As a small business owner, you're probably more concerned about getting your product perfect and getting it into your customer's hands than you are about the ins and outs of your accounting. You might even put it off until you're forced to do something about it like at tax time or when there's a particular bill than needs to be paid.
Proper accounting requires a year round effort, going over your finances for each month. This allows problems to be quickly spotted and dealt with before they balloon into major disasters for your company.
This monthly effort takes the form of a "monthly write up" that includes account reconciliation, your P&L statement, and your balance sheet. They'll often conclude with a general ledger review, to ensure everything is properly balanced.
For more information on the importance of having a CPA prepare your monthly write ups, or to hire a CPA to start helping you right now, please visit my client: Accountability Team
When it's time to start a new business in Hillsborough County Fl, there are things you will need to consider & prepare for early-on in the process. With guidance from the official Hillsborough County government site, here are some of these things.
See a more robust version of this article on the Accountability Team CPA website at http://accountabilityteam.com/business-advice/business-startup-checklist
Small Business Bartering
If you own a small business, it's likely that at some point someone will offer you a barter, or it will occur to you that you might want to make an offer to barter. This is a normal business practice that can benefit both parties to the barter. When your cash is tied up elsewhere, it can let you move forward on a project that might otherwise have to take a back burner.
There are some things to consider when you choose to barter. Specifically, the IRS considers anything you receive through the bartering arrangement to be income and requires it to be reported as such on your annual tax return. They also require that the value of the goods or services be set by fair market value.
You may barter with a friend who owns a business, a member of a leads group or networking group that you attend, or you may participate in a Barter Exchange through a website, phone app or even a physical location. A barter exchange will provide you with a 1099-B each year.
You can read more about bartering in small business here: Accountability Team
Trust the experience and training of your CPA, a real tax professional, to help ensure that your barter income is correctly reported to keep you out of trouble with the IRS. There may be some specific circumstances in which you may incur additional income, (self-) employment, or excise taxes on your bartered income. Let your tax professional guide you through these details.
Income taxes are complex. It's difficult to keep knowledgeable about them as they change rapidly. With over 70,000 pages of tax code, it can be a daunting task to interpret and properly prepare tax returns. This has many individuals and businesses seeking Tampa tax preparation by a CPA. Do you know where to find tax preparation by a CPA? Did you know there are different types of tax preparers? Let's discuss a few things to help you choose the right tax professional in Tampa.
Where to Look for Tampa Tax Preparation by a CPATampa businesses often create working relationships with one another. Referrals for Tampa tax preparers come from peers, clients, and advertisements. Local business networking groups usually have a member that is a CPA. Asking peers who they use for tax preparation will get you answers. Remember, friendly referrals don't always mean that it's going to be a good fit for your business needs. Use your own screening and questioning rather than just the opinion of the referrer.
What Is An IRS Enrolled AgentAn enrolled agent or EA, is a tax professional that focuses on taxes. Enrolled agents aren't required to hold a degree. They are registered and their knowledge is tested, by the IRS, before being enrolled. An IRS enrolled agent can represent income statements to the IRS, but are not qualified to handle auditing issues should they occur.
What Is The Role of an Unlicensed AccountantNot all accountants are CPA's. This might come as a surprise to some people. Unlicensed accountants at the core are bookkeepers and account managers. They compile monthly data and provide monthly income statements and spending reports. Unlicensed accountants can offer tax preparation services, it's your responsibility to file them. They may not have a degree or even a certificate of completion from an accounting program. Their main focus is bookkeeping and account management. They are capable of preparing tax forms. But an unlicensed accountant can not represent you should you be audited.
Why Choose Tampa Tax Preparation By A CPACertified public accountants are degreed tax professionals that offer services beyond income taxes and preparation. A CPA can advise on a wide range of financial situations outside of taxes. This could include auditing services, investment allotment, monthly record keeping and payroll management. Though not limited to these services. CPA's can represent you to the IRS and are qualified to present audited statements. This is one of the major reasons businesses choose services from a CPA. Individuals, families, and businesses can benefit from Tampa tax preparation by a CPA. Due to the amount of services offered by CPA's they can equip you with money saving knowledge others might overlook. Because CPA's handle audits they are usually the most viable choice of tax preparers by Tampa business owners.
