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October Newsletter

Wed, 09 Oct 2024 18:40:47 GMT

September Newsletter

Wed, 04 Sep 2024 16:52:08 GMT

August Newsletter

Fri, 23 Aug 2024 14:38:03 GMT

February Newsletter

Mon, 05 Feb 2024 17:34:24 GMT

January Newsletter

Wed, 03 Jan 2024 20:15:46 GMT

December Newsletter

Wed, 06 Dec 2023 18:15:01 GMT

It’s fa-la-la finally December!

This time of year can be incredibly stressful between yearend closing (keep reading for a handy checklist) and navigating the holiday season... so I’m going to make sure this email gets straight to the point! If you don’t read anything else in this newsletter, read this! We have two big bank holidays that fall on a Monday coming up: December 25th, 2023, and January 1, 2024. Make sure that you have a plan in place to adjust for payroll or any other important payments due on these dates.

Want to work together in 2024?

At Elite we have dedicated tax EXPERTS ready to get your 2023 tax return prepared timely & accurately. Did you know Elite is a full service accounting firm? We take care of all of your small business’ needs including payroll and taxes for one affordable monthly fee. Don’t waste another year guessing your way through your business finances. Visit our website at elitefsbr.com to schedule a consultation and get started today.

It’s Almost 1099 Season!

HOW TO GET A HEAD START ON 1099-NECs BEFORE JANUARY

Make a list of all contractors you paid for services this year and verify the amount paid to each contractor.
Make sure you have a W-9 on file for each contractor you paid over $600 or request one now!
If you paid via credit card, the payment processor will issue a 1099-K instead if reporting requirements are met. (Keep an eye on my social media this month for more info on these changes!)

Year-End Checklist

Feel a little lost when it comes to ALL the things you have to do as a business owner at the end of the year?

I’ve put together a FREE Year-End Business Checklist to help point you in the right direction when it comes to:

Accounting
Business Systems
Information Technology
Marketing and MORE!

Click here to request a copy of the Year-End Business Checklist

One last update from Elite Financial before you go, we’ll be officially Out of Office from December 18th to January 2nd. If you need immediate assistance leave a detailed message in your client portal. Our team will be enjoying this time with friends and family, and we hope you do too!

November Newsletter

Wed, 01 Nov 2023 16:45:54 GMT

The Accountant's Corner

Can You Believe It’s Already November?!

Getting into the spirit of a month that’s all about thankfulness, I want to take a moment to express how grateful I am for each one of you! THANK YOU for your support of my small business.

November is full of fun holidays, but one of my favorites is International Accounting Day! Keep an eye on my Instagram

@elitefsbr for a behind-the-scenes journey on how I got to where I am today!

Make Next Year’s Taxes Easy As Pie

MAKE A LIST of all the documents that were needed for your tax return this year. Mark documents as final if they’re for an account that was closed last year.

FILE YOUR RETURN as soon as you have all your tax documents ready to go!

WORK WITH a bookkeeper and tax professional! The most stressful part of tax season is being worried you’re going to screw something up by doing it all yourself.

Small Biz Saturday

November 25

MY FAVORITE FREE WAYS TO SUPPORT #SMALLBUSINESSES

Like, follow, and share their posts on social media!
Refer your friends and family to them!
Leave them a review or testimonial!
Attend their events and invite another small biz owner!
Sign up for their newsletter (or forward to a friend!)

Channeling Bob Barker

One of the biggest things I see entrepreneurs mess up on when they start their business is how to price their offerings strategically.

It’s easy to want to price as low as possible to get your foot in the door, but how can you handle increasing your prices later on? Hit REPLY and let me know you’d like your free copy of my Pricing Guide to learn more about the most common pricing strategies and what questions you should be asking yourself!

I’ll leave you with a friendly reminder for Black Friday sales! When it comes to buying something for your business: if you can find a GREAT deal on something you already need for your business, go for it! But, don’t buy *just* for the sake of getting a write-off. Is your business doing a fun Black Friday sale? Send me a link, I’d love to share it!

-Naomi

5 Smart Ways To Use Your Tax Refund

Fri, 12 Feb 2021 15:55:33 GMT

Save. It is absolutely necessary to have money set aside in case of emergencies, unemployment or other unexpected costs. If you haven’t adjusted your budget to allocate 10% of your monthly income to savings, adding your tax refund to the pot should help you get to your annual savings goal.

Invest. If you are preparing for retirement or investing to build your general wealth investing your tax refund is a smart choice. Why spend your tax refund when you can let it grow? Investing in a Traditional IRA may qualify you for a tax credit that results in more dollars on your tax return.

