Small Business Tax Tips

Tax Tip #1: Home Office
Make sure that your office is distinct from your living area. Whether it is a room of its own or a part of a larger space, there should be a clear line between your workspace and the rest of the home
If you only have one computer, claiming it as the office computer will be difficult. No auditor will believe that it is not utilized for personal use as well. The burden of proof will be up to you, so either dedicate a computer solely to work, or omit the computer area from your office space.

Tax Tip #2: Technology Purchases
Up-and-coming businesses need to be up-to-date on their technology, and Uncle Sam does not hinder this. Under Section 179 of the tax code, equipment expenses such as computers, printers, and even company vehicles are tax-deductible, up to a certain amount. Depending on the item, you can deduct the full cost on the year of purchase, or split it between several years.
Business-related software also qualifies under section 179. So don’t be afraid to get the technology you need to perform necessary business tasks. Just be aware of the amount you can deduct under section 179 because it changes yearly.

Tax Tip #3: Travel Costs
Since travel can be necessary for business success and expansion, many of the expenses are completely tax deductible.
Feel free to take your family with you, but only the costs for you, and only those that are business-related, can be deducted.

If you’re taking clients out for a meal, those costs are 50% deductible, just make sure to write on the bill/receipt the reason for the meal.
Conference fees are deductible as long as the conference is directly useful for your business. If it’s a conference related to your industry or will help you run your business more smoothly, then it probably qualifies.

As always with finances, especially taxes, it’s important to keep your receipts and details about the reason for purchases. While doing this for every purchase may seem over-the-top, it’s easy once you get into the habit of it. It will also save you a lot of grief if you get audited, and it will help you keep peace of mind that your finances aren’t going to get your business in trouble.

Courtesy of LessAccounting

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Taxes. Security. Together.

The Internal Revenue Service, state tax agencies and the nation’s tax industry urge you to join their effort to combat identity theft by doing more to protect personal and financial data from online threats.

Working in partnership with you, we can make a difference. That’s why for the second year in a row, we have embarked on a public awareness campaign called “Taxes. Security. Together.” And, we’ve launched a series of security awareness tips that can help protect you from cybercriminals. This is all part of the Security Summit effort, a joint effort between the IRS, the states and the private-sector tax industry.

Here’s an overview of basic steps to help protect your data:

1. Use security software. Security software can protect your computer – and your data – from numerous threats posed by malicious programs, also known as malware.

2. Use encryption software to protect sensitive data. If you keep sensitive financial data such as prior-year tax returns or important records on your hard drive, consider investing in encryption software to safeguard documents with password protection.

3. Use strong passwords. Use strong passwords of 10 or more digits that include letters, numbers and special characters. Do not use the same password for all your accounts, especially your financial accounts.

4. Avoid phishing emails. Never reply to emails, texts or pop-up messages asking for your personal, tax or financial information.

5. Back up your data. Periodically back up all the data on your computer via your protected cloud storage or a separate disk.

6. Protect your wireless network. If you use a residential wireless network connection, make sure you have a strong password protection for it. And, if you use public Wi-Fi, never share sensitive data.

The IRS, state tax agencies and the tax industry joined together as the Security Summit to enact a series of initiatives to help protect you from tax-related identity theft in 2017. You can help by taking these basic steps.

Courtesy of IRS

For more information contact Neikirk, Mahoney and Smith

Bookkeeping tips

Entrepreneurs keep a lot of the financial details of their business in their heads. Doing so has its advantages: No new software to learn, no danger of a system crash that loses all your data, and you can tweak your budget as often as you need without sitting down at a desk.

But when you don't have a system and some processes in place, unpleasant surprises can pop up, goals can be easily missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and maybe improve your profits. It can also help you to stay out of trouble with the Internal Revenue Service.

1. Plan for major expenses.
You're less likely to miss business opportunities or have to scramble for a loan when the expenses become unavoidable.

