Category - Accounting

Taxes and Paypal – The top 4 things you need to know about using Paypal to collect funds

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Online shopping increases in popularity each year, these days you can not only buy online from big corporations, but you can just as easily use companies like Paypal to send money to friends and family members. Some people believe that we are moving toward becoming a completely cashless society. That said, how much do you really know about your paypal account?

PayPal operates like a bank

While Paypal isn’t technically a bank, it is the leader in online banking and it can be an excellent resource for small businesses. All of the money paid to you through Paypal (or other similar sites) should be treated the way you do all of your other accounts. Make sure that you are sharing your Paypal information with your accountant or bookkeeper so that he or she can be sure it is accurately reflected in your books.

Paypal offers debit cards

Since so many small businesses use paypal to invoice their customers, it makes sense for many people to leave their money in the paypal account instead of transferring it out to a traditional bank. For this reason, Paypal began offering debit cards to their customers so you can spend money directly from your Paypal account. While this seems like a great benefit, be aware that online banking sites like Paypal are not regulated like traditional banks. Which brings us to the next point…

Paypal is not FDIC insured

While paypal acts as a bank, unlike traditional banks, Paypal is not FDIC insured. This means that in the case of bank failure the government has not insured the company and therefore they will not be able to assure the safety of your money. This may not be a problem if you use Paypal simply as a way to receive money, but if you use it as a bank to store your money you should be aware of the inherent risks.

Paypal may report your income to the IRS

When using paypal to run your business, remember that the site will report to the IRS your yearly earnings if they are more than $20,000 or if you exceed 200 individual payments. Make sure that your bookkeeper is aware of every transaction you’re making with your Paypal account so it can be included in your tax return.
These days there are so many great resources for people who are starting small business. Whether you use Paypal or another online banking service, make sure you are well aware of the way the company functions and the risks their services might pose to you financially. If you have any questions about this product feel free to contact us for a free consultation.

Top 3 reasons to have a monthly bookkeeping service for your business

Top 3 reasons to hire a monthly bookkeeping service for your business

At the core of every successful business is money. Whether you’re a hair stylist or a home builder, keeping your books up to date and accurate will make the difference between success or failure in your market. Often small business owners are tempted to keep bookkeeping and accounting within their companies to save money and protect their interests. Unfortunately, even the most loyal team member may lack the accounting and bookkeeping expertise that your company needs to grow and become more and more profitable each year. Here are three of the top reasons to hire a monthly bookkeeping service for your business.

Free up your staff

Chances are you did not start your business so you could manage numbers all day long! You’re an artist, or a chef, or a home builder, and you started your business because you’re passionate about your work. Hiring a bookkeeping service allows you and your staff to focus more on what you do best, and leave the rest to a bookkeeping expert. Fix-It Accounting’s Quickbooks Proadvisors are ready to provide you with high-quality service scaled to meet your specific needs.

 

Expertise when you need it

When companies use online softwares to avoid the added expense of a bookkeeping service, they cut themselves short in the area of expertise. In addition to managing your monthly books, our highly trained and experienced bookkeepers can help you avoid complicated tax issues by keeping a trained eye on every transaction. Paying just the right amount of taxes will save you time and money, and you don’t want to pass this responsibility on to someone who is not experienced.

Additionally, if you do find yourself being audited by the IRS you will absolutely want to have the backing of an expert bookkeeping service that is prepared to support you with well-managed and professional records. Hiring a bookkeeping team is as much about preparing for the future as it is about getting your books done today.

Keeping up with the work

Our bookkeeping clients receive clear and organized documentation on a monthly basis so there is never a lag in your record keeping. Depending on your current staff to manage the books in addition to their other roles in your company can create a lag time and cause unnecessary added stress for your team. As the old adage states, you have to spend money to make money, and investing in a bookkeeping service is a great way to build up your business.

Before choosing a bookkeeping service, research their current clients and reviews. You want to be sure that you choose a service that has a history of providing great service to their clients and is familiar with and confident in working with businesses like yours. If you’re a small business owner, it’s smart to hire a bookkeeping service that understands you services and can provide you with the exact service that you need.

As the leader of your company we know finances are always on the top of your mind. From the big picture trends to day-to-day bookkeeping and accounting, outsourcing this critical part of your company to a trusted, professional bookkeeping service will give you peace of mind and ensure that you’re getting a professional and consistent service every time.

At Fix-It Accounting, we are a locally-owned small business just like you. We understand exactly how complicated it can be to balance all of the different aspects of your business. We pride ourselves in providing our customers with excellent service, an impeccable product, and the peace of mind in knowing that your business is in good hands. Contact us for a free consultation.

 

Tax Lingo – What does Offer in Compromise mean? And other tax terms you need to know.

What does Offer in compromise meanTax Lingo 101 – What do these tax terms mean?

We hear it all the time, “it’s like accountants are speaking a different language.”  Or, you received a notice from the IRS that’s only provided more questions than answers. As always, we’re here to help you out.

