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To clarify – not talking about your personal library here. If your business books are a mess and you want to do better in 2024, it’s important to understand what exactly makes your books (accounting records) “good.” Here are the fundamentals of good bookkeeping. They are practically interdependent, each one supports the others, so you need all of these to have good books: 1. Timeliness . A basic requirement of good bookkeeping is maintaining up-to-date records. Your financ

If you work with contractors/vendors/attorneys/landlords and you typically pay them more than $600 during the year, then you know that you have to send them a 1099 at the end of the year. Trying to chase them down in January to fill out their W-9, in addition to calculating how much you’ve paid them to put on the 1099, is the worst way to spend the start of a New Year. And your accountant is probably especially fond of doing this for you, too (sarcasm). So let’s not do that

It’s a very popular question: how long should a business keep their receipts/records and what constitutes good support? It’s also a touchy subject. What most of us don’t realize is that “innocent until proven guilty” simply does not apply in the case of a tax return audit. It’s the opposite. When you file your return, you are asserting that you received a certain amount of income, and that a certain amount of that income should not be taxed because of your deductions. If

As a self-employed tax payer, and as an accountant and advisor to many small business owners, I am well acquainted with the shock and disgust of what I call the “April First-year Tax Sucker Punch”. Perhaps you are familiar – it’s that first tax return you file that shows a profit on your Schedule C, your independent business activity, for which you probably have not paid any withholdings or estimates during the year. That’s when you learn your first hard lesson about self-e

Accrual basis accounting is a way of recording financial transactions that focuses on when the transactions occur, rather than when the money actually changes hands. In other words, under accrual basis accounting, revenues and expenses are recorded when they are earned or incurred, regardless of when the money is actually received or paid. This method allows for a more accurate representation of a company's financial position over time, as it takes into account all transactio

Do you ever get the feeling that common sense just isn’t very common after all? If you think the tax code is logical and reasonable, you may find yourself claiming expenses for your business that just aren’t deductible. Here, for your information, frustration, and amazement, is a list of the most common attempted deductions that the IRS disallows on a frequent basis. It is possible that some of these expenses could properly be shown on your financial statements and reports

4 Common Mistakes that Make your Chart of Accounts a Mess by Kevin Clark, CPA If the financial reports you're seeing for your small business are hopelessly unreliable (like my mirror first thing in the morning), you may need to do some clean-up on the foundation of your accounting system - the Chart of Accounts. My what? Your chart of accounts is simply the list of all of the different categories that you see on your financial reports (balance sheet, income statement...etc)

Owning your own business can be exciting, but it can also mean you are responsible for absolutely everything. Payroll and taxes can get complex and may overwhelm as you start up or as your business grows larger. That’s where a CPA, Certified Public Accountant, can help take a big part of the stress out of your professional ventures, leaving you time for what you really want to focus on. There are many reasons to consider having a CPA help but here are some for today: 1. A