Prepare Your Online Business for Tax Time
Every year, tax season rolls around whether you’re prepared for it or not. It’s one of the most stressful times of the year, but one of the only times of the year we all come together and witness the same pain.
If you’re looking to finally have a stress-free, organized, and well-prepared tax season, we have the step-by-step guide for you! Follow along as we help you take control of your taxes this year.
1. Don’t Forget These Dates
The most important thing you need to know when tax season rolls around are the specific dates that act as deadlines for turning things into the IRS. While they can sneak up on you, adding them to your calendar and setting up multiple reminders will help you stay on top of everything.
Here are the most important dates to keep in mind:
- February 1 - make sure you’ve sent your 1099-MISC to any contractor and W2 to any employee if you paid them more than $600 for the year. This also needs to be reported to the IRS.
- March 15 - make sure you’ve filed your individual and partnership tax returns by this date, that way you can receive the Schedule K-1 in time to do your personal tax return.
- April 15 - make sure you’ve filed your personal tax returns by this date, otherwise you’ll be subject to a penalty or fee.
There are plenty more dates that you’ll need to know, but they’ll differ depending on the type of business you own and how big it is. Always make sure you consult with an accountant so you can feel confident when tax season rolls around.
2. Do You Have Your Receipts?
One of the most time-consuming tasks when tax season comes knocking is finding all the receipts you’ve accumulated throughout the year. These are going to prove to the IRS that you did, in fact, pay for all those expenses you mentioned in the tax return.
While most people still maintain paper receipts year after year, it’s not a sustainable or efficient way of getting things done during tax season. Instead, use one these platforms to simplify this process:
- Evernote - a free platform that allows you to access scanned receipts or photographs taken of receipts. They also have a personal scanner that does everything for you.
- ShoeBoxed - a service that costs up to $100 per month and allows you to ship an envelope full of receipts to the company and they’ll enter all the data for you.
- Expensify - as low as $5 per month and allows you to link a bank account to track expenses and transactions in real-time. There’s also an app that allows you to scan or take photos of receipts.
Getting your receipts organized before tax season rolls around is one of the most beneficial things you can do. It saves you a lot of time and allows you to focus on what’s really important.
3. Where Are Your Bookkeeping Records?
Before you enter tax season, it’s important you have a clear idea of what your books look like, where all your records are kept, and make sure they’re up-to-date. Doing so will protect you against an audit and better prepare you for what lies ahead.
There are two major ways of bookkeeping for business owners -- doing it yourself or having a professional do it for you. With the amount of accounting software available today, it’s extremely easy for owners to do it themselves.
At the end of the day, it comes down to preference. You should pick method and right software that works best for you, your business, and your day-to-day operations. As long as they’re accurate, up-to-date, and accessible, then you’ll be fine when/if the IRS shows up at your door.
4. Taking Care of Independent Contractors
Independent contractors make it easy when paying them throughout the year because they don’t require you to pay taxes. They do, however, need you to send them their 1099-MISC by February 1 and the same needs to be sent to the IRS by March 31.
There is a $600 minimum, however, meaning you don’t have to do this for any independent contractor you paid less than $600 the previous year.
5. Do You Understand Sales Taxes?
While sales tax can be a tricky and complicated subject, we’re going to touch base on the basics so you have a better idea of what to expect. Since these laws and guidelines generally vary by state, it’s important to do your own research. Of course, speaking with a professional makes this easy for you.
In order to have the right to charge sales tax in a certain state, you need to have a physical connection to that state -- which is called having ‘nexus.’ Once nexus is achieved, you can charge whatever that state allows.
You might be asking yourself, “What’s considered having a physical connection to a state?”
Living in that state is certainly the most popular way to gain nexus, but you can also achieve it by owning an office in that state, having employees that live there, a warehouse, hosting a pop-up shop in that state, or simply storing inventory in that state.
Since it’s a requirement that this sales tax is collected from the consumer and paid to the IRS every year is essential to limiting penalties and fees when tax season rolls around.
6. Do You Need a Tax Extension?
Many business owners get confused every year by the meaning of a tax extension. On the surface, you would think it means business owners get an extension to pay their taxes. In reality, you still have to pay the IRS by the original date.
So, what is a tax extension, then?
A tax extension gives you more time to do all the hard things -- the number-crunching, receipt-finding, and filing -- that some business owners save until the last-minute. In order to file a tax extension, you just need to fill out a form that requests it, along with the estimated tax payment and payment.
If there are any issues with the extension, the IRS will reach out to you. If not, then nothing happens and you’re expected to then file your taxes before the new date. The date will depend on the type of business you own, which breaks down as follows:
- Partnerships - file before March 15th for a 7-month extension by the IRS.
- Corporations - file before April 17th for a 6-month extension by the IRS.
- Sole Proprietors - file before April 17th for a 6-month extension by the IRS.
If you don’t have the money to pay for the taxes, you don’t have to send the payment right away. Instead, you’ll receive a fine for each month they don’t receive a payment. While you don’t have to send the payment, it’s best if you want to avoid a fee.
7. Deductions Save You a Lot of Money
One of the bright spots of tax season is the ability to list tax deductions, which are expenses that fall under the ‘business’ category. Since these expenses are meant to start-up, maintain, and grow your company, they effectively lower your expected taxable income.
Knowing what these deductions are is crucial to ensuring you receive the most benefits come tax season. If you’re an online seller, here are some of the most important deductions to consider:
- Home Office - in order to use your home office as a deduction, it needs to be used regularly and exclusively for work purposes. If so, you can deduct $5 per square foot of office space, but no larger than 300 square feet.
- Education - classes and courses that contribute to your business can also be deducted on your tax return.
- Utilities - if you pay monthly internet and phone bills for your business, those can be deducted on your tax return. You’ll need to account for personal use, so be careful if you use the phone or internet for other reasons other than just work purposes.
- Website - the cost of maintaining your company website is also viewed as a deduction. This can include the cost of themes, hosting, domain registrations, and any work you have done on it.
- Contractor - if the process of hiring an independent contractor costs your company money, you can deduct that cost on your tax return.
- Shipping - you can also deduct the cost of shipping goods to your customers, which includes both postage costs and packaging costs.
- Vehicles - by using a mileage tracker, you can track how many miles you travel for business or work. At the end of the year, the amount of money you spent on gas for those trips can be deducted from your return.
- Services - if you pay for any online services that contribute to your business, such as Spotify for store music, Amazon Prime for deliveries, or Microsoft Office, then those expenses can be deducted.
- Equipment - any equipment you purchase that contributes to you or your employee’s ability to do their jobs can be deducted. The process for this is a bit complicated and should be done by a professional.
In addition to those, your business could be eligible to list some expenses as ‘start-up costs’ if you’re new to the game. This is crucial, since there are often a lot of expenses that could count as a deduction when first opening your business that wouldn’t normally be counted for other businesses.
8. Do You Need Help?
Navigating through the many demands of tax season can be difficult for a business owner that already has a growing to-do list each and every day. That’s why most business owners elect to have a professional manage their taxes and financials throughout the year.
There are also a wide range of software programs, applications, and services designed to make it easier for business owners to manage themselves. You just have to find the one that works best for you and your business.
If you need help at all during this process, feel free to contact Consultants In-A-Box. We can help you find the right solutions that are catered to meet your needs year-in and year-out. We can’t wait to help you and your business continue to grow!
Paying Workers Without Paper Checks
The COVID-19 pandemic has created a widespread of challenges for businesses of all sizes. Not only has it changed the way businesses think and act, but it has changed the demands of employees and consumers alike.
One of the things the pandemic has changed forever is the way employees are paid and how they receive their money. It’s clear your employees and their families are in a tough position right now and they need as much help as they can get.
Unfortunately, many employers are still utilizing paper checks on payday -- opposed to the wide range of options available today. In fact, paper checks are one of the least-preferred methods when getting paid and it’s time for businesses to take notice of it.
So, why shouldn’t you use paper checks?
When business owners choose to pay their employees with paper checks, a majority of them don’t understand the process involved when printing the checks, placing them in envelopes, and sending them out. Not only does that require physical labor, but it requires time when dealing with shipping and handling.
