC, to take your business to the next level.

Plus, continue reading our blogs for more accounting news and tips.

29 04, 2024

Tax Benefits that Small Business Owners Need to Know

2024-04-26T15:49:14-05:00April 29, 2024|0 Comments

Are you a small business owner looking to maximize your benefits and save on costs? There are two tax benefits that small business owners need to know about with recent law changes that could help them reach both goals.

Two must-know tax benefits for small businesses

Let’s look at two credits that can help business owners save money and provide valuable employee benefits: the retirement plan start-up cost credit and the small employer health insurance credit.

Retirement Plan Start-up Cost Credit

As we start to review tax benefits that small business owners need to know, we should mention the law change in 2022 that enhanced the tax credit known as Secure 2.0. One of the most notable changes the Secure 2.0 Act brought about is the significant increase in the retirement plan start-up cost credit.

More specifically, it increases the credit to 100% of qualified start-up costs for employers with up to 50 employees. Employers with 51-100 employees are still eligible for a credit of 50% of qualified start-up costs.

According to the IRS, eligible employers could claim a tax credit of up to $5,000 for three years. Credits can apply to the costs of starting a SEP, a simple IRA or a qualified plan such as a 401(K).

Small Business Health Care Tax Credit

Another one of the tax benefits that small business owners need to know about is the small business health care tax credit. This credit helps small businesses afford the cost of providing health insurance to their employees.

This tax credit can benefit small businesses with less than 25 full-time employees who, on average, pay less than $61,400 per employee in 2023. 

In general, the maximum credit is 50% of premiums paid for small business employers and 35% of premiums paid for small tax-exempt employers. What’s more, the credit is available to eligible employers for two consecutive taxable years.

Find out more information about qualified health plans offered through the SHOP Marketplace at Healthcare.gov.

Summary

Are you wondering if your small business is missing these tax credits or others? Are you ready to learn more about the requirements for each tax credit? That’s what we are here for! Contact us to schedule your free consultation to learn how we can help your small business with taxes and more. Keep reading our blogs for additional tax tips and other industry news.

28 03, 2024

5 Things to Know about 2023 Taxes

2024-03-25T14:19:16-05:00March 28, 2024|0 Comments

Are you realizing Tax Day is quickly approaching and you still haven’t noted what’s changed for 2023? Deadlines have a way of sneaking up, and luckily, we’re here to remind you of five things to know about 2023 taxes before you file.

Tax brackets changed slightly. 

First on the list of things to know about 2023 taxes is that the tax brackets, or income ranges, for each of the seven tax rates shifted to account for inflation. To clarify, the rates didn’t change, but there was an increase in the income brackets. 

The top rate remains at 37% for single filers, but the income rate increased for single filers with an income of $539,900 or more in 2022 to $578,126 or more in 2023, for example. For a married couple filing jointly, the income range increased to $693,751 or more in 2023 versus $647,850 or more in 2022. 

The lowest rate is still 10%. The income brackets have bumped up to $0 to $11,000 for single filers and $0 to $22,000 for married couples filing jointly. Review all seven tax rates and brackets here. 

The standard deduction increased. 

Another change for taxes in 2023 is the standard deduction will increase too. 

For instance, according to the IRS, the standard deduction for married couples filing jointly for 2023 increases to $27,700, which is a $1,800 jump from 2022. What’s more, the standard deduction for single taxpayers and married couples filing separately increased by $900, rising to $13,850 in 2023. For heads of households, the standard deduction increases to $20,800 in 2023, a $1,400 boost from 2022.

The Child Tax Credit may give you a tax break.

If you have a qualifying child under 17 in 2023, the maximum Child Tax Credit is $2,000 per child if your annual income is less than $200,000 or $400,000 for a joint return. For other qualified dependents, you can claim a $500 credit.

Changes were made to retirement contribution limits. 

For those planning for retirement, it’s important to note that the contribution limits for retirement accounts have increased for 2023. The contribution limit for 401(k) plans has increased from $19,500 to $20,500, while the catch-up contribution limit for individuals over 50 has increased from $6,500 to $7,000.

This increase in contribution limits provides an opportunity for individuals to save more for retirement and potentially reduce their taxable income.

Double-check for any energy tax credits for 2023. 