Build Credit. If your credit score is below average you should consider a secured credit card or secured loan. With secured cards and loans you use your money (your tax refund) as a deposit and the lender extends credit. As you use the funds and make regular payments, your lender reports your timely payments to the credit bureaus which in turn increases your credit score.

Pay Down Debt. Consider making an extra mortgage payment or making a lump sum credit card payment. Did you know that just one extra payment per year can take years off of your mortgage? Paying down your credit card not only improves your debt-to-income ratio that lenders look at but it will also lower your monthly payment.

Start A Business. We have all heard the saying you have to spend money to make money. Having the funds to start your business is usually the first hurdle to get over when starting a business. As long as you have attainable goals and a solid business plan, use your tax refund to get your business up and running. You can turn that one time tax refund into monthly income for years to come.

Are You Guilty of Tax Fraud?

Fri, 12 Feb 2021 15:54:07 GMT

To be able to answer this question honestly we must define tax fraud.

Tax fraud is defined by the Internal Revenue Service as an intentional wrongdoing, on the part of a taxpayer, with the specific purpose of evading a tax known or believed to be owing. Tax fraud requires both:

a tax due and owing; and
fraudulent intent.

Have you ever heard someone say that their tax preparer “works magic”? More often than not, it’s illegal magic. The most common tax scheme that I see is adding a fictitious business to a tax return. If you need more income to qualify for a credit, add business income. If you owe taxes and need to reduce your taxable income, take a loss on your business. Let me make this clear. THIS IS TAX FRAUD.

However, avoidance of tax is not a criminal offense. Taxpayers have the right to reduce, avoid, or minimize their taxes by legitimate means. One who avoids tax does not conceal or misrepresent, but shapes and preplans events to reduce or eliminate tax liability within the parameters of the law. For example, if you itemize and you donate more for the year to increase your itemized deductions, that is completely legal.

If you think you can get away with explaining to the IRS that you simply did not know what was on your tax return or that the tax preparer did it without your knowledge, think again. When you sign the tax return you are taking full responsibility for what has been reported making you guilty as charged.

You can report abusive tax return preparers to the IRS using Form 14157 , Complaint: Tax Return Preparer. If a return preparer is suspected of filing or changing the return without the client’s consent, also file Form 14157-A , Return Preparer Fraud or Misconduct Affidavit. Forms are available on IRS.gov.

A tax fraud offense may result in both civil and criminal penalties. Restitution may be ordered in criminal tax cases pursuant to a plea agreement or a conviction under Title 18 U.S.C. and may be required as a condition of probation. 25.1.1.2.4 (01-23-2014)

So, did you inflate your income or expenses on your tax return to create a more favorable outcome? Or turn a blind eye to your preparer inflating your refund because you liked the bottom line? If so, you are guilty of tax fraud.

https://www.irs.gov/irm/part25/irm_25-001-001#idm140540698138736

www.irs.gov

File your taxes. Yes, even if you owe.

Fri, 12 Feb 2021 15:52:26 GMT

A big part of my tax practice is tax debt resolution. I help people resolve their tax debt by reducing their liability and sometimes eliminating their obligation to pay. Over half of my debt resolution clients don’t file tax returns for multiple years for fear they would owe the IRS. Let me say it loud for those in the back. Not filing your taxes is not going to keep you from owing the IRS. It will only leave you in the dark as to how much debt you are really in.

If you know you will owe the IRS filing your taxes on time will help you avoid some penalties. You won’t get out of paying failure-to-pay penalties or interest that will accrue on the balance due, but you will get out of the failure-to-file penalty. If you need more time to gather your documents you should file an extension . The extension will grant you six additional months to file your return without a failure-to-file penalty. Just know it’s only an extension to file, not to pay. Your tax is still due April 15th. Your return is due October 15th.

Filing even when you owe has its benefits. We all want to be aware of where we stand financially. You may think you owe more or less than you actually do. If you don’t owe a substantial amount at the end of the year the solution could be as simple as going to your human resources department and adjusting your W-4. If you owe more than you are comfortable paying at once, you not only need to change your W-4 but you also need to sit down and take a good look at your budget and personal finances. If you owe a good bit, changing your W-4 to have proper withholding will likely have a noticeable impact on your paycheck. The IRS has a withholding calculator that will help you determine the correct withholding for your household. If you owe the IRS for other reasons such as unearned income like interest & dividends, you may want to look at restructuring your investments. Either way, you need to be aware of WHY you owe the IRS so that you can change the situation going forward.

Filing your taxes is one of the easiest ways to set up a payment plan. Just include form 9465 with your tax return to let the IRS know when and what you can pay each month. By setting up a payment plan you have a good chance of staying out of collections. Collections is the department that issues liens, levies and wage garnishments. Trust me, you don’t want to hang out in the collections department if at all possible.

