What Tax Documents Should You Bring To Your Accountant?

Man running from a tidal wave of tax documents

If you are anything like most people and specifically business owners, the idea of having to even do your taxes can be incredibly stressful. In most cases it’s because many are afraid that they don’t know what they are doing and may make numerous errors and in most cases these people are probably right. Not everyone should be managing their own accounting needs especially as a business owner. Because of this many must consider hiring an accountant and if they do here are just a few things you should bring with you.

Your Social Security Card

This is probably unnecessary if you have used the same accountant year after year; however, if the accountant you are meeting with is new you’ll want to make sure you bring in your social security card for identification purposes. Your accountant will want to verify the spelling of your name and bringing your social security card will help with that. You will also want to bring the insurance cards for your spouse and dependents as well. If for some reason you don’t have access to your social security card, it might be worth stopping by your local Social Security Administration Office in order to get a replacement card.

Income Related Documents

Depending on what kind of worker you are you will want to make sure you are bringing in plenty of income related documents. A list  of these documents include but are not limited to:

  • Form W-2 (wage and salary income)
  • Form W-2G (gambling winnings)
  • Form 1099-A (foreclosure of a home)
  • Form 1099-B (sales of stock, bonds, or other invest-ments)
  • Form 1099-C (canceled debts)
  • Form 1099-DIV (dividends)
  • Form 1099-G (state tax refunds and unemployment compensation)
  • Form 1099-INT (interest income)
  • Form 1099-K (business or rental income processed by third-party networks)
  • Form 1099-LTC (benefits received from a long-term care policy)
  • Form 1099-MISC (self-employment and other various types of income)
  • Form 1099-OID (original issue discount on bonds)
  • Form 1099-PATR (patronage dividends)
  • Form 1099-Q (distributions from an education savings plan)
  • Form 1099-QA (distributions from an ABLE account)
  • Form 1099-R (distributions from individual retirement ac-counts, 401(k) plans, and other types of retirement savings plans)
  • Form 1099-S (proceeds from the sale of real estate)
  • Form 1099-SA (distributions from health savings accounts)
  • Form SSA-1099 (Social Security benefits)
  • Form RRB-1099 (Railroad retirement benefits)
  • Schedule K-1 (income from partnerships, S corporations, estates, or trusts)

Expense-Related Documents

  • Form 1097-BTC (bond tax credit)
  • Form 1098 (mortgage interest)
  • Form 1098-C (charitable contribution of vehicles)
  • Form 1098-E (student loan interest)
  • Form 1098-MA (homeowner mortgage payments)
  • Form 1098-T (tuition for higher education)
  • Business expenses (summarized by type and amount)
  • Child care expenses (summarized by provider and amount)
  • Gambling losses
  • Medical expenses
  • Moving expenses
  • Personal property tax, such as car registration paid
  • Real estate tax bills
  • Realized gain/loss report for any stocks, bonds, mutual funds and other capital investments sold during the year
  • Receipts or acknowledgment letters for gifts to charity
  • Rental expenses (summarized by property, type, and amount)

What If I’m Missing a Document?

If you’re missing a document, you can ask your employer to give you a new copy. If you’re missing 1099 contact your client.

Why Does My Startup Need an Accountant?

entrepreneur doing taxes in personal office overlooking city

When most people think about startups and startup founders they assume that the best way both should operate is simply by bootstrapping as many things as they possibly can. In the start up world, bootstrapping is the common practice that encourages individuals to do as much a they can with very minimal cost. While bootstrapping is something that should be done while trying to build a sustainable companies there are some things that you simply can’t bootstraps and accounting is one of them.

From day one it is important that you know exactly how your money is being spent, where it’s being spent and how much is being spent and quite frankly if you’re bootstrapping everything else in your business you may not have time to keep your eyes on this sort of thing. Below we share just a few reasons why your start up needs to hire an accountant.

Financial Management

As with anything else, the sooner you begin practicing financial management, the better off you will be when you have a ton of money to manage. As startups it’s important that you learn how to handle your finances early. We see so many startups fail or wound up in legal trouble simply because they mismanaged their money so poorly in the early days of their business it became the norm as their business progressed. Do not buy into the misconception that you should only hire an accountant when you have a certain amount of money in the bank.