2. Track expenses.
You otherwise might some miss tax write-offs and may lose out on others.

3. Record deposits correctly.
You may be less likely to pay taxes on money that isn't income.

4. Set aside money for paying taxes.
The IRS can levy penalties and interest for not filing quarterly tax returns on time.

5. Keep a close eye on your invoices.
Late and unpaid bills hurt your cash flow.

Some entrepreneurs believe that once they've sent out an invoice, they've taken care of billing. Not so, Every late payment is an interest-free loan and hurts your cash flow.

Courtesy of Entrepreneurs

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Accounting Tips for Small Business

Accounting can be tedious for any business, but if your small business doesn’t keep tight books it can make your taxes a nightmare. Without a system for your business’s finances a lot of things can slip through the cracks and end up costing you money in the long run. With a clear-cut process and some simple bookkeeping tips you can get a better grip on your financial situation, and even increase your earnings. The goal is to get a simplified process created detailing your businesses finances. Having a method that combines your expenses, invoices, deposit records and tax information can make your life as a small business owner ten times easier, especially as tax season rolls around.

1. Go Paperless by using Cloud-Based Accounting
Look for packages made for small business owners because they streamline the process by providing basic templates for your business like invoices, deposit slips, and business account check printing. With the addition of cloud-based accounting systems you can access your business information from anywhere.

2. Find A Good Advisor
Having a good advisor on payroll to help you out at least once a month can become invaluable. They can teach you how to handle your books properly, answer any questions and fix any mistakes that might have been made.

3. Keep Personal and Business finances separate
Never mix the two up, it will make your accounting much more difficult to handle. It’s a lot easier to keep accurate records if your only dealing with one type of account, so stay organized.

4. Plan for Major Expenses
Set aside money for major expenses like inventory, office supplies, repairs and maintenance.

5. Set Aside Money for Taxes
If you keep track of your financial records properly you can be prepared for year-end taxes. Setting aside a little bit of money each month towards paying your small businesses taxes you wont have to cutback at the end of the year or get a loan to pay your taxes, you will already be prepared.

6. Keep and Eye on Your Invoices
Late and unpaid bills can affect your businesses credit and effect your tax payments as well. Keep your bills organized and always pay on time.

7. Keep Daily Records and Reconcile bank accounts monthly
Double check your bank accounts and daily records at least once a month. Reconcile your withdrawals and deposits in your account so that discrepancies can be spotted more easily.

8. Avoid Cash
Using cash it is hard to keep track of spending. You also lose track easily of write-offs because there is no record of purchases. By using a debit or credit card you can keep track of amount spent, where it was spent and when it was spent.

9. Set up a specific time each week to go over your books
Giving yourself at least a half an hour ever week to go over your finances and make sure everything is in order.

10. Check Up Monthly On Your Accounts Receivable.
Having a client owe you money for services, especially at the end of the year, isn’t the same as having that money in your business account. Make sure you stay on top of your accounts receivable so that you are getting all the monthly payments you are owed. Without receivables, income dwindles.
Courtesy of Kabbage
For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Accounting 101

This assumption requires us as small business owners...

to keep all of our business transactions separate from our personal transactions.

The easiest and best way to so this is to open a business bank account.

Some people think that just keeping separate records is enough in separating business from personal. It is not. You should physically keep your money separate. Some business owners will go as far as keeping their personal and business accounts in different banks.

They said it is better for them as they have to write out a check to deposit instead of transferring between accounts in the same bank.

The main thing is not to pay for personal expenses out of that business account. If you need money from your business for personal expenses write yourself a check or transfer the money into your personal bank account.

One of the biggest justifications for keeping a separate bank account for your business is for clean and accurate bookkeeping.

If you have a separate bank account for all of your business transactions then it will be easier to match and record all of those transactions.

I have even missed recording a few expenses and caught them when I did my bank reconciliation...which by the way is 100 times easier when you have a separate account.

Come tax time, you or your accountant will be happy you maintained separate accounts too.

