About Virtual Bookkeepers USA.com
Virtual Bookkeepers USA is a full service Accounting, Bookkeeping and Tax Preparation firm dedicated to assisting the small business owner with outsourced Accounting, Bookkeeping, Business Consulting, and Human Resource needs. An efficient Business Management System is essential for every company to prosper. Mike McVay, Accountant unique Client Focused approach ensures that your business will receive the personal attention it deserves every time!
Virtual Bookkeepers USA staff has been successfully assisting small business clients with quality service for over 20 years, your business is in competent hands. Recognizing the needs of small business owners, and fulfilling them is our specialty. Virtual Bookkeepers USA offers professional bookkeeping, accounting, and business management to small, mid-size, and rapidly growing businesses.
Our profesional tax preparers will help you get the most in your 2015 tax refund.
As a business owner you can be assured that your Accounting and Bookkeeping will be completed timely and efficiently by accountants with real world experience. Let us show you how you can improve profitability with our outsourced online Bookkeeping and Accounting Services today! 850.725.5696.
It’s hard to believe that the holiday season is already upon us and the year will be coming to a close soon.
I know you would rather start preparing for the holidays, but this is a great time to make some end of season tax moves to help lower your tax bill and increase your tax refund come tax time since once the year ends so do most of your opportunities to reduce your taxes. Mike McVay has geared up for a very streamlined tax season. New offers and new technology will make for a great tax season for his clients. 850.725.5696 - www.MikeMcVay.com
Here are 10 quick and easy end of year tax tips you still have time to take advantage of:
1. Gather forms, and receipts. I know it may seem a little early but gathering receipts for tax deductible expenses and sources of income for the past year will keep you organized and ensure you don’t forget anything when you sit down to do your taxes.
2. Defer Bonuses. If your hard work paid off this year and you are expecting a year-end bonus, this extra money in your pocket may bump you up to another tax bracket and increase your tax liability. If you can hold off on seeing any extra income this year see if your boss will pay you your bonus in January. You will still receive it close to year-end, but you won’t have to pay taxes on it when you file your 2015 taxes.TurboTax TaxCaster can help you see where you stand with and without this income.
3. Accelerate Deductions, Defer Income
There are a handful of deductions that are recognized the year in which you spend them. For example, you get a mortgage interest deduction and if you make an extra mortgage payment on December 31st, you can claim that deduction on this year’s taxes. This lets you take the deduction immediately rather than wait an additional 12 months, when you do your taxes for next year.
4. Donate to charity. The holidays are a great time to get organized for the New Year and clean out clothes and household goods while giving to those in need. You can help someone in need and reap benefits of a tax deduction for non-cash and monetary donations donated to a qualified charitable organization. If you volunteer at a qualified charitable organization don’t forget that you can deduct your mileage (14 cents of every mile) driven to charitable service. TurboTax ItsDeductible will accurately value and track your yearly-donated goods. Make these donations count on your taxes by donating by December 31st. Even if you make a donation by credit card, you do not have to pay it off in 2015 to receive the tax deduction.
5. Take a class. Taking a course to advance your career is also a great way to boost your tax refund. Paying for next quarter’s tuition by December 31st may give you a valuable tax credit up to $2,000 with the Lifetime Learning Credit.
6. Maximize your retirement. Another great way to reduce your taxable income while building your nest egg is to make a contribution to your retirement savings account. Whether you contribute to a 401(k) or a Traditional IRA, you can take a dollar for dollar reduction in your income and also save for the future. The contribution limit for 401(k)s for 2015 is $18,000 ($24,000 if 50+) and for a Traditional IRA it’s $5,500 ($6,500 if 50+).
7. Spend your FSA. If you have a Flexible Spending Account and you have money left get caught up on your doctor’s visits. The old “Use it or lose it” rule may not still apply, but If you have unused money in your FSA account on December 31st, you may only be able to carry over up to $500 into your 2016 FSA or your plan may limit the amount of time to 2-1/2 months after the end of the plan year to use your funds.
8. Offset investment gains. Chances are you have a few investments in your portfolio that have gone down in value, you can recognize your losses and use them to offset investment winners. In order to take advantage of this, you will need to sell the losing investments and offset your losses against your gains recognized. If your losses exceed your gains, you can apply $3,000 of that against your regular income. Any extra will then be passed onto the next tax year.
9. Estimate your household income for Marketplace Insurance. Are you applying for a subsidy or discounted insurance in the Health Insurance Marketplace this open enrollment season? If so, you will have to project your 2016 household income and family size when you apply. Start looking into any changes that may take place in 2016 (growing your family, job promotion, heading into retirement, etc.). These changes may affect the amount of subsidy you are given to help you pay for insurance.
