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Tax 101: Small Business Preparation Tips

 

Tax season starts this year on Monday, January 27th. Though filing taxes isn’t everyone’s favorite task, it’s better to get it done early than wait until the last minute. Once you file your small business taxes, you’ll have a better idea of your official budget for the year. Here are some small business preparation tips for this year’s tax season!

Separate Personal & Business Expense

 

When you first start up your small business, you may find it difficult to separate your work and business expenses. While it may seem easier to just keep all financial information in one place, this can lead to a lot of confusion during tax time.

 

Mixing expenses can cause the IRS to disallow certain business expenses and also confuses your accounting information. The best way to prevent this is to open a separate bank account for your business.

Track Expenses

 

Keeping close track of your business expenses allows you to better reduce your tax liability. Certain business expenses can be used to reduce your adjusted gross income, therefore reducing the amount of tax money you’ll owe.

 

Keep track of each and every expense your small business makes, including office supplies, entertainment, travel, advertising, and insurance. Waiting until tax time to try and track your expenses increase the chance of overlooking something.

Remember the Dates

 

The IRS provides a tax calendar that helps businesses keep track of deadlines for tax season. This calendar includes dates for things like filing W2’s, W9’s, making estimated payments, and filing your return.

 

For freelance workers and independent contractors, you must obtain 1099’s from the clients you worked for during the year.

Digital Receipts

 

Modern technology has made it so much easier to get through tax season. There is expense tracking software that allows you to scan and save all of your small business receipts.

 

This makes it way easier to organize your expenses when they can all be accessed from one place. Creating digital receipts means you can throw away those paper ones, helping you organize your business space as well.

Hire a Professional

 

As a small business owner, your expertise may not be in accounting and that’s perfectly okay. Even with the expertise, time is limited when you have a business to run. Rather than stress yourself out about your business taxes, hire a professional to take care of it for you.

 

An account knows how to file your taxes correctly and efficiently the first time around. Having an experienced accountant on your team can make or break the long-term success of your small business.

Contact PL Consulting Today for Your Accounting Needs!

 

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax preparation, budgeting, and more.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

 

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

The Four Elements of Bookkeeping

Bookkeeping is essential to keeping your business finances organized and accounted for. A bookkeeper is responsible for keeping track of each and every financial transaction that takes place within your business, both ingoing and outgoing. This allows you to see exactly where your money is going and plan budgets accordingly. Here are the four elements of bookkeeping!

Accounts Receivables

The accounts receivable refers to the money that is coming into the business. Your bookkeeper should be sending some type of invoice to clients for all the services that you’ve performed for them. This invoice shows all the necessary costs that the client is required to pay to your business.

 

The bookkeeper keeps track of all incoming payments from clients, marking them down as deposits are made. Your bookkeeper also takes on the responsibility of following up with any clients that may be behind on payments.

Accounts Payable

Though businesses may not be too excited about accounts payable, it is still crucial to keep track of it. The accounts payable refers to the bills and expenses that your business has to pay to others.

 

A good bookkeeper will keep track of each and every outgoing payment your business needs to make. This helps you keep track of what you owe so you can determine the best system to make payments that maximizes your cash flow.

Bank Reconciliations

Your bookkeeper is responsible for regularly going through all of your bank and credit card transactions. They ensure that all your statements stay organized and sort them out so that they’re always easily accessible.

 

Bookkeepers also go through to make sure there are no duplicate transactions documented which could impact your business finances.

 

Once they’ve entered all your card transactions, they will go through to make sure that each account matches up with their bank statements and there’s no discrepancies.

Payroll

A good bookkeeper doesn’t only keep track of your accounts, but can also keep track of your payroll as well. Having someone operate your payroll saves you so much time, allowing you to focus on other important elements of business.

 

Your bookkeeper will keep track of your employee’s work hours, days off, commissions, etc. Once all of this is entered, the finished form will be sent to your management team for final approval and then payroll will be completed from there.

 

Your bookkeeper will keep track of this information and prepare tax documents for employees during tax season.

Contact PL Consulting Today for Your Bookkeeping Services!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax preparation, budgeting, and more.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

 

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

Business Budgeting 101: New Year Planning

The new year is right around the corner, so if you haven’t already, now is the time to plan a budget for the upcoming year. The new year is the perfect time to sit down and analyze your business finances, creating a plan to save money, increase profits, and ensure success. Here are some tips for planning your New Year budget!

Digital Footprint

With modern technology, more and more businesses are going digital in some way. Take a moment to evaluate your digital marketing strategy to see how you could expand and improve. An online presence is essential in this age to maintain a successful business.

 

Often times, digital marketing is less expensive than physical marketing. Including digital marketing in your overall marketing budget can help to improve business and also save you some money.

