Business Accounting - Vyde

What should I do if I owe the IRS money?

Nothing is certain except death and taxes, or at least that’s how the saying goes. But it’s the uncertainty of how much is owed, and what to do if you don’t have enough to pay, that seems to bring a lot of worry and questions when it comes tax time. Today, we wanted to shed a little light on the question, “What should I do if I owe the IRS money?”.

The Do’s and Don’ts of Owing the IRS Money

The Don’ts

panic, be afraid, or delay filing
decide to put it off
don’t try to solve the problem alone – ask for help or additional information

The Do’s

file a tax return on time to avoid additional penalties and interest
pay what you can by tax day
check into payment options or talk to a certified accountant

Creating Your Strategy for Tax Payment

It’s fairly clear that you shouldn’t panic, but we understand that it’s easier said than done. So lets get to building you a strategy filled with action items so you can pick the best route for you and your small business in working with the IRS and getting them the money you owe. You’ll want to submit your paperwork for your taxes and pay what you can so you can decrease the overall interest and the penalty charges.

If you can’t meet the filing deadline, then request an extension to file. This doesn’t mean you’ll get an extension to pay, taxes are still due on the original date, but it will provide you with lesser penalties for late filing. Remember, the best thing you can do is get your finances in order, file your tax returns, and then get ready to work on what comes next – figuring out how to pay what you owe while keeping the penalties and interest owed to a minimum. Now lets talk payment options.

IRS Payment Options

What you might not know is that the IRS actually provides quite a few options for making payments, even when you’re late or can’t pay the full amount. There are 3 basic payment options. Each payment option is linked directly to the IRS pages outlining the details and forms you’ll need to submit, but you’ll want to read on to find the one that fits your circumstances best.

Online Payment Agreement

There are a few different options for online payment plans, so you’ll have to apply for this option and make sure you’ve met the standard requirements. For businesses, the IRS provides long-term payment plans (you’ll pay in installments). Here’s what you’ll need to do to qualify:

you’ve filed all required returns
owe less than $25,000 in combined tax, penalties, and interest.

If you’re a sole-proprietor or independent contractor you’ll apply for your payment plan as an Individual.

Keep in mind that a payment plan comes with some strings. There are fees that will be added to your tax bill for this option and are outlined upon approval.

Offer in Compromise

Offers in Compromise provide you with the chance to settle your tax set for less than the full amount you owe. Each application is considered on it’s unique circumstances which include: your ability to pay, income, expenses, and asset equity. Most applications are approved when the offered amount represents the most the IRS can expect to collect within a reasonable period. You’ll have a variety of forms you’ll need to submit and you’ll find those and be able to read all the fine print on this option here.

Temporarily Delay Collection

Temporarily Delay Collection means the IRS has determined that you’re unable to pay any of your tax debt. It DOES NOT mean that you’re debt free, rather that you’re collection has been put on hold until your financial situation improves. This option DOES NOT delay interest on the amount you owe, but adds the penalty fees and additional interest to your total owed. The IRS also has the right to file a Notice of Federal Tax Liens to protect their interest in your assets, so you’ll want to consider how this option will effect your abilities to run and grow your business before you take it.

When to Look for Accounting & Tax Help

The last thing you want to do is dive into making decisions without having all the information you need. Taxes are tricky – there are a lot of specifics and we totally get that dotting and crossing financial i’s and t’s might not be your thing. Racking up debt or having a stack of bills isn’t something you want to do either. So when do you take on a professional bookkeeper for your business or hire a certified accountant to file your taxes?

Seek out a professional accountant and see if they provide consultation services. All you might need is to sit down with an accountant once or twice a year. They know the ins and outs of tax codes, and can help you with a long-term financial strategy, both to get you out of debt, and also in working to pay off any overdue taxes to the IRS. Make sure to keep a list of questions that you have regarding your finances and taxes so you’re money is well spent.

Have additional questions or want to look into working with us? We’d love to talk with you – contact us here.