Here is a handy little glossary list of tax terms for you to reference. We’ve selected some terms our clients often ask about. If there are other terms you’d like to learn more about please let us know in the comments below.

Amortization

Amortization is the paying off of debt with a fixed repayment schedule in regular installments over a period of time for example with a mortgage or a car loan. It also refers to the spreading out of capital expenses for intangible assets over a specific period of time (usually over the asset’s useful life) for accounting and tax purposes.

Bookkeeping

Bookkeeping is the recording of the financial transactions and information pertaining to a business. It ensures that records of the individual financial transactions are correct, up-to-date and comprehensive. Accuracy is therefore vital to the process.

Bookkeeping provides the information from which financial statements are prepared. It is a distinct process, that occurs within the broader scope of accounting.

A consultation is a meeting with a professional or expert for purposes of gaining information. Fix-It Accounting offers free initial consultations for bookkeeping services.

Depreciation

Depreciation is an accounting method of allocating the cost of a tangible asset over its useful life. Businesses depreciate long-term assets for both tax and accounting purposes. For tax purposes, businesses can deduct the cost of the tangible assets they purchase as business expenses; however, businesses must depreciate these assets in accordance with IRS rules about how and when the deduction may be taken.

IRS Payment Arrangement

Same as IRS Installment Agreement. Read more about IRS Payment Arrangements on our blog.

IRS Installment Agreement

If you’re financially unable to pay your tax debt immediately, you can make monthly payments through an installment agreement. Learn more about IRS Solutions.

IRS Levy

A levy is a legal seizure of your property to satisfy a tax debt. Levies are different from liens. A lien is a legal claim against property to secure payment of the tax debt, while a levy actually takes the property to satisfy the tax debt.

IRS Lien

A federal tax lien is the government’s legal claim against your property when you neglect or fail to pay a tax debt. The lien protects the government’s interest in all your property, including real estate, personal property and financial assets. If you have an IRS Lien consult with a professional to have it resolved and oftentimes the amount owed may be reduced.

Offer in Compromise

An offer in compromise is one of the programs offered by the Internal Revenue Service to allow someone to satisfy the tax liability owed by paying less than the full balance.

An offer in compromise is not made available to every taxpayer, as the Internal Revenue Service has strict guidelines it follows to determine who may make use of this benefit. These guidelines include the taxpayer’s ability to pay, income, expenses, and assets in determining if payment of the full tax liability owed would create an undue financial hardship for the taxpayer. Read more about the Offer in Compromise process in our blog post.

Trust Fund Penalties

If you are a person responsible for withholding, accounting for, or depositing or paying specified taxes including withholding and employment taxes, and willfully fail to do so, you can be held personally liable for a penalty equal to the full amount of the unpaid trust fund tax, plus interest. A responsible person for this purpose can be an officer of a corporation, a partner, a sole proprietor, a volunteer in a non-profit or an employee of any form of business. A trustee or agent with authority over the funds of the business can also be held responsible for the penalty.

Penalty Abatement

Abatement is a reduction in the penalties. Learn more about penalty abatement in our blog post.

Lien Release

A recordable document showing that a lender, judgment creditor, the IRS, or other secured creditor no longer claims a lien upon real property.

Lien Withdrawal

An IRS tax lien is the government’s legal right to your property when you owe taxes. A Tax Lien Withdrawal removes the public tax lien record, and helps assure other creditors that the IRS will not compete for your property and other assets.

NEW Tax Relief after Hurricane Matthew

tax-releifOn October 8, 2016, President Obama declared a “Major Disaster” for certain counties in Florida and Georgia. If you live in the affected areas (there’s a list below), you may be eligible for extended due dates for filing and paying your tax. This means that you can take a breath and focus on the cleanup behind Hurricane Matthew instead of the looming due date of October 17 for individual income tax returns on extension. NORTH CAROLINA JUST ADDED (UPDATE 10/13)

I’ve already seen firsthand how such a declaration impacts taxpayers…

A client dropped by my office this morning on our first post hurricane workday. We had just gotten our electricity and internet service restored, computers and printers up and running and opened the door.  She was crying. She has no electricity, no hot water, no A/C, a huge mess to clean up at her property, and 4 children to deal with. But she wasn’t crying about just those issues. No, she was all stressed out over her tax return due date next Monday. I told her not to worry. That she should focus on the immediate important issues and we’ll deal with the rest later.

Tax Relief for businesses after a hurricane

There’s relief for businesses too! We don’t have the specifics yet but there will be an “Extension Period” and a “Federal Tax Deposit Penalty Waiver Period” available to all eligible taxpayers.

 Florida Counties affected:

  • Brevard
  • Duval
  • Flagler
  • Indian River
  • Nassau
  • Johns
  • Lucie
  • Volusia

Georgia Counties affected:

  • Bryan
  • Camden
  • Chatham
  • Glynn
  • Liberty
  • McIntosh

 North Carolina Counties affected:

  • Beaufort
  • Bladen
  • Columbus
  • Cumberland
  • Edgecombe
  • Hoke
  • Lenoir
  • Nash
  • Pitt
  • Robeson

 

Casualty losses – This is where you may be able to recover funds quickly!

