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Accountants In West Palm Beach

(561) 842-1304

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West Palm Beach, FL 33407

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8 IRS Audit RED FLAGS you MUST avoid when preparing your taxes

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8 IRS Audit RED FLAGS you MUST avoid when preparing your taxes
Filing an income tax report is like walking on egg shells, do not be swayed by audit baits that will send the IRS knocking straight on your door. While the agency is reportedly having cuts in their budget, which would likely translate to fewer audits, that does not mean they are letting their guard down. 

Now let’s walk through standard IRS tax filing errors and find out how you can steer away from committing the same mistakes.

1. Declare ALL of your income.

IRS does not rely on your honesty, according to the National Association of Enrolled Agents (NAEA), it uses an automated form-matching program that detects discrepancies between what you report and what is in their database.

Copies of form W-2 for the wages, as well as 1099s for interest, dividends and capital gains filed by independent contractors and freelancers,  are also sent to the IRS. Always reflect these figures on your federal tax return or any discrepancies will trigger correspondence audit.


2. Don’t declare losses for extended periods, unless you can prove it.

Nobody is running a business for charity. It is understandable that new ventures need to recover the operation costs for a year or so before beginning to generate projected profits, and the IRS acknowledges this, but over declaring losses for an extended period will often sound the alarm for an IRS audit.

IRS tax attorney Garrett Gregory of Addison, Texas said: “report losses for three or more years and the agency will start to suspect ‘hobby lost’ cases” he said: “often calls for field audits which are in-person and more onerous than a correspondence audit.”

Be ready and keep records of your business expenses, document everything to prove you have a real business.

“You want to prove that you ‘breathed it, ate it, slept it, and drank it,’” Gregory added.


3. Anything Weird – Explain it.

Anything that looks off and questionable is among the IRS first red flags. Be the best judge, anticipate which of the entries would likely call for extra clarification, and provide it.

NAEA said insufficient net income, for example, warrants explanation and would require disclosure statement detailing how you managed to pull yourself off, either through savings, loans or credit cards.


4. Home Office Deduction Triggers.

Never report deductions for both office and home rental. Typically, your office is in one place, if not then explain it.

NAEA suggests that if your rental expense is for a business storage unit or equipment, it should be labeled property as ‘storage rental’ or ‘equipment rental.’

 

5. Report ALL Sales Incurred.

Bear in mind, the IRS has complete access to all necessary files and has programs that ultimately leave you no room to hide, either intentional or not, don’t leave anything out.

When you sell your home, the title company will send the IRS a 1099-S form, recording the proceeds from the sale. Even if the capital gains on the sale fall below the tax-exempt limits, it is still recommended to report the information on your return.

The same applies to the sale of mutual funds. Enrolled Agent Stephen DeFilippis of Wheaton, III said: “that in particular cases like selling a mutual fund bought before 2011 outside of tax-advantaged retirement account and reinvesting this in another mutual fund, must be reported or the IRS will assume the total proceeds from the sale are all taxable gains.”


6. Include Your Overseas Money.

If you think the IRS audit cannot sniff this, you are wrong. Under the new Foreign Account Tax Compliance Act (FATCA) foreign institutions will soon be sending this information to the IRS like any other bank or brokerage would in the United States.

If you fail to declare this income, penalties and back taxes will soon be crawling on your back.

 

7. Watch out for Mortgage Interest Deductions.

DeFilipis said: “when you co-own a house with your spouse, the lender sends you and IRS Form 1098, which records your mortgage interest during the year. However, often, this record also shows the social security numbers, should the person die, and the surviving partner tries to claim the mortgage interest deduction, it is already flagged.”

These tax audit red flags may come in handy; the key is to go over this carefully and declare everything, or better yet hire professional accountants in West Palm Beach to do the job for you.

For more information, please contact us.

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An Accountant Can Help You and Your Small Business Prevent Bankruptcy

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An Accountant Can Help You and Your Small Business Prevent Bankruptcy Small business owners can often be heard saying that hiring an accountant is a waste of money. Accountant is just there just to fill out forms and keep the government happy by having you pay more taxes. However, bookkeeping services are more than that. You will save time and money if you hire the right accountant. 

 How an accountant can help prevent a small business owner’s bankruptcy?

 Taxes

Bookkeeping services should be aware of the latest tax rules and government legalities related to small business. In addition to that, a reliable accountant must be aware of significant tax breaks that may be available for small businesses.

 Saving you Time

Other small business owners may think that they can’t afford an accountant. But think about how long it would take you or one of your staff to do certain tax related tasks. Is it really a good use of your time or would you rather focus on other revenue generating tasks?

 Saving you Money

Let’s assume that time is not an issue for you. Perhaps you bought a computer program that will do all the accounting for you. Just completing the tax forms is one thing. However, completing them in a way that only an accountant can do will save you the most money. Accountants will help you take advantage of all legal ways to minimize your tax bill.

 Business Advice

A reliable bookkeeping service has a great amount of experience in the small business industry. They can provide suggestions based on their experience to help keep your business afloat. Furthermore, they can also calculate and predict financial reports based on your business moves and decisions. Finding a reliable bookkeeping service is essential to your success as a small business owner.

 The question to ask yourself is not, can you afford to hire an accountant. The real question is, can you afford not to hire an accountant? To learn more about how one of our friendly and reliable accountants can help your business, please contact us now for free consultation.

 

Resources:

Chih-Fong Tsa. Feature selection in bankruptcy prediction

Narayan Vaish. Book-keeping and Accounts

M.Jambunthan. Book-keeping and Principles of Commerce

Newton, Grant. Bankruptcy and Insolvency Accounting, Practice and Procedure. 2009

Turner, Leslie. Accounting Information Systems: Controls and Processes. 2008

 

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A Basic Tax Guide for Freelancers

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IRS tax return, tax services, tax accounting

Independent contractors or freelancers are solely responsible for filing their Income Tax returns as well as ensuring that the Internal Revenue Service (IRS) receives the right information, regardless of the amount you earn. This is a serious matter, and you have to handle accordingly.

If you are a newbie, here’s some old hand advice on how you can effectively manage your tax account.

1. Keep Your Own Record.

As an independent player, you will be issued a Form 1099 at the end of the year, keep your record using spreadsheets, or better yet get small business accounting software like QuickBooks to make it easier to track.

Bear in mind the expert advice, that relying solely on 1099s to tell you how much money you have earned is too risky. Some clients miss payments and make mistakes in calculations, filing your record is the smartest way to avoid errors.

2. Don’t Attempt to Hide Anything.

Trying to make cuts on Freelancers Taxes is a no-no. Everybody sends copies of his or her 1099 to the IRS, so if you drop one out, the IRS system will undoubtedly detect the discrepancy. Although we know some clients do fail in record keeping, it is too risky, always be on the safe side.

3. Use Separate Business Accounts.

To quickly glean through independent contractors’ tax deductions, especially the newbies, simplify your records by starting off with a separate business bank account. This way, all of your personal spending will not get mixed up, and having different bank statements for your business makes it easier to backup the information on your tax return.

4. Expect Mandatory Self-Employment Tax.

On top of the regular income tax rate, independent contractors should expect mandatory self-employment tax designed to cover social security and Medicare concerns that would normally be withheld by a traditional employer.

5. Identify Your Deductible Expenses.

When it comes to IRS rules on deductions, it must be both reasonable and necessary.  Take for example the equipment you need and travel expenses; as long as they are incurred as an indirect result of your freelance work.

One good thing with independent contractors’ tax deductions is it be can used to save for the future. Consult with a financial planner or a retirement specialist to find out how you can fund your retirement without the 401k or pension benefits a regular job might provide. There are many options: IRAs, Roth IRAs, investments, etc.

Get Professional Help.

Filing your taxes can be a daunting experience, especially if you have not been keeping records, there’s a lot to look into, and management is an entirely different thing to accounting. Why not get some professional help from The Balance Sheet Accountants? They not only take charge of your tax concerns but can help you analyze your financial standing with the tools that they use and experience they bring to your company.

Call us at (561) 842-1304 for more information on how we can help.

 

The Top 3 Online Accounting Software Apps for Small Businesses 2016

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Online Accounting Software Apps for Small Businesses (2)Joyce Berryman, in Survey of the Literature, labels poor and careless financial management as the biggest cause of small business failure. Accounting software can be extremely helpful for small businesses, as it can organize and handle your finances.

How Online Accounting Software Beneficial for Small Businesses

  • Saves time with automated and fast processes.

  • Accurate and efficient because of its automatic calculations and centralized accounting data to work off of.

  • Enables better decision making through instant reporting and analysis to help you see the big picture. 

  • Helps you organize and keep meticulous records of financial data.

What Features are Offered in Excellent Accounting Software?

  • Many accounting applications can quickly create professional-looking invoices with your logo and branding.

  • Most provide appropriate billing solutions to easily manage cash flow.

  • Accounting software often has a built-in payroll system or has one available as an add-on, so you can pay your employees properly and on time, while also taking into consideration tax issues.

  • Many accounting suites will help you manage expenses and vendors Payments.

  • If you are traveling most of the time, opt for an accounting software package with incorporated mobile apps. It enables you to check financial matters wherever you are.

Top 3 Accounting Software Offerings for Small Businesses in 2016

Intuit QuickBooks Online is believed to be the best accounting software for small businesses. Intuit QuickBooks offers the most optimal, economical paid packages and services. The cheapest plan costs just $9.99 per month, but doesn’t compromise on key features that small businesses need to manage their finances. QuickBooks is very convenient to use and add new information to. Bank accounts and credit cards can be connected right from the dashboard.

  • Makes accounting efficient and less stressful by automating tasks.

  • Possesses all the features that accountant consider critical for small businesses.

Xero Accounting stands second in the best accounting software rankings. Popularly known as the “QuickBooks alternative,” Xero:

It is one of the easiest and most affordable accounting software;

  • Offers better returns for your money. For example, it starts at just $9 per month and includes features like 1099s, billing and expense reports, which cost extra on QuickBooks; and,

  • Provides a cost-effective payroll solution for $30 per month, while on QuickBooks it is around $75.

FreshBooks is the best mobile accounting app for small businesses. Freshbooks:

  • Is affordable and easy to use;

  • Easily creates professional-looking invoices;

  • Helps you track expenses from anywhere you work or travel to; and,

  • Supports several payment modes, such as PayPal, Stripe, and Authorize.Net.

Maxine Taylor, the power behind The Balance Sheet, Inc. has an odd passion for all things accounting. “I don’t advocate a non-accounting person processing the payroll,” she noted. “You are dealing with other people’s money and it has to be correct. And mistakes are not always the easiest to fix. Plus, there are reporting returns that go with payroll.”

Have questions about accounting for small businesses? Contact us – The Balance Sheet, Tax accounting bookkeeping company Florida.

5 Tips for Successful Financial Statement Preparation Services

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Financial Statement Preparation Services

If you need financial statements prepared, you should use a professional accountant.

The financial statements of companies usually include the following: income statements, balance sheets, statements of retained earnings and cash flow, and other financial summaries.

How to Find Great Financial Statement Preparation Services

The best way to deal with financial statements is to hire an accountant. The following tips will help you find a qualified professional accountant to prepare your financial statements.

  1. Research and receive a referral. Ask business colleagues, your bank or an attorney to refer you to a skilled accountant. You can usually find information published by the Society of Certified Public Accountants in your state. Remember that you need a reliable professional for financial statement preparation services.
  2. Interview all the candidates. You will need two meetings with the accountants – one at your site and one at theirs.

Since there are three categories of accounting services, you should know for sure that the accountant you hire can deals with financial statement preparation, specifically with the type of report you need.

  1. Make sure that the accountant’s style is compatible with yours. Ask the candidates how they would handle situations relevant to your business.
  2. Ask about their fee. Accounting companies usually charge per hour. Still, there are others that work with a monthly retainer. Make a comparison between the fees of the accounting companies and choose the one that fits your budget.

Your decision should not be based only on the price.  The accountant who charges higher is usually more experienced and able to work better and faster than an inexperienced accountant who charges less in order to attract clients.

  1. Ask for references. When you receive references and call the companies the accountant has worked for, you will find out valuable information about how their professionalism. A lack of references is a red flag. It could mean that either the candidate is inexperienced or that his/her work is not satisfying.

You can find the right accountant for financial statement preparation if you do your research. Hiring an accountant with references and good professional reputation can save you money in the long run.

Why You Need a Professional Accountant to Help with Your Business Tax Preparation

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Professional AccountantIt’s one of the most dreaded and unavoidable words in business… Taxes. Even for a fledgling company, tax rules and procedures can be overwhelming, and many new business owners don’t want to hire a professional accountant. They see it as just another cost in the long line of expenses that are draining their bank account. BUT the right tax accountant can actually save a business money, not to mention a whole lot of trouble.

A Professional Accountant Practically Pays for Themselves

Many business owners don’t realize that they can deduct accounting fees from their taxes. The irony is, a professional accountant could give them that information, as well as other ways to minimize their taxes. Because of their extensive, specialized knowledge, having a professional help with business tax preparation almost always results in a reduction in tax fees.

