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Author: Jake Snelson

Lower Your Taxes by Implementing These 3 Year-End Contribution Ideas

During Q4, tax season seems like it’s lightyears away. But prepping for tax season now, can save you time and money come tax time. Here are 3 year-end contributions you might want to consider before you ring in the New Year, and how they’ll help your bottom line.

Year-End Contribution #1: Charitable Donations

No one will refute that it’s the season for giving. But did you know that giving can provide you with tax write-offs in addition to a host of warm fuzzies? It can. Charitable donations can impact taxes for the year in which they were given. To claim donations on your tax return here’s what you need:

Receipts are required from all IRS-qualified charities for any donations larger than $250 if you’re going to claim them.
You don’t always have to donate cash – household items, cars, boats, etc., can also be contributed. In such cases a specified amount can be deducted from such donations.
If you’re claiming donations to individual charities, you’ll need to itemize the deduction, rather than claim the standard deduction that is set each year by the IRS.

Tip: Even if you’re not planning to donate now, maybe you’ve donated sometime this year. Take a few minutes and pull out your books, calendar, and bank statements. Review them and gather the necessary paperwork so you’ve got it ready for tax time.

Year-End Contribution #2: Health Savings Account

Invest in your health. It’s something you’ll spend money on anyway, so why not put away some cash in your Health Savings Account (HSA). An HSA allows any unused money to rollover into the following year and when the money is used to pay for qualified medical expenses is tax-free.

Tip: Now is the time to check into HSA options if you don’t already have one. If you have it, but aren’t sure where you’re at, check into your balance, scheduled needed appointments, and see if you’re taking advantage of any employer matching opportunities. Even consider raising the amount you contribute each month so you’re building a reserve for those unexpected medical expenses that may crop up.

Year-End Contribution #3: Retirement Savings

It’s always a good time to consider investing in your future. In fact, it can provide you with a tax break now, and cash later. Any contributions made to retirement accounts are deducted from your taxable income, which can lead to reducing the amount of taxes you owe or possibly increase your refund.

IRAs allow for contributions to be made for the previous year right up until the tax-filing deadline. But if you’re looking to stash some cash into a 401(k) and take advantage of any employer matching, you’ll need to act before year end (Dec 31) or check out the specific requirements for your plan.

Tip: Talk to your accountant and see what type of suggestions they’d make when it comes to contribution to your retirement savings. They’ll have a handle on all the ins and outs and can help you strategically place your money so it’s working for you both now and in the long run.

So with these 3 suggestions in mind, what plans do you have to lessen your tax load before year end? If you’re got questions, lets talk.

FAQs for Year-End Tax Prep and Contributions

How can charitable donations impact my taxes?

Charitable donations can provide tax write-offs for the year in which they were given. To claim these deductions, you need receipts from IRS-qualified charities for donations over $250. Non-cash items like household goods, cars, and boats can also be deducted if itemized properly.

What documentation do I need for claiming charitable donations?

To claim charitable donations, you need receipts for any contributions over $250 from IRS-qualified charities. For non-cash donations, you’ll need to determine and document the fair market value of the items. Ensure you itemize these deductions on your tax return.

What are the benefits of contributing to a Health Savings Account (HSA)?

Contributions to an HSA are tax-deductible, and funds used for qualified medical expenses are tax-free. Unused money in an HSA rolls over to the next year, allowing you to build a reserve for future medical costs. Check your balance and consider increasing contributions to maximize benefits.

How do retirement contributions affect my taxable income?

Contributions to retirement accounts, such as IRAs and 401(k)s, reduce your taxable income, potentially lowering your tax bill or increasing your refund. For 401(k) contributions, ensure they are made by December 31 to take advantage of employer matching and year-end benefits.

When should I make contributions to my IRA or 401(k) to benefit my taxes?

IRA contributions for the previous year can be made until the tax-filing deadline. However, 401(k) contributions should be made by December 31 to take advantage of employer matching and reduce your taxable income for the current year. Consult with your accountant for specific deadlines and strategies.

How to Micromanage Without Being “That Boss”

Everyone has probably had an experience with a boss or co-worker that micromanages. They’re the ones that are constantly checking over your shoulder, re-doing tasks you’ve already done, or taking over projects that they had previously delegated. The negative vibes that go along with this management style are vast, so why does it keep appearing in the workforce?

Our guess is that either micromanagers haven’t explored alternative approaches to getting things done, or that they’re so personally invested in their business (i.e. small business owners who have everything on the line and who are incredibly passionate about the product and/or services they provide) that its hard to step back and appropriately direct that energy.

So how do you flip micromanagement approaches on their head and come out with a win/win? We’ve got a few ideas.

Micromanage Information Not People

It’s true, that as the business owner or boss you need to be on top of things. You’re incredibly invested in the success of your business, which means that you need to understand what’s going on at every level. But being in the thick of things on a daily basis, not only aggravates employees, it also goes against the reason you hired additional employees in the first place – so that you could focus on other aspects of the business.

Instead of constantly being in the day-to-day workings, try checking in with managers more frequently. Ask for timelines and projections rather than the nitty gritty details and then ask for project statuses on a consistent basis. If there’s a need for those details make sure you’re asking “for understanding” rather than questioning their abilities. Being consistent in asking for information shows your managers that you’re invested in the outcomes and that you trust them to be invested as well, whereas infrequent checks implies that you’re only going to look in when you think something is going wrong.

