We can help you grow your small business by preparing financial statements to show potential lenders. If you are trying to secure a loan, you may need financial statements or a compilation. See how Capstone CPA Group can help.
Congratulations to young entrepreneurs! You are the catalysts of economic growth. People have started to think about work differently. Similarly, companies are also starting to see freelance and contract jobs as a benefit as well. Plus, job connection sites have made it easier to connect businesses with freelancers looking for work.
Click here for more information about the freelance movement
To all our friends and family we want to wish you a very Merry Christmas!
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
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.
- 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.
- 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.
- 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.
- 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.
- 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.
So You Want to Take the Leap of Faith?
As a small business adviser I see many business owners that truly do not understand the time commitment that is necessary to invest to make their dream a reality (or underestimate the size of the endeavor).
I encourage small business owners to stop and take the time to speak with another business owner in their industry. This discussion is worth its weight in gold, because it helps the new owner(s) to understand what has to go into their project first hand, before they take their leap of faith.
I am almost always optimistic when it comes to a new business venture, after all I had to take my own leap of faith.
But, ultimately it is important to have a business adviser or mentor that you can go to, through thick and thin. Not a friend, but someone that is going to tell you when you are heading in the wrong direction. If you don’t have that person you have to find them for your business to succeed.
Also, you have to be realistic in your endeavor and find people that are smarter than you. Yes I said it, you might not be good at everything. This is a harsh reality. But the sooner you come to terms with the fact that you are not the best ever at everything, the sooner you will find smart people that can take care of those things for you.