FAQs about Owing the IRS Money:

What should I do if I owe the IRS money?
Act promptly. File your tax return on time to avoid penalties and interest. Pay what you can by tax day. Seek professional advice if needed.
Can I delay filing my taxes if I can’t pay?
You can request an extension to file, but taxes are still due on the original date. However, this can reduce penalties for late filing.
What payment options does the IRS offer?
The IRS provides online payment agreements, offers in compromise, and temporary delay collections. Each has its own eligibility criteria and implications.
How do online payment agreements work?
If you owe less than $25,000 in combined tax, penalties, and interest, you may qualify for a long-term payment plan. Fees apply, and all required returns must be filed.
When should I seek accounting and tax help?
- Consider consulting a professional accountant if you’re uncertain about tax matters or need help with financial planning. They can provide valuable guidance and ensure compliance with tax codes.

5 Bookkeeping Tips & Strategies for Freelancers and Small Business Owners

Whether you have a steady nine to five or you’re a full-time entrepreneur managing your finances requires a lot of diligence. As a freelancer or small business owner you often are wearing many hats as you work on marketing, production, managing inventory, scheduling appointments and so on. Keeping the books may be on your ever-growing to do list, but it’s easy to push it to tomorrow, especially when you’re busy running the day to day stuff.

But putting your finances first can create a lot of freedom, not to mention help you grow your small business quickly. Who doesn’t want more time to network with clients, work to accomplish goals, or have enough extra cash to expand? We’re sure you’re nodding your head in agreement. So how do you as a freelancer, make your money work for you, instead of the other way around?

We’ve got a few strategies that might help you work bookkeeping into your normal routine. Plus we’ve proven that even just one or two will help grow your bottom-line and make your small business flourish.

Bookkeeping Strategies

Make a Plan – A dream is going to stay a dream, unless you make a plan. Taking even a few minutes to jot down a few goals and plan out your fiscal year can make all the difference when it comes to managing your money. It doesn’t really matter how you divide up your goals, but keep in mind that no one can do anything at once. As accountants and small business owners ourselves, we like breaking the year in to quarters. Sit down with a calendar and assign goals and tasks to each business quarter. You’ll want to dream big enough to make you stretch a bit, but plan well enough that executing the particulars is doable.

Tip: When you’re setting financial goals, play it smart. Ask yourself 2 questions.

How much money does will it take to run a sustainable business? (This means that you’ll need to take into consideration the cost of running your business, as well as what amount you’ll need to live on and meet your other financial obligations.)
How much money would I like to make? (This is the question where you put your dreams in the mix – make sure that you’re picking number that makes you stretch but that is still realistic.)

Then you’ll want to take those numbers and break them down. How much would you need to make each month? Each week? Each day? to reach your answers to questions 1 & 2. From here you’ll start looking at how to earn those amounts and go from there.

Make it a Date – We’ve found that we’re more consistent in sitting down with the books when we make it a date. Make it a point to sit down with your books regularly. Schedule it in your phone, in your work calendar, or even take a day off where you spend just a few of the hours working on your books with no interruptions. If you already do that, sit down and make a short list of financial matters you don’t seem to get around to – then plan to knock one out at the end of your bookkeeping sessions until you’ve completed the list.

Tip: Not everyone thinks working with numbers is fun. So take the idea of “date” literally. Make the hours you spend working on books fun by eating your favorite food, listening to music, or even meeting up with a business partner or another entrepreneur and working on the books at the same time.

Keep it Simple – We see it happen all the time. Just like New Year’s Resolutions people start off hardcore and get burned out quickly because it’s too cumbersome, detailed or just not their thing. Don’t plan to implement a complicated bookkeeping software if you’re a bookkeeping newbie or are barely keeping track of things with paper and pencil. Simple spreadsheets can get the job done and often cost far less (or are free) than the best software out there.

