Investments, savings accounts, bills, taxes, interest rates, inflation…these are terms that are enough to give anyone a headache. The time and energy spent on keeping afloat, much less building a portfolio, can be maddening.

Statistics on the matter don’t help things.

The average individual knows nothing about managing their financial accounts. In fact, in 2014 The Atlantic published an article claiming that only 30% of Americans could answer three basic financial questions correctly when asked. The top performing country (Germany) still only scored 53% themselves.

The Risks Of Doing Your Own Bookkeeping

Given those statistics, it isn’t a surprise that so many risks are involved in an individual maintaining their own financial accounts.

You may overlook a pending bill and pay it a week late, leading to your credit rating taking a hit as a result. Or you could have miscounted the amount in your checking when you made a purchase, and ended up with a costly bank fee.

It isn’t all risks to your credit score that you have to worry about. You may just not be getting as much back as you could be, and you would have no way of knowing. Are you making the right investments to give you the maximum return? Would you be better off with a Traditional IRA, or a Roth IRA? Is it worth buying stock, and if so, what stock?

You may be losing money, credit standing, and opportunities by managing your own finances.

Hiring A Professional

You have three options for hiring a professional to maintain your accounts.

First is a Certified Public Accountant (CPA). A CPA has done through extensive training, and holds a college degree in the accounting field. They have been licensed through the American Institute of Certified Public Accountants. This gives them a high level of authority on financial matters, including investing and planning for the future.

Next is an accountant. Someone who has been trained in accounting may or may not have a university degree. Often they will hold at least a certificate showing that they have finished some kind of financial course. While able to give advice on future planning, they are often sought more for tax and billing purposes.

Last is a bookkeeper. The average bookkeeper manages your basic financial needs, such as paying bills on time, monitoring checking accounts, reading and responding to credit card charges, and allocating a percentage monthly to savings accounts. A bookkeeper may or may not hold a certification in a financial discipline.

Hiring a professional will vary in cost based on your city, how much you make, and how much help you need. A simple bookkeeping service may cost as little as $10 per hour, while a full service CPA or accountant could cost up to $50 an hour, or more.

Good Decisions Now For Financial Stability In Your Future

Finding the right balance of professional and individual bookkeeping can have a huge impact on the stability of your future. Whatever you decide, remember that you are building a foundation for your life that may decide on everything from your status as a homeowner, to your retirement age.

Make the right choice for you and your family!

If you’re a small business owner, you may be enjoying some great tax benefits. However, you are keenly aware of the importance of proper accounting when it comes to paying taxes. One of the best ways to manage your business’ cash flow and avoid potential penalties is to pay your taxes quarterly, rather than annually.

Why Pay Quarterly?

It has been said that the only things we can rely on in life are death and taxes. When it comes to paying Uncle Sam, it just makes good business sense to divide that sum into equal amounts every three months. The last thing you want as a business owner is to be faced with a tax “emergency” where you may not have the cash flow to cover it. It may seem like a bother to pay taxes more often, but when the annual deadline looms, you’ll be glad you did. As long as you’re organized and keep accurate records, paying quarterly might be your best business move.

But I Hate Bookkeeping!

We get it. Many small business owners dread the accounting chores that are required for tax filing. That’s understandable, and it’s the reason so many simply put it off until the annual deadline, then try to play catch up. But when file quarterly, you still have a predictable schedule of deadlines – you just get to take smaller bites on the payments. If you don’t enjoy procedure (and who does?), your best bet is to hire a CPA to manage your filing and quarterly payments.

How a CPA Can Help

By consulting a CPA, you’ll have a clear understanding of whether quarterly filing is right for your situation. And with that qualified help, you can file with confidence, no matter when you do so. Just because your business is small doesn’t mean you don’t need a CPA. And contrary to popular belief, you can actually save money by hiring one. When you let a professional handle your quarterly tax filings, you can:

• Reduce your tax liability (pay less!)
• Avoid tax penalties
• Make sense of local and federal tax laws
• Alleviate stress
• Meet important deadlines
• Divide taxes into more manageable payments

What to Do Next

The best way to decide if you should be paying taxes quarterly is to talk to a qualified CPA. They can advise you on whether this schedule is financially beneficial for your type of business. Then, they can handle all paperwork that comes with filing on your ideal schedule. With a CPA’s help, you can rest assured that your taxes are taken care of while you focus on running your business.