Vendor Pricing

If your business requires going through a vendor, the beginning of the year is the best time to research vendors and ensure you’re getting the best quality for your money.

 

Often times, vendors are also completing their budgets around this time and offer better deals to ensure they achieve their financial goals. The right vendor will be reasonably priced and provide quality products to your company.

Equipment Check

It’s easy to get consumed in business tasks and forget to regularly check your business equipment. Testing your equipment at the beginning of the year allows you to plan accordingly for anything that needs to be fixed, updated, or replaced.

 

Make note of any equipment that will not last through the year and create a budget accordingly. High-quality, efficient equipment can greatly improve productivity and save your business money in the long run.

Employees

Take the time to analyze your staff at the beginning of the year. If there are any adjustments or additions that need to be made, now is the time to begin planning for it.

 

Finding the right person to fill a position is no easy task, so it’s better to plan in advance. Budget for new hires as well as any employee activities you’d like to have throughout the year.

Need Help with Your New Year’s Budget? Contact PL Consulting Today!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax preparation, budgeting, and more.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

 

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

4 Ways to Save Money in Your Business

 

Saving money is not an easy task, especially when you are running a business. Every time you find yourself saving business money, another expense comes up that needs to be paid for. With the new year just a month away, now is a good time to implement new strategies for saving money. Here are four ways to save money in your business!

Advertising Alternatives

In this digital age, the marketing industry is transforming in a way that makes it easier to advertise your business.

 

Cut the costs of traditional print advertising methods and opt towards utilizing social media, public relations, and SEO techniques to reduce the cost of your advertising!

 

A lot of social media accounts are free of charge, also offer cost-friendly advertising options to those trying to grow their following.

Outsource Services

In-house employees are essential to maintaining the productivity of your business. However, salaries and office space can account for a big portion of a business budget.

 

For services that don’t need to be performed in-house, consider outsourcing to independent contractors. Independent contractors typically have lower rates and can be put on a temporary contract.

Cloud Computing

Many businesses are converting to the cloud, not talking about the ones in the sky. The cloud is an online space to store information.

 

Not only is cloud computing less expensive than other data storage methods, but it also allows data to be accessed from any authorized device.

 

This gives your business more flexibility while eliminating the costs of expensive storage hardware.

Telecommuting

Telecommuting is a growing trend, allowing employees to work from home rather than come into the office. While this isn’t an option for hands-on businesses, it’s a great money-saving tool for businesses that use computers.

 

You may not be able to merge into a completely remote business, but consider offering employees a few telecommuting days each week. This saves a lot of money on office space and the cost of upkeep.

Contact PL Consulting Today for Your Budget Planning Needs!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax preparation, budgeting, and more.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

 

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

4 Tax Preparation Tips for Small Businesses

 

Tax season is right around the corner and quickly approaching. You don’t want to wait until the last minute to file your business taxes. In fact, it’s better to plan ahead and prepare so that you know what to expect financially and are able to get your taxes done faster. Here are four great tax preparation tips for small businesses!

Hire the Right Accountant

The first thing to remember is that there is nothing wrong with seeking professional help for your business taxes.

 

The best way to prepare for tax season is to invest in an accountant before tax season so that they can assist you throughout the entire year.

 

The right accountant will do more than just your taxes, instead of working with you to track financial transactions, profits, etc.

 

A good accountant helps you properly maintain your finances the entire time so that when it’s time for tax season, everything is already organized and in place.

Separate Business & Personal Accounts

When kicking off a small business, it may seem easier to just keep those finances in your personal account.

 

However, even if you reported all business expenses correctly, the IRS now has access to your personal account.

 

They can look into your personal account because of the combined money and this could end up impacting your tax information.

Keep Financial Records

It is so important to keep track of all your business expenses, both internal and external, as you go along. If you are unsure of the proper way to keep track of your finances, a professional finance service can help.

 

Bookkeeping has been made easier due to digital software, but a professional can ensure that all expenses are accounted for and also analyze financial information to help improve your small business and keep it growing.

Claim all Income Reported to the IRS

Trying to get over on the IRS is never a good idea because they most likely have access to the information that you are trying to withhold.

 

The IRS gets a copy of the same 1099-MISC forms that you receive, so they know exactly how much income your business has made within the year.

 

They compare the amount you made to the amount you reported and if they don’t match, it’s a red flag for the IRS.

Contact PL Consulting Today to Prepare for Tax Season!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax preparation, budgeting, and more.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

 

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

The Benefits of Annual Book Cleaning

Your bookkeeping records keep track of all internal and external financial transactions made from your business. Though you should be cleaning and organizing your books as you go, it is especially important to do so at the end of every year. Having a clean set of books at the start of the year allows you to analyze the financial progress of your business over the course of the year. Here are some more great benefits of annual book cleaning for your business!

annual book cleaning

Tax Preparation

One of the main reasons you should clean up your books before the years end is to help prepare you for tax season.