Tip: Look for other ways to simplify. Consider consolidating accounts, or putting all your spreadsheets together but separated by tabs, use automated bill pay if you can, and separate business and personal finances to avoid the headache of having to sort it out every month.

Put Money Aside for Taxes – The idea “a little becomes a lot” holds true when it comes to taxes. Nothing is more painful than having to cut a large check not to mention how stressful it can be the you know taxes are coming but you have no idea how much they’ll be or if you’ll have enough to cover them come tax time. Decide right now that you’ll set aside money for taxes every time you do your books. That way you’ll be ready and have at least a good chunk of cash ready when it comes time to pay.

Tip:

Quarterly taxes are something you can expect to happen 4 times a year. Include the dates. Because you’re a freelancer you’ll need to withhold your own taxes rather than rely on a W-2.

Pay yourself first – it seems like you should put the money where the need is and then pay yourself out of whatever’s left. But when you run your own business, it’s even more important to pay yourself first so you ca put money aside for savings. Any easy way to make sure this happens first thing is to set up an automatic transfer – you’ll hardly notice it and little by little it grow.

Tip: Sometimes as a freelancer income varies quite a bit month to month, so the idea of setting up an automatic transfer for a set amount can be iffy. If that’s the case, decide right now on a percentage that you can pull out of every paycheck that you’ll set aside for your own wages.

Now which strategy will you implement first in your bookkeeping approach? Have additional questions, we’d love to talk with you. Contact us here.

Top 10 Business & Accounting Posts for Realtors, Brokers & Property Managers

We’ve pulled together the Top 10 business and accounting posts for realtors, brokers and property mangers and complied them all in one place. Here at Vyde, we get that work keeps you busy – you’re in the industry of helping families, couples, and individuals make a fresh start with a new home. That said, there’s a lot going on behind the scenes as well – phone calls, setting up appointments, researching listings, and making new contacts – and that leaves little time to focus on bookkeeping or financial strategy.

These posts are filled with the expert advice we share with our clients who work in your industry. Our clients have implemented new ideas and put in processes and we’ve enjoyed hearing about the successes that come from having a strong bookkeeping and financial strategy for their business. So grab a pen and paper and take a minute to read through the posts that interest you most. We’d also love to hear your thoughts and successes in the comments below.

Top 10 Business & Accounting Posts for the Real Estate Industry

Have more questions about bookkeeping and taxes when it comes to your real estate business? We’d love to chat. You can contact us here.

A Complete Guide to Preparing your Businesses Taxes – Free Downloadable Checklist

There’s so much to do when it comes to running your small business. Hunting up paperwork, although important, isn’t probably at the top of your to do list – except at tax time. Make preparing for this year’s business tax filing a breeze by using our hand checklist. It includes all the items you’ll need to have on hand or provide to your accountant so they can file your taxes and you can get back to running your business.

General Information

A copy of your last filed tax return
If this is your first year filing a tax return for the business, we will need the following information for each owner:
- Full name
- SSN or EIN
- Address
- Phone Number
- Ownership percentages
Info about ownership changes occurring during the year

Documentation

December bank and credit card statements
All 1099s received
Merchant account annual summaries (Amazon, PayPal, Stripe, etc.)
Statements for outstanding loans (car loans, business loans, loans from owners, etc.) including the balance due at 12/31/2017
Information on large assets purchase, if not already provided (purchase price, amount financed, date purchased)

Common Business Deductions Not in Bookkeeping

The following items most likely will not show up in your monthly bookkeeping reports, so we would ask you to provide the information at year end if you haven’t already:

Business miles driven
Business use of home expenses

Tip: Spend just a few minutes each day gathering the items listed in each section – General Information, Income Items, and Deduction Items. Store all your papers in a manila folder and keep it handy so that if you run across items you can slip them in and then sort later. Also keep a stack of sticky notes or a pad of paper and pen handy so you can to down questions for your accountant as you think of them. Print off the downloadable checklist below and paperclip it to the front of your folder – check off the items as you find them, so you can see your progress.

