Tag: IRS Audit

Unlock Your Business Potential: 6 Accounting Secrets to Smarter Decisions

Post author By peakreliance
Post date December 7, 2022
No Comments on Unlock Your Business Potential: 6 Accounting Secrets to Smarter Decisions

Unlock Your Business Potential: 6 Accounting Secrets to Smarter Decisions

December 7, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Running a business comes with a whole host of responsibilities. From managing employees to handling customer service to staying on top of the finances, there’s a lot to manage. But one of the most important things you can do for your business is to be savvy with your accounting. Accounting is a crucial part of any business, and it’s often the key to making informed decisions that can have a big impact on the success of your business.

In this blog post, we’ll take a look at the basics of accounting, the secrets to making smarter decisions, common accounting mistakes that small businesses make, and tips to help you manage your accounting and bookkeeping more effectively. We’ll also provide you with some tools and resources to help you get started, as well as courses to help you become an accounting pro.

What is Accounting?

Accounting is the process of recording, analyzing, and reporting financial information about a business. It’s the language of business and involves tracking and recording financial transactions, measuring performance, and preparing financial statements. Accounting helps you understand the financial position of your business and make decisions based on this information.

For small businesses, accounting is especially important. It’s the key to making informed decisions that can have a big impact on the success of your business. With accurate accounting and bookkeeping, you can make decisions that will help your business grow and succeed.

Benefits of Accounting

Accounting is a powerful tool for small businesses. Having an accurate and up-to-date accounting system in place can help you make better decisions, plan for the future, and ensure you’re meeting your financial goals. Here are some of the key benefits of accounting:

Improved financial decision-making: Accounting helps you make informed decisions based on accurate financial data.
Better cash flow management: Accounting helps you track and monitor your cash flow and adjust your spending accordingly.
Increased efficiency: Accounting helps you identify areas of inefficiency and make changes to streamline processes.
Tax compliance: Accounting helps you stay up-to-date with your tax obligations and make sure you’re compliant.
Improved budgeting: Accounting helps you create and stick to a budget, giving you a better understanding of your financial situation.

Understanding the Basics of Bookkeeping

Bookkeeping is the process of recording and tracking financial transactions. It’s the foundation of accounting and involves recording all of your business’s financial transactions, such as sales, purchases, and expenses. Bookkeeping helps you track your income and expenses, which is essential for staying on top of your finances and making informed decisions.

Bookkeeping is the first step in accounting, and it’s important to make sure it’s done accurately. It’s important to keep accurate records of all financial transactions and to know how to use bookkeeping software. This will help you to more accurately track your finances and make better decisions.

Accounting Secrets to Smarter Decisions

Accounting isn’t just about tracking and recording financial transactions. It’s also about using this data to make informed decisions that will benefit your business. Here are some accounting secrets to help you make smarter decisions:

Analyze your financial data: To make smarter decisions, you need to analyze your financial data. Look for trends, identify areas of improvement, and use this data to make decisions that will benefit your business.
Set goals: Setting goals will help you stay focused and ensure you’re taking the right steps to reach your goals. Set short and long-term financial goals and use your financial data to track your progress.
Monitor your cash flow: Monitor your cash flow regularly and adjust your spending accordingly. Having a good understanding of your cash flow will help you make better decisions and plan for the future.
Track your expenses: Tracking your expenses will help you identify areas of inefficiency and make changes to save money.
Invest in accounting software: Investing in accounting software will help you save time and make sure your financial data is accurate and up-to-date.

Common Accounting Mistakes Small Businesses Make

Accounting mistakes can be costly and can have a big impact on the success of your business. Here are some of the most common accounting mistakes small businesses make:

Not tracking expenses: Not tracking your expenses can lead to overspending and cash flow problems.
Not monitoring cash flow: Not monitoring your cash flow regularly can lead to financial problems down the line.
Not staying organized: Not staying organized can lead to accounting errors and lost invoices.
Not investing in accounting software: Not investing in accounting software can lead to inaccurate data and inefficiency.
Not keeping accurate records: Not keeping accurate records can lead to mistakes and compliance issues.