More good news! Presidential Disaster Area declaration allows affected taxpayers the option of claiming disaster-related casualty losses on their federal income tax return for the year preceding the year of the loss. This is accomplished by filing an amended tax return and can get you a refund much sooner or provide tax savings. There are obviously conditions to be met, but this can potentially work for you.

 

Ask your tax professional about your options during this difficult time.

IRS problems?

IRS problems? We can fix it!

Are you drowning in IRS debt? Suffering the pain of tax liens? Having panic attacks and losing sleep? Don’t worry, there’s help. We can fix it!

Taxpayers call us every day wondering what we can do to help them. They think it’s just filing some tax returns or a power of attorney. Getting liens or levies released. Yes, we do those thing. Actually we do them very well. But our main line of business is offering peace of mind. Offering reassurance that everything is going to be okay. It can all be taken care of. It’s not as bad as you think.

Knowledge is empowering, so when we tell you exactly what needs to be  done to fix your problem, you immediately feel better. You might not understand what all of it means, but you do understand that we’ve got you covered! We’ve become your team members so now you’re not alone. Ahhhh, things look brighter already!

So stick with me in this blog and you’ll discover how things work with IRS resolution. But more importantly, you’ll get that warm and fuzzy feeling that you’re going to make it through.

Accounting For 1099 Contractors

Accounting For 1099 Contractors

By far the largest group of people we see with IRS problems are the 1099 Contractors. While employees have their half of the payroll tax withheld by their employer and the other half paid by their employer, contractors are completely responsible for their own payroll tax that tops 15% of their net business income. And on top of that, they have to pay ordinary income tax. And yikes, there is no employer to withhold the tax from a paycheck. This is where trouble begins!

Yes, contractors get tax write offs that employees don’t get and that sometimes makes being a contractor more appealing. But there are pitfalls! If you are a contractor, we strongly urge you to make estimated tax payments during the year to the IRS. They’re only required to be made on a quarterly basis, but we find that saving for 3 months just to pay the IRS is quite difficult for some. So we generally set our contractors up in the IRS electronic payment system known as EFTPS. It allows our clients to make payments as often as necessary to stay out of trouble!

And there’s more…contractors are responsible for record keeping and reporting of income and expenses associated with their earnings. This requires a whole new set of skills! But help is available. Here at Fix-It Accounting, we will teach you how to manage it all. We are not just your tax preparer but also your knowledgeable partner.

 

Accounting For Business Owners

Accounting For Business Owners

As a business owner, you may or may not be aware of the importance of a good accountant in your life. This recommendation (can the word “recommendation” be a link to the attached sheet?) from one of our happy clients explains it quite clearly.

When you hire Fix-It Accounting, you gain a team of professionals helping you to build your business. We take your success quite seriously! Part of our long term plan has been to develop a solid base of business clients to grow with. As you grow, we grow. As your revenues and profits increase, so do ours. We have a stake in your success. As we tell clients quite often, your goal should not be to reduce the amount you pay your accountant every year, it should be for that number to increase. If it’s going up, that means that your business volume and need for service is going up. It means that you’re moving and shaking in the right direction and hopefully enjoying the journey. For a business owner, a good accountant is worth his or her weight in gold!

Our business services can be taken on an as needed basis with maybe just annual tax return preparation or in an all-inclusive, budgetable monthly service package. No all businesses have the same needs so we can tailor your service to fit you. Here’s what’s available:

  • Business entity formation
    • Set up with the state Division of Corporations
    • Getting your EIN with the IRS
    • Sales tax application
    • Workers’ Comp Exemption Certificate
    • Bookkeeping set-up
    • Registered Agent for foreign corporations
    • Monthly or Quarterly or annual financial statement preparation
      • Data entry of all transactions
      • Reconciliation of all bank statements
      • Reconciliation of all loan and credit card statements
      • Ensuring proper classification of all income and expenses
      • Teaching you how to read your financial statements
      • If you have an in house bookkeeping department, we can just tweak their work to make sure everything is accurate and provide monthly financials.
      • Weekly, bi-weekly, bi-monthly or monthly payroll including Workers’ Comp Insurance Coverage, if necessary
      • Workers’ Comp Exemption Certificates
      • Payroll tax deposits
      • Quarterly Federal and State payroll returns
      • Annual Federal and State payroll returns
      • Annual W-2 and 1099 preparation
      • Calculation of estimated tax payments
      • Monthly or Quarterly sales tax return preparation
      • Preparation of annual Federal and State Corporation or Partnership income tax returns
      • Preparation of annual Federal and State  individual income tax returns
      • Audit protection
      • Business consulting – This is a big one! It is always helpful to have someone with experience give input on what you’re doing and where you’re going. Of course, it’s your business and you can take it or leave it but the most successful business people form a team of experienced professionals around them to help guide their progress.

Call us to day for your free consultation