Tip: Make sure that you use proper communication channels when checking in with employees. Going over managers’ heads never builds morale. Instead, teach the people in charge, ask to be invited to team meetings if necessary, and instill confidence in their abilities while expressing your desire to “stay in the loop” – no one ever seems to be offended if you’re “there to learn” or are “looking for more information”. And remember, asking for information too often is still micromanaging in a passive way, so consistency is key.

Micromanage Processes Rather Than Employees

Employees who say they are micromanaged often report that they feel like the boss doesn’t trust them to do his or her job. It’s a valid feeling and probably one you can relate to – you started your own business because you had a great idea and wanted to do your thing, rather than work for someone else. Encourage that same mindset among the employees you hire by micromanaging processes rather than your employees in two steps.

Step 1 – Identify core processes. These are the processes that need to run a certain way because they effect the overall outcome of the business. Shipping and production methods, how you manage finances, HR practices, how often certain key meetings are held, and overall strategy fall into the core processes category. Other processes, like communication styles, how team meetings are run, and tasks you’ve delegated off to employees are not core processes. Sure they need to be done in a timely manner, and done correctly, but you hired your employees because you trusted them and their skillset.

Step 2 – Delegate. Instilling trust is easily done in this area. When there are times when new processes need to be figured out consider asking a manager to oversee it and keep you in the loop. Provide plenty of opportunities to collaborate and acknowledge skills that each employee brings to the table as you assign tasks. Also ask employees to review core processes that are under their management and ask for their input – you’d be surprised how much trust this builds with an employee and how much good you can gain by getting a new perspective.

Tip: Instead of hovering over employees, communicate an open door policy by encouraging questions and being available to advise. Make sure to address something positive so that those who work for you feel like you’re seeing the good as well as things that may need improvement. Even mentioning that you’re “seeing a lot of progress” in a certain area is a positive in many cases.

Micromanage Growth Not Goals

One of the biggest complaints about micromanaging bosses is that they require employees to handle things the same way they would, or they come in and take over altogether. There’s more than one way to do things and as a leader, you should focus on overall growth not the personal goals of employees or how they accomplish them.

The best managers and bosses can see that an employee’s achievement of goals adds to the overall growth of the business. Encourage goal setting as a company (i.e. we’re hoping to gross a certain amount in Q4, etc.) and also as an individual (i.e. Sara’s looking to expand her skill set and wants to take a course; Adam wanted to work on his communication with co-workers, etc). As a boss, your job is to ask about their plans to accomplish their goals, provide ideas if needed, and then check in on their progress from time to time.

Tip: Don’t sweat the small stuff. As a leader and owner of your business, spend your time focusing on big picture items. Let your employees handle the small stuff in any way that brings results. Meet with employees quarterly or as needed to address growth – this will allow you to see new skill sets and also help you know who might be ready for a new task or opportunity.

What other ideas do you have to keep the negative side of micromanagement at bay? What ideas will you implement?

Frequently Asked Questions (FAQs)

1. What is micromanagement and why is it problematic?

Micromanagement involves excessive oversight of employees’ work, such as redoing tasks or constantly checking progress. It’s problematic because it can undermine trust, decrease morale, and limit employees’ autonomy, leading to reduced productivity and job satisfaction.

2. How can I avoid micromanaging my employees?

To avoid micromanagement, focus on managing processes rather than people. Set clear expectations for outcomes, check in periodically, and delegate tasks effectively. Encourage employees to handle tasks in their own way while providing support and feedback as needed.

3. What are some strategies for managing information without micromanaging?

Manage information by requesting regular updates and progress reports from managers rather than detailed daily check-ins. Use these updates to stay informed about key metrics and project statuses, while trusting your team to handle the details.

4. How can I effectively delegate tasks without losing control?

Identify core processes that are critical to business outcomes and delegate tasks related to these processes. Provide clear guidelines and support, and encourage employees to review and suggest improvements. Maintain an open-door policy for questions and guidance.

5. Why is it important to focus on growth rather than micromanaging how goals are achieved?

Focusing on growth rather than micromanaging goal achievement allows employees the freedom to find their own methods and solutions. This approach fosters innovation, boosts morale, and helps employees develop their skills, ultimately contributing to overall business success.

Top Year End Tips for Small Businesses

Every small business owner wears dozens of different hats. One of those includes the hat of accountant and bookkeeper. Here at Vyde we help dozens of small business owners build their businesses, because we appreciate the passion they have for their clients and their product and/or services they provide. Because we spend a lot of time with “the books” and because we’re certified CPAs we’re sharing our top year end tips that will help guide you to a successful tax season.

You can watch the complete webinar where we cover our top tips, or read the summary below. We’ve put in start times for each section so you can watch the webinar in it’s entirety or just listen to the year-end tips you’re most interested in. Here are a few things we look for while working on our client’s books and things we think you should look at too:

Unclassified transactions / Miscellaneous transactions

(start watching at 1:30)

One of the biggest questions we get asked by clients is if their unclassified or miscellaneous transactions can be an audit flag. And the simple answer to that question is yes. Unclassified or miscellaneous transactions are simply those that aren’t categorized or tagged with additional information. Simply put, you’re bookkeeper or accountant isn’t sure what the money was spent on because there’s not enough information to identify it. It’s not bad to have these transactions, but for our client’s books we try to keep this category to $3,000 or less. Obviously, this rule is scalable. If your total revenue is significantly larger, then the amount you have in this category could be more than $3,000. That said, it’s probable that large expenditures, especially those that aren’t categorized clearly, are going to run the risk of throwing an audit flag.