As we’ve seen with the COVID-19 pandemic, physical labor is still difficult to manage and there isn’t even a guarantee that it’s available. In addition to that, employees need their money sooner than ever because a majority of them are living with their backs up against the wall.
When your business uses paper checks, it does more harm than good to the employee -- and even your business. It costs you money, it takes time, and employees are stuck waiting an unnecessary amount of time just to get paid for the work they’ve already completed. Some of them might have to pay a small fee just to access that money, especially if they don’t have a bank account.
If that’s not enough to persuade you to consider paying employees electronically, think about all the different hands -- as well as germs and potential viruses -- that touch the paper check before reaching your employees. With how important public health and safety is today, paper checks present far-greater risks than we once imagined.
There’s a Better Option When Paying Workers
For the business owners out there that think paying their employees via paper checks or even cash is the only option when paying workers, we want you to think again. Paying them electronically is a much-more feasible option in today’s economy, putting you and your employees in a position to succeed short-term and long-term.
It shows your employees that you’re thinking about them and that their needs matter to your company. In an age where many employees feel like they’re not being heard or appreciated, this can go a long way -- not just for you, but for the rest of your employees and customers.
With so many different options out there, including direct deposit, individual pay cards exclusive to your payroll, mobile wallets, and even services like Zelle and PayPal. Desperate times cause for desperate measures and your employees would do anything to rid themselves of dealing with paper checks.
If you need assistance or guidance when switching from paper checks to electronic payments, Consultants In-A-Box is here to help. We’re experts when it comes to payroll, human resources, and accounting services for businesses of all sizes.
Contact us today to learn more about how we can help you and your business find the success you were imagining when you first opened up. One of our trained professionals will assist you immediately.
Signs It’s Time For Payroll Help
New business owners are faced with a wide range of difficulties and obstacles when getting their feet on the ground, but most people won’t properly prepare themselves for the payroll process. It might seem easy in the beginning, but you’ll eventually be screaming for payroll help as your business grows.
The more employees you hire, the more difficult it becomes to manage and maintain your daily, weekly, and monthly payroll challenges. It’ll get to a point where you simply don’t have enough time in the day to focus on your responsibility as owner AND manage your company’s payroll.
While most owners find themselves in a pickle when forced to decide between the two, Consultants In-A-Box is here to change that perspective and provide reasonable solutions to your payroll challenges. We’ll become the payroll assistant you’ve always wanted!
When Is It Time for Help?
We assist you with every part of the payroll process -- not just the part where you pay your employees. New hire paperwork, W-2s, quarterly payroll taxes, and much more are required on a consistent basis, taking away even more of your time.
We’ve helped many companies -- just like yours -- solve their payroll issues and we understand the biggest warning signs when it comes to needing payroll help. Let’s take a look at some of those warning signs, that way you can avoid disaster with your own business.
1. Late Payday & Tax Forms
Paying your employees late because you were too busy with other work or didn’t have enough time to process them sooner is unacceptable as a business owner. Your employees depend on receiving their hard-earned money on-time and won’t settle for anything less.
While timing is important with paychecks, it’s also important to the employee’s W2s and 1099s, which need to be sent out in a timely manner so the employee can file their taxes properly. Failing to send them on-time will surely lose your employee’s trust.
2. Payroll Errors
Errors in payroll are never welcomed and put your employee in a tough spot. Spelling their name or address wrong on the check can cause delays when cashing the check. Furthermore, the wrong amount in the check leads to distrust and more delays.
If errors are plentiful when processing payroll, consider finding a payroll assistant or software. They’ll help cut down on the mistakes and ensure everything is handled properly and accurately.
3. Missed Tax Deadlines
Constantly missing tax deadlines can result in some serious fees and charges against your business. These are an important part of owning a business and something most people aren’t aware of before they start a business.
The last thing you need is the IRS on your back. Talking with a professional ensures you know exactly how much to pay, when to pay it, and how to pay it so your business remains in good-standing with the IRS.
4. Depleted Cash Flow
Cash flow is essential when processing payroll. Without the money, you can’t pay your employees. This is the worst case scenario when doing payroll because it brings the entire process to a halt -- even if you’re ready to complete it.