10. Increase Your Marketplace Premium Tax Credit. If you received assistance for Marketplace Insurance in the form of an Advanced Premium Tax Credit one smart move you can make is to lower your adjustable gross income by contributing to your retirement plan, which may increase the premium tax credit you’re eligible for at tax time. If you are purchasing new insurance in the Marketplace you can also request to take half of your assistance to help you pay for insurance up front instead of the entire amount to alleviate having to pay anything back if you experience any changes to your income.
Falling behind on payments to your suppliers is a recipe for disaster. This is likely to lead to your vendors putting you on hold or even refusing to do business with you in the future.
Without your suppliers, you don’t have a business. Again, ask yourself why you’re missing or late with vendor payments. Is it due to a lack of cash flow or an inability to properly keep track of your bills and their due dates? We can process your accounts payable cheaper than you can in-house. Call 850.725.5696 for more details. www.VirtualBookkeepersUSA.com
When your small business has employees on staff, you need to pay them and go through a complicated payroll process during every pay period. If you miss your payroll deadlines, you’ll have disgruntled employees, and that’s simply bad for business.
Examine the root cause of your missed payroll deadlines. Are you missing them because you don’t have the cash on hand to pay your staff? That’s a sign of severe cash flow issues. Are you just missing them because you’re too busy with all of your other responsibilities? That’s an indication that you should outsource your payroll to a third party.
It's nearing the end of the calendar year and most businesses have undoubtedly begun the tedious process of filing tax paperwork. Unfortunately, any Tax Identification Number (TIN) and name combination errors can lead to an exuberant amount of fines from the Internal Revenue Service:
"Internal Revenue Code (IRC) section 6721 imposes a $50 penalty for information returns for each of the following infractions related to information returns:
1) What are the Benefits of filing early?
The two major benefits of filing your taxes early are
1: You get your refund sooner
2: You can catch any mistakes
On the other hand, filing your taxes in April can cost you a little more money. Many accountants charge a “premuim” for filing so close to the due date.
Early Return Audit Speculation
Lastly, there are some who believe that the sooner you file your taxes, the more likely you are to be audited. The reason being that The IRS is expected to meet a certain quota of audits, or since there are less tax returns available for an audit your odds go up.
Neither of these theories have been proven and most in the industry would suggest filing as early as possible.
2) What receipts should I hold onto during the year?The purpose of holding onto receipts is to “write-off” or deduct those costs from your annual taxable income.
How you take your deduction is up to you:
You can either take the standard deduction, or you can itemize. (Listing out a lot of different deductions in the hopes that they add up to more than the standard deduction)
You should only save receipts for things like charitable donations if you’re itemizing. Otherwise, don’t worry about it.
Deductions Without Itemizing:
But there are some deductions you can take without itemizing. Those include:
If you freelance, you don’t need to itemize to write your business-related expenses off. All those things will be listed out on your Schedule C. You can deduct as little as $5 for coffee with a business contact.
So save your receipts for:
Most of the time, the people who are audited, are those who claim suspiciously high deductions while earning little in taxable income.
However, if you are audited, stay calm. Most audits are relatively painless and take place through the mail. To be on the safe side, it’s recommended to hold onto all documentation supporting any deductions you take.
5) What can I deduct if I’m self-employed?If you are self-employed there are several important deductions you should consider:
1. Health Insurance Premiums. If you’re self-employed, you can deduct 100% of health insurance costs as an adjustment to your income. There are restrictions if you are able to get insurance through a spouse. So ask your accountant about your particular situation.
2. Retirement Contributions. SEP and SIMPLE retirement funding plans.
3. Tools and Equipment Used for Your Business. You are allowed to deduct the cost of necessary tools for your business. (Take note that items used longer than one year are deducted differently than items used for under one year.)
4. Vehicle Expenses. If you use the standard mileage rate, you can only deduct the mileage at a standard rate. For 2013, the rate is 56.5 cents.
You can’t deduct:
Instead, you can deduct:
5. Cell Phone Expenses. You can deduct cell phone expenses from business use only.
6. Home Office. You can deduct the cost of your “office” at home as long as the office is used only for business purposes.
Mike McVay is a Pensacola Florida Accuntant serving all 50-states. Call today for a FREE consultation. www.VirtualBookkeepersUSA.com can help you navigate this years complicated tax filing. 850-725-5696
Some people may advise you to take a very liberal approach to the “business expenses” you claim as deductions, but if you’re caught claiming unqualified expenses, you’re going to be penalized.
You need to be careful with making deductions related to your car. According to the IRS, you are allowed to deduct the full cost (with some limits) of your car’s operations if your car is used for business purposes only. However, if you use your car for both business and personal use, you may only deduct the cost of its use for business.