Download the 2017 Business Taxes Checklist Here

Looking for some help on preparing your personal taxes for filing? We’ve got a handy checklist for that too – you can find it here.

A Complete Guide to Preparing your Personal Taxes – Free Downloadable Checklist

For an accountant and the early bird, January signals the start of tax season. We’re busy prepping our client’s books and hoping their doing the same. But not everyone loves tax season like we do; in fact, we know many people dread it. There’s all that paper work to find and put in one place. And don’t forget any receipts or paper work documenting applicable deductions. And it does seem that without fail your accountant will end up calling you to ask questions regarding your paperwork causing you to hunt up additional info and/or wrack your brain to remember the details of a purchase, expense, or contribution.

To keep everyone from having to spend a lot of extra time, we’ve put together a complete guide to preparing your personal taxes. If you follow this list, you’ll have a fairly comprehensive stack of paperwork that will streamline filing your taxes and hopefully help you avoid those phone calls form your accountant. Here’s what you’ll need to provide your CPA or gather together before you file your taxes for 2017:

General Information

Full names and relationship of all family members
Social security numbers for all family members
Birth dates for all family members
Filing Status – Married, Single, Head of Household, etc.
Full address
Estimated Payment Information (Dates and amounts of each payment) if applicable

Income Items (as applicable)

W2s received
1099s, 1098s, 1095s received (interest, dividends, capital gains, IRA withdrawals, etc.)
K1s received
Unemployment benefit statements
Social security benefit statements
Alimony
Rental property income documentation
Other Business income
Tax refunds from the State
Documentation related to any other income received

Deduction Items (as applicable, make sure to note questions you have and ask your CPA)

Health insurance status (were you covered all year?)
Changes in dependents
IRA/Retirement Contributions
Mortgage interest
Charitable contributions (cash, miles drive, other donations, etc.)
Medical expenses (including health insurance premiums)
Real estate and other taxes
Unreimbursed employee expenses (personal expenses paid for business, job search costs, uniforms, etc.)
Child and dependent care expenses
Questions about any other deductions

Download the 2017 Personal Taxes Checklist Here

Looking for some help on preparing your business taxes for filing? We’ve got a handy checklist for that too – you can find it here.

The 10 Most Popular Business & Accounting Posts of 2017

Year-end is a great time to do a lot of things. As accountants, wed recommend tying up loose ends in your business, working on closing your books, and gathering essential paperwork to make filing taxes a breeze. But the new year is also a great time to focus on things that went right in your business. It’s also a great time to look around and decide what things you might want to work on or learn more about.

We’ve gathered quite a bit of knowledge as we’ve worked with our clients. Some of the most frequently asked questions have stemmed from their desires to grow their business and go far beyond just the bookkeeping and financial aspects. We’ve learned right along with them in those areas (marketing, management, building community, etc), and given our best advice when it came to accounting matters and how to manage and track the dollars and cents.

After taking a look at our stats, we’ve pulled together the 10 most popular business & accounting posts for 2017. You’ll find they cover a lot of accounting but also a few great topics that seem to be on the minds of many small business owners. We hope you’ll find some key pieces of information that might help you as you plan your strategy for the new year ahead.

General Top 10 Posts

Saving on Taxes – Last Minute Questions to Ask Your CPA

Everyone wants to save on taxes. Everyone. But who really has time to figure out all the details when it comes to taxes and bookkeeping for small businesses? We’ve taken some of the questions we hear the most from small business owners and those just starting out in entrepreneurship and answered them. They’re the same answers we give to our paying clients – it’s our best advice and it’s helped dozens of small businesses be successful when it comes to saving on taxes time and again. So grab a pen and something to write with – we hope you’ll find a few good ideas to apply to your own business.

Want to catch a sneak peek of what’s included in the webinar? Scroll down to find the questions we cover and when to start watching. You’ll be able to find the things you’re most interested about and have an idea of other things we cover so you can come back and watch on those later.