Save Money, Time, and Trouble on Business Tax Preparation

The old saying, ‘time is money’ is especially true when it comes to the small business owner, who is likely juggling multiple roles. Business tax preparation is time-consuming and confusing. Having a professional tax accountant saves the business owner time and frustration. It also provides a resource to go to with tax questions, rather than spending hours poring over the dry legalese of the tax code, and, a tax professional can deal with the IRS in the case of audits.  It always helps to have a back-up!

Find the Right Professional Accountant

Since it is so beneficial to have a proficient tax professional helping your business, you need to take the time to find the right accountant. This is a time to be picky and shop around. Look for someone who is knowledgeable but also listens to you and makes you feel comfortable. One of your most important business relationships will be the one you have with your professional accountant. 

The professionals at The Balance Sheet are dedicated to creating lasting relationships with their clients.  With years of experience and knowledge, Maxine Taylor and her team will help you save the most with your business tax preparation. View our tax services and schedule a consultation today.

5 Key Ways Hiring a Small Business Accountant Will Save Your Dream

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As a small business owner, you were able to make your passion and dream become a reality. As your business grows you will have to graduate from doing everything and begin to employ others to cover certain administrative tasks. An accountant can help you realize your dream in five interconnected but distinct ways.bs1-edited

Year-Round Accounting Tracking is Not Your Problem

Having a competent accounting team support you year-round means you don’t have to track IRS deadlines. Your accountant tracks tax deadlines for your business and makes sure the IRS receives accurate and complete forms in time.

Outsourcing Accounting Services is Cost-Efficient

Your time is valuable. Your employees’ time is valuable. It is a waste of time and resource to try and have someone “learn on the job” when you can outsource to an expert and not have to pay for training. Your team member can focus instead using their skills to help your business grow.

Ultimately, you will save by avoiding training and the additional salary of an in-house accountant.

Accounting Services Gives More Control Over Your Small Business

Maxine Taylor of The Balance Sheet in West Palm Beach, Florida says that businesses “armed with accurate records of past and current books are better able to make projections and financial decisions for their businesses.” Which then leads to the ability to make better decisions.

Well-Done Accounting Leads to Intelligent Business Decisions

“Intelligent decisions” means deciding on a direction based on a good premise. A well-maintained and complete database leads to accurate financial reports and charts. These help you assess the health of your company and choose actions to improve and strengthen it, which ultimately leads to higher profit.

Accurate Accounting Leads to Higher Profit

As ‘The Five Stages of Small Business Growth’ by Niel Churchill and Virginia L. Lewis put it, profit is at the heart of bookkeeping. Your accountant can make sure you have the right bookkeeping foundation, that costly tax and IRS mistakes don’t occur, and that you receive the financial analysis of your business that you need for decision-making. Ultimately, all of these efforts are geared towards making your business more profitable. A good accountant never loses sight of that goal.

Making your dream business flourish requires having a great support team, especially in regards to accounting. Contact Maxine Taylor, the power behind The Balance Sheet, today for a consultation and find out how she can put her experience and expertise to work helping you build and strengthen your dream.

 

 

 

4 Ways to Help Your Bookkeeper and Accountant Provide Excellent Service

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As a business owner, tax time can be a little stressful as you’re hurrying to pull together all of your receipts and trying to remember all the events that transpired over the past year. You can contact your preferred bookkeeping service to help you, but in order to get the job done swiftly, they’ll need certain items from you. Below are four ways to help your accountant and bookkeeper provide an excellent service to you.bs4

Have a system to record financial documents for easy retrieval.

The first step in helping your bookkeeper and accountant is to file appropriate records and documents in an easy to retrieve and easy to maintain fashion. Receipts are easily lost. An old-school way of dealing with them is to staple them to appropriate bank or credit card statements. If you’ve joined the digital age, scanning them to appropriate file folders (that are backed up in case of computer crashes) would also work.

Provide all documents to your accountant.

To maintain your books, your accountant will need complete access to the financial records of your business. As a guide you should provide the following:

  • Bank statements
  • Sale and Purchase Invoices
  • Credit card statements
  • Check books
  • Petty cash receipts
  • Copy of VAT returns/working
  • Any loan agreements taken out in the year

Organize your documents, so your accountant doesn’t have to play sleuth and waste time.

Do not just hand your receipts to your accountant without arranging them. Take time to organize your documents, be consistent in format and system. The more you organize the information, the faster the accountant can prepare your return.