If you’re having issues in this area, payroll software can help you stay better organized and ensure you have the necessary funds when you need them. You won’t need to rely on loans to pay your employees anymore and can start to build a level of financial stability.
5. Hourly Employees
Hourly employees present a wide range of difficulties without the right tools or resources. Especially in today’s digital world, technology is your best friend when taking control of your hourly payroll. If you’re having a tough time accurately keeping track of hourly employees, a payroll software or assistant helps you stay diligent.
At the end of the day, payroll should be an easy process for the owner that requires minimal work and more reviewing than anything. You shouldn’t be running into issues left and right. If you are, it’s time to search for some help -- and there’s no shame in that. It’s a smart move!
Are You Ready to Save Your Payroll?
A quality, smooth, and accurate payroll process is essential to a business. It keeps your financials in order, it keeps you prepared, and leads to more employee loyalty -- which benefits your business in so many more ways.
If you need help keeping everything in check, there are three quality options you can consider immediately -- outsourced professional, payroll software, or both.
The payroll software will make things easier for anyone, whether you’re taking care of the payroll yourself, already have a payroll team, or plan on hiring one. Outsourcing your payroll to a professional might cost money each month, but it’ll add time to your day and accuracy to your books.
Of course, the combination of both is what puts your business in the best position to succeed. Choosing a professional who knows your payroll software is important, but having a professional with their own solution is even better.
When you’re ready to save your payroll and prove to your employees that your company can be a reliable place to work, contact Consultants In-A-Box today to be connected with one of our highly-rated professionals.
How To Choose The Right Bookkeeping Software
Most small business owners aren’t considered experts at financial management. Since your business’ financials never stop, having to manage this yourself with ineffective tools can be frustrating and time-consuming. It’s what makes small business bookkeeping such a dread.
Finding the right bookkeeping software for your company is essential to maintaining an organized environment that limits mistakes and confusion. Below, we’re going to discuss some of the most important factors when determining the best bookkeeping software -- that way you can make a more-informed decision.
Finding the Best Bookkeeping Software
First and foremost, you need to understand what your business needs. Some businesses need something simple, while others need something complex. Some companies might be looking for something that can support both if they plan on scaling the business in the future.
Either way, you need to have a deep understanding of this before you start looking at software or consultants. It’ll help you narrow down your options initially so you can focus on the things that separate the best bookkeeping software from everything else.
In order to determine that, there are five major factors you need to consider -- customization, simplicity, accessibility, customer support, and integration. To limit any confusion with these factors, we’ll break them all down one-by-one for you.
1. Customization & Personalization
When it comes to small business bookkeeping, every business is unique and they all have their own way of operating. In order for a bookkeeping software to be of any assistance to your needs, it needs to be flexible enough to customize and personalize to your liking.
Whether you have hourly employees or contractors working for you, need assistance managing income and expenses, or need general help when it comes to taxes, your bookkeeping software should have a solution for you.
2. Ease of Use is Crucial
No small business owner wants to invest company funds into a bookkeeping software that provides more confusion and frustration than it does assistance. In fact, it would defeat the purpose of investing in bookkeeping software to begin with.
Your new software shouldn’t have a steep learning curve for any business owner or accounting team. It should streamline the process and save you loads of time in the process. If you’re receiving anything less than that from your bookkeeping solution, it’s time for new software
3. Accessibility At All Times
Much like you want the software to be simple, you also want it to be accessible. This means having the ability to view your books and financial insight whenever or wherever you need to -- especially since most small business owners are constantly on-the-go.
It doesn’t matter what device you’ve grown to love over the years, your new bookkeeping software should be supported on it. Phones, tablets, laptops, PCs, you name it!
4. Excellent Customer Support
Any product, service, or software needs excellent customer support. Nothing is perfect and you’re sure to run into an issue, question, or comment at some point. Since bookkeeping is a stressful process in general, having courteous and helpful customer service agents by your side is a must.
That also means having easy access to these agents, whether it be live chat, phone call, email, by mail, in-person, or through social media. The more options, the better!
5. Integration At It’s Finest
Over the years, every small business owner has become attached to certain software, apps, tools, and resources when running their business. Having a bookkeeping software that easily integrates with your existing operations is essential to finding one that works for you.