What’s an EIN and do I need it?

(start watching at 1:14)

What’s the best way to figure out how much I should set aside for taxes?

(start watching at 2:35)

Should I pay my taxes quarterly or just once a year?

(start watching at 5:47)

I only pay taxes on the money that I take out of the business, right?

(start watching at 9:40)

Is medical insurance premium tax exempt for joint filing?

(start watching at 11:12)

Is there anything I can do before the end of the year that will help me save on taxes?

(start watching at 15:19)

What is a SEP IRA?

(start watching at 18:52)

If it passes, will the proposed tax bill effect my 2017 taxes?

(start watching at 22:57)

How do I know how long it should take for me to break-even, or be out of the red, as I start my business?

(start watching at 24:53)

Do you have a question regarding your personal or small business taxes we didn’t answer? We’d love to talk taxes or bookkeeping with you. You can get connected with us here.

The Ultimate Guide to Business Holiday Gift Giving

With the holidays upon us, it’s the perfect time to make your list and check it twice when it comes to gift giving. We’re sure you’ve got it covered for family and friends, but have you thought about employees, clients, and co-workers? There are a ton of questions, dos and don’ts, and even great ideas on how the gifts you give can potentially provide you with a tax deduction. That said, you’re busy with the holiday bustle and don’t have time to call your accountant, figure out gift giving rules outlined by the IRS, or even create a strategy for your business holiday giving.

We’ve talked about it in year’s past, and this year we’ve pulled it together so you have an easy reference point. Figure out what to give, to whom, and how much to spend (and what that means in possible tax deductions). Plus, have a strategy for sending, giving and review the dos and don’ts of business holiday gift giving – to make your gift the most meaningful and this holiday season the least stressful.

Want to know what gifts are tax deductible?

Vyde’s Business Holiday Gift Giving Guide: Part 1

Want to figure out what to give and who to give it to?

Vyde’s Business Holiday Gift Giving Guide: Part 2

Need to know the do’s and don’ts of of client gift giving?

Vyde’s Business Holiday Gift Giving Guide: Part 3

Need ideas broken down by budget? We’ve listed our top gift ideas by price range.

Vyde’s Updated Holiday Gift Giving Guide for Small Businesses and Entrepreneurs

Want to know more about giving year-end employee bonuses?

Small Business Owner’s Guide to Year-End Employee Bonuses & Holiday Gifts: Part 1

Want other ideas for employee gifts if bonuses don’t fit this year’s budget?

Small Business Owner’s Guide to Year-End Employee Bonuses & Holiday Gifts: Part 2

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.

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.

Resources

Category: Business Accounting

The Do’s and Don’ts of Owing the IRS Money

Creating Your Strategy for Tax Payment

IRS Payment Options

When to Look for Accounting & Tax Help

Bookkeeping Strategies

Top 10 Business & Accounting Posts for the Real Estate Industry

General Information

Documentation

Common Business Deductions Not in Bookkeeping

General Information

Income Items (as applicable)

Deduction Items (as applicable, make sure to note questions you have and ask your CPA)

What’s an EIN and do I need it?

What’s the best way to figure out how much I should set aside for taxes?

Should I pay my taxes quarterly or just once a year?

I only pay taxes on the money that I take out of the business, right?

Is medical insurance premium tax exempt for joint filing?

Is there anything I can do before the end of the year that will help me save on taxes?

What is a SEP IRA?

If it passes, will the proposed tax bill effect my 2017 taxes?

How do I know how long it should take for me to break-even, or be out of the red, as I start my business?

Year-End Contribution #1: Charitable Donations

Year-End Contribution #2: Health Savings Account

Year-End Contribution #3: Retirement Savings

FAQs for Year-End Tax Prep and Contributions

Unclassified transactions / Miscellaneous transactions

Loans

Equity

Health Insurance

FAQs for Year-End Tax Tips for Small Business: