Category: Accounting

Tax Season: 3 Tips for Small Businesses

Post author By peakreliance
Post date December 20, 2022
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Tax Season: 3 Tips for Small Businesses

December 20, 2022

peakreliance

Accounting, Taxes

It is common for small business owners to put off thinking about taxes until the last minute. However, starting to prepare for tax season early can help you reduce your tax burden, increase deductions, and avoid the stress of trying to complete everything at the last minute. By getting a jump on tax season, you can take proactive steps to minimize your tax burden and ensure that you are well-prepared for the upcoming filing deadline.

Keep employee and independent contractor information up-to-date

As a small business owner, it is important to keep track of all your independent contractors and employees. If you work with independent contractors who are not employees or an incorporated business, you will need to submit a 1099 form to report any payments of $600 or more. To ensure you have the most accurate contact information for your contractors, you may request that they fill out a W-9 form, which will provide you with their business tax identification number and contact information.

To prepare for tax season, it is also important to make sure that you have updated contact information for all your employees. You should request that all employees log into your payroll system and update their information before the end of the year. By January 31, each employee should receive a W-2 form. By starting early and ensuring that you have accurate and up-to-date information for all your contractors and employees, you can avoid last-minute issues and ensure a smooth tax season.
Boost Your End-of-Year Deductions

As the end of the year approaches, it is a good idea to consider ways to minimize your tax bill. Here are a few ways you can do this:
- Buy Necessary Equipment: If you need to purchase new computer equipment or office furniture, you may be able to deduct the cost of these items on your taxes. Under Section 179, small businesses are allowed to take a tax deduction of the full purchase price for certain qualifying property, such as business equipment and supplies like computers and office furniture, rather than depreciating the cost over time.
- Provide Donation to a Qualified Charitable Organization: Donating cash or in-kind (property or equipment) to a qualified charitable organization can help you reduce your tax burden. Your deduction limits will depend on your business’s organizational structure.
- Give your employees year-end bonuses: If your business has had a successful year, consider giving bonuses to outstanding employees before the end of the year. Bonuses given before December 31 can help minimize your tax burden.
- Organize a Reasonable Holiday Party: Your holiday party expenses may be deductible if they meet certain criteria established by the IRS. For example, the IRS may allow you to deduct 100% of your holiday party expenses if the event promotes employee goodwill and is limited to all employees (not including the owner) and their spouses. No contractors, vendors, or business contacts are allowed to attend in order to qualify for the full deduction. Additionally, the event must be reasonable in relation to your annual revenue and not considered extravagant.
Gather documentation

To minimize your tax burden, it is important to have accurate and well-organized documentation for all your expenses and deductions. This may include receipts, invoices, and other documentation. You may want to make copies or electronically scan paper receipts and other hard-to-read documents to ensure that you have access to them when you need them.

Start collecting receipts and invoices for items that are often overlooked, such as cloud-based subscription services like Dropbox, domain names and web hosting, and online shopping services like Amazon Prime or membership programs like Costco, if they are used exclusively for your business. You should also review business credit card accounts, current year bank statements, or last year’s tax returns to identify any forgotten expenses. Don’t forget to gather receipts for any paid professional services, such as attorney fees, membership dues, or business-related publications. If you attended any conferences or trade shows this year, make sure to gather receipts for the event registration fee and related expenses like parking or toll fees.

It is a good idea to start organizing your documentation as early as possible, rather than waiting until the end of December. This will help you avoid last-minute scrambling to find receipts and get your documents to your tax professional in a timely manner. Consider setting up an easy-to-use filing system to help you keep track of all your documents and files.

Don’t let tax season stress you out! Let Peak Reliance help you navigate the complexities of small business tax preparation. Our team of experts will ensure that you receive all the deductions and credits you’re entitled to, and help you file your taxes accurately and on time. To learn more about our services and pricing, visit our pricing page or give us a call at (718) 218-5558. You can also email us at [email protected] with any questions or to schedule a consultation.

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How Long Does it Take for an Accountant to Complete My Taxes?

Post author By peakreliance
Post date December 19, 2022
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How Long Does it Take for an Accountant to Complete My Taxes?

December 19, 2022

peakreliance

Accounting, Taxes

As tax season approaches, you may be considering whether to hire an accountant to prepare your taxes. In addition to the cost of hiring a professional, you may also be wondering about the turnaround time for tax preparation. In general, if you have a complicated tax situation, such as an inheritance, small business taxes, or other significant life changes, it may be worthwhile to hire a certified public accountant (CPA) to handle your taxes. On the other hand, if your taxes are relatively straightforward, you may be able to save time and money by completing them yourself.

What is the average turnaround time to wait for an accountant to do my taxes?

The turnaround time for an accountant to prepare your taxes can vary depending on the complexity of your return and how promptly you provide them with the necessary documents and information. It’s a good idea to plan ahead and ask an accountant for an estimated timeline before the tax filing deadline. There are also steps you can take to speed up the process, such as gathering all relevant documents and information in advance and communicating clearly with your accountant.

What is the cost of preparing a tax return and how long will it take?

There are a few factors that can impact the time it takes to file your taxes, some of which are within your control.

First, it’s important to have all necessary documentation and forms ready for your tax preparer. This includes income statements like W-2s and 1099-NECs for independent contractor earnings, as well as forms like the 1098 for mortgage interest and insurance premiums.

If you plan to itemize deductions rather than take the standard deduction, you’ll need to have receipts for eligible expenses such as medical and dental expenses, mortgage interest, and state or local property tax. Make sure to organize these receipts and provide them to your tax preparer.

Remember to also consider any deductions or credits that you may be eligible for, as these can significantly reduce your tax liability and may affect the complexity of your return.

How do small businesses prepare taxes?

As a small business owner, your tax situation may be more complex due to the various deductions and credits you may be eligible for. It’s important to keep track of receipts and other documentation throughout the year to claim these deductions and credits. Online accounting software can be helpful in managing your business income and expenses.

The cost of tax preparation and filing can vary depending on the complexity of your return. More complex returns may require higher fees, but these fees may be offset by any tax refund you receive. If you choose to work with a local accounting firm that specialized in tax preparation, you may pay more for their services, but they can offer expertise and knowledge of tax law and code to ensure you receive all available deductions.

At Peak Reliance, we offer a range of plans to meet the tax needs of businesses of all sizes. Our accounting team is knowledgeable about tax law and can assist you with tax planning to minimize your tax expenses in the future.

How much time do you spend preparing your tax returns?