Remember, the same W-2 your employer sent you is the same W-2 your employer sent to the IRS. That goes for any income document you received. So if you think the IRS just won’t know you owe if you don’t file, think again. They know. But by the time the system flags you as not filing you will be up to your eyeballs in interest and penalties.

What about if you are self-employed and don’t have any income that is reported to the IRS on your behalf? You will need an income document to borrow money, buy a car, house or have any type of credit extended to you. One of the first things lenders request are your tax returns. Also, self-employment tax consists of two things: Social Security tax and Medicare tax. If there is a such thing by the time you need to worry about it, you will want to have paid into both.

Long story short, file your taxes. Yes, even if you owe.

10 Tips to Wrap Up Financial Awareness Month

Fri, 12 Feb 2021 15:48:11 GMT

Make a monthly personal or household budget. Budgets help you spend your money more efficiently and responsibly. Budgets also give you more control over your finances.
Open a savings account. The rule of thumb is to have three to six months worth of your monthly expenses in your savings account. When creating your monthly budget, try to allocate 10% of your income to savings. If you want to save for something special (vacations, holidays, etc.) open a separate account. Most banks do not charge for multiple accounts.
Start saving for retirement now. With inflation the value of your dollar will be worth less in the future than it is now. And, with modern medicine the average life expectancy is longer. You won’t want to outlive your retirement income.
Check your credit score at least twice a year. You want to make sure no one has opened accounts in your name. If there are any negative factors on your report you can clear them up before they become bigger problems. Each credit bureau offers one free credit score a year.
If your credit is less than average you can build credit with a secured credit card or secured loan. You simply give your lender a deposit and they extend credit to you. As you make timely payments they report that the credit bureaus improving your credit score.
Make an extra mortgage payment toward your principal. Just one extra payment per year can take years off your mortgage.
Pay more than the minimum payment on your credit cards. Most times the minimum payment is only covering interest and your balance is staying the same from month to month. Only use about 30% of your available credit. This will help you maintain your good credit score and in case of emergencies you’ll have a backup resource.
Do something useful with your tax refund. Saving, investing, paying down debt or starting a business are just a few alternatives to blowing it on something temporary.
File your tax returns on time even if you owe. Filing on time will help you avoid the penalty for failure to file. And even though you will still accrue interest, setting up a payment plan if you can not afford to pay in full will decrease interest and penalties that you receive for failure to pay.
Invest in life insurance. Not only will your policy help your loved ones when the time comes, but depending on the type of policy you have you may be able use it to supplement income, borrow against it, or use it for investment purposes.

10 Reasons You Should Hire a Bookkeeper for Your Startup

Fri, 12 Feb 2021 15:46:25 GMT

1. Keep your focus on core business needs.

A startup needs the attention of its founder, including his or her attention to growing the idea into a viable product or service. That means that, as that founder, your time should be devoted to strategy, marketing, funding and other key areas that require your focus over the daily operational tasks of a business.

2. Stay out of what you don’t really know or understand.

Not many founders have backgrounds in finance or even a working knowledge of accounts payable, accounts receivable and taxes. It’s better that a professional who took courses and was certified in these areas handle those aspects of the business.

That way, mistakes will be less likely, as well as issues that could cost you more money. Remember, if you miss a bill or forget to pay something important, this will significantly impact your business credit.

3. Calibrate a work-life balance.

While you could focus on core business needs and handle everything else in your startup, the problem is you’ll have no time left at the end of the day or week for yourself or your loved ones. Therefore, you’ll be missing that balance every person needs in order to stay healthy and not burn out on what you are doing.

4. Get a different perspective on the business.

Although you may believe you have a good idea about the state of your startup during the development phase, it helps to have another pair of eyes on this.

Your bookkeeper can put the financials in order and run reports showing how you are doing each month, where the funds are going and how your efforts are paying off (or might need improving upon). He or she will give you that "big picture" through the numbers being crunched.

5. Escape the tedious aspects of business.

It’s hard to imagine that the financial aspects of your business make you excited. You likely have no passionate feelings about tallying up payroll or writing checks to pay the bills.

However, your bookkeeper may enjoy those tasks, so it makes sense to hand over these areas to someone who does them -- and does them well -- because of that motivation.

6. Make sure everything is paid on time.

Between traveling, keeping the startup moving forward, putting out the daily fires that pop up and staying balanced, something most likely gets left out along the way. And that often ends up being the bills that need to get paid.

You don’t want your credit impacted by late or forgotten payments, so put a bookkeeper in charge to give you the confidence that everything has been handled on time.