When you have all your technology working together, it makes everything that much easier for you and your team. Since putting yourselves in a position to succeed is crucial to achieving success, you’ll be in a good spot moving forward.
Now that you know what to look for, put that knowledge to good use and find a bookkeeping software that works well with your business. Contact Consultants In-A-Box today to learn more about our solutions and how we can help you take control of your business’ financials.
Six Reasons For Outsourcing Payroll
The vital role outsourcing plays in business growth cannot be downplayed. A lot of major players in the marketing industry have long taken advantage of these ‘outside expert services’ to streamline and boost the productivity of their business.
The strategic services of outsourcing companies have been utilized in times past, and if success stories are any indication, it is quite beneficial to hand out some core responsibilities to these outsourcing firms—and that includes payroll.
We, at Consultants-In-A-Box, will be exploring some of the reasons why you need to outsource payroll to an expert firm. But first things first.
What are Payroll Outsourcing Services?
Payroll outsourcing services, like Consultants-In-A-Box, are employed by companies to handle their payroll process in an efficient and specialized manner. As a payroll provider, these outsourcing companies bring their expertise and efficiency in procuring payroll to the parent company.
Why Do You Need A Payroll Outsourcing Service?
There are several beneficial reasons to hire the services of an expert payroll service. We’ll be looking at 6 of them.
Less Time Calculating The Payroll Of Every Worker.
An employee in charge of payroll will always have a long, rough day before or after payment day. He or she would have to constantly and accurately calculate the net salary of every worker in the organization.
They’d have to calculate and remove the taxes, include benefits such as child supports, pension, healthcare, transportation allowance, and other additions or deductions. And that’s just one person!
When you factor in the amount of time that he or she would complete the task, ensuring all your staff is accounted for, it’s going to take a huge slice of the week.
Contracting this specific task to an expert payroll outsourcing firm is beneficial for you in the long run.
Limit Common Payroll Mistakes.
When it comes to payroll and calculating workers’ paycheck, mistakes do occur, and this negatively impacts the business or the employees directly. When a worker’s work hours aren’t correctly inputted to calculate his gross salary, he or she would notice a decrease in their pay.
Also, when tax deductions are properly removed, a huge chunk of the worker’s salary is removed. This may breed resentment towards the company, and if they take legal actions against your company, they’d be right to do so.
To avoid mistakes like this, you need a reliable payroll outsourcing service to take the weight off your shoulder.
Professionals With Relevant Experience In Payroll.
When it comes to payroll, no one does it better than a professional company set up for just that purpose. They understand the many complexities of payroll processing and still deliver the very best. Some of their duties include:
- Submitting year-end and quarterly payroll taxes.
- Adjusting the correct tax deductions by updating W-9 forms.
- Handling healthcare, social security, and FICA deductions.
- Background knowledge of national regulations as regards with payroll deductions.
- Ensuring state and federal tax laws are strictly adhered to.
Security Of Payroll Data.
Hiring the services of professional payroll providers guarantees you of payroll data safety. Most companies still struggle with issues ranging from embezzlements, identity theft, and intentional tampering of records.
Hiring a payroll outsourcing company means your confidential records are safe and secured away from prying eyes inside your company.
Compliance With Government Laws.
When you’re managing several workers at once, having to track their allowance and deducting federal, state, as well as healthcare taxes can be really tasking, and mistakes may occur.
To remain on the side of the law, it is important to hire the services of a payroll provider to remit accurate taxes and returns to the government.
Generating Reports For Company Use.
After a payment period, the records containing the pay earned by employees, including tax, miscellaneous deductions are documented and kept for future use. When you’re making use of an in-house staff for this, mistakes may occur and negatively impact your business.
The services of seasoned payroll providers should be hired to accurately analyze and document these reports.
When with all this information at your fingertips, the need for an outsourcing payroll company arises. Consultants-In-A-Box, since our inception, has prided ourselves in delivering the best payroll service that your business needs at the moment. Contact us today to take advantage of our awesome packages.
Money-Saving Accounting Tasks That You Don’t Need to Outsource
Most small business owners fear the term ‘accounting’ and run from anything considered ‘bookkeeping.’ While outsourcing your accounting needs is beneficial to your company, it also costs money. The key here is limiting the amount of work you need to outsource with the right accounting tips.