If you have filed your own tax returns in the past, you may have spent a considerable amount of time and effort ensuring that everything was filled out correctly. This may have involved gathering all necessary tax forms and expense records, checking to make sure you included every applicable form, such as form 1040, and handling more complex situations like capital gains or business deductions. You may have even had to itemize your deductions due to large medical expenses, further adding to the complexity of your tax return. Despite your efforts, you may still have had doubts about the accuracy of your return. In such cases, it may be beneficial to hire a professional to handle tax preparation for you. Not only can they ensure that everything is done correctly, but they can also help prevent common errors that could slow down the filing process.

Do You Need an Accountant to Do Your Taxes?

If you need help preparing your taxes, it’s best to hire a qualified tax preparer. There are three main types of qualified tax preparers: enrolled agents (EAs), certified public accountants (CPAs), and tax lawyers. These professionals have the education and experience to handle complex tax situations. Retail firms may also offer tax preparation services, but the individuals working there may not have specific tax training.

Hiring a qualified tax preparer can save you time, energy, and potentially even money. They are familiar with the IRS tax code and must stay up-to-date on any changes. They also may be aware of deductions that you may not know you qualify for.

If you own a business, it’s likely that you’ll need the services of a tax preparer. Business taxes are often more complex than personal tax returns, and may require expertise in areas such as employee taxes, equipment, and investments. Tax consulting services can help ensure that your business tax return is completed correctly.

To ensure a smooth and efficient tax filing process, it’s important to keep all of your tax-related documents organized and stored throughout the year. This will help you to quickly locate any information that you need when it comes time to file your taxes.

If you are a small business owner or have more complex tax needs, it may be helpful to consider using a professional tax preparer like Peak Reliance. These services can save you time and money, especially if your tax return is complicated. Contact Peak Reliance for expert assistance with your small business tax needs. To learn more about our services and pricing, visit our pricing page or give us a call at (718) 218-5558. You can also email us at [email protected] with any questions or to schedule a consultation.

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How to Properly Keep IRS Receipts for Tax Deductions

Post author By peakreliance
Post date December 18, 2022
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How to Properly Keep IRS Receipts for Tax Deductions

December 18, 2022

peakreliance

Accounting, Taxes

Are you a business owner trying to understand the IRS receipt requirements for tax purposes? Don’t worry, you don’t need to keep a massive collection of physical receipts in order to meet the expectations of the Internal Revenue Service. While it is important to keep track of your expenses, the IRS does not require you to keep physical copies of every single receipt as proof of your deductions. In fact, the IRS receipt requirements are not as strict as you may think.

A simple guide to tax deductions for your business

As a business owner, you are required to file income tax returns with the IRS and pay any taxes owed based on your business’s earnings. However, you can reduce the amount of taxes you owe by claiming tax deductions for qualified business expenses.

For example, if you purchase a new desk and computer for your business, you can subtract the cost of those items from your earnings when you file your taxes. Tax deductions lower your income and therefore decrease your tax obligation.

There are numerous opportunities for tax savings through deductions, as long as you have the necessary documentation. Some common deductible expenses include:

Transportation expenses for business travel
Meals or lodging expenses from company trips
Office furniture
Technology
Marketing expenses
Contractor fees

It’s important to note that simply having a receipt is not enough to prove that an expense is deductible. The IRS requires expenses to be “ordinary, necessary, and reasonable” for business purposes. Therefore, that luxurious vacation may not qualify as a deductible expense.

How does a business tax receipt work?

A business tax receipt is a record that provides documentation of business expenses that are included as deductions on a tax return. This includes information about what was purchased, the amount paid, and the date of purchase. Business tax receipts may be required by the Internal Revenue Service (IRS) in the event of questions about a tax return or during an audit. It is important to note that a business tax receipt is not the same as a permit allowing a business to collect sales tax in a particular state, which may also be referred to as a business tax receipt.

What receipts should I keep? How about other documents?

It is important to keep supporting documents that provide itemized proof of purchase for business expenses. This may include receipts, credit card statements, bank statements, canceled checks, itemized invoices with digital payments, and real estate closing statements. It is also important to document income by keeping receipts of income such as cash register tapes, receipt book stubs, invoices with digital payments, cleared or canceled checks, bank statements, and IRS 1099 forms.

These documents may be in physical or digital form and should be kept for the duration of the tax year. It is important to properly store and organize these documents to make them easily accessible when needed.

What is the best way to organize and manage my business tax receipts?

To effectively manage and organize your business tax receipts, it is best to go digital. This means storing electronic copies of bank statements, purchase history, credit card statements, and online banking records. These records will often be automatically tracked, making it easier for you to stay organized and prepared for a potential IRS audit. If you do have physical receipts, such as for large cash purchases, there are financial apps that can convert them to digital copies for electronic storage.

To store these digital records, you can simply download them and save them in categorized folders. It can be helpful to regularly organize your expenses to make it easier to locate relevant deductions come tax time. However, you may need to pay more attention to documentation for cash transactions and reimbursements. In these cases, it is important to keep thorough records in order to properly account for these expenses during tax season.

Receipts must be kept for how long?

In general, it is recommended that you keep business receipts for at least three years. However, in certain situations, the IRS may require you to retain your receipts for up to six years. For example, if you underpaid your taxes by more than 25%, you will need to have records on hand for a longer period of time.

You may be able to find documentation from previous years through online bank records or merchant websites, but it is not guaranteed that these older documents will be available. Additionally, you will not have access to records on accounts that you have closed or stores that have closed or changed their websites.

To properly store receipts, it is best to download digital PDF copies (if available) and save them in a folder for each month and year. You can also scan paper receipts using a digital receipt app. It is important to ensure that these folders are backed up or saved in a secure, easily accessible location so that you can access them as needed in the future.

How do I deal with reimbursements?

It is common for business owners or employees to use their personal credit cards or bank accounts to make purchases on behalf of the company and then be reimbursed from the business account. These types of reimbursements are common in large organizations and are completely legal. However, it is important to keep thorough documentation of these transactions, including details about what was purchased, when, and for how much, as well as information about the original payment method and the reimbursement amount. This documentation will be necessary to properly account for these expenses during tax season.

How do I deal with cash purchases?

It can be challenging to track and document cash purchases, as there is no automatically generated statement like there is with credit card transactions. It is important to carefully record and track your use of cash to ensure that all business-related expenses are properly accounted for during tax season. It is also good practice to obtain itemized receipts for large cash expenditures, as these can be helpful for tax purposes. However, it is worth noting that the Cohan rule allows for some flexibility in terms of documentation for smaller cash purchases. This rule allows taxpayers to claim business expenses even if receipts are lost or misplaced, as long as the expenses are considered “reasonable and credible.” Therefore, if you have lost the receipt for a small cash purchase, it may not necessarily be a problem.

How can Peak Reliance help?

Are you struggling to keep track of your business tax receipts and documentation? Let Peak Reliance help you stay organized and prepared for tax season. Our team of experts can assist you with implementing a system for tracking and storing your receipts digitally, as well as providing guidance on how to properly document cash transactions and reimbursements. To learn more about our services and pricing, visit our pricing page or give us a call at (718) 218-5558. You can also email us at [email protected] with any questions or to schedule a consultation. Contact us today to learn more about how we can support your business.

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Accounting Bookkeeping Taxes

5 Reasons Why Bookkeeping is an Important First Step in Settling Your Tax Debt

Post author By peakreliance
Post date December 17, 2022
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5 Reasons Why Bookkeeping is an Important First Step in Settling Your Tax Debt

December 17, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Bookkeeping is an essential aspect of managing your finances and ensuring that you are in compliance with tax laws and regulations. It involves accurately tracking and recording your income, expenses, and other financial transactions, which helps you get a clear understanding of your financial situation. In this article, we will discuss five reasons why bookkeeping is an important first step in settling your tax debt.

Determining your tax liability: One of the main reasons why bookkeeping is important in settling your tax debt is that it allows you to determine how much you owe in taxes. By accurately tracking and recording your income and expenses, you can determine your tax liability and create a plan to pay off the debt.
Accurate tax liability determination requires keeping track of your income and expenses throughout the year. This can be done through proper bookkeeping, which involves accurately tracking and recording your financial transactions. By keeping accurate financial records, you can ensure that you are reporting all of your income and claiming all of the deductions and credits you are entitled to.

Once you have accurately determined your tax liability, you can create a plan to pay off the debt. This may involve negotiating a payment plan or settlement with the Internal Revenue Service (IRS) or state tax agency. If you are unable to pay the debt in full, you may be able to negotiate a payment plan or settlement to pay off the debt over time. Having accurate financial records can help you provide the necessary information to negotiate a favorable payment plan or settlement.

In addition to helping you pay off your tax debt, accurately determining your tax liability can also help you avoid any potential penalties or fines. The IRS and state tax agencies may audit your tax return or request documentation to verify the information you have reported. Having accurate and complete financial records can help you provide the necessary documentation and avoid any potential penalties or fines.

Overall, determining your tax liability is an important step in settling your tax debt because it helps you create a plan to pay off the debt, avoid any potential penalties or fines, and ensure compliance with tax laws and regulations. By accurately tracking and recording your income and expenses and calculating your tax liability, you can take control of your financial situation and work towards paying off your tax debt.
Identifying potential tax deductions: First and foremost, tax deductions reduce the amount of taxable income you have, which means you will owe less in taxes. If you are able to claim enough deductions, it could potentially lower your tax bill enough to help you pay off your tax debt.
Additionally, identifying potential deductions can help you negotiate with the Internal Revenue Service (IRS) to pay off your debt. If you can show that you have taken steps to reduce your taxable income, such as by claiming deductions, the IRS may be more likely to work with you on a payment plan or offer other relief options.

Finally, identifying potential deductions can help you avoid getting into tax debt in the first place. By claiming all the deductions you are entitled to, you can reduce your tax bill and ensure that you are not overpaying on your taxes. This can help you avoid the need to borrow money or pay interest and penalties on unpaid taxes.

Overall, identifying potential tax deductions is an important step in managing your tax debt and ensuring that you are paying the right amount of taxes. By taking the time to review your tax situation and claim all the deductions you are entitled to, you can potentially reduce your tax bill and make it easier to settle your tax debt.
Compliance with tax laws and regulations: Proper bookkeeping is essential for compliance with tax laws and regulations. It helps to ensure that you are accurately reporting your income, expenses, and other financial transactions. This is important because it allows you to accurately determine how much tax you owe and to file your tax returns on time.
If you are not keeping proper records or if you are not reporting your income and expenses accurately, you may end up owing more in taxes than you should. This can lead to tax debt, which can be difficult to resolve.

On the other hand, if you are keeping accurate records and complying with tax laws and regulations, it will be easier for you to settle your tax debt. For example, if you have overpaid your taxes, you may be able to get a refund or credit to help offset your tax debt. If you have underpaid your taxes, you may be able to negotiate a payment plan or offer in compromise with the IRS to help resolve your tax debt.

In short, proper bookkeeping and compliance with tax laws and regulations are essential for settling your tax debt. It is important to keep accurate records and to report your income and expenses accurately in order to avoid tax debt and to resolve any tax debt that may arise.
Negotiating a payment plan or settlement: Negotiating a payment plan or settlement for your tax debt can be a complex and stressful process, but it’s important to remember that the Internal Revenue Service (IRS) wants to work with you to find a solution that is mutually beneficial. One way to approach this process is by using bookkeeping to help negotiate a payment plan or settlement.
Here are some steps you can take to use bookkeeping to negotiate a payment plan or settlement for your tax debt:
- Gather all of your financial documents, including tax returns, pay stubs, bank statements, and any other documents that show your income and expenses.
- Use bookkeeping software or a spreadsheet to create a budget that shows how much money you have coming in and going out each month. This will help you understand how much you can realistically afford to pay towards your tax debt.
- Contact the IRS and explain your situation. Be honest about your financial situation and explain that you are willing to work with them to find a solution.
- Consider negotiating a payment plan with the IRS. If you can’t pay your tax debt in full, you may be able to negotiate a payment plan that allows you to pay off your debt in smaller monthly installments.
- Alternatively, you may be able to negotiate a settlement with the IRS. This could involve paying a reduced amount of your tax debt in exchange for a release from the remaining balance.
- Use your budget and financial documents to support your case for a payment plan or settlement. The IRS will consider your ability to pay when determining the terms of a payment plan or settlement, so it’s important to have a clear understanding of your financial situation.
- Keep track of your payments and make sure to meet all of the terms of your payment plan or settlement. If you fail to make payments or meet the terms of your agreement, the IRS may take enforcement action, such as garnishing your wages or seizing your assets.
By using bookkeeping to help negotiate a payment plan or settlement for your tax debt, you can work with the IRS to find a solution that is financially feasible for you. It’s important to be honest and proactive in this process, as the IRS is more likely to work with you if you are willing to take steps to resolve your tax debt.
Improved financial management: In addition to helping you settle your tax debt, accurate bookkeeping can also improve your overall financial management. By tracking your income and expenses, you can identify areas where you can cut costs and save money, and make informed financial decisions.

One of the primary benefits of proper bookkeeping is that it allows you to have a clear and accurate record of your income and expenses. This can be especially useful when it comes to tax time, as you can use your records to accurately report your income and claim any deductions or credits that you are eligible for. In addition, if you are self-employed or run a small business, proper bookkeeping can help you to keep track of your business expenses, which can be deductible for tax purposes. This can help to reduce your overall tax burden and make it easier to settle any tax debt that you may owe.

Proper bookkeeping can also help you to identify any errors or discrepancies in your tax return. For example, if you have made a mistake in calculating your income or claiming deductions, this may result in tax debt. By keeping accurate and detailed records, you can more easily identify and correct any errors before filing your tax return, which can help to reduce the likelihood of incurring tax debt.

In general, bookkeeping is a necessary first step in resolving your tax debt, since it aids in understanding your financial situation, identifying tax deductions, complying with tax laws, negotiating a payment plan or settlement, and improving your financial situation. By accurately tracking and recording your income and expenses, you can create a plan to pay off your tax debt and avoid any potential penalties or fines.

How Peak Reliance Can Help

If you’re looking for expert bookkeeping services to help you keep track of your financial transactions and improve your overall financial management, look no further than Peak Reliance. Our team is here to help you streamline your bookkeeping processes, identify and correct errors, and make informed decisions about your finances.

Need help settling your tax debt? We can assist you in negotiating a payment plan with the tax authorities, identifying any errors or discrepancies in your tax return, and finding ways to reduce your overall tax burden.

To learn more about our services and pricing, visit our pricing page or give us a call at (718) 218-5558. You can also email us at [email protected] with any questions or to schedule a consultation. We look forward to helping you achieve financial stability and success.

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8 Common Tax Issues and Their Solution

Post author By peakreliance
Post date December 16, 2022
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8 Common Tax Issues and Their Solution

December 16, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Taxes can be a complicated and confusing topic for many people. While everyone is required to pay taxes, there are a variety of issues that can arise that can make the process even more difficult. Here are 8 common tax issues and solutions to help you navigate through them.

Filing taxes late
If you miss the deadline to file your taxes, you may be subject to penalties and interest. To avoid this, make sure to file your taxes on time, even if you can’t pay the full amount due. If you need more time to file, you can request an extension using Form 4868. This will give you an additional six months to file your taxes, but it does not extend the deadline to pay any taxes owed. If you can’t pay your taxes in full, you can make partial payments and work out a payment plan with the IRS.
Incorrect information on your tax return
If you realize that you have made a mistake on your tax return, don’t panic. Simply file an amended return using Form 1040X. Be sure to double-check all of your information and make sure it is accurate before submitting the amended return.
Not receiving a tax refund
If you’re expecting a tax refund and haven’t received it, there could be a few reasons for this. It could be that your return was lost in the mail, or that it was sent to the wrong address. It could also be that your refund was applied to a past due debt or used to offset any unpaid taxes. To check the status of your refund, you can use the IRS’s “Where’s My Refund” tool online.
Receiving a notice from the IRS
If you receive a notice from the IRS, don’t ignore it. It’s important to respond to the notice as soon as possible, even if you think it’s a mistake. If you need help understanding the notice, you can contact the IRS or seek the assistance of a tax professional.
Failing to report all of your income
If you fail to report all of your income on your tax return, you may face penalties and interest. It’s important to report all of your income, even if you don’t receive a W-2 or 1099 form for it. If you receive a notice from the IRS for failing to report all of your income, it’s best to respond to the notice and pay any additional taxes owed as soon as possible to minimize any penalties and interest.
Not paying estimated taxes
If you are self-employed or have income that is not subject to withholding, you may be required to pay estimated taxes. These taxes are due on a quarterly basis and must be paid on time to avoid penalties. If you’re having trouble paying your estimated taxes, you can contact the IRS to request a payment plan or extension.

By being aware of these common tax issues and knowing how to address them, you can ensure that you are in compliance with tax laws and avoid any unnecessary headaches. If you have any questions or concerns about your taxes, it’s always a good idea to seek the help of a tax professional.
Forgetting to set aside money for taxes
Not setting aside money to pay taxes can be a serious mistake that can lead to financial difficulties. When you don’t pay your taxes on time, you may be subject to penalties and interest, which can add up quickly and make it even more difficult to pay what you owe.

One way to avoid this issue is to set aside a portion of your income each month specifically for taxes. This way, you’ll have the money you need when it’s time to file your taxes and pay what you owe. You can also consider adjusting your withholding on your paychecks so that more money is taken out each pay period to cover your taxes. This will help to ensure that you have the funds available to pay your taxes when they are due.

If you are self-employed or have income that is not subject to withholding, you may be required to pay estimated taxes on a quarterly basis. It’s important to make sure you set aside enough money to cover these payments to avoid any penalties and interest.

If you are having trouble paying your taxes, it’s important to contact the IRS as soon as possible. The IRS may be able to work with you to set up a payment plan or offer other options to help you pay your taxes. It’s always better to address any issues with taxes early on rather than waiting until it’s too late.
Keeping poor record
Poor record keeping can lead to a variety of problems, including tax issues. When you don’t keep accurate records of your income and expenses, it can be difficult to prepare your tax return accurately and claim all of the deductions and credits that you are entitled to. This can result in you paying more in taxes than you should, or even facing penalties and interest if you make mistakes on your tax return.

In addition to tax issues, poor record keeping can also make it difficult to track your finances and make informed financial decisions. It can be challenging to keep track of your spending and budget if you don’t have accurate records of your income and expenses.

To avoid these problems, it’s important to keep good records of your financial information. This includes keeping track of all of your income, including salary, investments, and other sources of income. You should also keep track of your expenses, including bills, receipts, and other documents related to your financial activities. By keeping accurate records, you can ensure that you are prepared to file your tax return accurately and claim all of the deductions and credits you are entitled to. You’ll also have the information you need to track your finances and make informed financial decisions.

Are you struggling with tax issues and feeling overwhelmed? Don’t worry, you’re not alone. At Peak Reliance, we understand that tax issues can be complex and stressful, which is why we offer a range of services to help you navigate the process and find the best solution for your specific needs. Check out our pricing and various plans, call us at +1 (718) 218-5558 or email us at [email protected] to get started.

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2022 Corporate Income Tax in Florida: A Comprehensive Guide

Post author By peakreliance
Post date December 14, 2022
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2022 Corporate Income Tax in Florida: A Comprehensive Guide

December 14, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Corporate income tax is an important aspect of running a business. It can be a complicated and time-consuming task to understand and stay up-to-date on the latest corporate income tax laws. In Florida, the corporate income tax rate is subject to change each year. As we look ahead to 2022, it is important to familiarize yourself with the current corporate income tax laws in Florida. This article will provide an overview of the corporate income tax in Florida for 2022, including the current tax rate, filing deadlines, and other important information. By understanding the corporate income tax laws in Florida, you can maximize the benefits of your business and minimize any unnecessary stress or costs.

Overview of Corporate Income Tax in Florida

Corporate income tax is a tax on the net income of businesses that are incorporated. An incorporated business is one that has received legal recognition by forming a corporation or limited liability company. All 50 states and the District of Columbia collect corporate income tax, but the rates, due dates, and rules vary from state to state. The corporate income tax is one of the most expensive taxes on businesses. The corporate income tax rate is determined by the state in which a business operates. States also have different thresholds for when businesses are subject to corporate income tax. For example, some states require businesses to have a minimum amount of gross annual revenue before they are required to pay corporate income tax.

Current Corporate Income Tax Rate in Florida

Florida’s current corporate income tax rate is 5.5%. This rate is set to remain in effect throughout 2022. All corporations operating in the state of Florida are subject to this rate, regardless of the amount of revenue they generate. This rate applies to corporate income tax returns that are due by May 01 of each year.

2022 Corporate Income Tax Filing Deadline

Corporate income tax returns due in 2022 will be filed on May 01, 2023. This means that you will have until May 01 to file the corporate tax return for the year 2022. It is recommended that you file your corporate tax return as soon as possible after the end of the calendar year. The longer you wait to file your corporate tax return, the more likely you are to forget important details and incur additional expenses.

Corporate Income Tax Exemptions in Florida

Certain types of corporations will not be subject to the state corporate income tax in Florida. Depending on the type of corporation, there may be additional tax incentives and benefits.

The following types of corporations are exempt from the state corporate income tax in Florida:

Wholly owned corporations: A wholly owned corporation is a company that is 100% owned by one corporation.
Partially owned corporations: Partially owned corporations are corporations that are partially owned by another corporation. The corporation that owns a partially owned corporation is responsible for paying the state corporate income tax on the profits generated by the partially owned corporation.
Non-profit corporations: Non-profit corporations are corporations that are primarily operated for charitable, scientific, or educational purposes.

Penalties for Not Filing Corporate Income Tax in Florida

If you fail to file a corporate income tax return, you may be subject to penalties. For example, if you fail to file your corporate income tax return by the May 01st deadline, you may be fined up to $5,000. However, if you file your corporate income tax return after being notified that you were behind on filing, you will not be fined or penalized. You may be able to avoid or reduce penalties by filing your corporate tax return as soon as possible after the end of the calendar year. The longer you wait to file your corporate tax return, the more likely you are to forget important details and incur additional expenses.

How to File Corporate Income Tax in Florida

You will need to file a corporate income tax return if you operate a corporation in Florida that meets the minimum gross revenue threshold per year. Once your company has met this threshold, it is required to file a corporate income tax return. If you are operating a corporation in Florida, it is important to file your corporate income tax return on time to avoid fines and penalties. You can file your corporate income tax return online or by mailing a paper copy. You will be required to provide information such as your company name and address, the amount of gross revenue your company generated during the calendar year, the amount of corporate income tax you owe, and other important details. If you file your corporate income tax return online, you may be able to pay your taxes electronically. You will be required to have a valid Florida Corporate Tax ID before you can file your corporate income tax.

Corporate Income Tax Planning

As a business owner, it is important to understand and plan for your company’s corporate income tax obligations. By taking the time to understand the current corporate income tax rates in Florida, you can prepare for the tax obligations associated with running your business. By reviewing the due dates for filing corporate income tax returns, you can be sure that your business stays compliant with state tax laws. This can help you avoid costly fines and penalties. If you are unsure about any aspect of the corporate income tax in Florida, you should reach out to your accountant for help. Your accountant will have experience understanding the current corporate income tax rates in Florida and may be able to help you plan for upcoming tax obligations.

Resources for Understanding Corporate Income Tax in Florida

Florida Department of Revenue: This is the state agency responsible for collecting corporate income tax. It can provide you with important details about corporate income tax in Florida.

IRS: The IRS also provides information about corporate income tax on its website.

Tax Foundation: This non-profit organization can help you understand the history of corporate income tax. This website provides a comprehensive overview of corporate income tax rates by the state since 1916

Citizens for Tax Justice: This website provides information about the history of the corporate income tax and its impact on the economy.

Tax Policy Center: The Tax Policy Center can help you understand the impact of corporate income tax rates on the economy.

Tax Analysts: This website provides a historical overview of the corporate income tax.

Tax History Project: This website provides a comprehensive overview of the corporate income tax rates by state since 1916.

Frequently Asked Questions About Corporate Income Tax in Florida

How much are corporate taxes in Florida?

The corporate income tax rate in Florida is 5.5%. All corporations operating in the state of Florida are subject to this rate, regardless of the amount of revenue they generate.

How long have corporations been taxed in the US?

The federal government began taxing corporations in 1909. At that time, the corporate income tax rate was 1%.

What are the corporate income tax rates in the US?

The corporate income tax rate varies by state.

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Accounting Bookkeeping

10 Steps to Streamline Your Month-End Closing Process

Post author By peakreliance
Post date December 13, 2022
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10 Steps to Streamline Your Month-End Closing Process

December 13, 2022

peakreliance

Accounting, Bookkeeping

The month-end close process is a critical part of managing a small business, but it can be a daunting task. However, with the right tools and habits, it doesn’t have to be overwhelming. By using a month-end closing checklist and maintaining good bookkeeping practices, you can make the process more manageable and ensure your financial data is accurate and up-to-date. This can help you achieve your long-term business goals and manage your finances effectively.

What is a month-end close process?

The month-end close process is an essential part of managing a small business’s finances. It involves recording, reconciling, and reviewing all business transactions and finalizing the account data for the month. This process requires several key pieces of information, including bank statements, income and expenses, accounts receivable and accounts payable, inventory, fixed assets, accruals and prepayments, and the general ledger. It’s important to capture all financial data for the month to ensure the accuracy of your financial records.

The specific workflow for your month-end close process will depend on the accounting basis you use. There are two main types of accounting: cash basis and accrual basis. With cash basis accounting, you recognize income and expenses when you receive or pay cash. With accrual basis accounting, you recognize income and expenses when you incur them. If you use cash basis accounting, you won’t have balance sheet accounts like accounts receivable and accounts payable.

With the right tools and habits, the month-end close process doesn’t have to be overwhelming. It can help you manage your finances effectively and achieve your long-term business goals.

Why is the month-end close process important?

As a small business owner, it’s normal to feel overwhelmed with daily operations and dread the monthly financial close process. However, there are several benefits to completing this process promptly. First, it allows you to identify and address any discrepancies in your accounts. This can help you make better business decisions and address any issues in your business promptly. In addition, completing the month-end close process on time can save you time and money on catch-up bookkeeping. It can also make your year-end close less stressful and make tax filing easier.

Maintaining accurate and up-to-date financial records is also important for providing lenders with the information they need, or during an IRS audit. By completing the month-end close process without delay, you can ensure your financial records are accurate and up-to-date. This can help you manage your finances effectively and achieve your long-term business goals.