Tax Planning in Tampa
There are plenty of reasons to choose Tampa, Florida as the home of your family or your business. The weather is unbeatable, there are beaches and amusement parks nearby, and there are professional sports teams to keep you and your potential customers entertained.
Another great aspect to living and working in Tampa is that Florida has no income tax.
The Feds still take their share though, so you'll need a great CPA to help you plan ahead to minimize the tax burden placed on your company and your individual finances.
Tanya Higgingotham, of whom I've written before, has been a CPA for close to twenty years, working with singles, families, and a wide range of businesses of varying size and industry.
Yes, a CPA can help you file your taxes, but that's just scratching the surface of what a CPA really does for you.
Other services include
Let Tanya help you with these issues and others.
Read more about her at Accountability Team LLC
The future of the ACA
The future of the ACA (sometimes called "Obama Care") is an open question, so paying close attention to new health legislation is paramount. You must pay attention to running your own company or caring for your own family. Let a Certified Public Accountant who's well equipped to follow and understand these changes, help you keep track of it all.
I have had the opportunity to work with one such CPA, Tanya Higginbotham, who is the Managing Member of Accountability Team LLC.
Recently mentioned on the Accountability Team LLC website is the importance of meeting the individual mandate, keeping good records of your coverage, and careful preparation of your taxes in light of any ACA compliance issues.
The ACA has caused some confusion. Each year since it passed, clients are "surprised" to find that they have to pay a penalty for not having insurance that complies with the ACA. Also, anyone on a subsidized Obama Care health plan may have to pay back some or all of their premiums if their family income increased from bonuses, raises, new jobs and the like. When these increases happen, the taxpayer may have to repay some or all of the ACA subsidy.
This work in reverse too. If your family suffers a job loss or other reduction in income, and you don't contact the marketplace to increase your subsidy, you may be entitled to pay less taxes, or even get a larger refund.
The Employer Mandate Might Not Apply to Small Businesses
If you have less than 50 Full Time or Full Time Equivalent (FTE) employees, you won't be required to provide coverage for your employees. If you have a fluctuating workforce, and your numbers draw near to 50, pay close attention and keep good records. There is a formula that determines if certain non-full time hours add up to additional FTEs. Trust your CPA to get this right.
If you have less than 25 employees making less than $50,000 and you pay at least 50% of their premium through the SHOP marketplace, you could get a tax credit.
For a more detailed look at this topic, visit Affordable Care Act – Obama Care on Tanya's Accountability Team LLC website.
When you're ready to prepare your taxes, or make plans for next tax season, give her a call at 813-689-6413
Choose a business structure
One of the first things that must be considered when starting a business is what type of entity that business will be. This decision will have an impact on your personal and business taxes and the liability that you and your company have for each other's debts and judgments.
Only corporations and LLCs can chose to have the IRS treat them as S-Corps. An S-Corp allows the profit of the company to pass through to the owner, but any owner who actually does valuable work for the company must pay self employment tax on the portion of their pay that is a direct result of their labor. This must be a "reasonable salary".
As the owner of TecBrat.com LLC, I have the pleasure of working with Business Coach, Cynthia Alloway, of Common Sense Business Solutions.
In addition to helping you to grow as a professional and teaching you to make good business decisions, Cynthia can help you identify and avoid scams that might cost you some of your hard earned profits.
Here are just a few of the scams we've seen over the years:
Labor Law Compliance Posters
There are federal and state requirements for displaying labor law notices. There are posters that conveniently combine all the right notices for your location, and update every year. You are not required to purchase these posters. You can print your own from the various municipal websites, and some payroll companies will offer them for free as a convenience to their customers. Don't be tricked into paying high fees for something you can get for free.
Corporate Minutes Compliance letter
At lease two companies. "Compliance Services" and "Corporate Records Service", have been attempting to fool small business owners in Florida into paying $125.00 to $250.00 to file their corporate minutes. The mailing is made to look like an official state document. Corporations are required to keep minutes of their annual meeting, but there is no requirement in Florida to file these minutes. This is likely an attempt to confuse business owners because there is an "Annual Report" that must be filed, but it's rather simple and can be done at sunbiz.org.
