3 Solutions That Can Benefit Your Small Business

chicagos-new-cloud-tax-by-accounting-solutions-ltd.Do you remember when running your small business was easy? Remember when handling balance sheets, payroll, inventory, customer satisfaction, and the plethora of other objectives was a walk in the park?  Good.  Neither do we. With Accounting Solution Ltd’s cumulative decades of experience working side by side with small businesses, we have internalized the trials and tribulations that Chicagoland business owners face on a daily basis. We have dedicated ourselves to making sure that our clients are financially prepared for any situation, whether related to tax season or general operations. Today, we will dive back into a topic that our experts are more than a little familiar with…filing taxes. Although we have covered this topic many times before in our blog, there are always new and essential pieces of knowledge to present to our loyal followers. The following mistakes are things that we have pinpointed as being particularly prevalent over the past few tax seasons.
They Are Called ‘Records’ For A Reason: Sure, tax season may be over, but there is no reason to discard your paperwork. In fact, we couldn’t be bigger advocates for retaining these documents.  The IRS has the power to perform audits with cause, and sometimes without, upon small businesses for up to nine years after the return was filed.  If they can prove fraud, then they can go back even further than that. If the entrepreneur being investigated fails to produce the proper documents, they may face significant increases in tax, penalty and interest which could cripple your entire operation. If you are in Illinois, we recommend maintaining records at the State Level for seven years and at the Federal Level for nine.
Quarterly Payments Are A Must: It may seem pretty easy to put a quarterly tax payment on the back burner.  But just because it sounds easy doesn’t make it the proper course of action. If you owed more that $1,000 on last year’s federal return, you are required to make estimated tax payments.  Another way of handling this would be to increase the withholding on your W-2 to a more proper level.  Through our experiences as CPAs and EAs, we have witnessed this mistake multiple times. Having to pay off a large tax bill in April simply because you failed to submit payments months before is a great way to be fiscally irresponsible. Especially since you would probably be forced to pay an additional penalty for not making your estimated tax payments.  If you have issues, comments, or concerns regarding your quarterly payments, feel free to give Accounting Solutions Ltd. a call so that we may help remedy your situation.
Personal And Business Should Never Mix: No, we are not referring to that new good-looking executive in marketing. We are referring to the common fallacy that business owners both big and small make in blurring the lines between their personal and entrepreneurial expenses. Since the distinction between these two monetary spheres can sometimes be rather unclear (they are both technically YOUR money) it is somewhat understandable how one can make the mistake of writing off their business expenses as personal ones or vice versa. If there is one piece of vital advice that we would love to emphasize to every entrepreneur, it is: DON’T DO THIS! In the eyes of the IRS, these criss-crossed deductions are tax fraud and inherently illegal. If you need help differentiating and categorizing these monetary categories, then our CPAs and EAs would happily offer resources and advice.
Running a small business is certainly difficult.  Only those who are consistently motivated, possessing the right financial support are able to become successful. Just because tax season is over doesn’t mean that you can’t start preparing for the next one.  Accounting Solutions Ltd. would be honored to help on your pathway to success. If you would like to discuss this article further, or have financial questions to be answered, feel free to give us a call!