TIP: take a look at your unclassified or miscellaneous transactions. Review your books or bank statements now and identify as many of them as you can. If you do your own books, make notes and gather receipts for these or provide them to your accountant or bookkeeper. Working on this before year-end is easier than trying to remember right before the tax deadline and already working/spending for another year.

Loans

(start watching at 3:30)

Loans are treated differently than general income. Because of this, it’s crucial that you note when loan money comes into your account and notify your bookkeeper/accountant about all loans. Loans aren’t taxable income, and it’s important to make sure the interest expense is broken out from the principal payment, so you’re sure you’re getting all the deductions you deserve come tax time. The reason we suggest this as a year-end “to-do” is because it’s easy to gather the information at that time, with your year-end loan statement.

TIP: Many banks send out paper forms for year-end statements and others are completely paperless. Regardless, find out where you can access your year-end loan statement for all of your current loans and put them together in one place. You may even want to pass these off to your bookkeeper or accountant if you have one, or hold a short meeting to make sure they’re up to date on the specifics of your loans.

Equity

(start watching at 7:50)

If you’re been in business for very long, or even if you haven’t, you’ve probably heard the advice to keep your business and personal accounts separate. It’s a great rule to follow, but it’s not always as easy to implement. Plus, there is always the action of pulling a salary or paying yourself from your business that falls into the grey area of this rule of thumb. Your accountant or bookkeeper will probably use words like owner’s distributions or owner’s draws – simply put, the money that falls into this area includes when you write yourself a paycheck, transfer money to your personal account from your business account or even make personal transactions with your business account or business card. You’ll want to listen to the webinar where we outline this fully and talk about putting money into your business, which falls under owner’s contributions.

TIP: because this is a detailed process, we’d highly recommend watching this section of the webinar or asking your accountant or bookkeeper about it directly. If you know that you’ve purchased personal items/services from your business account, take a few minutes to write them down and included exact dates and numbers if possible. This will make searching your bank statements easier for either you or your accountant.

Health Insurance

(start watching at 17:03)

Health insurance is something that’s highly specific because of the variety of plans but also because the rules are written just a bit differently by the IRS. What you pay for health insurance shows up differently than a normal expense on your tax return, and filing is different based on the type of business entity you run.

TIP: take a few minutes and make sure you know the type of business entity you run, plus the forms you’ll need to file for it. Then make sure you’re including what you pay for health insurance correctly by reading through the IRS rules or reviewing this information with your accountant or bookkeeper. Year-end is a great time to ask questions and make changes if needed, because it’s open enrollment.

Hopefully you’ve gleaned a few great tips to help you finish the year strong. If you have additional questions, we’d love to chat with you.

FAQs for Year-End Tax Tips for Small Business:

Are unclassified transactions a potential audit flag?

Yes, unclassified transactions can raise red flags during audits. It’s advisable to categorize them properly, aiming to keep this category to $3,000 or less, facilitating easier tax preparation.

How should small business owners handle loans for tax purposes?

Loans aren’t taxable income, but it’s essential to segregate interest expenses from principal payments. Collect year-end loan statements and ensure your accountant or bookkeeper is aware of all loans for accurate tax reporting.

What does managing equity entail for small business owners?

Maintaining separate business and personal accounts is crucial. Properly categorize owner’s distributions or draws, including salaries and personal transactions, to avoid complications during tax filing.

How does health insurance impact taxes for small businesses?

Health insurance expenses have specific tax treatment, varying by business entity and IRS regulations. Ensure proper filing and documentation, consulting with your accountant or bookkeeper for clarity.

Why is year-end an opportune time for tax-related inquiries and adjustments?

Year-end allows for review and preparation before tax deadlines. It’s an ideal period for clarifying tax rules, gathering necessary documentation, and making strategic adjustments for optimal tax management.

How Volunteering Helps Build Your Business & Supports Your Bottom Line

Pay it forward. It’s good for the soul and for those you help. But did you think that by volunteering you’d get payback as well? It might not come in the form of dollar and cents, but lending a helping hand can actually save you money by providing you with tax write offs. Here’s a few questions that might get you thinking about the volunteer work you do and if it can do more than just give you the warm fuzzies.

Do you travel to volunteer?

If so, you’re in luck. The following items can be used as deductions come tax time as long as you’ve kept a log and/or have receipts:

Tolls, parking fees, or money spent on Uber, train, or city bus fares (keep receipts)
Log the number of miles you drive while volunteering
If your volunteer efforts require a lengthy trip you can also include airfare, living accommodations and the cost of meals.

Do you wear a uniform?

If you’re required to wear jeans and t-shirt that doesn’t hit the mark, because you can wear it for everyday use. However, if you’re required to wear a hard hat, or some type or uniform that you wouldn’t just wear to work in the yard or to the mall, then it meets the requirement.

What do you spend money on when you volunteer?

Do you make calls asking for donations or to set up board meetings for your organization? If so you can count the minutes on the phone towards a deduction. But if your plan provides unlimited minutes, no deduction can be made because it wasn’t an added expense. Other ways that you might spend money to volunteer might include mailing out packages of information, creating fliers, or purchasing space at a job fair or bazaar to get the word out about your volunteer opportunity. This one is a little bit more detailed, but if you’re wondering whether it counts or not, make a note and then ask your accountant about it the next time you meet.

Do you make donations?

If you have clothing, furniture, toys or other household items that are still good but that you don’t use anymore, consider donating them. Charitable thrift stores are glad to get used goods and you can use organizing your home and closet as a way to procure a tax writeoff. There’s no need to have original receipts for any of the items, the tax deduction is calculated off of the current value of the items. Just remember to ask for a receipt when you drop your used items off at your donation site.

Making a cash donation is just as effective for both those in need and your bottom line. All you need is a canceled check, bank statement, or a receipt from the receiving charity. If you’re attending a charity event, make sure that any benefits you receive (dinner, entertainment, golf tournament etc.) are deducted from the total amount you donated.

Not everything can be counted as a deduction. Here are a few to keep in mind:

Not all nonprofit organizations are created equal. They may do good work, but they also have to meet the qualifications of the IRS for it to be a deduction for you. Double check the the charity before you donate by searching for them on the IRS website.
Giving blood is a great way to help, but there’s no tax deduction here – you just get to feel good about saving a life.
If you purchase supplies to do volunteer work, the cost of those items can be counted as a deduction. The number of hours you spent volunteering (or the wages you’d have made if you’d put those hours in at work) don’t count.

Have questions about your volunteer efforts and if they qualify? Want to talk to an accounting professional about your taxes, possible writeoffs and keeping your business in tip top shape?

The Important Documents You’ll Want to Save to Prepare Your Taxes

Are you hoping that the shoebox of receipts, bank statements and other random papers in your closet is enough documentation for your taxes? There is always a lot of confusion around what important documents need to be kept for taxes. We’re here to help you keep what you need and throw away the rest. Our quick guide will help you determine what’s important for your personal and business taxes. We even have a few storage method suggestions because heaven help you if anything happens to that shoebox!

Important Documents for Personal Taxes

There are quite a few documents you’ll want to save for your personal taxes. The top of the list is going to include statements that you get on a regular basis.

Bank Statements
Credit Card Statements
Mortgage Statements
Investment Statements

You’ll get most of these on a monthly or quarterly basis – don’t throw these out! Keep them because you’ll want them when it comes time to prepare your taxes. Most of these can be obtained electronically. This is a great option if you’re prone to losing random pieces of paper, which, let’s be honest, who isn’t. Download those statements and save them in a file on your computer and then you will know where they are come tax season.

Next, you’ll want to keep track of how you spent money that could be tax deductible.

Charitable Donations
IRA Contributions
Health Care Costs
Life Insurance Payments

You should keep receipts or statements regarding these expenses to help your accountant find the most deductions for you.

Finally, you’ll want to hold onto any important documents that show you had a major life event.

Marriage Certificate
Divorce Papers
Birth Certificate for children
Home Purchase Documents

All of these are significant life events that can change your tax bill. Make sure you let your accountant know about them so they can file your taxes correctly.

Important Documents for Business Taxes

Business taxes also require documentation for any tax deductions you wish to take. You’ll need to save basic documents, just like you did for your personal taxes.

Bank Statements
Credit Card Statements
Bills

These are all important for your tax returns, so save them in a safe place in your office.

Next, you’ll want to make sure you save receipts for things you plan to take a deduction on.

Travel Expenses
Business Meals
Gifts
Giveaway Purchases
Transportations Costs
Petty Cash Receipts
Advertising Costs
Office Supplies

All of these are tax-deductible, but you need to be able to prove that you used them for business. It’s really helpful to make a note of what the receipt was for. For instance, if you took a client out to lunch, then you could make a note of the client’s name and what you discussed. A great way to do this is to tape the receipt to a piece of paper and write what you did on the paper. Then scan the paper into your computer and file it away so you have it when it’s time to do your taxes.

Finally, you’ll want to keep track of these expenses that are specific to businesses.

Payroll Records
Asset Records
Property Costs (Rent or Mortgage)

These are all very important for business taxes because they can help keep your tax bill lower. The assets can roll over from year to year, so make sure you keep your records up to date.

How Long Do I Need to Keep Important Documents For?

We recommend keeping your important records for a minimum of three years. The IRS requires that you keep records for at least three years after the due date of the tax return or the date you filed the tax return, whichever is later. The period of limitations to file an amendment is three years; however, the IRS can audit you up to six years later.

You can either bookmark (or pin) this post, The Important Documents You’ll Want to Save to Prepare Your Taxes, so you know what you’ll need when it comes time to prepare your taxes.

Salon Accounting: Top 5 Accounting Tips for Hair Stylists & Salon Owners

As a stylist, you’re the expert when it comes to knowing what tools to use when and whether or not bangs works for your client. However, when it comes to salon accounting and taxes - like for hair stylists, barber shops and salons - we’ve got the expert status covered.

To make things simple, we’ve pulled together some of our best advice for keeping things organized and keeping your accounting on point.

Top 5 Tips for Setting up the Record-keeping Side of Your Biz:

Get your books set up before you open up shop. There’s no need to worry if you’ve already booked a slew of clients or have a thriving business – just start now if you haven’t already. You can always take care of past tracking at a later point, but for now, just start. Our best advice is to keep it simple, and have it be something that’s fairly easy to complete on a routine basis.

Create a ledger. It doesn’t have to be expensive accounting software, or even a fancy spreadsheet. It could be as simple as a small notebook where you jot down all the financial stuff for your business. Pick whatever works best for you. Just remember that some kind of record keeping is better than none at all.