10 steps to complete the month-end close process

To help streamline your month-end close process, it’s helpful to create a checklist of tasks to complete. This can help you organize your workflows and ensure you don’t miss any important steps. Here is a checklist of steps to follow to complete your month-end close process:

Gather all financial data for the month.
Review and reconcile your bank statements.
Record all income and expenses.
Review accounts receivable and accounts payable.
Update your inventory records.
Review fixed assets.
Review accruals and prepayments.
Update your general ledger.
Prepare financial statements.
Review and analyze your financial statements.

By following this checklist, you can ensure you complete all necessary steps in the month-end close process and maintain accurate and up-to-date financial records for your business.

Gather all financial data for the month: Gathering all financial data for the month is an important step in the month-end close process. This includes gathering bank statements, income and expenses, accounts receivable and accounts payable, inventory, fixed assets, accruals and prepayments, and the general ledger. It’s important to gather all relevant financial information for the month to ensure the accuracy of your financial records. By gathering all financial data, you can ensure you have a complete picture of your business’s financial position and can make informed decisions about your finances. It’s also important to keep this information organized and up-to-date to make the month-end close process as efficient as possible.
Review and reconcile your bank statements: Reviewing and reconciling your bank statements is an essential step in the month-end close process. This involves carefully reviewing your bank statements to ensure all transactions are accounted for and there are no discrepancies. It’s important to check for any errors or missing transactions and to make sure your records match your bank statements. This can help identify any issues with your financial records and ensure the accuracy of your financial data. Reconciling your bank statements also helps to prevent fraud and can give you a better understanding of your business’s financial position. By regularly reviewing and reconciling your bank statements, you can maintain accurate financial records and make better business decisions.
Record all income and expenses: Recording all income and expenses is a crucial step in the month-end close process. This involves accurately and consistently recording all income and expenses in the appropriate accounts. This is important because it allows you to see the financial position of your business at a glance and make informed decisions about your finances. It’s essential to record all income and expenses accurately and consistently to ensure the accuracy of your financial records. By keeping track of all income and expenses, you can also identify any trends or issues in your business that need to be addressed. Overall, recording all income and expenses is an important part of managing your finances and ensuring the success of your business.
Review accounts receivable and accounts payable: Reviewing accounts receivable and accounts payable is an essential part of the month-end close process. This involves carefully reviewing all invoices that have been sent and received, as well as any payments that have been made or received. It’s important to ensure that all invoices have been sent and received and that all payments have been recorded accurately. This can help identify any issues with your accounts receivable and accounts payable and ensure the accuracy of your financial records. By regularly reviewing accounts receivable and accounts payable, you can maintain accurate financial records and make better business decisions. This can also help you identify any overdue invoices and take appropriate action to collect payment.
Update your inventory records: This involves adding any new items to your inventory and removing any items that have been sold or disposed of. It’s important to keep your inventory records up-to-date to ensure the accuracy of your financial records and to manage your inventory effectively. By regularly updating your inventory records, you can ensure you have an accurate picture of your inventory levels and can make informed decisions about your inventory management. This can also help you identify any issues with your inventory, such as overstocking or stock shortages, and take appropriate action to address them.
Review fixed assets: Reviewing fixed assets is an important part of the month-end close process. This involves carefully reviewing all fixed assets, such as equipment and machinery, to ensure they are accounted for in your financial records. It’s important to check that all fixed assets are accounted for and that any depreciation has been recorded accurately. This can help ensure the accuracy of your financial records and give you a better understanding of the value of your fixed assets. By regularly reviewing your fixed assets, you can also identify any issues with your fixed asset management, such as underutilized assets or obsolete equipment, and take appropriate action to address them. Overall, reviewing fixed assets is an essential part of managing your business’s finances and ensuring success of your business.
Review accruals and prepayments: An important part of the month-end close process is reviewing accruals and prepayments. This involves carefully reviewing any expenses that have been incurred but not yet paid, as well as any payments that have been made but not yet incurred. It’s important to ensure that all expenses have been recorded accurately and that any prepayments have been accounted for correctly. This can help ensure the accuracy of your financial records and give you a better understanding of your business’s financial position. By regularly reviewing accruals and prepayments, you can also identify any issues with your financial management, such as underpayment or overpayment, and take appropriate action to address them. The review of accruals and prepayments is a crucial part of managing your business’s finances and ensuring its success.
Update your general ledger: The general ledger must be updated as part of the month-end closure procedure. This includes uploading any journal entries and modifying entries to ensure that your financial records are accurate. It is critical to evaluate your general ledger on a frequent basis to verify that it is up to date and correct. This can assist you in identifying any flaws or discrepancies in your financial records and taking suitable corrective action. By keeping your general ledger up to date, you can assure the accuracy and completeness of your financial data and make smarter business decisions. Overall, maintaining your general ledger is a crucial aspect of managing your company’s finances and guaranteeing its profitability.
Prepare financial statements: Preparing financial statements is an important part of the month-end close process. These statements include the income statement, balance sheet, and cash flow statement. These statements provide valuable information about the profitability, value, and cash flow of your business.
If you have accounting software, you can easily generate these financial statements and avoid a lot of manual work. Once you’ve prepared your financial statements, it’s a good idea to review them with a CPA. They can provide insights and analysis of your numbers to help you make better business decisions. By regularly preparing and reviewing financial statements, you can gain a better understanding of your business’s financial position and make informed decisions about your finances.
Review and analyze your financial statements: To avoid mistakes during the month-end close process, it’s important to review your financial information beforehand. One way to do this is to ask someone who didn’t prepare the accounts to review them, as they may be able to identify errors or problems that you didn’t notice. It’s also a good idea to review the following reports: the general ledger and the financial statements discussed above. These reports can provide valuable information about the financial health of your business and can help you identify any errors or issues that need to be addressed.
Once you close your books for the month, you won’t be able to make any changes to your financial records. Therefore, it’s essential to make sure your financials are accurate before closing the accounting period. By taking the time to review your financial information and ensure its accuracy, you can avoid mistakes and maintain accurate financial records for your business.

What can Peak Reliance do for you?

If you’re struggling to keep up with your books and the month-end close process, you can outsource your bookkeeping to Peak Reliance. We can’t analyze your numbers, but we can reduce your month-end admin by taking care of your books and making them accurate and up-to-date. We’ll also do your bank reconciliations, so you can leave behind the month-end stress and focus on what you love: growing your business!

If tax work is overwhelming, we offer tax preparation and tax filing services as well. With Peak Reliance, you’ll get unlimited year-round tax support to stay on top of your taxes. Take a free trial with Peak Reliance to see how we can help you.

