Help yourself to some free stuff.
We believe that by sharing knowledge acquired and resources developed in our work, we help inform and enable a more collaborative accounting community — and that benefits everyone.
IAA Blog
We post quick tips, how-to’s, and more to help every business. There’s always something new for you.
FAQ
You have questions? Check here first for answers to the many of the most frequently asked questions.
Resources
Links to helpful accounting tools and resources for business finance professionals like you.
Tax planning + tax preparation = a proactive approach to minimize your tax liability
Tax planning requires us to look forward to the next year to implement strategies that will minimize your tax liability, while tax preparation looks back on the past year to calculate the taxes you owe. Getting expert help can ensure you keep more of what you work hard all year to earn. However, by doing some homework and following a few basic steps, you can ensure you’re in compliance while protecting your business and personal assets.
- Put money in an IRA, 401(K), 529, FSA and/or HSA to lower your tax bill
- Research the tax rules and tax credits to know which changes affect you
- Understand tax deduction requirements and be prepared to meet them
- Collect all pertinent income and expense information in advance of filing
- Retain tax returns and records for six years after filing in case of an audit
Business Income taxes
When you have your own business you will be taxed one of 2 ways. Either you will pay taxes or your business will pay the taxes. Your entity selection and ownership structure will play a large part in this.
Business Pays Taxes:
1) Applies to C-Corporations
2) You are a C Corporation if you select to be a Corporation in your state OR if you are an LLC and elect to be taxed as a C Corporation
You pay the Taxes (i.e. the income is reported on your Form 1040):
1) Applies to Pass-through entities and Sole Proprietorships
2) You are a pass-through entity if (Reported on your Schedule E):
– You are an LLC, have more than one owner, AND have not elected to be taxed as a C-Corporation (you will either be a Partnership or S-Corporation)
– You are an LLC, have one owner, AND have elected to be taxed as an S-Corporation
– You are structured as a Partnership in your State
3) You are a Sole Proprietor if (Reported on Schedule C):
– You have a business but have not setup a separate legal entity with the state
– You are an LLC, have one owner, AND HAVE NOT elected to be taxed as a C or S-Corporation
Please check our FAQ’s for additional info on which entity is best for you
Tax Tips for Businesses & Individuals
1) Always File your Taxes (even if you can’t pay)
– If you don’t file you will be subject to the Failure to File Penalty
– You can also lose your ability to claim a refund if you do not file a return within 3 years of the original due date of the return.
– The IRS offers installment plans to help with paying your tax bill to allow you to get on track with your filings and payments
2) The Golden Tax Rule
– ALWAYS make sound business / personal financial decisions first…THEN identify the best structure and options for tax considerations. For example, buying a new truck that is not needed just for a tax write off actually costs you more than just paying the taxes
3) General Rule for Record Retention
– We recommend 7 years. There situations where you can retain records for less than this but 7 years covers the longest retention situation
– Please note if you do not file OR file a fraudulent return you must retain your tax records indefinitely
Crash Course in Payroll Taxes
1) Payroll taxes are the taxes assessed on your employee’s wages. A portion of these taxes are withheld from your employee and some are paid by the company. Below are the taxes you need to be aware of when getting ready to setup payroll
2) Common Types of Payroll Taxes to be aware of:
– Income Withholding
• Is only withheld from Employee Wages
• Is assessed for Federal Taxes, State Taxes (if applicable) and Local Taxes (if applicable)
• For State and Local Taxes requires setup of a withholding tax account with the State / Local Agency (usually the Department of Revenue)
• For Federal Taxes your Tax ID number is all that is needed
– Security & Medicare
• ½ is withheld from the employee and ½ is paid by the employer
• Is only assessed at the Federal Level
• Your Tax ID number is all that is needed
– Federal Unemployment Taxes
• Only paid by the employer
• Is only assessed on the first $7,000 of wages per employee
• Your Tax ID number is all that is needed
– State Unemployment
• Only paid by the employer
• Only assessed on a certain base amount of wages. The actual $ amount depends on each state
• Requires and account to be set up with the State’s Department of Labor
Tips to keep your Records Accurate
1) Reconcile your bank account at least 2-3 times per week. You will find you spend the same or less time vs doing this once per month since all transactions will be fresh on your mind
2) Use an “Ask My Accountant Account”. When in doubt just code your transaction to this type of account. This will insure your cash and credit card account balances are accurate while still having a detailed log of the items you did not know how to code
3) Understand you have a Balance Sheet and a Profit and Loss Statement. One of the common errors we see if that everyone codes all activity to their Profit and Loss Statement.