Tips to Effectively Manage Accounting & Bookkeeping

Managing your accounting and bookkeeping can be a daunting task, but it’s essential for the success of your business. Here are some tips to help you effectively manage your accounting and bookkeeping:

Invest in accounting software: Investing in accounting software is one of the best ways to save time and ensure your financial data is accurate and up-to-date.
Keep accurate records: Keeping accurate records of all your financial transactions is essential for staying on top of your finances and making informed decisions.
Monitor your cash flow: Monitor your cash flow regularly and adjust your spending accordingly.
Track your expenses: Tracking your expenses will help you identify areas of inefficiency and make changes to save money.
Set goals: Setting goals will help you stay focused and ensure you’re taking the right steps to reach your goals.

Tools and Resources to Help Small Businesses Manage Their Accounting

There are many tools and resources to help small businesses manage their accounting. Here are some of the best tools and resources to help you get started:

Accounting software: Accounting software is essential for tracking and recording financial transactions, measuring performance, and preparing financial statements.
Accounting templates: Accounting templates are great for helping you create and maintain accurate financial records.
Financial calculators: Financial calculators can help you calculate things like loan payments and interest rates.
Accounting books: Accounting books can help you better understand accounting principles and how to use them to make smarter decisions.

Courses to Help With Accounting and Bookkeeping

If you’re looking to become an accounting and bookkeeping pro, there are many courses available to help you get started. Here are some of the best courses to help you become an accounting and bookkeeping pro:

Accounting Fundamentals: This course covers the basics of accounting and bookkeeping, such as setting up accounts, recording transactions, and preparing financial statements.
Advanced Accounting: This course covers Accounting concepts with lot many case studies to solve. Approaching complex topics through case studies is the best way to understand them and you will find lot many in this course.
Financial Modeling: This course covers the basics of financial modeling, such as spreadsheet design, financial analysis, and data visualization.
QuickBooks: This course covers the basics of QuickBooks, the most popular accounting software for small businesses.

Conclusion

Accounting is a powerful tool for small businesses and can be the key to making informed decisions that will benefit your business. This blog post has provided you with the basics of accounting, the secrets to making smarter decisions, common accounting mistakes that small businesses make, and tips to help you manage your accounting and bookkeeping more effectively. We’ve also provided you with some tools and resources to help you get started, as well as courses to help you become an accounting pro.

If you’re looking for help with your accounting and bookkeeping, contact Peak Reliance today. Our experienced accountants can help you set up an accounting system, manage your finances, and make smarter decisions. Call us at +1 (718) 218-5558, or email us at [email protected]. We look forward to hearing from you!

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IRS, IRS Audit

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Accounting Bookkeeping Taxes

2023 Tax Filing Deadlines: Avoid Penalties with Our Comprehensive Guide

Post author By peakreliance
Post date December 6, 2022
No Comments on 2023 Tax Filing Deadlines: Avoid Penalties with Our Comprehensive Guide

2023 Tax Filing Deadlines: Avoid Penalties with Our Comprehensive Guide

December 6, 2022

peakreliance

Accounting, Bookkeeping, Taxes

Tax filing and extension deadlines for 2023 are quickly approaching and it is important to be aware of them in order to avoid costly penalties. Tax filing and extension dates vary from year to year, so it is important to stay up to date on the current deadlines. Knowing the dates and understanding the consequences of not meeting them is critical for anyone looking to avoid a costly penalty. This article will provide an overview of the 2023 tax filing and extension deadlines, as well as important information on how to submit an extension request and the consequences of not meeting the deadline. With this information, you can ensure that you are filing your taxes on time and avoiding any costly penalties.

Overview of 2023 Tax Filing and Extension Deadlines

The tax filing and extension deadlines for 2023 vary depending on the type of taxpayer you are and the type of tax return you are filing. The following table provides an overview of the tax filing and extension deadlines.

Tax Type	Tax Filing Deadlines	Extension Deadlines
Individual Income Taxes	April 15	October 15
Corporate Taxes	April 15	September 15
Trust and Estate Taxes	April 15	October 15
Self-Employment Taxes	March 15	September 15
Other Taxes	April 15	September 15

Submitting an Extension Request

If you are unable to meet the standard tax filing or extension deadline, you can submit an extension request form. Depending on the type of tax return you are filing, you may be able to file a paper extension request form, or you may be required to electronically file an extension request. Paper extension request forms are typically provided at the time an individual tax return is due. If you are required to electronically file an extension request, you will be provided with an official IRS form. You can find extension request instructions and forms on the IRS website. If you meet the criteria for an extension request, it is important to submit the form on time to avoid a penalty. Taxpayers who are granted an extension are required to pay any taxes they owe by April 15, the following year. If you are granted an extension and are unable to pay the taxes you owe by the April 15 deadline, you can avoid a penalty by entering into a payment plan with the IRS. If an extension request is accepted, the IRS will not charge interest on any taxes that are paid past the original deadline.

