Giving Thanks

Thanksgiving is a time to reflect on everything we are thankful for. With that in mind, I wanted to take a minute to thank my family, friends and loved ones for all of their love and support in the last year.

I love Thanksgiving because it is a time to get together over a meal with everyone I love and catch up with them.

I hope you have a wonderful Thanksgiving with everyone you love.

Happy Thanksgiving from Anthony Momany, managing partner – Capstone CPA Group

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Business tax audit risk

Five tips to help small businesses reduce the risk of a tax audit.

While you cannot assure someone that they will be able to avoid a business tax audit, you can help them reduce the risk. You will also notice that most of these items are generally good advice, so if you do find yourself facing a small business tax audit, you can feel a little better knowing you followed these principles. While you still made some mistakes (especially if you do not follow item #1) at least you will know that you were on the right track, which is important when you are dealing with a business tax audit.

  1. Hire a professional: Unlike most personal returns, business returns are more complex and usually have multiple forms to fill out just to file a single business tax return. For this reason it is important to hire a professional and not leave your business to chance. This is most important if you do not know what types of expenses you can include on your business return. This step alone assures that you have a professional to work with you, if you do face a business tax audit.
  2. Be honest: While it is tempting to “fudge the numbers” if you are facing a small business tax audit, it is much better to know that you have followed at least reasonable standards of filing and that you have a process in place to be able to review the numbers.
  3. Review the numbers: Depending upon the tools you use in your business, it may be very hard to review the numbers in your business. This is actually a big reason why we recommend that all businesses use some formal accounting system. Without a formal accounting system, not only might you be under reporting your income. You actually might be under reporting your expenses as well (we find both in business). In a business tax audit situation it is important to be able to rely upon your processes to find errors.
  4. Watch your deductibles: We have a theory that you should not pay one more dollar than necessary in taxes. That does not mean that you make numbers up. It also doesn’t mean that you leave numbers out. If you are in business you have more accounting and record keeping duties than an individual taxpayer, this is just part of your duties. But, there are ways to make sure you are reporting all of your business income and expenses. That is a large reason why CPAs are in business. If you are struggling with business accounting, hire someone that can help you out. This is what we do every day.
  5. File electronically: When you fill out your tax return by hand, you increase the chance for errors at multiple times. Business and personal returns can be very complex, but they become more complex when you attempt to fill out the forms by hand (most preparers would have a hard time filling out a tax return by hand as well). Computer software has streamlined the process of filling out and filing a return.

If you would like personal advice on some tax issues you have, and you are worried about a business tax audit (or you have received a tax audit notice), reach out to us. We are business and personal advisors that have an extensive background in business and personal taxation and can help you with your problem.

This is a blog article that uses content as included in a recent article by: CPA Practice Advisor. However, some of this material is new material. If you would like to check out the original article, click here.

Happy taxing!

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Outsourced Accounting Services

Outsourcing- Definition:               Obtain goods or services from an outside supplier in place of an internal source.

American companies embrace innovation almost as much as they embrace outsourcing. If you think about it objectively there are very few manufacturing companies that obtain goods from an internal source, in the truest sense.

So why would you consider outsourced accounting services:

  1. Save time and money- Time and Money, if only we had more of each. If you only had more time or money (or both), most of our problems would go away. How many of your vendors are offering you time and money savings? Outsourced accounting services can offer both.
  2. Real time access to accurate data- Large companies agree that having access to accurate reports is invaluable to decision makers. So why would small business be any different? If anything this information may be more important to Presidents, CEOs and CFOs.
  3. Your documents/files stored securely- If you ask any client that has had to recreate lost data due to a computer crash, they will tell you what it is worth to have multiple layers of backups available in case you lose that data.
  4. Eliminating the knowledge power holder- Most small to mid-sized businesses have gone through this transition. They had a bookkeeper/controller employee who knows how all the systems come together. What happens when you need to replace this employee? Or worse, what happens if they quit expectantly? Sometimes an in-house knowledge base is fine, but how do you deal with one person who runs everything, and maybe knows a little too much about employee compensation.
  5. Other benefits- When you outsource, inherently you are going to avoid many concerns associated with hiring employees. Benefits like: avoiding sick-time calculations, unemployment claims and miscellaneous employee baggage. Usually our business owners also find that due to the fact that they do not have to worry about execution of specific objectives they can focus their time executing their own business growth objectives. This re-allocation of time can be very beneficial for business leaders (and their investors).

If you would like more information about outsourced accounting services, please reach out to us. We offer many different service levels for many different sizes of clients. We tailor our accounting services to your particular business needs.