How do you do that, exactly?
You take some of the easier responsibilities for yourself and leave the more difficult accounting tasks for the professionals. Don’t worry, the accounting tasks you take on won’t take any special skills and won’t be time-consuming.
They will, however, be money-saving and that’s what’s most important.
Today, we’re going to discuss five of the simplest and easiest-to-manage accounting tasks small business owners should learn to take care of themselves. With the right software and accounting tips, these tasks will be as easy as checking your social media.
Microsoft Excel is an amazing tool that can provide a wide range of benefits to any business -- including managing and recording invoices. Unfortunately, using Excel puts you at risk of constant data entry errors, wrong dates, incorrect amounts, and more.
Of course, this all leads to a delay in receiving payment from the client or customer, which is what no small business owner wants.
Avoiding this requires the right accounting software and accounting tips to help you not only automate your invoicing, but allow you to easily and quickly preview an invoice before being sent. This makes it much for manageable for any busy small business owner.
In addition to that, accounting software can help you change currency for each client, accept deposits up-front for work you just signed a contract for, receive notifications about overdue invoices, allowing the ability to duplicate past invoices for easy editing, and much more.
2. Accepting & Recording Payments
Getting the invoice to the client is essential, but making sure they have the resources to quickly and easily pay that invoice is just as important. It’ll put a smile on your face when you see clients and customers paying you in a timely manner.
The right accounting software helps you not only keep track of who paid you, but also how they paid, whether the payment was cleared, when it was sent, when it was paid, and just about anything else you’ll need to track when it comes to accepting and recording payments.
The right software also saves you time by giving you an all-in-one solution when depositing checks, handling payments that bounce, and even helping you with foreign currency exchange when dealing with customers overseas.
In terms of accepting payments, you can integrate an easy option built into the invoice. That way the client can pay that invoice the moment they receive it with little work on their end. You can set it up so the money is deposited directly into your business bank account.
In terms of recording everything, a majority of data is recorded automatically to make it easier on the business owner. It’ll keep everything under the same roof so you can easily manage future, current, past, and overdue invoices.
When it comes to accounting tasks, managing income isn’t so bad when watching your business grow and receive payments. Unfortunately, things aren’t as fun when managing the money your business is losing -- but they’re just as crucial to the process.
When using a spreadsheet, tracking expenses is difficult and leaves your business prone to mistakes. With the right software and small business accounting tips, you can connect your business bank account directly to the software. That way all your expenses are automatically uploaded to the software every single day.
It’ll make keeping track of expenses a lot easier because you’ll only have to add in the cash expenses, which don’t happen as often in business. Simply snap a picture of the receipt, add in what it was for and how much, and save the entry. You can always label them to further organize, as well.
Accounting software can also help you manage tax deductibles, including meals, business travel, vehicle-related costs, home office expenses, and technology costs.
4. Sales Tax
Collecting sales tax helps cover tax costs for any small business owner, but most neglect the process of recording and keeping track of the sales tax collected over the past year. This leads to the sales tax being added into your income and used with your spending money.
Of course, a nightmare is bound to happen when you don’t have the funds to cover tax payments. To avoid this from happening, it’s important to manage sales tax collections and keep them separate from everything else you’re receiving.
You’ll always have access to your data and can easily manage how much you’ll owe in sales tax whenever you need to.
5. Financial Knowledge
When running a business, it’s essential you understand where your business stands financially at all times. You need to know how much cash flow you have, how much money is coming in, how much is leaving, and knowing what the future has in store for you.
Most business owners wait to take care of all these things at month’s end, but that leaves you prone to rushing and making mistakes. Having a software that keeps everything right in front of you throughout the month allows you to stay on top of where your business stands whenever and wherever.
Financial reports should be easy to run and easy to read, they shouldn’t add more frustration to your situation. When choosing a software that’s right for your company, take this into consideration to avoid making the wrong investment.
Once you start to turn these small business accounting tips into habits, you put your business in a much better position moving forward. You’ll have the confidence you need to grow your company and inspire your employees to do better every day.