Penalties for Not Meeting the Deadlines

If you are unable to meet the standard tax filing or extension deadline, you will face a penalty. The severity of the penalty varies depending on the type of tax you are filing and the length of time you are unable to meet the deadline. For example, failing to file an individual tax return by the standard deadline will result in a failure-to-file penalty. The failure-to-file penalty is 5% for each month that the tax return is late. The maximum penalty for a failure-to-file tax return is 25% of the amount due on the return. If you fail to pay taxes that are owed by the standard deadline, you will be charged a failure-to-pay penalty. The failure-to-pay penalty is 0.5% of the amount due for each month that the taxes are not paid. The maximum penalty for a failure-to-pay tax bill is 25%.

Tax Filing and Extension Deadlines for Self-Employed Individuals

If you file as self-employed, you will be required to file a Form 1040 with estimated taxes. As a self-employed individual, you are responsible for paying taxes throughout the year, rather than waiting until April to pay your taxes as an employee would. Self-employed individuals are required to file taxes on a quarterly basis and pay any taxes due on a quarterly basis. The standard tax filing deadline for self-employed individuals is March 15. However, if you are a self-employed individual, you may be able to submit an extension request to extend the filing deadline. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to September 15.

Tax Filing and Extension Deadlines for Corporations

If you file as a corporation, taxes are due on the 15th of the month following the end of the quarter. Taxes are due on April 15 for the third quarter, which ends on September 30. If you are filing as a corporation and are unable to meet the standard tax filing deadline, you can submit an extension request. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to September 15.

Tax Filing and Extension Deadlines for Non-Profits

If you are a non-profit organization, taxes are due on the 15th of the month following the end of the quarter. Taxes are due on April 15 for the third quarter, which ends on September 30. If you are a non-profit organization and are unable to meet the standard tax filing deadline, you can submit an extension request. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to September 15.

Tax Filing and Extension Deadlines for Individuals

If you file as an individual, taxes are due on the 15th of the month following the end of the quarter. Taxes are due on April 15 for the third quarter, which ends on September 30. If you are an individual and are unable to meet the standard tax filing deadline, you can submit an extension request. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to October 15.

Tax Filing and Extension Deadlines for Trusts and Estates

If you are a trust or estate that is required to file an income tax return, taxes are due on the 15th of the month following the end of the quarter. Taxes are due on April 15 for the third quarter, which ends on September 30. If you are a trust or estate and are unable to meet the standard tax filing deadline, you can submit an extension request. You will be required to submit an extension request electronically via the IRS website. If you meet the criteria for an extension request, the IRS will extend the filing deadline to October 15.

Tips for Meeting the Tax Filing and Extension Deadlines

The following are tips for meeting the tax filing and extension deadlines. Follow the tips below to ensure that you meet the tax filing and extension deadlines, do not incur a penalty and receive your tax return by the April 15 due date.

Resources for Further Assistance

Tax filing and extension deadlines are critical. It is important to be aware of them in order to avoid costly penalties. With this article, you can ensure that you meet the deadlines and receive your tax return by the April 15 due date. If you have any questions about the tax filing and extension deadlines, contact a tax professional.

Get the professional help you need to ensure you meet all your tax deadlines – trust Peak Reliance to guide you through the process.

Check out our pricing plans or call us at +1 (718) 218-5558 for more information. You can also email us at [email protected]

Post Tags :

IRS, IRS Audit

About Us

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575 Lexington Ave., New York NY 10022

+1 (718) 218-5558

[email protected]

09.00 AM – 6.00 PM

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Accounting Bookkeeping

How Far Back Can the IRS Audit a Business?

Post author By peakreliance
Post date December 5, 2022
No Comments on How Far Back Can the IRS Audit a Business?

How Far Back Can the IRS Audit a Business?