No one likes filing their own taxes, it takes time, organization, and a great amount of knowledge to file them correctly. For this reason many people to choose to hire a CPA or a tax preparer to help them get the biggest refund possible on their filed taxes. The following tips will help you find a qualified professional to prepare your taxes for you.

How to Begin:

Anyone who has a Preparer Tax Identification Number or rather a PTIN, can prepare a tax return for a client. However, there are over 700,000 people who have obtained their PTIN through the IRS so finding the right professional for you can be difficult.

• Ask Your Friends and Family: You ask the people you trust most for advice in all aspects of your life and finding a trusted professional to do your taxes should be no different. If your friends or family have a tax preparer of CPA that they love, by all means use them.
• Make inquiries: Don’t hesitate to personally call a CPA or tax preparer and ask them questions. Make sure and get a good understanding of their specialties and qualifications. There is a big difference between filing taxes for a salaried employee with a single W-2 versus someone who owns a business. Be sure that whoever you hire is equipped to handle your taxes.
• Look Them Up: Before you hire anyone, make sure and look up their qualifications. You can verify their credentials on the IRS website or by checking the American Institute of CPAs website where they can authenticate your professional’s license.

Ask the Tough Questions:

Whoever you hire to prepare your taxes will essentially be your employee for a temporary time. Anyone who is in the business of hiring a new employee will undoubtedly ask them questions to see if they are qualified for the task. Benjamin T Koeller CPA, PLLC has prepared 23 questions that you can ask your potential new employee. The following are a few questions that can be found on his website:

1. “How much professional education do you get annually?”- The tax code as well as the interpretation of the tax code change every year, so it is important to make sure that your tax preparer is up to date on their proficiency.
2. “Who will I be interacting with?”- It is common within tax firms for professionals to collaborate on a single return, make sure you know who you will be dealing with directly.
3. “What’s your policy on returning phone calls?”- You want to be confident in how quickly they will respond to any questions or concerns you may have regarding your taxes.
4. “Why should I use you?” – If they don’t seem genuinely interested in your success, find someone who is.

What to Avoid

While there are number of things to look for in a CPA or tax preparer, there are also a few things that should be avoided.

• Contingent Fees- It is important for you to avoid any tax preparer who charges a contingent fee. This is a percentage of money based off of your tax return. As this is essentially an unknown number, it is far better for you to come to an agreed amount of money before they begin working on your taxes.
• Procrastination- Don’t wait too long to begin searching for a certified tax preparer. You don’t want to procrastinate and lose out on the more qualified professionals because they are too booked with other clients.
• Disorganization- The more organized you are with your paperwork throughout the year, the easier it will be on everyone when it comes time to file your taxes.
• Ignorance- While it’s true that a tax preparer must sign for the work they did, it is essentially your responsibility for how accurate your return is. Be sure and go over your tax preparer’s work before you sign and file your return.

Filing your taxes each year doesn’t need to be something that you dread. Find a professional that you trust to do your taxes and continue using them annually.

Tax day is just around the corner. A large percentage of the population will turn to automated computer programs to do their taxes for them, but there’s danger in that. The smallest mistake could cost you big, particularly if it ends in an audit from the IRS. Others will try their hand at calculating their taxes by hand.

When you don’t hire a certified accountant, it’s easy to make mistakes while doing your taxes, but here are eight errors you should avoid this year.

1. Waiting Too Long

You’ll face some hefty penalties if you miss the April 15 tax due date. Don’t wait until April 14 to get started. As soon as you’ve received your employment tax documents at the beginning of the year, start the filing process.

2. Avoiding the Computer

Some people like to file their taxes the old-fashioned way with paper and pen, but it only slows down the process. You’ll get the same results if you file on the computer, but you’ll typically receive your refund much sooner.