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Accounting Bookkeeping Taxes

W-2 vs. W-4: A Complete Guide for Businesses on Tax Forms and Withholding

Post author By peakreliance
Post date December 12, 2022
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W-2 vs. W-4: A Complete Guide for Businesses on Tax Forms and Withholding

December 12, 2022

peakreliance

Accounting, Bookkeeping, Taxes

As a business owner, hiring employees is an exciting milestone that can help your company continue to grow and thrive. But while hiring top talent is a great achievement, the paperwork that comes with it is less enjoyable. When you bring on full-time or part-time employees, you’ll need to file W-2 and W-4 tax forms. If you’re not sure how to differentiate between the two or how to file them, our tax guide has you covered. We’ll help you understand the differences between W-2 and W-4 forms and provide step-by-step instructions for filing them accurately and on time.

The Difference Between W-2 & W-4

The main difference between W-2 and W-4 forms is who fills them out and how they are used. W-4 forms are completed by employees when they start a new job and are used by their employer to process payroll and calculate withholdings. W-2 forms, on the other hand, are completed by employers after the end of the year and contain a record of the employee’s wages, withholding, and other deductions. Employees receive a copy of their W-2 by January 31st of the following year, and employers are required to file a copy with the IRS. It’s important for both employees and employers to understand the differences between these two forms and to complete and file them accurately and on time.

What’s a W-4 form?

Form W-4, also known as the Employee Withholding Certificate, is used to collect information needed to calculate how much income tax to withhold from each employee’s paycheck. To complete the form, employees need to provide basic identifying information such as their name, address, social security number, marital status, and number of dependents. They submit the form to their employer, who is responsible for keeping records of it. The IRS does not receive a copy of the W-4. Employees are responsible for updating their W-4 if they have a life-changing event that affects their withholding. They should also review it periodically to ensure it is up-to-date. Employers must have a W-4 on file to process payroll for their employees.

How to Get and Use the W-4 Form

To obtain a copy of the federal W-4 form, you can visit the IRS website or contact your payroll provider. Many payroll providers will provide a copy of the form when you start using their software. Keep in mind that the IRS periodically updates the form, so make sure you are using the most recent version. When hiring new employees, be sure to provide them with a copy of the form and ask them to complete it before the next payroll processing date. You should also request that your current employees fill out the form if you do not have one on file for them. Completed W-4 forms should be kept in the employee’s payroll file for reference

State Withholding Tax

While some states use the federal W-4 form to calculate state tax withholding, others have their own separate forms that employees must complete. If you have employees in multiple states, they will need to fill out the appropriate withholding form for their state of residence. In addition, you must register with each state’s taxing authority and remit state payroll tax payments according to the state’s rules. If you work with a payroll processor, they should handle the registration and payment process on your behalf.

What’s a W-2 Form?

Form W-2, also known as the Wage and Tax Statement, is completed by the employer and provided to employees after the end of the year. It contains basic identifying information such as the employee’s name, address, and social security number. Employers must send W-2s by January 31st of the following year, and there are steep fines for missing the filing deadline. It is essential that your business file the forms accurately and on time.

The W-2 contains basic identifying information such as name, address, and social security number.

Form W-2 contains several important boxes with information that employees will use to complete their individual tax returns. The most important boxes for your employees are:

1 (Wages, tips, and other compensation) – total amount paid to the employee during the year

2 (Federal income tax withheld) – amount of federal income tax withheld by the employer

3 (Social security wages) – total wages subject to Social Security tax

4 (Social security tax withheld) – employee wages withheld for Social Security tax

5 (Medicare wages and tips) – total wages subject to Medicare tax

6 (Medicare taxes withheld) – amount withheld for Medicare taxes

17 (State income tax) – amount withheld for state income taxes, which may be blank if you are in a state that does not collect state income tax

Businesses are required to file W-2s by January 31st each year, but they can file an amended W-2 form if an error is identified. There is no deadline for filing an amended W-2. The IRS uses the information on W-2s to verify that employees have claimed all of their wages on their individual income tax returns.

To fill out a W-2 form, follow these steps:

Gather all necessary information, including the employee’s name, Social Security number, address, and income information.
Make six copies of the W-2 form, labeled as follows:
- Copy A: sent to the Social Security Administration
- Copy 1: sent to city, state, or local tax departments
- Copies B, C, and 2: given to your employee
- Copy D: kept for your records
Fill out each copy of the form with the required information.
File the forms electronically if possible. Employees can opt-in to electronic delivery of their W-2 forms.
Keep a copy of the forms for your records, and give copies to your employees as specified.

It is important to accurately and completely fill out the W-2 forms to ensure that employees receive the correct amount of tax withholding, and to avoid penalties from the IRS.

To complete the employer information section of a W-2 form:

In boxes b, c, and d, report the name and address of your business, as well as your employer identification number (EIN).

To complete the employee information section of a W-2 form:

In boxes a, e, and f, fill in the employee’s name, address, and Social Security number. This information will be used to mail the form to the employee if you send physical copies, and to identify the employee for tax purposes.

To report wages and withholdings on a W-2 form:

Use boxes 1-14 to report the employee’s gross pay for the tax year and the amount withheld for taxes. This should include all types of withholdings, such as federal, state, and local taxes, as well as Social Security and Medicare.
These boxes also contain information about adjustments to the employee’s wages, such as deductions for life insurance, health insurance, and retirement plan contributions.
Box 14 contains miscellaneous information, such as union dues and tuition assistance.

To report state and local information on a W-2 form:

Use boxes 15-20 to report any state and local withholding information. These boxes may also contain information about local taxes and other withholdings. Note that very few localities have separate withholdings.

Ensuring that your business is tax-compliant can be a challenging task, but it is essential for the success and growth of your company. One important step is to have accurate W-4 forms on file for all of your employees, as this will help you calculate their tax withholding correctly. Additionally, it would help if you made sure to submit accurate W-2 forms to the appropriate authorities before the end of January.

Don’t let taxes and payroll stress you out. Contact our team of experts at Peak Reliance for help with your business’s W-2 and W-4 forms. Call us at +1 (718) 218-5558 or email us at [email protected] to get started.

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Accounting Bookkeeping Taxes

North Carolina Self-Employed Tax Rates for 2022: A Guide to Calculating Your Taxes

Post author By peakreliance
Post date December 11, 2022
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North Carolina Self-Employed Tax Rates for 2022: A Guide to Calculating Your Taxes

December 11, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Self-employment is a great way to build wealth and get your own office, but it comes with some unique tax considerations. When you’re self-employed in North Carolina, you may be responsible for paying taxes on income that you receive from yourself and from certain business operations—but not on other sources of income. That means you’ll need to know whether your business activity qualifies as self-employment or whether it’s something else. Keep reading to see what kinds of businesses are considered self-employed in North Carolina, what the top rates are for different types of self-employment, and how you can calculate your self-employment tax obligations.