Saves Time

When most people think about finances they automatically go into a place of negative thinking. While finances are not always the most glamorous thing to talk about, outsourcing it will help you save a lot of time. Think about how much time you probably spend going to the bank to cash, deposit and withdrawal money from your account simply because you have to do other things first such as see how much money is already there. Additionally, consider how much money you spend on invoicing each month. If you hate dealing with finances, outsourcing them will lift a huge burden for you.

Helps Your Business Grow

One of the number reasons why small business growth is often stifled is because startup founders tend to focus so heavily on areas in which they don’t perform well that they lose sight of the areas in which they thrive in. If you really want to see your business go to the next level, considering outsourcing an area such as accounting in order to give yourself the opportunity to focus on the areas in which you are comfortable.

Your Business May Require an Audit

Every small business has nightmares about the possibility of having their business audited and in many ways that nightmare is valid. While not all small business are required to conduct audits but if you don’t speak with an accountant first you may not find out that your business has to do an audit until it’s too late. By hiring and account you are ensuring your records are not only compliant but that they are being properly regulated.

Your Budget May Be Falling Short

A recent study conducted by the Bureau of Labor Statistics stated that about half of all businesses will fail after five years of opening.  While there may be many various reasons as to why a company may fail, it can mostly be attributed to not having an accountant around to help you analyze your budget, catch errors or even accurately capture financials.

Do Self Employers Have To Pay Quarterly Taxes?

A self employed person filling out paperwork with CPA for quarterly taxes

Before one can truly answer the question about do you have to pay quarterly taxes as a small business you must understand what is identified as a self employer. According to the IRS the following things must apply to you:

  • You carry on a trade or business as a sole proprietor or an independent contractor.
  • You are a member of a partnership that carries on a trade or business.
  • You are otherwise in business for yourself (including a part-time business)

What Obligations Do Self Employers Have?

As someone who is self-employed it is often times required that you file an annual return and also pay a tax quarterly fee that is estimated.

Under federal law, the self employed must pay what is referred to as an SE tax in addition to income tax. SE tax is required because it is identified as the social security and medicare tax for individuals who work for themselves. It is often compared to the taxes that are withheld from the pay of wage earners for social security and medicare.  In most cases when you hear someone refer to self employment tax they are primarily talking about social security and medicare taxes.

Before you can decide whether or not you must pay self employment tax and income tax it is important for you to identify your net profit and or net loss.  You can do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income. If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income.

Once you are able to determine whether or not you are self employed and how much you must pay in quarterly taxes you are now ready to start marking quarterly payments but now you’re probably wondering how. If you head on over to the IRS website you will be able to identify a form that is called Form 1040-ES. It is used to help you figure out your quarterly taxes. It also contains a worksheet that you will fill out  that can help you estimate how much you should be paying in taxes.

After you determine your quarterly taxes it’s now time for you to start focusing on  how to file your annual return. In order to file your return you will need to use Schedule C.  Schedule C is used to report your income loss from a business you operated or a profession you once practiced. In most cases a Schedule C is used for employees and businesses who have expenses that are less than $5,000.  

Another popular question that is often asked is are you required to file an information return and the answer is yes. If you have made or received a payment as a small business or as a self employer you are required to file an information return which is defined as a mandatory tax document that businesses must use to notify the IRS about such transactions. (For example, IRS Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2 are all information returns.) Informing the agency about reported transactions is mandatory.

At the end of the day it is important that you know the law in your state. By understanding your tax law you will understand which tax forms you need to fill out, what taxes you’re required to pay and most importantly you will be able to identify how the IRS views your business.

Can You Claim Expenses Before A Business Starts?

Glasses on a business expense claim form

When starting a new business most startup founders have to spend a large amount of their own personal money to start the business. While that may be stressful there is good news, you can now take a start up deduction to limit your tax bill. Here’s how:

What Can I Write Off As a Startup Founder?

Once you launch your business the cost of all business expenses become deductible. These business startup costs are capital expenses. These are the costs that you incur to get an asset (a business) that will benefit you for more than one year.

In most cases you are unable to deduct expenses unless you sell or dispose of the business; however, there is a tax rule that will allow you to deduct up to $5,000 in start up expenses a year then after that you can deduct the remainder over the course of 15 years.

Here are examples of start up costs you can write off:

  • Legal and accounting fees
  • Licenses, permit, and other fees
  • The cost of investigating what it would take to create a successful
    business, including research on potential markets or products
  • Advertising costs, including advertising for your business opening and creating a business website
  • Office rent and utilities paid before the business begins operating
  • Rental of business equipment such as computers and office supplies
  • Costs for employee training before the business opens, and
  • Expenses related to obtaining financing, suppliers, customers, or

Can A Small Business Deduct The Cost Of A Computer?

Yes and no which means it depends on the situation. If you purchase a computer for your business and you use that computer exclusively for your business you can deduct the entire cost. If you use it for more than half of the time for your business you can also deduct the cost.

Additionally, you have to take into consideration your personal time. If you use a computer only 60 percent of the time, you can only deduct 60 percent of the expense.

Are There Exceptions to Start Up Cost Deduction?

There are exceptions to start up cost deduction because some costs related to opening a business may not be considered a start up expenses.  A few of these exceptions could include the following:

  • Inventory
  • Mile Tracking
  • Long-Term Assets
  • Research and Development Costs
  • Organizational Costs

When Can You Deduct Business Startup Costs?

Expenses that began as start up expenses are now operating expenses once your business fully launches. An example of this could include supplies such as paper, pens, printers, computers, etc.  These operating costs are the things that keep your business going on a day to day basis.

For Tax Purposes, When Does My New Business Begin?

Many people often ask when does your new business begin and according to tax purposes the IRS says that a venture becomes a business once it acquires all the assets necessary to perform its intended functions. You must also put those assets to work. The moment you start doing business is when you start doing business even if you aren’t yet earning money.

For example, If you have business that provides therapy to customer or clients your business begins when you first take the initiative to offer your services to other people. According to the IRS nobody has to hire you before you can become a full business you just have prove you are available to be hired.

In what ways can you claim expenses before a business starts? We’re always open to new thoughts, leave your comments below.

Small Business Coaching: Tax Basics

small business person accounting their taxes

The best and worst thing about running a small business is that you’re responsible for everything. While there’s a certain freedom that comes with this, there’s also an often overwhelming level of responsibility. Everything from finances, to staffing, to advertising, will fall squarely on your shoulders. You’ll have to be willing to accept the many challenges that come with running your own small business. For entrepreneurs all over America, these challenges are well worth the rewards that come with being your own boss. However, what many small business owners continue to be daunted by is the prospect of handling their company’s taxes. Needless to say, dealing with taxes for a business is a lot more complicated than just filing your personal taxes! We’re here with some of the tax basics for small business to make the task a little bit less stressful.

What Do I Have To Pay? 

Businesses have to pay a variety of taxes, rather than a simple blanket income tax. You’ll be taxed on a variety of aspects of your company; for example, you’ll have to pay unemployment taxes if you have hired people to work for your small business. If you are selling items, such as through a storefront, you’ll also need to calculate the sales tax that you owe. Payroll taxes, Social Security, and Medicare (FICA) will also be required.

In addition to these, there are a few other forms you’ll need to file for your business. First, you’ll want to fill out an SS-4 form to receive an Employer Identification Number, or EIN. You’ll use this number on most of the other forms that you fill out. You’ll fill out a Form 1040-ES to calculate your income tax, form 940 for Federal Unemployment Tax, and you’ll be required to withhold federal income taxes from the wages of your employees.

Who Are My Employees? 

Sometimes, there’s confusion as to who exactly the “employees” of a business are. The rules are different depending on if you have full fledged, W2 employees, or contractors that require a 1099 form. Each employee of your business will be required to fill out a W4 form, informing the IRS of their withholding allowances, any exemptions, and their marital status. You’ll be required to withhold their federal income taxes and pay into Social Security and Medicare. For non-employees who are being paid by your company, including independent contractors, freelancers, and consultants, you’ll have to send them IRS Form 1099 if they made more than $600 from you in any given year. In this case, you’re not required to withhold anything and the contractors themselves will have to report their own income. But how do you tell whether someone working for you is, legally speaking, an employee or a contractor? Usually, an employee is someone who is specially trained to work for your company, on your job site, and regularly receives direction from you. If they receive benefits from your company, then in the vast majority of cases they’ll be considered a W2 employee and not an independent contractor.


