Wednesday, August 31st, 2011
I came across this article and it has 5 great tax deductions you can take as a small business. If you’re a small business owner make sure you’re at least \”trying\” to take these deductions. they can really help lower your tax bills.
1. Write off all your medical expenses as a business deduction with a medical reimbursement plan. Here’s a way to treat all your medical expenses as a business deduction, including those not covered by insurance. If you are a sole proprietor and you currently have no employees, you can put your spouse on the payroll and then reimburse him/her for all out-of-pocket medical expenses. End result: your business gets a deduction and the reimbursement is tax-free to your spouse/employee. Other business entities can use this strategy, too, but the specifics vary from entity to entity, so be sure to consult with a tax pro to sort out the best way to do this for your particular situation.
2. Medical expenses are viewed differently with different countries. Generally though, on American or Canadian tax software, write off all your medical expenses as a business deduction with a medical reimbursement plan. Here’s a way to treat all your medical expenses as a business deduction, including those not covered by insurance. If you are a sole proprietor and you currently have no employees, you can put your spouse on the payroll and then reimburse him/her for all out-of-pocket medical expenses. End result: your business gets a deduction and the reimbursement is tax-free to your spouse/employee. Other business entities can use this strategy, too, but the specifics vary from entity to entity, so be sure to consult with a tax pro to sort out the best way to do this for your particular situation.
3. Say good-by to depreciation with the Section 179 deduction. Congress has done well to greatly increase the amount of business equipment you can write off 100% in the year of purchase. Forget those crazy depreciation rules. The Section 179 deduction rocks! At the time of this writing, you can deduct the entire purchase price of up to $500,000 of most business equipment, such as computers, printers and office furniture. Of course, every great deduction has a few tricky rules, so make sure you read the fine print to ensure you qualify for this one.
4. Plan your trips to maximize travel deductions. If you plan your out-of-town excursions right, you can mix business with pleasure and still get a deduction for your transportation, lodging and meal expenses. To get the most out of this strategy, the key is that the trip to primarily for business purposes. Be sure to document your time spent on business activities throughout the trip. For example, on domestic trips, if more than 50% of your days are spent primarily on business, then 100% of your round-trip transportation costs are deductible, even though you engage in recreational activities during the trip.
5. Deduct your commuting mileage. This deduction goes hand in hand with the home office deduction. For this to work, you also must have a second work location outside of your home. Here’s the deal: normally, commuting mileage is non-deductible. But mileage between two business locations is deductible. So if you start your day by working in your home office, and you then drive from your home office to your second office or other work location, you’ve just converted non-deductible commuting miles into bona fide business miles. Sweet.
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Wednesday, August 24th, 2011
OK. So what happens when you have almost $500,000 dollars that’s not accounted for in your accounting books? You guessed it. You get a visit from the IRS.
All of us accountants have to make sure our clients don’t do stupid mistakes like this. It’s just an example of how bad accounting can get you in a world of trouble.
Read this and you’ll see what I mean:
LOUISVILLE, Ky. (AP) – The Internal Revenue Service is auditing a high school booster club’s books to find out why it has as much as $480,000 in funds that are unaccounted for.
Fern Creek booster club president Tim Fries says the IRS has been auditing the club for 17 months, since before he became president. Fries told The Courier-Journal (http://bit.ly/q36JIM ) that he has warned members that the club may be required to pay a fine.
An attorney for the booster club says he has seen no evidence that money was embezzled from the booster club and the problem may simply be poor bookkeeping. He says he expects a report on the audit in the next week.
The club has raised money to support the school’s athletes by selling concessions and running regular bingo games.
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Friday, September 10th, 2010
You can now hire a virtual assistant to manage your small business accounting tasks. It is way easier then looking for and finding an accounting company. A virtual assistant is a skilled professional who works on different tasks, depending on what you agree on. They are not full time employees, they do not need to set foot into your office, and they don’t even need to be trained. They are equipped with skills, computers and software, communication gadgets and apparatus. They work on a contractual basis so you don’t need to think about paying for their insurances, taxes, incentives, bonuses, you don’t even have to deal with giving them paid leaves, or to deal with their absences. In short, you get all the bookkeeping assistance that you need and nothing else.
They bookkeeper or virtual assistant can fax or email to your office your bank statements, copies of checks and others every month. They cod the statements to the right accounts; reconcile the bank statements as well as the credit card statements. Then they email you back those monthly financial statements.
These VAs usually conduct a monthly meeting with you to help you analyze your financial reports so that you would understand you financial status. They also notify you of any transactions which are suspect.
Some VAs may ask for a higher fee, sometimes as much as $100 a month for a 10 page banks statement, any additional pages are usually $10 each.
With this set up, you can save thousands of dollars every year and you don’t have to deal with any accounting software which you don’t know how to operate anyway. Most of all, you don’t need the headache of having to install the latest upgrading software to keep you on track.
Accountants who visit your office every month will no longer have to be dealt with, and you can even use the office space for the in office bookkeeper for something else.
The virtual bookkeeper is highly skilled and they are professionals, the only difference is that you may never have to meet them face to face or for them to even step into your office. They can do their work from anywhere, as long as there is a high speed internet.
You get to manage your accounts easily with a virtual bookkeeper and because you are now worry free, you can do other tasks that need your immediate attention, and that includes the task of having to make sure that your family life is active and strong.
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