 

Procrastination is way too common when it comes to taxes, but the earlier you get them done, the better off your business will be financially.

 

Cleaning up your books makes it easier to determine your estimated income for the past year as well as an estimate on taxable income. Cleaning up your books before the year’s end also allows time to make financial decisions that could possibly lower your taxable income for the season.

Business Analysis

If you don’t keep your books clean and organized, it’ll be difficult to keep your business organized as well. Cleaning your books at the end of the year allows you to go back and see how much money you made and lost in the past year.

 

You can get a better understanding of what brought in more money versus what caused your business to lose money. You can analyze which sales methods were more effective, what expenses went outside of your budget, and more.

Fresh Start

After analyzing your business books from the previous year, you can now plan properly for the upcoming year. Starting the year fresh, organized, and with a plan in place will allow your business to have a strong start in the new year.

 

If you don’t have your books cleaned up at the end of the year, the start of the new year will be quite unorganized and your business may end up making the same financial mistakes as the prior year.

 

A clean set of books gives you something to refer back to without being overwhelmed and helps you to create a concrete budget for the upcoming year.

 

Organization is key to the success of any business, especially when it comes to finances!

Contact PL Consulting Today to Clean-Up Your Books!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax management, budgeting, and more. If you have questions on annual book cleaning give us a call.

 

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

 

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

The Benefits of Outsourcing Your Payroll Services

When running a business, there are really no days off. You are responsible for every element of the business, from building maintenance to employee management to customer satisfaction, it can easily get overwhelming. The good thing is that you don’t have to take on all of these responsibilities alone. In fact, it’s better to ask for help to ensure that everything is done thoroughly and efficiently. Payroll can be a nuisance, especially if finances aren’t your expertise. Here are just some of the many benefits of outsourcing your payroll services! 

outsourcing payroll services

Risk Management 

Payroll and tax regulations can be complex and you do not want to take the risk of owing the IRS or your employees a bunch of money because you did payroll incorrectly.

A professional financial services company knows all the ins and outs when it comes to legislation, government regulations, security, and privacy, to ensure that everything is done correctly.

This is especially great for small businesses who don’t have a lot of team members with payroll expertise. You will have peace of mind knowing that your payroll is being handled efficiently.

Control Costs

Without proper financial management, no business can truly be successful. Your goal when running a business is to keep clientele happy while also increasing profits.

Outsourcing your payroll services allow you to focus on other aspects of your business so that you can maximize the amount of money coming in.

With someone else managing your payroll, you also don’t have to worry about the costs of payroll software, equipment, and training, which are all included in the one service fee you pay your payroll expert. 

Time Saving

As mentioned before, there are really no days off when running a business. However, when you outsource payroll services, you can now use that extra time to focus on other aspects of your business that need to be addressed.

Hours can be spent entering payroll data and double checking numbers to ensure accuracy. Leave this task to the professionals while you take care of your clients and employees. 

Maintain Control 

Many people think that outsourcing payroll services means you no longer have control over payments. However, this means quite the opposite. You have full discretion over which specific services you will outsource to professionals, allowing you to keep control over desired aspects of payroll services.

You may choose to outsource the data entry and tax aspect of payroll, but keep the actually check distribution in-house. This flexibility gives you full control over your outsourced services and gives you a peace of mind knowing that well-trained professionals are managing your payroll funds. 

Contact PL Consulting Today for Your Payroll Services! 

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax management, budgeting, and more.

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

4 Benefits of Budget Planning for Your Business

budget planning

It is nearly impossible to run a successful business without a budget in place. As a business owner, you must keep track of how much money you have and what you are spending it on. Budget planning not only helps with the financial aspect of your business, but also improves general business management. Here are four benefits of budget planning for your business.

Pricing Assistance

When you are setting a price for your products or services, you must take into account all of your business costs. The only way to make a profit from your product is to make sure that the price outweighs the cost.

A budget maps out each of your costs including health care, utilities, wages, rent, and marketing. Once you’ve figured out the costs, you can set a reasonable price.

Credit & Capital

When it comes to taking out loans or trying to gain credit, you must prove to the lender that you have valuable assets. Without financial data to prove that your business is financially stable, it is highly unlikely that you will be able to get a good loan.

Having a budget is especially beneficial for new businesses trying to acquire credit and capital because it shows your potential partners how their participation affects your profits.

Adaptability

It is a well-known fact that everything doesn’t always go as planned. Having a budget in place means you can easily track your business’ financial activity and performance throughout the year.