Another common question is that of deductions. What, exactly, can you deduct? What even is a deduction? Well, if you write an expense off, you’re subtracting it from your total taxable income, meaning you owe the IRS less. Which costs and expenses can be written off on your taxes, and which cannot? Usually, you can deduct any business expenses that come up. What exactly constitutes a “business expense” is pretty broad; travel, equipment, raw materials, and legal fees can all be written off. However, it’s not quite as simple as simply deducting the cost of whatever you spend. You’ll usually only be able to deduct up to $5,000 in the first year for each of your startup cost. Any remaining cost will have to be paid off over the following years. We highly recommend seeking the help of a tax professional if you have complex expenses that you have questions about.

Getting Further Help

Seeking the help of a professional tax adviser is highly recommended to maximize your deductions and minimize the amount you owe, especially when you’re just starting out. A professional tax adviser will make use of the most up-to-date software, be aware of the latest laws and regulations, and be able to make educated, professional recommendations regarding your company. This will leave you free to make other critical business decisions, without spending a lot of manpower stressing over your taxes.

Process Payroll Quickly And Efficiently

Hand Writing Payroll With Blue Pen On Glass For Huddleston Tax CPAs Blog

Many businesses, in particular small businesses, waste a lot of valuable company resources as a result of mismanaged payroll. For anyone used to navigating the ins and outs of payroll, it’s not hard to understand why it can be such a challenge. However, it doesn’t have to be; an efficient, quick payroll system is certainly possible for a business of any size. Actually, it’s not only possible – it’s critical. An improperly managed payroll system can be a woeful drain on your company’s resources, in terms of both time and money. With that in mind, here are a few tips on how to process payroll quickly and efficiently:

Go Digital

In today’s modern, hi-tech world, one of the quickest and simplest ways to streamline your payroll is to simply go paperless. Paper timecards, paychecks, and pay stubs all cost money and have to be kept track of, costing time. It’s not just the cost of paper that you’ll save on; equipment such as printers, photocopiers and scanners are all expensive and you’ll be able to reduce that cost as well. Going paperless is a relatively simple process. The majority of workers you employ today will own smartphones; they can use these to clock in and out and keep track of their hours; just one example of a way you can start digitizing your payroll system. Keeping all of your financial information on paper is also a potential security risk that you can help to eliminate by switching to digital. Digitize as much of your payroll process as you can to save money, improve efficiency, and reduce waste.

Use The Most Up-To-Date Software

Whether you’ve already gone fully paperless, or are in the process of doing so, your payroll software should always be fully up-to-date. Whenever upgrades become available, you should take advantage of them in order to keep your payroll quick, efficient, and inexpensive. As your company grows, you’ll need to ensure your software keeps up; for example, you may need a program that can automatically generate 1099 forms if you employ independent contractors. The right program can do pretty much anything you’ll need; for example, many of them can streamline your HR and handle your taxes as well.

Keep Yourself, And Your Staff, Informed

Keeping yourself and your workforce properly informed is another critical step in the process of streamlining your payroll. It’s not enough to train your workforce once and decide that’s enough; as your business grows, your needs evolve, laws change, and technology improves, you’ll need to continuously update your staff. Occasionally, this will mean bringing in professionals to hold formal companywide trainings; sometimes, it will simply mean required reading material or training videos. Either way, keeping everyone in your company informed of all updates and changes is a must to maintain a quick payroll process.

Outsource, If Necessary

While following the advice given in this article will help you save a great deal of time and money, it’s also a lot for a small business owner to have to keep in mind. In many cases, you may be better off if you choose to outsource your payroll. A reputable payroll company can handle nearly everything for you. They’ll keep track of your staff and make sure they’re paid correctly and on time. They’ll also always have access to the latest software and be educated on the latest legislation regarding payroll in your state. When it comes to compensating your workers, one of the biggest challenges is the proper handling of payroll taxes. Outsourcing means that your taxes will be in the hands of educated professionals. Of course, choosing the right company to handle your payroll isn’t always easy. Make sure that you carefully vet any potential firms you are considering. Read reviews, check references, and don’t be afraid to ask questions! If you’re unsure of anything, a great payroll company will be able to put your mind at ease.