Also if you were ever audited...you do not want to bring in a bank record that has your personal expenses mixed in. Auditors tend to frown upon that.

Courtesy of BasicAccountingHelp

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Accounting tips for Small Business

Keep it separate.
By keeping separate bank and credit card accounts for business and personal, you’ll save yourself hours of work and make it easy to keep track of deductible expenses in one place.
Call in a pro.
An accountant will almost always find more deductions and keep you penalty-free.
Pencil it in.
Set aside about 15 minutes every week to organize your finances, and don’t let other things take priority during this time.  You’ll have more insights into your business, be able to make more informed financial decisions and have everything organized when tax time approaches.
Consider your people.
Whether you’re paying a full staff or you’re the only one on the payroll, make sure you’re tracking the costs of wages, benefits, overtime and any other costs associated with labor. By tracking your spending on labor, perks and benefits, you may find you have more money to incentivize your employees — or that you’re outspending your budget.
Don’t forget to get paid.
If you’re not keeping proper records that you can make sense of at a glance, it could be months before you realize you have outstanding invoices. You could be collecting payments late, or missing some altogether. Make sure you’re properly tracking all payments due and recording when each invoice is paid, how long customers generally take to pay, and which customers you’ve had difficulties collecting payments from in the past.

Courtesy of Forbes

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Five bookkeeping tips for entrepreneurs

Entrepreneurs keep a lot of the financial details of their business in their heads.
But when you don't have a system and some processes in place, unpleasant surprises can pop up, goals can be easily missed and important paperwork forgotten. Getting a better handle on your money can help you to make and keep long-term goals, smooth out the seasonal ups and downs of your cash flow and maybe improve your profits.

1. Plan for major expenses.
You're less likely to miss business opportunities or have to scramble for a loan when the expenses become unavoidable.
2. Track expenses.
You otherwise might some miss tax write-offs and may lose out on others.
3. Record deposits correctly.
You may be less likely to pay taxes on money that isn't income.
4. Set aside money for paying taxes.
The IRS can levy penalties and interest for not filing quarterly tax returns on time.
5. Keep a close eye on your invoices.
Late and unpaid bills hurt your cash flow. Assign someone in your organizations to track your billing.

Courtesy of Entrepreneur

For more information contact Neikirk, Mahoney and Smith at 502-896-2999

Tips to Get Your Small Business Accounting in Order

Bookkeeping is a necessary chore of all businesses, helping you manage your operations and prevent an audit by giving the IRS what they need. To keep moving toward your long-term goals and improve profits, get your small business accounting in order with these essential tips:

Separate Business and Personal Expenses – Having a dedicated business bank account, including checking and a credit card, saves you precious man-hours when it’s time to tally up deductible expenses.
Track Every Expense – Label and categorize each expense, and track your cash flow.
Accurately Record Deposits – Loans, revenue from sales and other cash infusions are easy to lose track of, and that can lead to paying unnecessary income taxes.
Understand When It Pays to Pay – Hiring a professional bookkeeper or accountant, even for just a few hours a week or month, can make a big difference.
Dedicate Time to Update Your Books – Block out weekly time in your calendar to get necessary paperwork in order and avoid letting receipts and invoiced receivables pile up.
Keep Tabs on Labor Costs – Paying employees, including yourself, may be your largest expense. Take note of overtime, perks and other benefits you offer to prevent over- or under-paying.
Expect Major Expenses – Computer upgrades, equipment replacement and tax deadlines shouldn’t come as a surprise.
Maintain Inventory Records – Avoid misplacing merchandise – or theft – by noting dates purchased, stock numbers, purchase prices, dates sold and sale prices.
Follow Up on Invoices and Receivables – Avoid overpaying on taxes and hours spent sifting through your revenue account and receivables listing by circling back with vendors who owe you money.

Courtesy of Fundera

For more information contact Neikirk, Mahoney and Smith at 502-896-2999