3. Math Errors

The most common tax return error is math. This can either reduce your tax refund or make you pay more than necessary. The IRS has people monitoring for discrepancies, and if they find yours, you’ll pay what you owe plus extra penalty fees. Using tax software or a human accountant can eliminate your errors and protect you from the IRS’s examination.

4. Misspellings

You’ll want a clean-cut tax form no matter what, but spelling things wrong, particularly your name, will result in all kinds of problems. The IRS can only identify you according to the exact spelling of your name that matches your social security number, and if you get that wrong, they’ll kick back your return and slow down the process.

5. Relying on Direct Deposit

Direct deposit is convenient, but it comes with its concerns. If you input even one digit of your account number incorrectly, it’ll result in you losing the money entirely. The IRS won’t repay your refund just because they sent the money to the wrong account. Either triple check your account numbers when you file, or ask for a check to make sure you get your money.

6. Deduction Mistakes

If you own your own business, you’re allowed to make certain deductions for business expenses. However, be careful in this process. You never want to deduct more or less than necessary. One will result in IRS scrutiny and possible penalties and the other will require that you pay extra.

7. Inaccurate Charitable Contributions

Always keep your receipts and backup documentation when making charitable donations. Without these receipts, the result could lead to inaccuracies on your taxes that could cost you big.

8. Shopping Around for a Big Refund

Stop trying to find someone who will give you the biggest refund possible. Instead, look for someone who will do your taxes correctly and will save you from tax errors that can lead to penalties or an audit.

Whether your business is made up of a single person or a few dozen, you’ll need to prepare before filing your taxes this year. At AA Tax & Accounting Services, we know how difficult this time of the year can be for small business owners, so we’ve created a simple list of things to know as you file your business taxes.

Assemble Your Records

Begin by collecting any applicable business records. This will include information such as:

• Employment forms (W-2s, 1099s, etc)
• Recorded tax deductions (advertising, phones, internet, office supplies, transportation, travel, office space costs, repairs, insurances, etc.)
• Gross receipts from sales or services
• Sales Records
• Returns and allowances
• Business account statements
• Inventory information

When you meet with your certified tax preparer, you’ll need this information to fill in the applicable fields on your tax form.

Keep Clean and Accurate Records of Your Deductions

When assembling records in preparation for file, be sure to include deductions. It’s best if you write down your deductions as you go to avoid taking too many deductions or too few when the end of the year comes around. You can receive tax credits for anything from your office space and business car to your travel expenses and insurance policies.

Remember to Pay Quarterly

It might be a little late to tell you this, but if you’re a small business owner, you should have been making estimated tax payments quarterly. If you failed to do so last year, you can still pay your taxes, but you’ll be subjected to a small fee when you file. The first quarter payment of the year is due April 15, so if you didn’t pay quarterly last year, there’s still time do so this year.

Choose Your Form

You have a couple of options for tax forms. One choice is Schedule C, which is a simple way to list expenses and calculate earnings. You can also use Form 1120, which calculates the same things, but asks for more details along the way. If you fill out Form 1120, it will be an entirely separate tax form from your personal income tax report.

You Might Not Get a Refund

If you’ve been paying estimated tax throughout the year, you might get some money back. But, depending on the revenue you generated, you might owe money when tax day comes around. Be sure that you have some cash saved up just in case.

The ultimate secret to successful tax filing is found in your preparation. If you’re ready, you’ll be able to relax, save money and time, and enjoy an all-around better tax experience.

Once upon a yesteryear, the role of an accountant was a very different one. Receipts, invoices, and shoeboxes full of miscellaneous papers all needed to be sifted through, organized, and logged. With the advent and exponential integration of mobile internet access, the role of the accountant is changing. Now, records and receipts are logged electronically and can be accessed from anywhere at any time.

This access to information is important, because every business lives and dies on numbers. Numbers are the language of any successful business, and accountants are the translators. Where previously an accountant was limited only to the information immediately available, they can now post questions on the internet, interact with their client instantaneously through a Facebook chat or Twitter, or even hold an impromptu meeting through Skype.