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Tips To Finding A Good Tax Adviser

Cartoon Man At Crossway With Three Arrows Pointing In Different Directions for Huddleston Tax CPAs Blog About Finding A Good Tax Advisor


No matter what your tax situation, tax season can be a huge headache. The more complex your financial situation is, the more difficult filing your taxes can be. This can be doubly true if you’re a business owner; trying to handle all of the credits, deductions, and various incomes for a business can be absolutely overwhelming. One of the ways you can take charge of your tax situation is to hire a tax adviser. However, there are many tax advisers out there and many of them aren’t exactly reputable. This article will offer a few tips for finding a good tax adviser for yourself or your business.


What Will A Good Tax Adviser Do For Me?

 Before we get too deep into offering advice, we should define what exactly it is that a tax adviser does. A tax adviser – a good tax adviser, anyway – is someone highly educated in local and federal tax laws, preferably a credentialed CPA, who will file your taxes for you and minimize your risk of audit. While there are many people, in a variety of professions, who can bring a lot of tax knowledge to the table, you should look for someone with one or more certifications. The first thing you should look for is a Preparer Tax Identification Number, or PTIN. Anyone who prepares tax returns professionally is required by the IRS to have a PTIN, so this the most basic requirement when looking for a tax adviser. You’ll want someone who has more than just this, however; find a professional who is credentialed in some way. While a CPA is the best option, an enrolled agent or licensed attorney can also be good options. 


Do I Need One?

 Whether you need a tax advisor or not largely depends on how complex your taxes are. If you are simply filling out a 1040EZ form, chances are you can handle it on your own pretty easily. However, if it gets much more complicated than that, you will probably benefit from making use of a tax adviser. If you’re in business for yourself, it gets more and more critical that you make use of a professional to file your taxes. Whether you own a business, are self-employed, or own property that you rent out to paying customers, your tax situation can veer towards the confusing and having your taxes filed professionally can decrease your audit risk significantly.


How Much Will It Cost?

 There are a lot of untrustworthy people out there claiming to be tax advisers, while in fact they’re scam artists trying to swindle you out of your money and perhaps even make off with your tax refund. You’ll have to be cautious when looking for a tax adviser; one of the things that you should keep an eye on when looking for someone to prepare your taxes is the fee. A professional CPA will usually charge an hourly rate; if a so-called “tax adviser” wants to charge you a flat rate, or take a cut of your refund, then there’s a good chance it’s a scam.


How Do I Find The Best Tax Adviser Out There For My Money?

 Even after you filter through all of the tax advisers that are obviously scams, you’ll still be left with a lot of people claiming that they’ll do the best job handling your taxes. Choosing the best one involves a little research, and a willingness to vet anyone you’re considering. First, look for someone who specializes in your specific needs; for example, if you’re a business owner, you’ll want to find someone who is an expert in business tax. When you find someone who has the proper credentials, make sure you read reviews online and check their references. Finding out if your prospective tax adviser has a lot of other satisfied customers will go a long way toward your own peace of mind. Make sure whoever you choose is well versed in all of the IRS laws when it comes to filing; for example, they have to provide their PTIN number when they file your taxes. They should also e-file when they submit your return; not only should this be expected of any reputable tax prep company working in the modern day, it’s also IRS law for any preparer that files more than 10 returns and receives compensation for their work.



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The Benefits of Outsourcing Payroll

Man buried under his payroll paperwork for his small business

Once you go into business for yourself, you discover just how much effort is involved in creating a small business. It can truly be overwhelming at times! From staffing, to equipment purchases, to taxes, there’s no shortage of headaches for a business owner to deal with. That’s why more and more business owners are choosing to outsource where they can. One of the ways you can save yourself a great deal of time, effort and money is by outsourcing payroll. Here are a few of the benefits of doing so:

You’ll save time – and time is money!

When you decided to start a business, chances are it wasn’t because you enjoyed poring over mounds of paperwork for hours on end. Nevertheless, that’s just what you may find yourself doing when trying to work out the finer details of your payroll. While it may have started off simple enough, as your business grew and expanded the payroll became more and more complicated. Every moment you spend ironing out the details of payroll is a moment you can’t devote to other business matters. Not only is this inconvenient for you, it can become downright costly. After all, your time is valuable! Any time you, or one of your valued employees, spends working on payroll is time you can’t devote to bringing more money in.

