For new business owners and sole proprietors, it's so easy to forget or not even known about all of the best deductibles and write-offs for your future tax season. So here are some of the best tips and hints and what you can look forward to writing off come April 15th!
April 15th. It's a day that goes down in infamy once you're proudly bringing home your first paycheck or have opened your own business or have become a sole proprietor. Even though it's still 9 months away from when we all have to open our wallets for Uncle Sam, taxes don't have to be as painful or as costly to you or your business as you think. We get it - taxes aren't your favorite thing. So to ease the pain between now and April 15 let's talk about something a little less painful - your tax write-offs and deductibles! Those glorious write-offs can cut your taxable income and cut down on what you end up paying for your taxes come tax season. But are you writing off everything that you can? Do you know just how much you can track and write off every year to make sure you're getting the financial break you and your company deserves? Let's break down what exactly you can write off - and how you should be keeping track. Federal tax laws can be a bother and can get in the way of what you think you can write off and what you actually can. Tax code and Tax law does change a little every year, so there are loopholes and certain things that will affect how, how much, and when you can write off certain things. When tax season does come around, make sure you, your tax advisor, or your Quickbooks extraordinaire takes the time to research the new tax code for the year. This list covers the big write-offs - and a handful of others that you might not know about. A lot of the time the more unknown or forgotten write-offs can be some of the most lifesaving and profitable at the end of the day. Make sure you're keeping track - and reading the small print. Our first recommendation is to keep track of everything for your company. Quickbooks is a simple and easy tool that can help you track all of your project probability, manage bills, track your mileage, keep track of your income and expenses, help you manage your invoicing and payments, manage your contractors, and of course - pay your workers. It's simple, efficient, and can take the headache out of tax time. You will also be a star employer if you get your taxes finished sooner than the cut off date. The faster you do, the faster that tax return can get back into your pockets and the pockets of your employees. The first general idea to keep in mind when you're just beginning and making plans of what you're going to be writing off this year, your write-offs HAVE to be something that is always used in your business industry. Once this is established, don't forget to keep and track your records. There are TONS of amazing apps and programs that can help you stay organized. Did I mention how amazing Quickbooks is and how they can do all of that for you? TOP WRITE OFFS FOR SMALL BUSINESSES!
Next up: Things you think you can write off, but actually, you cant!
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Tax season is quickly approaching, and Pathways wants to ensure that your business has their taxes under wraps! Here are a few tax tips for your business!
Use Quickbooks Payroll When it comes to payroll, it can be difficult to manage by hand and keep up with all the employees of your business. In order to combat that, and provide relief come tax time, we recommend using Quickbooks payroll! File your Taxes on Time Many have been there, in crunch time, and end up missing the deadline for their taxes. Don't let that be you with your business. Ensure you get your taxes done on time, if not early, by using Pathways! Call and schedule your appointment today! Take Deductions Seriously When it comes to taxes and running a business, it helps to know what deductions you can file for and have. It is best to communicate with a Pathways team member to discuss the deductions that you and your business qualify for. We hope to see you soon for your tax appointment, make sure to get everything you need to get done early so you do not have to pay any late fees come 2019! Did you know The Tax Cuts and Jobs Act was issued and installed more than a 100 new tax provisions? Don’t miss out on this fantastic news, and come to Pathways where we can start planning your taxes NOW and save you money in the upcoming tax season! Pathways will makes sure you itemize your deductions appropriately with the new 2019 installment! We will help ensure that either the standard deduction or itemizing is what is in your best interest. When it comes to medical expenses, the threshold for deductions has returned to the past 10%, which make it difficult to qualify once again. These thresholds would include payments made to doctors such as care physicians and dentists, optometrists, and even reaching to equipment such as glasses, oxygen tanks, and medications. For those who are high-income taxpayers, the recommendation to offset capital gain remains an option. This is where the option to sell underperforming investments comes into play; some have the option to defer income into January by delaying invoices to where payment arrives within the following year’s taxable income. For the charitable hearts, you now will have to itemize deductions if you want to claim deductions on the donations you gave. Take your IRA and 401K seriously by ensuring you are putting away the cap amount in each every year. This will also shrink your taxes! Don’t waste any more time, as November comes to an end here soon, there’s only one month left within this year to prepare for tax season. Take advantage of that and head over to Pathways Consulting where we can help you prepare for tax season NOW! Financial Transaction TaxA financial transaction tax is characterized as a levy on a particular transaction of a certain purpose. It is also important for any business and owner to be conscious of. Since the start of the first financial transaction bill in 2008, financial transaction tax bills have been proposed multiple times since 2009 in the U.S.