Be sure to ask your tax professional about the changes and additions to energy tax credits in 2023 under the Inflation Reduction Act. If you’re a homeowner who made qualifying energy-efficient improvements, for instance, you may be able to claim up to 30% of the improvement expenses in 2023 instead of just 10% previously. 

Summary

Now that we’ve shared these things to know about 2023 taxes, it’s time to spring into action. Whether you want to make sure you are maximizing your tax return or you want to ensure the information is accurate, we are here to help. Contact us to learn more about our tax services, and keep reading our blogs for more industry news and tax tips. 

28 02, 2024

Direct Tax vs. Indirect Tax: What’s the Difference?

2024-02-20T10:50:06-06:00February 28, 2024|0 Comments

Direct tax vs. indirect tax. You’ve probably heard these terms before, but do you understand what they are and how they differ? Keep reading to learn the differences between direct tax and indirect tax.

What is a direct tax?

A direct tax is a tax levied on companies and individuals that cannot be passed onto another taxpayer.

What’s more? Direct tax is progressive, and the tax burden increases with income. Meaning, an individual with a high income will pay a disproportionate share of the tax burden, whereas someone with a lower income will see a small tax burden.

Direct tax types

There are five categories of direct tax: individual income tax, corporate income tax, capital gains income, estate tax and property tax.

Individual income tax

Individual income tax, or personal tax, is a tax imposed on salaries, wages, investments or other forms of income a household receives.

Corporate income tax

Incorporated businesses are taxed on their profits minus their allowable deductions. This is a corporate income tax.

Capital gains tax

Capital gains tax is a tax on the profit made from the sale of an asset, such as stocks or property. These tax rates can vary depending on two factors: income level and how long an asset has been held.

Estate Tax

Estate tax is a tax on the net value of a person’s taxable estate at the time of their passing. The estate pays the tax before any assets are distributed to the heirs.

Property tax

Property tax is a tax imposed on commercial and residential properties such as buildings and land. This tax can also be levied on tangible personal property like business equipment, inventory and vehicles. Property taxes vary between states.

What is an indirect tax?

Continuing with direct tax vs. indirect tax, indirect tax is a tax that can be passed on to another entity or individual. This type of tax can be imposed on goods or services.

Furthermore, an indirect tax is regressive. Meaning the tax is applied regularly regardless of an individual’s level of income.

Indirect tax types.

There are four main types of indirect tax: sales tax, excise tax, value-added tax and gross receipts tax.

Sales tax

Sales tax is a consumption tax on the sale of goods and services. This means once the tax is added to the sales price of a good or service, it is then charged by the retailer. The retailer then remits that tax to the government. Sales taxes differ from state to state.

Excise tax

Excise tax is a tax levied on specific goods such as alcohol, tobacco and fuel. Typically, companies pay the excise tax and then pass the cost of it onto the consumer—this is known as the hidden tax.

Value-add tax

Value-add tax, or VAT, is a tax on the value added at each stage of the production of a good. Each business along the production chain pays a VAT at that stage, and the business in the earlier stage is then reimbursed. Ultimately, the end consumer pays the VAT.

Gross receipts tax

The gross receipts tax is a sales tax that applies to business-to-business transactions. Businesses are required to pay on their gross receipts, or their gross sales, without deductions. The gross receipts tax is applied to the business, but the cost of the gross receipts is often passed onto the consumer.

Summary 

To summarize, it may help to talk to a professional when it comes to dealing with direct tax vs. indirect tax. If you are ready to start understanding your taxes better, give us a call at (704) 919-3220. And in the meantime, continue reading our blogs for more industry news and tips.

29 01, 2024

6 Tips for Learning How to Use QuickBooks

2024-01-22T16:03:41-06:00January 29, 2024|0 Comments

As the end of January approaches, are you realizing that accounting software like QuickBooks could be useful in reaching your 2024 business goals? Luckily, we are here to help by sharing these six tips for learning how to use QuickBooks with ease! 

Have a basic understanding of accounting principles.

First of all, learning QuickBooks will be easier if you have a basic grasp of accounting. That doesn’t mean you need to become an expert, but understanding the guidelines for reporting financial data is key to having accurate numbers and making informed financial decisions. 

Note your daily objectives.