You’ll reduce errors – and save money that way, too!

Errors in your payroll can prove to be costly for your business. As you know, it’s not as simple as just paying your staff. There’s insurance, taxes (both state and federal) and a bevy of other financial considerations. If you make a mistake somewhere along the way, chances are you will shoulder a serious financial penalty as a result. For example, if you don’t calculate your taxes correctly, or if you are late on a payment, you can get hit with a fine. The easiest way to avoid all this hassle is by outsourcing payroll; put your finances in the hands of seasoned professionals and you’ll greatly reduce the chances of costly mistakes.

You’ll be a lot more adaptable

Part of what makes payroll so complex is its ever-changing nature. Tax laws are always in flux and your staffing needs are always changing too. Some weeks, your part-time employees will work many more hours than others; with every change, you’ll find yourself starting from scratch. A professional payroll service will not face this problem. They are constantly being trained in the latest changes to tax law and they’re also trained to handle a varying level of employee hours. Ensure your company can weather the ever changing business climate by outsourcing payroll.

A payroll service handles more than just paychecks

If you outsource to a reliable payroll company, they’ll do a lot more than just issue your company’s paychecks. Not only can they calculate the amount of money owed to each employee, they can also work out tax obligations for each individual. They’ll allow employees to designate a certain amount of each paycheck to a 401(k), should they wish to do so. A payroll service will also calculate how much your company owes in payroll taxes.

Outsourcing payroll

If, after reading this article, you are considering outsourcing payroll, we think that’s a great step to take for your business! Make sure you do the necessary research and contact any potential companies you are considering using. There are a few questions you should always ask. What is the cost of the service? What services will you get for that cost? How are taxes handled? Make sure to contact a few references, as well. Check to see if the service is reliable and if previous customers have been satisfied.

9 Reasons To Outsource Your Accounting Department

notepad saying your should outsource accounting vs hire

As an entrepreneur, you’re always looking for ways to cut costs and increase profits for your business. No doubt you have learned that managing a small business can be a real headache, with many challenges – some expected, some unexpected! – and you want to get a leg up whenever you can. One way you can do this is by looking for accounting services for small businesses. While you may think that outsourcing your accounting department will end up costing you more money, this doesn’t necessarily have to be the case. In fact, outsourcing can be a great way to save your small business time, money, and bring in extra profits. Here are 9 of our top reasons to outsource your accounting department:

1. You’ll Save Money on Training Costs

One of the biggest expenses incurred by any business is the cost of training; getting your employees familiar with all of their responsibilities, as well as software and other equipment, takes time and money. By hiring an accounting service for your small business, your accountants will come pre-trained and armed with expert knowledge.

2. You’ll Benefit from the Services of a Team of Experts

If you hire an in-house accountant, no matter how good they may be, they will still only be one person. A professional accounting firm will bring years of experience to bear, from a team of seasoned professionals; having extra sets of eyes studying your finances will also reduce the incidence of error, greatly improving your peace of mind.

3. You’ll Save on Software Costs

Another expense that many small business owners grit their teeth and pay for is the cost of the newest technology; after all, it’s important to always have access to the latest software, whether it be QuickBooks or other programs. Hiring an accounting service for your small business will save you from expensive yearly updates; they will always have access to the latest technology.

4. You’ll Free Up Time for Other Projects

The old saying, “time is money,” is an absolute truth – any time you spend trying to figure out your finances is time you can’t spend doing other crucial tasks. If you’re constantly poring over QuickBooks trying to keep track of every dime that comes in and out, you will have a lot less time to handle the other daily aspects of running a business. By outsourcing, you’ll have a lot more time to do those important jobs.

5. You’ll Reduce the Risk of Financial Problems

There are a lot of potential financial problems that can plague a small company. Everything from tax audits to theft can severely impact your bottom line. By having a team of professional accountants keeping track of your money, you will rest easy with the knowledge that your finances are being handled by an impartial group who won’t allow anything to get by them – or you.

6. You’ll Be Able to Make Better Financial Decisions

With a professional team of accountants handling your money, you’ll have access to whatever financial information you need at any time. You will never be unclear on exactly where your business is in terms of income and expenses, allowing you to be better informed when it comes to staffing, equipment purchases, and other major decisions for your company.