The bill that is in use now, suggested a tax of 0.25% of stock, 0.02% of features contracts on the buying or selling of specified commodity, and 0.02% of credit default swaps between two firms would be implemented. The projected revenue of this tax, being $150 billion, would be used deficit reduction and job promotion. While this tax does not apply to families, the businesses within the United States are subject to adhering to these financial transaction tax policies. What do you think about this tax? Is the revenue from it going to appropriate places, or would you rather it be put elsewhere? Tell us in the comments below! Pathways focuses on helping and educating the businesses within the Summerville area and strive to see the businesses grow! Call us today for any of your accounting or tax needs! The Do's and Don’ts of Quickbooks for a Small BusinessRunning a small business is no small task. Often times, a business owner will find themselves looming over numbers and bookkeeping more so than running their business. Why? Because they haven't switched their business over to Quickbooks! The advantages of using Quickbooks for your small business are endless, but here are some quick do's and don'ts when it comes to understanding what Quickbooks can do for you! Do’s Take advantage of the automatic bookkeeping tasks QuickBooks is a wonderful tool that takes time to devote toward Small Businesses. With is comes the ability to connect various kinds of money keeping engines. Connect your bank, PayPal, credit card, or Square to access transaction access. Quickbooks will even take of the calculations, so you don’t have to! Balancing has never been so easy! Perform tasks on mobile while in the field Does your business require you to be on site and not cooped up in an office? With Quickbooks, mobile is just as functional as the desktop version! With todays technology, there is no reason for a business owner to be unable to access all bookkeeping information while on the go. Your information will be synced with Quickbooks so all changes will be kept safe and correct. Use Quickbooks to keep a healthy business Quickbooks allows you to stay organized in order to keep your business running smoothly. Receive reports and access to data that shows you how your business is doing in a straightforward fashion. Don’ts Manage bills on your own It’s frustrating having to keep up with paying bills on multiple platforms. With Quickbooks, all bills are easily scheduled and formatted. There is no need to manage your bills on your own. Everything is documented when using the billing section of Quickbooks, even your records and bookkeeping. Forget to log expenses There is nothing left unlogged with Quickbooks. When making purchases for the business, quickly use the mobile app to take a photo of receipt. Quickbooks will quickly log and organize the expense among previous entries. No more worry of having lost a receipt! Become frustrated at tax time With Quickbooks, you don’t have to worry about being unorganized when Tax Time comes around. If you have used Quickbooks efficiently, the software will organize all the information you need for tax season for easy access. All records are alongside the FASB regulations. There are only positives when it comes to Quickbooks helping your small business. Ensure that you are getting the most out of your experience with Quickbooks by asking any of our trusted members of Pathways Consulting. We are trained in understanding Quickbooks to the fullest extent and love helping others! Take your business organization to the next level with Quickbooks and our help! Familiarize Yourself With QuickbooksQuickBooks is known for the amazing features you can use to grow your business. It may seem a bit daunting, but do not worry! Here are a few ways to familiarize yourself with QuickBooks! Organization Tackle the organization of your business’ moving parts through inventory tracking, categorization of expenses used on your company card, and much more! Invoicing Give your company the look and feel you desire through QuickBooks’ variety of personalization options! Branding is as important to QuickBooks as it is to your business. Reports Simple and efficient performance reports at your fingertips! Since QuickBooks handles multiple parts of your business, they can also provide you with detailed reports on how your business is thriving! Taxes Accountant access is simple and hassle free, so when tax time comes, there won’t be stress! QuickBooks also helps you with you 1099s! Payroll Pay your employees with W-2s easily with QuickBooks. With easy hour entry and optional direct deposit it check, your employees with continue to be happy! QuickBooks also guarantees payroll taxes with zero errors! Cash Flow QuickBooks easily organizes your incoming and outgoing payments. It even allows you to email clients who have yet to pay your business! QuickBooks has many elements that are just right for your business. It has all the tools in order to make your business boom with productivity! At Pathways, we are available to assist you in your QuickBooks journey anytime. Feel free to contact us with any questions or concerns! It's Quickbooks Season!
