Tawny Johnson CPB Blog

Often overlooked, receipt keeping is a critical part of accurate small business bookkeeping. Receipts provide the most direct and acceptable support for every entry recorded in your financial records and tax returns. In the event of an IRS audit, your business must show documentation proving not just the amount paid—but that the expense was a qualified business expense. Many business owners mistakenly assume that bank or credit card statements are sufficient. However, these statements often lack the level of detail needed. The IRS may disallow expenses that don’t include full itemization or proof of business purpose. The solution? Save itemized receipts and annotate them when necessary. A simple receipt with a few notes c…

Is your bookkeeper helping you maximize tax write-offs? Are they actively working to reduce your company’s tax liability? Are they pushing you (nagging) to provide the necessary documentation to account for EVERY POSSIBLE business expense? Ask yourself the following questions… Does your bookkeeper provide suggestions on tax-free contributions (IRA, HSA, 401K)? Do they check for hidden business expenses in personal credit cards, bank accounts, or overlooked sources? Do you know your Gross Income (Revenue minus the Cost of Goods Sold)? More importantly, do you know how much you need to sell to break even? Do you understand your Accounts Receivable? Are you actively collecting ou…

Ever wonder why some small businesses pay fewer taxes than others? It all comes down to business expenses, tax deductions, tax credits, and proper documentation. Here are some essential tax-saving strategies to ensure you're only paying what you NEED to. Tip #1: Keep Detailed Records of ALL Expenses Always request a receipt for every business expense. If you don't receive one, create one! In the case of an IRS audit, canceled checks and bank statements are not enough. The IRS may disallow expenses that lack physical proof of purchase. Tip #2: Contribute to a Pre-Tax Retirement Plan Reduce your taxable income by contributing to an IRA, 401(k), or HSA. You could save up to $6,500 tax-free,…

Business owners — As we near the close of this tax season, it’s essential to take advantage of every opportunity to cut your tax bill and improve your bottom line. Business owners can deduct business expenses from their income throughout the year. To qualify, an expense must be directly related to the business and considered ordinary and necessary in your industry. Common Deductible Business Expenses: Home Office use: utilities, garbage, phone, internet, etc. Business travel: meals, transportation, hotel, taxi, etc. Entertainment expenses related to business Tools and supplies for work Business meals and entertainment Educational resources: classes, seminars, books Bank, ATM, and credit card fees Cell phone u…

Mark your calendars! Below are some critical tax deadlines that every business owner should keep in mind to stay compliant and avoid penalties. 🗓 By January 31, 2019 Form 940 – Employer’s Annual Federal Unemployment Tax Return Form 941 – Quarterly Federal Tax Return Form 943 – Employer’s Annual Federal Tax Return for Agricultural Employees Form 944 – Annual Federal Tax Return (replaces Form 941 for some employers) Form 945 – Annual Return of Withheld Federal Income Tax (non-payroll sources) Distribute W-2 Forms to employees Submit 1099s and W-2s to the IRS and SSA 🗓 By March 15, 2019 Partnership and S-Corporation tax returns are due 🗓 April 17, 2019 C-Corporation and Individual income tax return…

Creating a corporate budget—or even a household one—is arguably one of the most important tools in business. A business budget provides a roadmap for expected income and expenses and allows you to compare your financial goals with actual performance. In short, it serves as a barometer for how your business is doing. (Entrepreneur Magazine, 2009) Every small business should conduct an annual budget review and planning session to ensure that their numbers are up-to-date, relevant, and aligned with growth goals. A well-crafted budget serves three major purposes: 1. Control Business Expenses A business budget helps ensure that company cash is used wisely. This may mean reducing unnecessary expenses, negotiating better vendor …