If you are tackling QuickBooks on your own, try breaking up your daily objectives to help structure your learning plan. For example, day one could include going through initial QuickBooks tutorials to get started and browsing through the program to become familiar with it. 

On day two, objectives might include entering basic information, getting organized and possibly setting up a few accounts. From there, you can start learning more about inputting employee information, customer information, invoicing and so on.

Explore QuickBooks tutorials and videos. 

Next on the list of tips for learning how to use QuickBooks is a no-brainer! Take advantage of the plethora of information created by QuickBooks to help beginners like you. 

Their resources include tutorials, webinars and videos to make learning easy and self-paced. 

Learn handy QuickBooks keyboard shortcuts.

The software also uses a variety of convenient QuickBooks keyboard shortcuts to make some common actions even quicker. For instance, Ctrl + A pops up the Chart of Accounts window. Ctrl + C copies your selection to the clipboard, and Ctrl + I takes you to an invoice. 

Watch YouTube videos. 

Try learning QuickBooks through a variety of approaches, including watching YouTube videos made by QuickBooks pros. 

Work with us for one-on-one training.

Finally, when it comes to tips for learning how to use QuickBooks, work with a professional for personalized, one-on-one instruction. Did you know we are your local QuickBooks professionals in Charlotte? 

As a proud member of the QuickBooks ProAdvisor Program, we can ensure you set up QuickBooks for your business correctly from the beginning. Plus, we can help you manage and apply it moving forward.

Summary

In summary, find out more about the benefits of using QuickBooks for your small business. Then connect with us to get started. Are you looking for additional accounting information, from tax tips to deciding what business entity is right for you? Keep reading our blogs and discover all that and more! 

28 12, 2023

6 Accounting Resolutions for Your Business This New Year

2023-12-28T10:15:35-06:00December 28, 2023|0 Comments

With the new year just around the corner, it’s time to make your new year’s resolutions. And we don’t mean changing your diet or exercise routine—we’re talking about the resolutions you should make as a small business owner. Check out these accounting resolutions for your business this new year.

Meet with your accountant.

First and foremost, it is important you meet with your accountant. This will allow you to review your year-end numbers and lay out a plan of action in order to achieve the new year’s goals. Additionally, you should schedule regular meetings with your accountant to stay up-to-date on your finances.

Conduct a financial review.

Not so much a resolution, but an essential task for moving into the new year—if not every quarter—is to conduct a financial review. In doing so, you can double-check your figures and see if your business is in good financial standing as the year ends.

Understand any tax changes.

Tax codes and regulations change every year. This includes district, county, state and federal levels. Be sure, when meeting with your tax professional, that you review and understand the newest and most up-to-date regulations and how they will affect your company’s tax returns.

Update your accounting software.

When making accounting resolutions for your business this new year, add updating your account software to the list. There are a wide variety of accounting software options that can help your business run smoothly and more efficiently with accurate bookkeeping.

Talk to your clients.

When creating goals for your business in the new year, you will want to know what your clients wants and needs are, as well as where your business is excelling and lacking. Send out a survey or contact your clients for feedback in order to find where you can improve.

Set your business goals for the new year.

Now onto the most important resolution for your business: setting goals for the new year. How can you improve your business? How will you grow your revenue? Make a plan and set goals in order to streamline your accounting and more.

Summary

And don’t worry, if you’re searching for a team of trusted professionals that can help you with these accounting resolutions for your business this new year, contact Todd Greene! We can help you with small business accounting and bookkeeping, new business planning, tax preparation, tax planning and much more.

In addition, continue reading our blogs for more financial tips and accounting news.

28 11, 2023

5 Tips for Charitable Gifting

2023-11-27T14:11:21-06:00November 28, 2023|0 Comments

‘Tis the season of giving, so why not get the most out of your giving, not just personally but financially as well? We’re sharing these five tips for charitable gifting to help you, the giver, maximize the benefits. 

Before we get into our helpful tips for charitable giving, let’s quickly state the obvious. Giving to others makes us feel good. But the benefits of giving can go well beyond feelings. In some instances, charitable gifts can actually reduce your taxable income. 

Plan your giving.

For starters, impactful giving takes planning. And knowing who to give to takes thought and research, including understanding which charities and donations qualify for tax deductions. First of all, you have to give to an IRS-approved charity—for nothing in return—to claim a tax deduction.