Keep track of receipts. Especially when you pay cash! Purchase a expandable file folder, grab an envelope or go digital (some clients scan receipts, or snap pictures of them with their phone and store them in a digital folder). If you have a credit card/bank account for your business (you should!) you can even annotate the monthly bank statements and keep them in the same place as your receipts. Just make sure to keep that paper trail!

Keep your business & personal accounts separate. We mentioned this briefly in #3, but it goes without saying that keeping things separate, keeps things simple. By having your personal and business assets (and expenditures) in different places you make paying taxes, paying yourself, and putting money back into the business so much easier.

Set a plan and stick to it. There’s a reason that we’ve mentioned making things simple from the start. That’s because running the business-side of any business takes consistent effort and when it’s confusing or technical, it’s all the less appealing to sit down and stay on top of it. We suggest keeping track of things monthly or even bi-monthly if your client base is fairly large. When things are kept up to date, it takes a lot less time to manage the money.

TIP: Wondering what all goes into that ledger we mentioned in #2? We thought you might ask, so here’s what we tell our clients:

Start with recording the current balance of your business account (make sure to add a date to this line and every line you insert into your ledger)
Keep track of the revenue ($$ coming in) – cash or card payments for services or products. Don’t forget tips, especially those paid in cash!
Make a list of expenses ($$ going out) – purchasing products for your clients, rental fees for your booth or building, tools of the trade, etc.
Put a star next to any expenses that are recurring – rent, utilities, insurance and product purchases. This way you’ll be able to keep tabs on the average you spend each month and get a better idea of what it takes to run your business.

Have more questions? Want the nitty gritty details from a professional? Looking to find a great accounting service that can take care of the bookkeeping side of your salon so you can get back to what you do best? Contact us at https://vyde.io/get-started/ We’d love to chat!

FAQs about Setting Up Accounting for Hair Stylists and Salons:

1. Do I need to set up accounting before opening my salon?

Yes, it’s essential to have your books set up before opening your salon. Start now if you haven’t already. Keeping it simple and consistent is key.

2. What’s the simplest way to keep track of finances for my salon?

Create a ledger. It can be a basic notebook or a digital folder. Any form of record-keeping is better than none at all.

3. How should I manage receipts for my salon expenses?

Keep track of receipts, especially cash purchases, using an expandable file folder, envelopes, or digitally. Annotate monthly bank statements for credit card transactions.

4. Why is it important to keep personal and business accounts separate?

Separating personal and business accounts simplifies tax filing, paying yourself, and reinvesting in your salon. It also helps maintain financial clarity.

5. How often should I update my salon’s financial records?

Aim to track finances monthly or bi-monthly, especially if your client base is large. Consistent updates make managing money much easier and less time-consuming.

Interested in Learning More?

Schedule a free consultation with our team!

How an External Accountant Can Help Your Business Through a Natural Disaster

Trying to recover after a natural disaster is incredibly overwhelming. But, trying to get your business to recover can be a whole new headache. Using an external accountant, an accountant that doesn’t work from your office, can be beneficial because it’s one less thing on your plate. An external accountant can help take some of the load off and help you get your business back on track.

Here are a few ways an external accountant can help you and your business through a natural disaster.

An External Accountant Will Have Your Records

Damage to your office can mean that you lose a lot of important documents. As you know, documentation is an important part of taxes and bookkeeping. If you’ve lost your documentation, you may be in trouble when you need to claim a tax deduction; however, an external accountant can come to the rescue.

When you use an external accountant, you normally send them documents showing purchases, income, and more. Which means there is a backup of all of your documents in another location. Because of this your accountants can replace those lost documents.

If you’re in the opposite situation, where your accountant’s office is in a natural disaster, then you are still covered. The IRS grants you a filing extension, which we’ll go into more in depth later.

Accountants Can Help You Find Natural Disaster Tax Credits

Tax credits are available to business that have suffered from natural disasters. In order to qualify for tax credits or deductions, the president has to declare your area as a “federally declared disaster area.”

One of the credits available to business owners in a natural disaster is the natural disaster casualty loss break. The casualty loss break allows people who have been affected by a natural disaster to file an amended tax return on the previous year’s taxes. This is helpful so that people can get a refund quickly, instead of waiting until the next tax season. The rules for casualty loss differ between business and personal property, so make sure you talk with your accountant and find out exactly what your business needs to do to use the tax credit.

You will need to assess and document the following areas in order to take advantage of disaster tax credits.

Determine and list all of your property that was destroyed or damaged in the disaster.
Find out the original cost (or the adjusted cost) or each damaged item.
Learn the fair market value of the items before the disaster struck. (What were they worth?)
Determine the current worth of the property.
Add up the reimbursements and/or other payments you have received, or plan to receive, from insurance.

External Accountants Can Help You File Taxes on Time

To ease the burden on victims of a natural disaster the IRS can extend tax filing dates. When IRS does extend filing dates, it only applies to areas designated as federal disaster zones. The IRS has already issued tax extensions for victims of Hurricanes Harvey and Irma.

After a federally-declared natural disaster, the IRS allows businesses more time to send in payroll taxes and returns. As long as you send them in before the new deadline, the IRS will wave any penalties or interest that may have accrued.

Whether the IRS has granted your natural disaster a tax extension or not, an external accountant, like Vyde, can help you get your taxes in on time.