Domain Name Trickery
Modern businesses rely on their websites. One of the first things we have to do for a website is to register a domain name. Domain registrations must be renewed, either every year, or every few years, depending on the length of the original registration. When the domain is nearing expiration, this information is publicly available and the scammers will send a "renewal" letter. They'd like you to think it's your current registrar and your just renewing, but you'd actually be switching from your current registrar to them. Be sure to read your renewal notices carefully.
Domain Name Trickery 2
Do you really need a .cn or .asia domain name? You may receive an email claiming to be from a Chinese domain registry asking if it's okay for some other company to register a domain name similar to yours, but with ".cn" or ".asia" at the end. It starts out like you are being given an opportunity to prevent this. It then turns out that the only way you can prevent it is if you register the names yourself, at great cost to you. You can safely ignore these emails. If you have a real need for a ".cn" or ".asia" domain, check with your registrar, technology specialist or business coach to ensure you purchase them from a reputable registrar.
Domain Name Trickery 3
Extra TLDs. By now, we've all seen ".com", ".net" and ".org" domain names. These suffixes are called the "top level domain" or "TLD". For most industries, ".com" is the only one that matters. You might choose to register ".net" just to prevent others from using it, and if you run a non-profit, you might consider the ".org". But, the scam is that someone will send you a letter that looks very much like a renewal notice, but it's actually an offer to sell you your domain name, but with a different TLD. These "offers" are usually at greatly inflated prices. Like I said about the Chinese domains, if you have a real need for an additional TLD, ask your business coach or technical advisor.
Cynthia has been helping businesses for over 20 years, so she is familiar with these and other ways that disreputable individuals and companies will try to separate you from your cash. If something looks like a scam, it probably is. If you're not sure, ask Cynthia.
If you run a small business, you might ask yourself if you really need to hire a CPA.
The first thing many people think of when it comes to CPA services is tax preparation. It's important to know that while anyone can act as an accountant, even someone without so much as a high school diploma or GED. A Certified Public Accountant is one who has completed thorough training and passed a rigorous state exam to ensure they are qualified to serve you according to skill and knowledge. CPA's are required to complete 80 hours of Continuing Education Units (CEU's) every two years in order to maintain their license. The 80 hours must include 20 hours of accounting and auditing, 4 hours of a Board approved ethics course, and no more than 20 hours in behavioral subjects.. They know how to minimize your likelihood of being audited, have the experience to deal with an audit, and are able to represent you directly to the IRS. A non-licensed accountant, even one with a PTIN, has limited practice rights.
Beyond tax season, a CPA knows business. A CPA knows finance.
A bookkeeper and an accountant can keep your accounts straight, and let you know if you're profitable or not, but a CPA can analyze your records, identify excessive costs and opportunities for increased profit, and in general help you make better financial decisions based on years of study, experience and understanding.
I can't tell you that your small business absolutely must hire a CPA, but I can tell you that there are reasons to give it your serious consideration.
If you are running a small business or large international corporation, profits are a direct indicator of the health of that business. It is, therefore, essential that you are maximizing your profits where possible. This is where a business coach can help you uncover areas where you can either increase revenue or decrease expenses, both of which have a direct impact on profitability. We will now take a closer look at these two important aspects of profitability.
Let’s start with increasing revenues and there are a few approaches to doing this. A business coach can help your business in any of these areas.
We will now look at the other impact on profitability, decreasing expenses. Again a business coach would be invaluable in any of these areas. There are many ways to decrease expenses, but we have narrowed them down to a few important areas as shown below.
The above strategies have an immediate impact on your bottom line, but there is another area you should look at when trying to maximize profits and that is Outsourcing. Human resources are probably the biggest expenditure for any business. There are certain tasks that can be easily outsourced for a fraction of the cost of a full time employee and you can pay for the services as needed. For example, press releases, website design and content and design projects can all be outsourced for a fraction of the cost of an internal team. Outsourcing can increase profitability if used wisely.