Enjoy a little tax relief.

In fact, there are many tax-planning opportunities with charitable donations that you can take advantage of for the largest deduction possible. In general, charitable contributions allow you to deduct up to 60 percent of your adjusted gross income. But, depending on the organization and the kind of contribution, you may only be allowed to donate 20 percent, 30 percent or 50 percent of your income.

No matter how many organizations you donate to, the limit applies to all of your donations made during the year.

Cash and household items can be tax-deductible. 

Remember to ask for a receipt or proof of your charitable donation. Typically, any cash donation of $250 or more needs written acknowledgement from the organization stating when the gift was given.

However, smaller donations can be verified with a copy of a bank statement or a receipt from the charity, for example. If you decide to make a charitable donation through a payroll deduction, be sure to keep your pay stub, a W-2 form or some other record from your employer showing the date and amount. 

While certain charities and organizations will accept gently used household items, including clothes, toys and furniture, the rules for non-cash donations are a little stricter. Again, be sure to talk to your accountant for more in-depth information about these guidelines. 

Check to see if volunteer expenses are tax-deductible. 

While volunteers can’t deduct the estimated value of their time or services, they can deduct certain costs of volunteering for an approved organization from their taxes. Examples of direct expenses that could be claimed include mileage. 

The miles you travel to volunteer opportunities and charitable events, as well as the mileage you use to transport goods to donation sites, can be deducted from your tax deduction contributions—just save the receipts. 

Pay attention to the deadline.

Your donation must have been made by the end of that specific tax year for it to be recognized as tax-deductible when you file. For instance, donations that you want to claim on your 2023 tax return, which must be filed by April 2024, must be made by December 31, 2023.

Summary

Last but not least, when it comes to tips for charitable gifting, work with a tax professional you can trust. To find out more about charitable gifts and tax breaks, contact us to schedule a free consultation. For more industry news and tax advice, keep reading our blogs. 

27 10, 2023

Tangible Assets vs. Intangible Assets: What’s the Difference?

2023-10-24T11:25:33-05:00October 27, 2023|0 Comments

Businesses have many kinds of assets, including tangible assets vs. intangible assets. But what’s the difference? Let’s take a look!

What is a tangible asset?

A tangible asset is an asset that has a physical form, meaning it can be held and manipulated. These types of assets can typically be transacted for some type of monetary value through liquidity.

The owner of the tangible asset can decide to hire an appraiser who determines the fair market value of the asset, or they can choose to sell the asset for cash.

Types of tangible assets

Tangible assets come in two categories: current and fixed. Current assets are those that can be easily used and converted to cash. Fixed assets, on the other hand, have a lifespan of one year or more. For example, inventory is considered a current asset, and things like property and equipment are considered fixed.

There are many types of tangible assets. Some common forms include:

  • Equipment
  • Furniture
  • Inventory
  • Land
  • Property
  • Vehicles

Things such as stocks and bonds are also considered tangible assets, even though they cannot be held. This is because they derive their value from contractual claims.

What is an intangible asset?

An intangible asset is an asset that is not physical. This type of asset is recorded at its cost when acquired. Some intangible assets have a limited life and are more amortized to expense, while others have an unlimited life and are not amortized.

Types of intangible assets

The market value of a company’s intangible assets is often far greater than that of its tangible assets. Examples of intangible assets include:

  • Copyrights
  • Patents
  • Mailing lists
  • Trademarks, brand names and logos
  • Domain names
  • Goodwill

Summary

With that, it is now time to take a look at your tangible assets vs. intangible assets. Not sure where to get started or how to record them? Don’t stress—contact Todd Greene for all your booking and accounting needs!

And since you’re here, continue to check out our blogs for more accounting tips and news.

28 09, 2023

Business Entities Defined: Limited Liability Company and Its Benefits

2023-09-28T16:21:16-05:00September 28, 2023|0 Comments

Before you start a business, several decisions must be made, including the business structure. One of the most popular business structures in the U.S. is a limited liability company. So, let’s look at a limited liability company and its benefits more in depth to see if it’s the right setup for your future company.

What is a limited liability company?