The 3 Most Common Marketing Mistakes Small Businesses Make and How to Fix Them

Marketing is a touchy field and there is a balance that must be met. Marketing mistakes are easy to make, but there are a few that you want to avoid at all costs. These marketing mistakes are usually bigger mistakes that are done completely out of ignorance. In a lot of cases, small business owners are trying to do their own marketing and don’t know any better. However, avoiding these three marketing mistakes can help your business thrive.

Marketing Mistake #1: Thinking You Don’t Need a Blog

Blogging is a lot of work. It requires that you plan content, write posts and then, find people to read your posts. It sounds like it’s a lot more work than it’s worth. But, that’s where small business owners are wrong.

Blogging is an integral part of gaining customer trust. Having a blog on topics relevant to your field, makes you look like an expert, which you probably already are. When you’re an expert in your field, people will instantly trust you. It’s easy to take the advice of someone who knows what they’re talking about. With so many frauds on the internet, people want to know that they are being taken care of.

An active blog can also help your website rank higher in search engines. Search engines, especially Google, are looking to make sure websites are active and frequently updated. You don’t usually need to make tweaks to your main content every week, so it can be difficult to show that your business and website are active. This is where a blog is helpful. Posting once a week is a quick and easy way to show search engines that your site is relevant.

If you don’t think a blog would work for your business, try to think outside of the box. What is your target customer searching for in Google? For example, not all of our posts are about accounting. However, we know that our clients are small business owners so we blog about topics relevant to small business owners. You might just have to look a little past your business’ main focus to find topics to blog about.

Marketing Mistake #2: Not Using Happy Customers

Marketing professionals will tell you that the best, most reliable, marketing doesn’t come from you. It comes from your customers. A recommendation from a happy customer almost guarantees that you’ll make another sale.

The real question is, how can you use happy customers as part of your marketing? The most common way small businesses use happy customers is through positive reviews. Potential customers use sites like Google+, Yelp and Facebook to decide if they want to use your services. If they see you have good reviews, they’re more likely to give you a try. So, you should always encourage your customers, especially your happy ones, to leave a review for you on a review site. Tell your customers that they can be a part of your success, just by telling other people about their experience.

Another way to use happy customers is to include them in other marketing projects. If you’re making a video, ask customers to be extras, or even be interviewed. Put a shout out on Facebook or Instagram asking for models for your next photo shoot. Anytime you can use smiling faces or positive statements about your business call on your loyal tribe. They’ll be even more excited to help you get the word out about your business if they feel like a part of it.

Marketing Mistake #3: No Unique Selling Proposition

Beginner marketers have a lot more trouble with this, but it can plague any business. A unique selling proposition (USP) is what sets you apart from the crowd. Without a USP, you can’t tell your potential clients why they should choose you instead of a competitor.

Your USP should be the purpose behind your business. At Vyde, we knew we wanted to provide accounting, bookkeeping and tax services for small business owners who couldn’t afford corporate level pricing. It disrupted the accounting field and made us unique. Now we use that to set ourselves apart from other accountants.

If you’re having a hard time pinning down your USP consider these areas of your business to focus on:

Price point
Characteristics of your product
Your target market
Your personal or company values
Location

Once you find out why you’re running your business you can nail down your USP and then incorporate that into how you market your business.

Avoiding these marketing mistakes will help you move forward and reach more people. Which, after all, is the whole point of marketing.

FAQs for Common Marketing Mistakes Small Businesses Make

Why is having a blog important for my small business?

A blog helps establish your expertise, builds customer trust, and improves your website’s search engine rankings by keeping content fresh and relevant.

How can I effectively use happy customers in my marketing?

Encourage happy customers to leave positive reviews on sites like Google and Yelp. Additionally, involve them in marketing projects, such as testimonials, videos, and photo shoots.

What is a Unique Selling Proposition (USP) and why do I need one?

A USP is what sets your business apart from competitors. It highlights your unique qualities and reasons why customers should choose you, making your marketing efforts more effective.

What are some examples of areas to focus on to develop a USP?

Consider aspects like your price point, product characteristics, target market, company values, and location to identify what makes your business unique and appealing to customers.

What can I do if I don’t have time to maintain a blog for my business?

If maintaining a blog seems overwhelming, consider outsourcing the content creation or finding topics that align closely with your business goals and customer interests to keep the process manageable and beneficial.

4 Questions Before Making a Big Purchase for Your Small Business

No matter how big or small your business is, at some point in time you’ll have to make a big purchase for your business. When the time comes, there are a lot of points to consider, but these four questions should be at the top of your list.

How will this big purchase fulfill the needs of my small business?

Obviously, as a small business owner, you’re making your money go as far as it can. So when a big purchase comes up, you may think the answer to this question is obvious, but it’s still an important question to answer. Make sure that the big purchase you’re about to make is worth the investment. This means that it should help you make more money than it will cost you.

You should also evaluate how long the purchase will last. Will you need to make the same purchase next year or will it last a couple of years? If it is something that is only going to last a short time, then it might not be worth the investment. Make sure that your big purchase is going to be worth the time, energy and money that you’re about to spend on it.

After you’ve answered this question you can move on and determine how to purchase your new business tool.

How will I pay for this item?

Once you’ve determined that you need to make a big purchase for your business, the real question is where will the money come from to pay for it?

In the best case scenario, you would be able to save for your big purchase and then pay cash for it. However, big purchases usually pop up before you’re 100 percent ready. In that case, you still have a few options for payments.