The Early Bird gets preferred service

Start early. Don’t wait until the deadline. During this time, your bookkeeping and accounting service is swamped with last minute details from other clients. As much as possible, prepare everything in advance to lessen the chance of errors or overpayment. Spend a little time early on to make sure that your accountant’s job during tax season is smooth and as easy as possible.

Develop an ongoing relationship with your accountant.

The best way to make sure that you are receiving the best service from your accountant and bookkeeper is to develop an ongoing relationship with them throughout the year. They should know how your business runs, what your expectations are, and any issues that may pop up. If they are kept apprised of changes, they can help. The more your accountant knows about your business, the better they can help you plan your next steps.

Keep in mind that your accountant is more than someone who handles your taxes once a year; they are also strategic business partners who can give sound advice on how to reach your goals while reducing overall costs.

 If you’re looking for a reliable and detailed-focused accountant, contact Maxine for a free consultation on how The Balance Sheet can help you. 

 

What are the 3 Critical Services Provided by a Payroll Service Provider to Small Businesses?

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As a small business owner, your focus should be on building business. So it would be a smart step to outsource certain tasks to suitable service providers so that you can direct your time and effort toward more productive jobs. Outsourcing your payroll to payroll services for small businesses would be intelligent on your part as payroll is a crucial part of the business.bs5 Managing payroll is a stressful, tedious and sensitive task. Apart from consuming a lot of your time and effort, it will create much confusion and invite huge penalties in case any errors are found by the IRS in managing the payroll processes. Once you outsource your payroll to a payroll service provider, you save your valuable time and energy and escape from the trouble of incurring enormous stress and hefty fines.

What to look for in a payroll service? It should provide you 3 critical services as discussed below-

  1. Paying Employees on Time- Your business flourishes due to the efforts of your employees. So it is imperative to keep them happy and satisfied. Your payroll service takes great care to pay them on time and in an appropriate manner. They calculate the employees’ wages, withhold the desired amount of taxes and issue the paychecks.
  2. Paying Payroll Taxes on Time- When you have your payroll service to assist you, you don’t have the headache of reminding yourself every now and then about what tax is due and when. Your payroll service will do this for you by calculating your federal and state payroll taxes and keeping track of the due date for the payments of these taxes. See https://www.taxaccountingbookkeeping.com/services/tax-services/
  3. Filing Payroll Forms on Time- You might find it unexciting to file forms, but it is a vital part of your business. Again, your payroll service assists you by preparing, calculating and filing Federal & State Payroll tax forms on behalf of your business.

We, at The Balance Sheet, Inc., located in West Palm Beach, Florida provide payroll services for small businesses.  We offer tax services in addition to bookkeeping and accounting services. Serving the West Palm Beach area is always our priority. Contact us at https://www.taxaccountingbookkeeping.com/contact-us/.

Also, feel free to contact Maxine for a free consultation on how The Balance Sheet might benefit your business!

 

 

3 Important Facts Regarding Payroll Services for Small Businesses

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Payroll and other financial services can be time-consuming and complicated for small business owners. Making the choice whether to keep payroll in-house or purchase the services through another company is a big decision. If the choice is to purchase payroll services you then have to determine whether to use a large company or a local accounting firm. In making this decision for your small business, keep these facts in mind:

  • In-House Payroll Can Cost You

While it can be tempting, keeping payroll services in-house for money-saving purposes without the expertise can be very costly. bs6Payroll errors can result in IRS audits as well as hefty fines and penalties for incorrect bookkeeping. Plus, chances are you and your employees are not experts in the area and can spend your time doing something much more valuable for your business.

  • Large Payroll Companies are Oversized for Small Businesses

Large payroll companies can obviously offer the expertise required to handle your small business payroll needs; however, they also often offer other services that you do not need like human resources. Large payroll companies are going to be more expensive as well and lack the knowledge of local expertise.

  • Local Accounting Firms are Experts in Local Payroll and Tax Requirements

Local accounting firms offer the same expertise of the large payroll services with a lower cost and the added bonus of local knowledge. And really, who better to take care of a small business than another small business? These companies understand the needs of a small business on top of the local requirements, making them an excellent option.

For small businesses in the West Palm Beach area seeking a local payroll company, The Balance Sheet is a highly respected and reputable company with 26 years of experience in the field. They offer not only payroll service but also bookkeeping, accounting, and tax services. Maxine Taylor is an enrolled agent with the IRS so she can not only prepare your taxes but also represent you in the event of an audit. Maxine and her team stand behind their work and are known for integrity, speed, and accuracy. Contact The Balance Sheet today for your free consultation at (561) 842-1304.