For a better understanding of a limited liability company and its benefits, let’s start with the definition of a limited liability company. To summarize, it is a hybrid entity that combines the features of a corporation with those of a partnership or sole proprietorship.

Limited liability companies protect their owners from being held personally liable for the obligations of the company. Similar to a corporation, an LLC offers its owners limited liability in the event that the company fails. However, like a partnership, an LLC “passes through” its profits so that the owners must pay taxes on it as part of their individual income.

In fact, those very traits are two of the main advantages of a limited liability company.

The benefits of LLCs

One of the biggest benefits of a limited liability company is that it is a separate entity. In other words, the personal assets of company owners or members cannot be used to fulfill the company’s debts and other obligations. Therefore, members only risk losing what they invested in the company, not their individual belongings.

The flexibility of how an LLC is to be taxed is another one of the benefits. While LLC’s can be taxed as corporations, partnerships or sole proprietors, the default tax classification is as a sole proprietor if it has one member and as a partnership with two or more members.

In a nutshell, all the companies’ profits can be distributed directly to the owners, which are then taxed as part of their personal income. This prevents “double taxation” of the business and its owners because it’s only taxed once.

Whereas with a corporation, for instance, the profits are taxed first at the company level and then again once the profits are passed on to the business shareholders.

In addition to limited liability and streamlined taxation, limited liability companies are relatively easy to set up and offer a more flexible management structure than other types of business entities. However, rules and regulations vary state-by-state, so be sure to double-check your state’s requirements.

Summary

Now that we’ve reviewed more about a limited liability company and its benefits, get ready to take the next step with our help! Did you know we offer new business planning services? We do! Contact us to schedule your free consultation. In the meantime, keep reading our blogs for more industry news.

28 08, 2023

5 Tips for Getting Your Small Business Finances in Order

2023-08-28T12:12:08-05:00August 28, 2023|0 Comments

Managing your small business finances well is a crucial part of keeping your business running smoothly and successfully. Disorganized finances could mean sacrificing cash flow, missing out on valuable tax deductions and ultimately setting your business back. If you’re ready to get a better handle on your business finances today, check out these five tips for getting your small business finances in order.

Separate your business and personal finances.

Combining your business and personal finances (i.e., putting everything in the same bank account) may be tempting, but over time, it will complicate things. For one, it can be hard to track your business spending when you’ve consolidated it with your personal spending.

The first thing you want to do when setting up your business for financial success is to establish its structure to make a clear distinction between business and personal finances. Common options include LLCs (Limited Liability Companies), Partnerships, Sole Proprietorships and S Corporations.  

Hire a qualified bookkeeper.

Hiring a bookkeeper is a great way to help sort through your business finances and set up a financial plan. Professional bookkeepers can help restructure, reorganize and keep track of your business’s cash flow. 

These professionals understand marketing strategies and will figure out how to keep costs low, increase revenue and find potential tax breaks. In addition, bookkeepers can also reconcile your monthly books and create custom reports in order to plan your sales and marketing strategies.

Create a budget.

Running a successful small business is impossible without a business budget. Putting a budget in place allows you, as the business owner, to view the full picture when it comes to seeing where your money is coming from and where it is going. 

Additionally, creating a budget allows you to be wise about your spending priorities and be diligent in your future financial planning. This step is critical and can ultimately help relieve stress.  If you utilize QuickBooks, you can prepare a budget within it’s program.  

Limit your unnecessary expenses.

Take a look at your monthly expenses. Can your business survive without some? If your business can successfully run without certain expenses, get rid of them.

For your necessary expenses, try to downsize them. For example, you can try to find banks that don’t charge monthly fees or have any “hidden” fees.  QuickBooks has a built in way to plan out your expenses based up on your current spending.  

Create a plan to increase your revenue.

And now for one of the most important tips for getting your small business finances in order: creating a plan to increase your business’s revenue stream.

To do this successfully, you will need to have followed the previous steps. Once you’ve done that, you will be able to review your income and develop a concise plan to increase your revenue. 

Summary

Running a successful small business relies heavily on the status of your business finances. But by planning today and following these tips for getting your small business finances in order, you have all the tools you need to get started!

Need some help along the way? From setting up financial plans to handling bookkeeping and more, the Todd Greene team is here to help! Plus, for more financial tips and news, continue reading our blogs.

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