The first option is to put your new purchase on a credit card. This isn’t a terrible option, but we don’t recommend putting purchases that you don’t have the cash for on a credit card. If you do, you will have to make payments on it while paying interest, at an extremely high rate. You can get better interest rates through a business, or even personal loan.

Which leads up to the next option: loans. Securing a business loan from a financial institution is a great way to get the money for your big purchase. You should meet with several different lenders to determine which loan is going to be right for you and your business before you make a decision. If you can’t get a business loan, talk to your bank about a personal loan.

When you are factoring in the costs of your big purchase, you’ll want to make your own payment plan. Make sure your payment plan matches the lender’s required payments. With a small business, your funds often fluctuate, so make sure that you can afford your payments, even in the low months. Don’t get something out of your budget, or you will pay for it later.

Will my vendor be there for me after the purchase?

When you’re making a big purchase, you’re probably going to meet a lot of vendors who are determined to sell you his or her products. They may schmooze you now in order to make the sale, but what is their goal long-term? Big purchases usually are something you’re going to be using on a daily basis. You want a vendor who is going to be there for you when you’re using the product, not just for the sale of it.

You should also consider the following things when choosing a vendor:

Best Price (obviously)
Customer Service and Support
High-Quality Products
Delivery Times (Can they get the product to you by the time you’ll need it?)
Can they help you recycle or get rid of the equipment your big purchase is replacing?

A vendor can make or break a purchase, and even your relationship with a company. Make sure your vendor will look out for you and will do everything they can to help you.

What costs are hiding in this big purchase?

The dollar amount listed on a website, or what a salesperson is telling you, isn’t always an accurate representation of how much an item is going to cost you. With bigger business purchases, there are a lot of hidden costs. These costs aren’t always up front either. They can come into play down the road.

Some costs you should consider at the time of purchase are:

Shipping and Delivery
Installation
Taxes
Training Classes

All of these things could increase the cost of your big purchase, so make sure that you can fit them into your budget. If you can’t, then you’ll either need to find a new vendor or negotiate the costs down.

One of the biggest mistakes small business owners make when they are making a big purchase is not budgeting for routine (or surprise) maintenance costs. This is where your purchase can end up costing you a lot more. Talk to your vendor about what they handle maintenance. Will you be responsible for all the costs? Is there a warranty on your item?

The more you know up front the better decision you can make and with a big purchase, you can never to be too informed.

Frequently Asked Questions

1. How will this big purchase fulfill the needs of my small business?

Ensure the purchase adds value by evaluating its ability to generate profit and its longevity. Assess whether it justifies the investment of time, energy, and money.

2. How will I pay for this item?

Consider saving or explore financing options like business loans or credit cards. Craft a payment plan aligned with your budget and revenue fluctuations.

3. Will my vendor be there for me after the purchase?

Prioritize vendors offering competitive prices, excellent customer service, quality products, prompt delivery, and ongoing support post-purchase.

4. What costs are hiding in this big purchase?

Consider hidden expenses like shipping, installation, taxes, and training. Budget for routine or unexpected maintenance costs and inquire about warranties or vendor maintenance.

5. How should I choose between vendors?

Evaluate vendors based on pricing, reliability, customer service, product quality, delivery timelines, and their commitment to assisting with equipment disposal or recycling.

5 Most Commonly Overlooked Business Tax Deductions

At Vyde, we have a lot of experience with business taxes. Ben Sutton, one of Vyde’s founders and a Certified Public Accountant (CPA), recently hosted a webinar on the most commonly missed business tax deductions. Ben’s experience as a CPA has helped him learn what business tax deductions business owners are missing out on. In the webinar, Ben discusses what business tax deductions are the most lucrative for small businesses. You can watch the webinar below.

Business Tax Deduction 1: Set up a Business Entity Structure

Entity structuring can be confusing and overly complicated. At Vyde, we found that setting up your business as an S Corp can be the most tax-efficient because S Corps usually pay the least amount of taxes.

We always check with our clients to see if they qualify to structure their business as an S Corp. If you structure your business as an S Corp, you, the business owner, have to be on the payroll and you have to pay yourself a reasonable salary .S Corps don’t have double taxation like C Cops do, so the only thing that is taxed is the salaries the shareholders take. So, as the business owner, you only pay social security and Medicare taxes on the salary you take out. Other business entities require you to pay taxes on your total profits and on any salary you take.

Changing your business entity to an S Corp can result in $5,000-10,000 in tax savings.

Business Tax Deduction 2: Automobile Expenses

If you are using your personal car for your business, then you should be taking business tax deductions! Automobile tax deductions are especially helpful for realtors and insurance agents because those professions require a lot of driving. There are two ways you can get automobile tax deductions.

Mileage: The IRS offers a standard mileage deduction for business owners. The mileage deduction is based on the number of miles driven for business, but the cash value of the deduction changes from year to year. A lot of people overlook or forget about mileage deductions because it isn’t tracked on a monthly basis, like other bookkeeping tasks. Instead, mileage is reported at the end of the year. However, you should always be keeping track of your mileage so you can take the deduction. You can learn more about mileage deductions in our post, What Are My Mileage Deduction Options?
Actual Costs: Instead of taking the standard mileage deduction, you can add up all the expenses included in using your car for business and deduct those on your taxes. The actual costs include gas, insurance and repairs that you pay for throughout the year. If you lease your car, you can also deduct your lease payment. If you own your vehicle, then you should depreciate the vehicle, typically over five years. In the end, you’re getting a lot more than just gas expenses deducted. But, you must keep track of all of the expenses you want to deduct, which can be a lot of work.