According to USA Today, the company that creates Gibson guitars and Baldwin pianos has filed for a Chapter 11 bankruptcy in an effort to stabilize the business in a new deal. Gibson Brands itself was founded in 1894, and though the company had many supporters, their rapidly declining sales in recent years made it difficult to keep afloat. Link: https://www.usatoday.com/story/money/2018/05/01/gibson-guitar-chapter-11-bankruptcy/567821002/ With this latest anouncement about Gibson Brands, Pathways Consulting LLC has been thinking about the adjustment business owners have to make to their business over time in order to continue on. When you start to decline in sales in your business, it's very important to come up with a 'gameplan' as to how you will continue your business efforts. As people grow and change, community does as well so often times the service or products you provide become outdated. For instance, many decades ago, they had calltakers for the telephone lines as a prominent job position. As telephones became more self-sufficient in communication, that job position began to become unnecessary. So what could the business owners of those companies have done to adapt and continue their business? Perhaps refine their service to telephone repair or design? If you are a small business owner, you know how hard it is to keep everything running. The main way to keep it running smoothly is by preparing and planning. Think about how your company could adapt as trends change and your business industry evolves over time. The 3 Financial Statements Small Business Owners Should Understand Part 3. Cash Flow Statement10/23/2017 This is the last part of this blog series. I hope it has been interesting and informative so far. The reason this statement is last is because it builds on the balance statement. In this final part we are taking a look at the cash flow statement.
Primarily, the point of the cash flow statement is to monitor cash coming and going from the business. The best part is you can use your newfound knowledge of the balance sheet to understand cash flow. Since any changes in your assets or liabilities will affect your cash flow statement. The statement is divided into three parts:
Your cash flow statement is important especially the operating activities. Your operating activites are the daily operations of the business. Watching this carefully can help you manage the cash flow generated by the ongoing nature of the business rather than you seeing a large increase in total cash flow that was a result of a one time sale or stock issuance that will inflate the number. For example, let’s say you only look at the net cash increase at the end of every month. You see that this month you were in the green. Not a bad thing we can all agree, and you look at nothing else and make no changes. The next month you are losing money. Well the last month you didn’t notice the the operating activities were falling, and only because a large increase in cash from another activity propped the business up for the month. This is the importance of the operating activities. It shows how well the business can sustain itself through normal operations alone. The 3 Financial Statements Small Business Owners Should Understand Part 2. Income Statement9/5/2017 Welcome to the second part of our three part series of the most important financial statements for a small business owner to know. The income statement, which can also called the P&L (profit and loss statement), is another important financial statement for your small business. We are going to start with a overview of how the statement is arranged, then we are going to dive into how to read the statement in a meaningful way. In order to build an income statement you will decide on a time period and list out your revenue and expenses accrued during that amount of time. After getting a total for all your revenue this is considered your top line. Then total up the amount of expenses and subtract your expenses from your revenue. This is your net income or bottom line. The income statement is an easy financial statement to build as long as your accounting of your revenue and expenses were accurate.
Reading an income statement is more than just seeing if a business was profitable. The income statement is different from the balance sheet because the balance sheet shows a snapshot of a business at a single point in time. Where the income statement uses information over a period of time. You can find the gross margin by dividing the gross profit by the revenue. The net profit margin can be found by dividing the net income(after taxes) by the revenue. The return on equity can by useful to see how well you are investing your money, by dividing the net profit by the average shareholder equity for the period. Though the income statement is easy to prepare, the strength lies in what the numbers allow you to see rather than what the top and bottom line are themselves. |
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September 2020
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