7. You Can Change with the Times

Accounting, like anything else, changes with the times and by hiring an accounting firm, you’ll be able to stay up to date. If you have an in house accountant, or handle your finances yourself, you will likely be stuck with the information you had when you were originally trained. By outsourcing, you’ll be able to always have the latest in information, technology, and fraud prevention techniques.

8. Outsourcing Even Helps the Environment

For many businesses, going green is another great benefit of outsourcing your accounting firm. Hiring a professional accounting firm will save you a lot of money on disposables such as paper, printer ink, and other sundry costs. It will also reduce your carbon footprint and benefit the environment.

9. You’ll Be Able to Grow Your Business

By outsourcing to an accounting company for your small business, you’ll be able to upgrade easily once your income increases. Many business owners find themselves defeated by their own success, as your business becoming more popular and busy can leave you and your employees overwhelmed. With an accounting firm, you’ll be able to meticulously track the growth of your business, and adapt as needed. Best of luck in your business ventures!

Deductible Expenses For Real Estate Agents

A real estate agent filling out their deductions with a calculator next to their hand and with tax season in blue font


As yet another tax season rolls around, and people everywhere are scrambling to save as much money as possible by maximizing their deductions. This can be a real headache if you’re in real estate, since it’s a complex line of work with a wide array of different expenses, some of which are deductible and some of which are not. Which items you can and cannot write off depends on many factors, including the size of your business, your office, your vehicle, and other things. Here are a few of the most popular legal deductions for real estate agents:

Your Home Office

If you work from home, you might be eligible to deduct the cost of a home office. As long as you have an area of your home specifically dedicated to work, you should be able to subtract its cost from your yearly taxes. This applies even if you also make use of your broker’s office space. There are several rules, however; to deduct the cost of a space, for example, it must be your primary workspace and it must not be used for other things. You can’t deduct your bedroom just because you have a computer there that you occasionally use for work; you would have to use the computer solely for your real estate job and you would only be able to deduct the cost of the square footage of the area you are employing.

Your Vehicle Mileage

Of course, you will be expected to travel quite a bit as a real estate agent, especially during your busiest times. The more work you are getting, the more you’ll have to drive, and the cost of gas and wear and tear on your car can really rack up. Fortunately, if you keep a detailed log of your mileage, you will be able to deduct the travel that you do for work. The IRS has a standard rate for miles traveled; it could potentially add up to quite a bit if you’re traveling a lot for work. Keeping track of your mileage is no longer the slog that it once was, either; you can simply use an app on your phone to maintain a detailed record of everywhere you went for work. It’s potentially also possible to deduct the cost of leasing a car, or even to deduct the depreciation of a new car; both of these are viable options, as a successful real estate agent shouldn’t be seen driving around in a clunker!

Other Travel Expenses

Occasionally, you will have to travel for work for meetings, seminars, and other crucial business ventures. In most cases, you can deduct the cost of travelling, including hotel fees, airline tickets, and other sundry costs. Meals such as business lunches are 50 percent deductible too, so make sure you keep a detailed record anytime you take a client to a restaurant or cater an open house.

Your Office Supplies

Most of what you use in your office can be deducted as well. This ranges from little things that add up over time – such as stationary and photocopies – to larger expenses such as furniture. If you purchase a new desk, for example, you may be able to deduct the full amount. If you made such a purchase a few years ago, you might still be able to deduct the cost, minus a few years of depreciation. If you use your cell phone for work, you can deduct a certain amount of your payments as well. Or you may have a work phone that you use only for business; in that case, you can deduct the full amount (this also applies to a landline to your office).

Your Realtor’s License

As a real estate agent, you have certain fees that you must pay annually, many of which are deductible. For example, you can deduct the cost of renewing your state license each year; you can also deduct the cost of your business insurance and your Errors and Omissions insurance. There are other potentially deductible costs as well, such as membership dues, and certain other real estate taxes. Self-employment taxes, however, are not deductible.

Retirement Plan Contributions

Of course, just as anyone in any line of work should, a real estate agent should make regular contributions to a retirement plan. Often, you can make deductions based on how much you are contributing to a retirement plan; for example, the limit for a standard IRA is 12.5%.