7. Ensure correct tax filings.

The last thing you want is to get audited or have the taxman after you just because you forgot those quarterly or annual tax filings. Depending on the type of business structure you’ve created for your startup, you will have various tax requirements, including estimated tax payments, corporate tax payments, 1099s for contractors or freelancers and other filings.

It’s ideal to find a bookkeeper who can handle taxes a well as payroll and other financial issues.

8. Maintain cash flow.

Because you are so busy, you may not realize that there are outstanding payments from your client base. Any late payments here could infringe upon the cash flow you need to keep your startup humming along.

With a bookkeeper working for you, he or she can stay on top of this and send out reminders to make sure your cash flow remains optimal. This will also look good when it’s time to seek another round of funding because you can show positive cash flow you might not have been able to show without that assistance.

9. Resolve conflicts of interest with any business partners.

With more than one founding partner, issues could arise where each partner has some idea of how the money should be spent and how to easily access it. Otherwise, conflict could arise that could impede the progress of your startup.

That's why a bookkeeper should be the gatekeeper of the money, creating the necessary approval processes that stop partners from just withdrawing money.

10. Reduce the cost of financial obligations.

Although you may think you save money by doing everything yourself, the fact is that a professional bookkeeper actually saves you more. That’s because there is a reduced level of risk for human error, lack of knowledge, missed payments and tax obligation due dates and delayed accounts receivable.

Plus, your time is money that you could be using toward getting your new business running and bringing in the revenue to move to the next level.

From the time and money savings, to the focus on expertise and greater cash flow, a bookkeeper makes good business sense for your startup. So, go start the hiring process today.

https://www.entrepreneur.com/article/290854

Basic Guide to Small Business Taxes

Fri, 12 Feb 2021 15:26:46 GMT

If you are self-employed or own a small business, Congratulations! It is likely you go to work every day to do something you love. I mean what is more rewarding than that? But if your business and life’s passion is not accounting like mine, then it is also likely that you may not know the ins and outs of your business’s taxes and accounting.

First let me say this. Even though my business is a tax and bookkeeping firm I am well aware that every business does not need professional tax and/or bookkeeping services. I believe there are many instances where individuals and small businesses can save time and money by self-preparing their tax returns and doing their own bookkeeping. For this reason I feel that it is very important to educate entrepreneurs and individuals on what they should be doing to keep their finances in order. In this article I will focus on small business finances.

1. Keep records of income and expenses.

Here is a fun fact: you may not need fancy accounting software to keep your income and expenses in order. Microsoft Excel or even a spiral notebook may be sufficient. Only if your business is very small or does a small amount of transactions it is okay to use a manual system. I suggest at least using Excel. Either way, keeping up with what is coming in and going out of your business is the most important step in keeping your business finances in order. Missing deductible expenses on your tax returns can have a dramatic impact on your return.

2. Know what expenses are deductible.

Since you are self-employed or a small business (LLC) you file your business income and expenses on a form called a Schedule C. This form reconciles your income and expenses to calculate your net profit. Your net profit from business is then entered on your main Form 1040. Now that you understand how the Schedule C works let’s take a look at what’s on it.

The form takes your gross profit (all income sources) and subtracts all deductible business expenses. Deductible business expenses are: Advertising, Car and truck expenses (3), Commissions and fees, Depletion, Depreciation and 179 Expense (4), Employee benefit programs, Insurance (other than health), Interest, Legal and professional services, Office expense, Pension and profit sharing plans, Rent or lease, Repairs and maintenance, Supplies (excluding cost of goods sold), Taxes and license, Travel and meals, Utilities, Wages, Other expenses, Home office expense (5). To see Schedule C click the link below.

https://www.irs.gov/pub/irs-pdf/f1040sc.pdf

3. Track mileage or actual automobile expenses.

The standard mileage rate is the easiest way to calculate the deductible costs of operating an automobile for business purposes. The standard mileage rate for the use of a car (also vans, pickups or panel trucks) is 58 cents per mile driven. To use the Standard Method you simply keep track of business miles driven and total miles driven for the year.

Even though the standard mileage rate is a much easier way to claim car and truck expenses taxpayers always have the option of calculating the actual costs of using their vehicle. When you use the Actual Method you will keep track of gas, repairs, depreciation, oil, fees, tires, insurance, washes, registration, and lease payments. Remember, you cannot take the full amount. You can only deduct the business use percentage. For example, if you use your vehicle 50% of the time for business, you will deduct one half of all of the expenses listed.