If something unexpected happens that throws things off track, it is easy to make adjustments if you already have a budget in place. Changes can be made as needed to help cut costs and increase profits.

Prevent Unnecessary Spending

Without a budget, it becomes a lot easier to spend money that you don’t actually have. A business budget allows you to see upcoming costs so that you have time to prepare and account for those.

Budgeting out the exact amount for bills and other payments each month will ensure that you always have enough to pay necessary expenses.

PL Consulting for all Your Financial Needs!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax management, budgeting, and more.

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

The Best Bookkeeping Software for Small Businesses

When it comes to small businesses, each person likely has multiple roles and responsibilities. The good thing about this modern age is that a lot of things have gone digital, making business tasks easier and more convenient. Bookkeeping software allows you to digitally keep track of your finances and most also provide accounting features. Here are some of the best bookkeeping software for small businesses!

FreshBooks

This bookkeeping software is great for those who send out repeated invoices or need a time tracking feature. Freshbooks can easily be integrated with other business applications so that they can all be accessed from one place.

You are even able to see the location where your customers opened their invoices so that there is documented proof that it was received. Freshbooks has a mobile app that allows you to keep track of your bookkeeping information no matter where you are.

Sage 50cloud

Better for small to medium sized businesses, Sage 50cloud can send invoices, track in and outgoing transactions, and even calculate what you will owe at tax season.

These features are great for tax planning and maintaining your budget. With this bookkeeping software, you are unable to track time and it does not have collaboration tools.

Xero

For those that are always on the go, Xero is a great bookkeeping software. You can customize and send invoices, track your inventory, and create purchase orders all from your mobile device.

This convenient software can send financial reports to your device and easily connects to your bank account. One thing Xero doesn’t offer is live support, which can be inconvenient when troubleshooting.

Intuit QuickBooks

The great advantage that Intuit QuickBooks has is its ability to integrate with PayPal, Shopify, and Square, making it so much easier to track payments.

There are several different plans to choose from, but they all allow you to track your business income and expenses, send invoices, receive payments, run financial reports, and organize receipts. If you opt for a more advanced package, you can track time, inventory, and run payroll.

PL Consulting for all Your Financial Needs!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax management, budgeting, and more.

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/

4 Important Tax Planning Concepts

Tax time can be a stressful time of year for everyone, but everything becomes easier when there is a plan in place. Tax planning is a great tool to use for things like business, wills, retirement, and properties.

In short, it is a way to help figure out just how much money you will be spending on taxes per year, while figuring out the best ways to minimize your tax liability.

Here are four concepts you should know to make tax planning easier.

tax planning

1.  Tax Bracket

The first thing you need to understand when tax planning is your tax bracket. This is important because it gives you an idea of your current standing, which is vital before you can plan for the future.

The U.S follows a progressive tax system, meaning that the higher your income, the more money you pay in taxes.

There are seven general tax brackets (10%, 12%, 22%, 24%, 32%, 35% and 37%), but often times, you won’t pay that percentage on your entire income.

This is because tax deductions are taken into consideration and the government also divides your taxable income into segments before applying taxes.

2. Tax Deductions vs. Tax Credits

Both tax credits and deductions can reduce your tax bill, but they do so in different ways. Tax Deductions are expenses that you have that can be subtracted from your taxable income. Tax Credits are more beneficial, giving you a dollar-for-dollar reduction.

3. Standard Deduction vs. Itemizing

  1. Standard Deduction: A lot of taxpayers choose to utilize standard deduction because it’s a lot faster. A standard deduction is a flat rate, no questions asked deduction. The government sets an amount of the standard deduction each year and the one that you qualify for depends on your filing status (single, married, head of household)
  2. Itemize: This is a longer process, but typically ends up in more deductions than if standard is used. Itemizing means you take your tax deductions one by one. PL Consulting can help you determine exactly which deductions you qualify for and if it’s worth itemizing over using standard deduction.

4. Tax Records

A crucial part of tax planning is keeping all records of tax returns and documents. It can take the IRS up to three years to decide whether or not to audit your return, so you want to hold onto your records for at least that long.

If you’ve under reported your income by more than 25%, you want to keep your records for at least six years. If you’ve ever skipped a tax return, keep your files indefinitely.

PL Consulting for all Your Financial Needs!

At PL Consulting, we consider our clients part of our team. We provide full financial management services including bookkeeping, accounting, payroll, tax management, budgeting, and more.

Serving the Baltimore area for several years, we are dedicated to providing customized service to fit each and every one of our client’s unique needs.

To book PL Consulting today or get more information, contact us at (410)-764-3731 or at https://www.plcfo.com/contact/