Freedom From Paper

Up until the turn of the 21st century, accountants were shackled to physical paper. Reams of it listed columns of numbers and data. Everything had to be manually calculated and organized by the accountant and presented as clearly as possible to the clients. With the advent of software such as Microsoft Excel, this entire process shifted into a sleek machine. Where before the accountant had to manage the numbers, now the computer handled the information. As time has advanced even further, more and more companies have been able to create entire suites of software designed to help the accountant:

• Manage statements for accuracy
• Track and compute taxes owed and ensure they’re paid on time
• Keep the accounting books organized and up to date
• Test financials and provide advice in how the business can save money both in reduced costs, as well as make money with increased revenue

Sky’s the Limit

The entire nature of business itself is growing with every new discovery and technological advancement. As the world becomes increasingly more comfortable integrating their lives with the internet, allowing their information to be readily accessed, simple evolution has dictated that businesses enhance their methods in order to survive. This has caused more companies to allow the interchange of information through private, secure intranets, portals, and encrypted emails. This information was once carried out in face-to-face meetings accompanied by those boxes of receipts. Now a swift, secure, and immediate exchange with the click of a mouse button ultimately saves money in both reduced scheduled meeting times as well as travel costs.

The latest iteration of this technology already utilized by dozens of businesses across as many industries is the cloud. A 2014 survey posed questions to firms about which software choices they were using. With vendors already releasing software-as-a-service (SaaS) versions of their products, it’s becoming a viable option for accounting firms looking to stay ahead of the game.

New software and technology is developed every year. With it, the face of accounting is not only becoming more efficient, but changing for the better, helping businesses run more efficiently and stay on track.

Sources: CPA Practice Advisor, Nola.com

It’s tax season, and if you own a business, that means a lot of extra paperwork. With so many different tax forms — and even more added every year — it’s easy for some to slip through the cracks. Here are a few tax documents you may need.

We’re going to talk about:

• Non-profit 990
• Sales Tax, and
• Heavy Highway Use

Let’s dive in!

Non Profit 990

If you’re a non-profit business, the 990 is a must-have. Required by the IRS, the 990 form is used as a way of reporting the annual income and total assets for most organizations that are exempt from income tax.

Anyone filing any sort of government form knows that wording is specific and critical. This is even truer about tax forms. Some clients have been confused when the 990 form refers to both “the organization” and the “filing organization.” These are the same entity: the organization filing the form. However, said organization cannot file a single form to consolidate information from other organizations. Each requires its own form.

Sales Tax

Reporting sales tax is a beast of another color. As defined by the Utah State Tax Commission, sales tax is a tax specifically on the rental or retail sale of tangible personal property, admission and user fees, and certain services provided. The tricky part is that the tax is on the transaction itself, and not the item. This means that it’s the purchaser who is paying the tax, and the role of the business is simply to collect it and pass it on to Utah. This tax can be reported monthly, quarterly, or annually.

The forms you’ll need differ depending on if you’re a single place of business (Form TC-62S) or multiple places (Form TC-62M) but in either case, if your annual sales tax liability is $96,000 or more, you’ll have to file it electronically anyway.

Heavy Highway Use

Form 2290 and a Schedule 1 is required for any highway heavy vehicle weighing 55,000lbs or more. This isn’t just limited to major companies, but includes individuals, LLCs, Corporations, or any other form of organization running these types of vehicles.

This tax applies to any vehicle designed to carry a load over public highways, regardless of the load. This means that if you were to buy a heavy vehicle from a dealer and simply drove it from the dealership to your home using public highways, that drive would be your first taxable use of the vehicle.

When it comes to heavy highway use vehicles, the 2290 must be filed the month of the vehicle’s first use on public highways during the current period. The form must be filed by the last day of the month following the first month.

Organize, Organize, Organize

Taxes can be a complicated thing with many ins and outs. To make your life easier, be sure to:

• Make sure you have all the forms you’ll need
• Make sure each form is filled out correctly, proof read, as any mistakes could delay or even have them sent back to be redone
• Stay mindful of deadlines

Utah tax laws change every year, and with all of these forms and rules to follow, it can be daunting for anyone. If you’re looking for that professional touch to make sure everything is in order, it never hurts to reach out and ask people whose job it is to be knowledgeable and helpful.

Sources: IRS, Utah State Tax Commission