Balance Sheet: Used to records your assets (cash, inventory, etc..), Liabilities, (loans, credit cards, etc..) AND Equity (money you have put in and the company has earned)
Profit & Loss: used to record Revenue & Expenses. The Net Profit from your P&L is also reported in the equity section of your balance sheet under an account called Current Earnings (or something similar)
Use the items on your Balance Sheet to help you Generate Revenue and Pay Expenses
When you have your own business you will be taxed one of 2 ways. Either you will pay taxes or your business will pay the taxes. Your entity selection and ownership structure will play a large part into this.
Business Pays Taxes:
1) Applies to C-Corporations
2) You are a C Corporation if you select to be a Corporation in your state OR if you are an LLC and elect to be taxed as a C Corporation
You pay the Taxes (i.e. the income is reported on your Form 1040):
1) Applies to Pass-through entities and Sole Proprietorships
2) You are a pass-through entity if (Reported on your Schedule E):
– You are an LLC, have more than one owner, AND have not elected to be taxed as a C-Corporation (you will either be a Partnership or S-Corporation)
– You are an LLC, have one owner, AND have elected to be taxed as an S-Corporation
– You are structured as a Partnership in your State
3) You are a Sole Proprietor if (Reported on Schedule C):
– You have a business but have not setup a separate legal entity with the state
– You are an LLC, have one owner, AND HAVE NOT elected to be taxed as a C or S-Corporation
Please check our FAQ’s for additional info on which entity is best for you
1) Always File your Taxes (even if you can’t pay)
– If you don’t file you will be subject to the Failure to File Penalty
– You can also lose your ability to claim a refund if you do not file a return within 3 years of the original due date of the return.
– The IRS offers installment plans to help with paying your tax bill to allow you to get on track with your filings and payments
2) The Golden Tax Rule
– ALWAYS make sound business / personal financial decisions first…THEN identify the best structure and options for tax considerations. For example, buying a new truck that is not needed just for a tax write off actually costs you more than just paying the taxes
3) General Rule for Record Retention
– We recommend 7 years. There situations where you can retain records for less than this but 7 years covers the longest retention situation
– Please note if you do not file OR file a fraudulent return you must retain your tax records indefinitely
1) Payroll taxes are the taxes assessed on your employee’s wages. A portion of these taxes are withheld from your employee and some are paid by the company. Below are the taxes you need to be aware of when getting ready to setup payroll
2) Common Types of Payroll Taxes to be aware of:
– Income Withholding:
• Is only withheld from Employee Wages
• Is assessed for Federal Taxes, State Taxes (if applicable) and Local Taxes (if applicable)
• For State and Local Taxes requires setup of a withholding tax account with the State / Local Agency (usually the Department of Revenue)
• For Federal Taxes your Tax ID number is all that is needed
– Security & Medicare:
• ½ is withheld from the employee and ½ is paid by the employer
• Is only assessed at the Federal Level
• Your Tax ID number is all that is needed
– Federal Unemployment Taxes:
• Only paid by the employer
• Is only assessed on the first $7,000 of wages per employee
• Your Tax ID number is all that is needed
– State Unemployment:
• Only paid by the employer
• Only assessed on a certain base amount of wages. The actual $ amount depends on each state
• Requires and account to be set up with the State’s Department of Labor
1) Reconcile your bank account at least 2-3 times per week. You will find you spend the same or less time vs doing this once per month since all transactions will be fresh on your mind
2) Use an “Ask My Accountant Account”. When in doubt just code your transaction to this type of account. This will insure your cash and credit card account balances are accurate while still having a detailed log of the items you did not know how to code
3) Understand you have a Balance Sheet and a Profit and Loss Statement. One of the common errors we see if that everyone codes all activity to their Profit and Loss Statement.
Balance Sheet: Used to records your assets (cash, inventory, etc..), Liabilities, (loans, credit cards, etc..) AND Equity (money you have put in and the company has earned)
Profit & Loss: used to record Revenue & Expenses. The Net Profit from your P&L is also reported in the equity section of your balance sheet under an account called Current Earnings (or something similar)
Use the items on your Balance Sheet to help you Generate Revenue and Pay Expenses
Whenever you’re ready, we’re waiting to help.
We know how reluctant you might be to trust an outside team for bookkeeping and accounting, but spend some time on our site and you will see that we’re not like other firms or consultants. We are hard-working business partners who understand how to improve financial and operational performance. Let’s talk about how we can help your company.