December 5, 2022

peakreliance

Accounting, Bookkeeping

Getting a notification from the IRS about an audit may completely destroy your day. How far back may you be audited by the IRS? It is only normal to be concerned about an IRS audit, especially given how long they may go. Internal Revenue Service audits typically cover a period of no more than three years, although there are several exceptions.

What is an audit?

An audit for companies usually means a financial statement audit and it is the most common type of audit. A financial audit is an objective review and evaluation of an organization’s financial statements to ensure that they are a fair and accurate portrayal of the transactions they purport to reflect. The audit might be performed internally by organization workers or externally by a Certified Public Accountant (CPA) company.

The word “audit” may make you sweat instantly, but knowing what it is and how the Internal Revenue Service (IRS) operates may help you feel a little more at ease. Some audits are minor inconveniences, while others are burdensome. When the IRS audits your company, they conduct a thorough examination of your financial records. This includes reviewing your financial statements and ensuring that they correspond with your bookkeeping.

They usually want to make sure you aren’t underreporting your income or overreporting your deductible expenses. In either situation, you are declaring a lower tax liability than you actually have.

What triggers IRS to conduct audit?

It’s impossible to predict an audit. But they’re prompted for one of these three reasons:

Random choice through the IRS system,
Computer screening of returns that fall outside the IRS norms,
Related examination in case your tax return is connected to another taxpayer who is being audited, you may be audited because of your connection.

The different ways you can be audited

There are 3 ways in which IRS can do this:

Correspondence audit: The IRS will request further information through email or regular mail. Typically, this is due to an income omission or some major miscalculation. You must pay the amount specified in the communication, contest it with a lawyer, and/or submit the relevant documentation, such as receipts for deductions or missing W2 forms.
Office audit: The IRS may choose to have an in-person interview with you. You will need to visit the IRS office. It’s a good idea to have a CPA or a lawyer with you. You may wind up paying more in taxes or penalties, or you may not have to pay anything at all if you contest it.
Line-by-line audit: This was selected at random. The IRS examines each line of your tax return in order to create the “norms” that will trigger future audits.

What do you need to provide?

You will get a formal request from the IRS requesting the precise records we need to view. The records that the IRS could ask for are listed below.

Bills
Canceled checks
Legal papers
Loan agreements
Receipts

Some electronic records generated by tax software are accepted by the IRS. In place of or in addition to other records, the IRS may seek these.

The law mandates that you maintain all the documents you used to complete your tax return for a minimum of three years from the filing date.

How far back can an audit go?

In an audit, the IRS typically considers returns filed during the last three years. However, the IRS may audit more preceding years if a significant mistake is found during the audit process. The IRS seldom conducts audits that stretch back more than six years.

Although there is no statute of limitations for some tax matters, the IRS has a six-year statute of limitations for audits. There is no time restriction for an audit, for example, if Form 3520, which is related to foreign income or inheritances or gifts exceeding $100,000, is not filed.

Consequences of an Audit

Three outcomes are possible for an audit:

No change: an audit in which all the things under evaluation have been validated and there are no errors or understated returns.
Agreed: a review in which the IRS suggested adjustments, and you accept and understand them.
Disagreed: An audit in which the IRS has suggested adjustments, which you comprehend but with which you disagree.

A Tex Levy

A tax levy is a result of an audit and allows the IRS to lawfully collect your property to satisfy a debt, might result after an audit. Your assets may be confiscated to cover your tax bills if you owe money and fail to reply to IRS notifications CP501 or CP504 (Notice of Demand for Payment and Final Notice of Intent to Levy, respectively).

Such assets include:

Wages
Bank accounts
Real estate
Retirement income
Social Security

How can Peak Reliance help?

Your books should be the first thing you organize if you’re concerned about an audit. Our team at Peak Reliance specializes in assisting proprietors of small businesses that have gotten behind with their accounting. Our knowledgeable bookkeepers can assist you to organize your finances so that you are better prepared to handle any tax issues.

Once your financial records are up to date Peak Reliance will also help with filing your late taxes, determining your tax due and even advocating for you before the IRS. Check out our pricing plans or call us at +1 (718) 218-5558 for more information. You can also email us at [email protected]

Post Tags :

IRS, IRS Audit

About Us

Empowering small businesses and individuals with efficient and reliable bookkeeping & tax services.