4. Depreciate or 179 Expense your assets.

Depreciation lets you deduct a portion of an asset's cost every year, until the asset no longer retains any value or has been sold, destroyed, or otherwise disposed of. The concept of depreciation is based on the notion that business assets eventually wear out, get used up, or become obsolete. It is required to depreciate assets with a useful life of over one year. The only exception is to claim the asset as a Section 179 expenses which allows you to take the total expense in one year.

Business assets must meet 3 conditions to be depreciable:

The asset must be used to produce business income, rent, or royalty payments.
The asset must wear out, decay, becomes obsolete, or lose value over time.
The asset has a useful life that can be measured and exceeds 1 year.

5. Remember to take the Home Office Deduction.

Housing-related expenses such as mortgage interest, rent, utilities, repairs, and depreciation for the portion of your home or rental that you use to run your business are allowable expenses under the home office deduction.

You may be able to claim the home office deduction if your office is:

Used regularly and exclusively for your business, and
Is your principal place of business (both conditions must apply).

Keeping track of your business finances can be a bit overwhelming and that is why there are professionals such as myself to help you stay on track. However, with a little effort, guidance and the correct tools, basic recording keeping needed for tax time can be simple. Remember to seek help when you feel you need assistance. If you don’t need full service bookkeeping you may want to consider a quarterly or bi-annual checkup. Keep in mind your tax/accounting professional can also assist with estimating quarterly tax payments and self-employment tax. Of course there is one other reason to seek assistance from professional. Expenses that you pay to your accounting professional are deductible on your Schedule C.

Organized Finances Equals Peace of Mind

Fri, 12 Feb 2021 15:23:19 GMT

You know that feeling you get after organizing your closet or cleaning your refrigerator? That feeling of knowing where everything is in your closet and maybe even finding few treasures you’ve totally forgot about. What about those old jeans you can’t fit or the takeout you forgot in the fridge that needed to go out ages ago? Organizing your finances will give you the same feeling. It gives you a fresh outlook and perspective on life. There is nothing better than understanding what’s in front of you, being prepared for it, and getting rid of unnecessary bumps along the way. Here are some tips on how to tackle what keeps you up at night and get organized once and for all.

Understanding what’s in front of you from a financial standpoint starts with a clear understanding of your current financial situation. You must start with a personal budget. A personal budget is simply a balance sheet of income and expenses. Knowing what bills and expenses you have coming up and how much income you have to cover those expenses is the first and most important part of financial peace of mind. You may not be exactly where you want to be and that’s okay. With a budget you can now start planning and strategizing your way to financial freedom. Click here for the Income and Expense Worksheet.
Preparing your personal budget will also help you plan for known and unknow n expenses. We all know we have rent/mortgage, car notes, cell bills etc. But what about the about those quarterly or one-time events like oil changes, birthdays, holidays, tuition, or vacations? These are usually the expenses that get you off track financially. Writing down and planning for these events in advance will take the edge off and keep you on track. Known expenses should be added to your budget so you can save for them little by little. For bigger and more prominent expenses like vacation, tuition, Christmas or emergencies I suggest a separate savings account that is not easily accessible or linked to your debit card. Make online transfers or direct deposits into this account as planned. The smaller expenses like oil changes or gifts for friends should go in a savings account that you can access easily. If you attended my Spending Basics course you know how much you can save and how much need to allocate to your emergency fund.
Look at your budget often and revise it as needed. A budget is useless if it’s impossible to follow or inaccurate. It will lead you to become discouraged and give up on your financial goals. I think of a budget a lot like diet or workout plan. If the diet is too strict the first thing you will do is cheat. If the workout is too hard the first thing you will do is skip a workout session. Your budget has to be doable and encouraging or you will not stick with it. So budgeting for reasonable personal expenses in your budget is just as important as planning for a cheat meal or workout recovery days.
Going through your bank statements often will help you get rid of unnecessary bumps in the road. Remember that takeout in the back of the fridge or those outdated clothes that you would not be caught dead in? Well it’s very possible you have some expenses taking up valuable space in your finances. Maybe you forgot about a subscription you aren’t using anymore or after reviewing your statements you see you go through the drive-thru a little more often than you thought. Sometimes small adjustments can have huge positive impacts on your budget.
Finally, make a payment schedule. Many of us get paid twice a month and those of us that are self-employed may receive income all month long in uneven increments. After you print the Income and Expense Worksheet , print a calendar and write your income and expenses as they occur each month. Does your pay schedule align with your bill/expense schedule? Changing due dates on monthly expenses is usually as easy as a phone call and can save you the headache of trying to make one paycheck cover too many expenses.

Even if you feel like you aren’t where you want to be financially, being organized, knowing what you are up against and having a plan is half the battle.