What Is Self-Employment Income?

Self-employment income is income that you receive from your own business and that is not derived from another source. The term includes money you make as a partner in a business, as an employee on a self-employment job, as an independent contractor, or as a wife, husband, or parent who earns money on behalf of one or more people. You can also earn money as a consultant or other outside employment. If you make money this way, it is called self-employment income. When you start your own business, you may report your self-employment income as full-time or as part of your business income. If you are a full-time self-employed person, you generally must report all of your income, including income from other sources, as income from that business.

What You Need to Know About Self-Employment Income in North Carolina

When you’re self-employed in North Carolina, you’re not just earning any old amount of money. You’re earning income from a specific business, and it’s important to know the income you’re reporting as income from that business. Here’s what you need to know about self-employment income in North Carolina: Partner income—On a partner-only business, your share of the profits is reported as partner income. Employee earnings on a self-employment job—You may report the income you receive from a self-employment job as employee income on your taxes. You must include on your tax return the regular salary you receive, as well as any other income you earn as a result of your business activities. Outside income—You must include on your tax return all income that comes from outside the United States, even if you’re a non-citizen.

Self-Employment Tax Rates in North Carolina

The top tax rate you must pay on your self-employment income in North Carolina is just as it is on all other income you earn. In general, the rate is 35% of your income. However, there are a few exceptions. Some of these rates are lowered for people who are age 65 or older. Also, there are special rates for people under age 18 who are the parents or guardians of qualifying children. These rates also apply to certain groups of people who are disabled.

How to Calculate Your Self-Employment Tax Obligation in North Carolina

To calculate your self-employment tax obligation in North Carolina, first determine what portion of your income is from self-employment. This is the most important part of the equation because it determines how much income tax you will owe. To be sure you have all the information you need to calculate your income tax obligation, you can use one of several online tax calculators. You can also look up your income tax return information in your local library or assessor’s office.

Conclusion

If you’re self-employed in North Carolina, you’ll likely have to pay self-employment taxes on a portion of your income that is not related to employment. This is due to the fact that you’re self-employed and your income is not derived from another source. You may be surprised by the rates and amount that must be reported as self-employment income in North Carolina. The lower the rate you report as self-employment income, the less income tax you will owe; however, this may not be the case for all income you receive. Make sure you understand which income you’ll be reporting as self-employment income and which will be considered your primary income.

Need help with your self-employment taxes in North Carolina? Contact us at +1 (718) 218-5558 or [email protected] to learn more about our services and get expert assistance with your tax obligations.

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Georgia Self-Employed Tax Professional: Key Information on Tax Rates for 2022

Post author By peakreliance
Post date December 10, 2022
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Georgia Self-Employed Tax Professional: Key Information on Tax Rates for 2022

December 10, 2022

peakreliance

Accounting, Bookkeeping, Taxes

The self-employed are supposed to be tax-friendly. The self-employed are generally not considered professionals and their personal finances are often not as transparent as those of their professional colleagues. Self-employment can present a whole new set of challenges, but with the right tax planning, it can also present many opportunities. Understanding your risks and rewards is key to staying sane during these changes in your job and personal life. Before making any decisions about your future, you need to know whether you want to go it alone or with an accountant. It might be tempting to trust the people who keep showing up at your front door with your financial affairs, but you’ll be setting yourself up for failure if you do so. If you’re an experienced tax professional and work for a tax-prep firm, that’s great. However, for most people, this is probably not the case And even for those of us who aren’t sure if we have what it takes to become a tax pro, it’s worth looking into whether Georgia has any “unfair” taxes on the industry we choose to practice.

What Is The Difference Between Self-Employed And Independent Contractor?

The term “independent contractor” is often misused. It’s not the same thing as “freelancer,” which is another term often confused with it. A “freelancer” is someone who works for someone else and is paid for their services. “Independent contractor” is a term that describes someone who does work for themselves without being paid for it.

What Is The Difference Between Partnership And Sole Proprietorship?

A partnership is a legal form of organization in which one party, called the “partner,” is responsible for managing and controlling the activities of another, called the “partner.” A sole proprietor is typically the individual who owns and operates the business. It’s important to note that most jobs that qualify as “self-employment” do not fit the definition of partnership or sole proprietorship.

How Self-Employment Tax Changes In Georgia Are Impacting Your Practice

One of the most significant changes to the self-employment tax landscape that took effect on January 1, 2018, is the elimination of the “Roda” exception. This exception allows individuals to treat their business as a “Roda” or “rickshaw” and pay only state and federal income taxes on the full amount of profit made. The new Internal Revenue Code also changed the rules aroundstep-up in complexity. Now, people who itemize their deductions and pay more than the standard 20% tax rate will have to deal with the new rules. People who itemize their deductions and pay less than the standard 10% tax rate will not. This includes certain types of business income, including interest, dividends, and capital gains.

Best Tax Strategies For Self-Employed Tax Practitioners

If you’re self-employed, you’ll need to make a variety of decisions that affect your personal finances and your business finances in tandem. These decisions will affect your personal and business finances in different ways. The following are some of the most important ones to make. Decide what type of business you want to have. Are you going to be the primary business owner or is your company going to provide the majority of your income? If you’re the primary business owner, you can deduct the entire amount paid for business expenses, including property taxes and business interest. Thus, if your primary source of income is business income, you’ll want to make sure that you are able to itemize your deductions. Decide where you’ll accept payment. Do you plan to sell products or services? If so, you’ll want to decide whether you want to accept payment in cash or by check. Moreover, you’ll want to decide whether you want to accept payment by check in person, by mail, or by phone. Decide how much to charge for your product or service. Do you plan to charge a fee for your product or service? If so, decide how much to charge and whether that fee will cover the costs of business expenses, including property taxes and business interest.

Where To Start With Tax Preparation For Yourself-employed Client

If you’re just starting out as a self-employed individual, there are a few pieces of information you’ll want to know. First, you’ll want to get your taxes done every year and understand your individual taxes as well as your firm’s. You can find a list of firms in your area by visiting the IRS’s website. You can also call your local IRS office to find out if they accept tax returns. Note that you don’t have to file your taxes jointly with your spouse. You can file them separately and claim a separate tax return for yourself.

Summing Up

The self-employed are unique in that they lack many of the protections and benefits that are available to those who work for a company. Additionally, the taxes they pay are generally lower than those paid by people who work for a company. This article has provided details on the taxes that you as an individual will have to deal with and what you need to know. If you’re self-employed, it is critically important that you understand your risks and rewards.

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Georgia, Self Employment Taxes