575 Lexington Ave., New York NY 10022

+1 (718) 218-5558

[email protected]

09.00 AM – 6.00 PM

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Tags IRS, IRS Audit

Accounting Bookkeeping

Here’s How an IRS Audit Works – And How to Prevent It

Post author By peakreliance
Post date December 1, 2022
No Comments on Here’s How an IRS Audit Works – And How to Prevent It

Here’s How an IRS Audit Works – And How to Prevent It

December 1, 2022

peakreliance

Accounting, Bookkeeping

What is an audit?

They usually want to make sure you aren’t underreporting your income or overreporting your deductible expenses. In either situation, you are declaring a lower tax liability than you actually have.

You’ll have a clearer picture of the situation once you’re involved in the aforementioned situation. So, wipe your brow, and let’s get started.

What happens when you get audited?

There are 3 possible outcomes of an audit:

They find out you don’t owe them any money and leave you alone; a hugely popular one.
The IRS finds out you owe them money. So, they make you sign an official document, confirming the amount you owe and so you pay them the due amount.
The IRS finds out you are liable to pay them additional tax, and you disagree with it. In this case, you’ll want the support and expertise of an expert like a bookkeeper, accountant or a CPA.

Peak Reliance has got your back with their exceptionally trained and experienced accounting professionals to cater to all your tax needs.

Depending on your argument, the IRS will either reduce the amount you owe, make you pay the full amount, or throw out the charges altogether.

What triggers an audit?

It’s impossible to predict an audit. But they’re prompted for one of these three reasons:

Random choice through the IRS system,
Computer screening of returns that fall outside the IRS norms,
Related examination in case your tax return is connected to another taxpayer who is being audited, you may be audited because of your connection.

The different ways you can be audited

There are 3 ways in which IRS can do this:

Correspondence audit: The IRS will request further information through email or regular mail. Typically, this is due to an income omission or some major miscalculation. You must either pay the amount specified in the communication, contest it with a lawyer, and/or submit the relevant documentation, such as receipts for deductions or missing W2 forms.
Office audit: The IRS may choose to have an in-person interview with you. You will need to visit the IRS office. It’s a good idea to have a CPA or a lawyer with you. You may wind up paying more in taxes or penalties or not have to pay anything at all if you contest it.
Line-by-line audit: This was selected at random. The IRS examines each line of your tax return in order to create the “norms” that will trigger future audits.

How to prevent an audit?

There is no guaranteed method of avoiding an audit. However, if you do the following, you may significantly lower your chances of being subjected to one.

Account for all of your income
The IRS compares the income and deductions you record on your return with the information provided by others, such as employers, banks, and companies, using the information on Forms W2, 1098, and 1099. Any disparities in reported income numbers that result in underpayment of taxes are a clear red flag for the IRS. It will very certainly prompt additional inquiry.
So, if you have a side hustle, such as consulting or freelance work, make sure to record it, even if you think you can get away with it

Double check your return
Making a thoughtless mistake on your tax return is one of the simplest ways to ensure a visit from the tax man. The IRS is required to examine your case if there is any omission, miscalculation, or error on your return. Hire a bookkeeper to ensure your records are accurate and tax-ready. Peak Reliance not only prepares your books, but can also submit your taxes for you via a tax filing provider.
Stay consistent with your accounting method
As a business owner, you have the option of using either cash basis or accrual accounting. If you switch back and forth between the two approaches, the IRS may suspect you’re attempting to confuse them. That is when you will be audited.
Whatever accounting approach you use for your company, be sure it is consistent.
Keep it straight—employee or contractor
When you recruit help, you must correctly designate them as employees or independent contractors. The distinction dictates which taxes must be paid, when they must be paid, and who is responsible for them.
Employees are often compelled to withhold income taxes and pay unemployment, social security, and Medicare taxes. You do not have to withhold or pay taxes on an independent contractor’s paycheck.

How to make an audit easier

There’s always room for help in elaborated processes and for a task like an audit, help is an integral part of the journey to a successful one. Calling in an accountant for help is the best shot for you. Peak Reliance is a reliable team of professionally seasoned accountants and tax experts that can help you get out of an audit if the need arises. Our accountants can also aid you with their experience so that an audit can be avoided at all costs, but if one does come up, we will make sure to keep you prepared. Check out our pricing plans or call us at +1 (718) 218-5558 for more information.

Post Tags :

IRS, IRS Audit