Additionally, most business owners and employees are only entitled to deduct 50% of the cost of meals while traveling for business, entertaining customers or attending a conference. In most instances, trying to deduct more than 50% of these meals or deducting meals not related to business is a recipe for trouble. Remember to always keep your receipts for business meals and write down the business purpose of each meal and who you were with. The onus is on you to prove the legitimacy of these expenses.
Claiming a home office is tempting for small business owners who work out of their homes. However, you need to pay careful attention to IRS guidelines on home office deductions. According to the IRS, “you must regularly use part of your home exclusively for conducting business” to qualify for a home office deduction.
Before you start calculating the square footage of your home office and deducting a percentage of your rent or mortgage, think carefully. As with most IRS regulations, complexities and exceptions exist. If you’re unsure whether your business expense deductions are acceptable. For more information call Mike McVay 850.725.5696
As a small business owner, you work tirelessly every day to keep your business afloat and, hopefully, see it grow.
You seem to be making headway – attracting new customers, finding better ways to accomplish tasks and achieving revenue growth. Yet, when you sit down to examine your profits, you don’t find any.
As much as you try to keep on top of your bookkeeping, you’re unable to pinpoint what exactly is causing your cash flow problems and preventing you from turning a profit.
If this situation sounds painfully familiar, hidden costs could be the reason you’re not making more progress in growing your small business profits. Keep reading to discover three hidden costs you may not be accounting for and what actions you should take to put your small business on the right path.
Hidden Cost #1: Employee Theft When you look at your books, are your cost of goods sold numbers higher than projected? Are they higher than your industry averages?
While you might simply have a distribution problem, it’s also likely that you have a more insidious (but easily solvable) problem: shrinkage or employee theft.
When left unchecked, employee theft can devastate a small business’s cash flow and bottom line. This problem may be particularly acute for small businesses such as retail shops or restaurants.
The Solution: Keep good records and Invest in surveillance and security
As much as you may trust your employees, if your numbers just aren’t adding up, it’s important to determine if you have a shrinkage problem. Consider installing more surveillance cameras throughout your location to identify if employee theft is cutting into your profits. If you’re able to identify a thief, the long-term benefits of your investment will easily outweigh the short-term costs.
Having up-to-date records and a system in place to track inventory is critical. These records will provide you with an early indication that there may be a problem. Meeting with your accountant or bookkeeper monthly to review these records will help you to more quickly confirm a problem exists.
Hidden Cost #2: Employee Turnover Any small business advisor or accountant would advise you to never overpay for your employees’ salaries and benefits. While this is good advice, there is a significant risk of underpaying your employees: turnover.
Employee turnover has a devastating effect on small business cash flow. When one of your employees quits, you need to spend money looking for a replacement and, eventually, training one. Plus, you may also lose productivity while your new employee learns his or her new role.
The Solution: Strike a better employee compensation balance
If you’re losing too many employees to turnover, sit down with your small business advisor to determine what kind of compensation or benefits increases you can reasonably afford. When conducting your analysis, keep in mind the financial impact turnover has already had on your business.
Hidden Cost #3: Missing Out On Big-Picture Strategy As you pore over your books to understand why you’re not making a profit, consider how much time you spend, well, poring over your books. Many small business owners are bogged down in nitty-gritty accounting details and, as a result, aren’t focused on developing strategies to attract new customers and grow their businesses.
Let’s face it, you didn’t start your small business because you love processing payroll, filing quarterly taxes or reconciling your books at the end of the month. If you spend too much time on these tasks, your business suffers since you don’t have enough time to focus on your strengths and help your business succeed.
The Solution: Outsource your bookkeeping and tax responsibilities
If you’re trying to manage your bookkeeping and taxes yourself, it’s likely you’re doing so out of a noble desire to control costs. However, finding an affordable small business advisor may be easier than you think, and the time you save by outsourcing these tasks may be just what you need to focus on other priorities that help to improve cash flow and profitability.
Identify Your Hidden Costs To Solve Your Cash Flow Problems When you take the time to uncover the hidden costs draining your profits and killing your cash flow, you’re taking action to put your business on the right path. If you’re unsure where to begin, speak to a small business advisor who has the expertise to help you find the root causes of your problems.
Do you have the support you need to manage your small business cash flow and taxes? Schedule a 30-minute appointment to speak with a local (Pensacola Florida Accountant) small business advisor. QuickBooks ProAdvisor Certified. Payroll and Income Tax Specialist. 850-725-5696
Mike McVay, Tax Accountant Blog
Certified QuickBooks ProAdvisor & Licensed Tax Accountant Pensacola, FL
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