The auto deduction can save you $3,000-8,000 in business tax deductions.

Business Tax Deduction 3: Retirement Plans

We’re going to focus on the SEP-IRA. While a SEP-IRA is very inexpensive to set up, you will want to meet with a financial advisor to cover your bases.

Your business is the contributor to the SEP-IRA. Companies can contribute 25% of the employee’s compensation or up to $54,000 a year. The only catch is that the company has to contribute the same rate for all employees.

If you set up your business as a S Corp, then a SEP-IRA is a great option. Because you are an employee with a salary, you can have the business contribute to your IRA. You can still set up a SEP-IRA even if you don’t have an S Corp. LLCs and Sole Proprietors can have SEP-IRAs, the requirements are just different.

All of the money you put in your SEP-IRA counts as a business tax deduction, so the savings depend on your contributions. However, you will have to pay taxes on that money when you pull it out of your retirement account.

Business Tax Deduction 4: Self Employed Health Insurance

For non-business owners, health insurance costs and medical expenses are only deductible when you do an itemized deduction. The problem with that is, in order to deduct any insurance or medical expenses, the total you spent must exceed ten percent of your adjusted gross income. Which makes it hard to qualify for.

However, if you are self-employed you can deduct 100% of your insurance costs and medical expenses on your taxes, without itemizing. This isn’t a business tax deduction, it’s a personal tax deduction that only applies to business owners. There isn’t a threshold you have to meet for this deduction like there is for non-business owners. This only applies to people who purchase insurance. If you use a health share ministry, which is exempt from the marketplace fines, then you can’t deduct it because they aren’t considered premiums.

Business Tax Deduction 5: Previously Personal Expenses

When you own a business, you use a lot of personal items for your business. Normally you wouldn’t get a tax deduction for personal expenses, but because you own a business, and use these items for your business, they are now deductible, The following items all qualify as previously personal expenses:

Cellphones
Computers and equipment
Office expenses
Home Office
Supplies

These expenses won’t get you a huge deduction, but all together they can add up to a few thousand dollars each year. While the savings are still moderate, it’s still well worth the time to count them.

Bonus: Plan Ahead to Pay Taxes

While no one enjoys paying taxes, but it’s a simple fact that if you make money, you must pay taxes. There isn’t a way around it. If you are doing your best to take advantage of all the business tax deductions you can, then you need to have a plan for saving money to pay your taxes.

Six to eight months before you file your taxes, meet with an accountant to determine what you’re going to owe in taxes. At Vyde, we like to schedule a tax discussion call with our clients. We look at how much money you’ve made and what you plan to make for the rest of the year. Then we look at what tax deductions you’re going to take advantage of. Once we know all of this, we can determine how much you’re going to owe in taxes.

A tax discussion is also helpful so that you aren’t surprised when tax season rolls around and all of a sudden you owe the IRS a big chunk of money. Instead, you can put money aside throughout the year so that you’ll have plenty of money to pay the tax man.

FAQs About Business Tax Deductions

What is the most tax-efficient business structure for small business owners?
- The most tax-efficient business structure for many small business owners is an S Corporation (S Corp). This structure helps reduce taxes because it avoids double taxation, unlike a C Corporation. As an S Corp, the business owner only pays taxes on the salary they take, not on the entire business profits. This can result in significant tax savings, ranging from $5,000 to $10,000. However, you must ensure you qualify for an S Corp and meet requirements, like paying yourself a reasonable salary.
Can I deduct my automobile expenses if I use my personal vehicle for business?
- Yes, if you use your personal car for business purposes, you can deduct automobile expenses. There are two main ways to do this:
  - Mileage deduction: The IRS offers a standard mileage rate for business driving, which changes yearly. It’s important to track your business miles accurately.
  - Actual expenses: Alternatively, you can deduct the actual costs associated with your car, including gas, insurance, repairs, and lease payments. Keep detailed records of all related expenses for this method.
How does a SEP-IRA work as a business tax deduction?
- A SEP-IRA is a retirement plan that allows businesses to contribute up to 25% of an employee’s compensation or $54,000 (whichever is lower). For business owners with an S Corp, the business can contribute to their own SEP-IRA, and the contributions are tax-deductible. The money in the SEP-IRA grows tax-deferred, but taxes will be due when the funds are withdrawn in retirement. You can also set up a SEP-IRA if your business is structured as an LLC or Sole Proprietorship, though the contribution rules may differ.
Can self-employed individuals deduct their health insurance premiums?
- Yes, self-employed individuals can deduct 100% of their health insurance premiums, including medical expenses, from their taxes. Unlike for regular employees, there is no requirement to itemize these deductions or meet a minimum threshold. This deduction applies only to business owners who purchase health insurance; however, it does not apply if you use a health share ministry, as these are not considered insurance premiums by the IRS.
What are “previously personal” expenses that can now be deducted as business expenses?
- As a business owner, you can deduct costs for items that were previously personal but are now used for business purposes. Common examples include:
  - Cellphones and computers
  - Office supplies and equipment
  - Home office expenses
    These deductions may not be large individually, but together they can add up to significant savings, potentially a few thousand dollars per year. It’s important to keep track of these expenses and ensure they are used for business-related activities.

Vyde is a licensed accounting firm (CPA) based in Provo, Utah, and members of the AICPA. We provide professional accounting services to businesses and individuals, with a focus on small business bookkeeping and taxes.