Attention Tax Preparers, Advisors and EA’s:
Are you tired of doing the books for your tax clients? Then we could be the solution, we can help! Outsource accounting and bookkeeping to us. We will handle the books for you so that you can do the things that matters to you most. Having us as your partner will free your firm of the time doing the hard work and many more. Our partner firms are enjoying the benefits, be one of them!
Talk to you soon,
CMCPA Services
Back taxes is a term for taxes that were not completely paid when due. Typically, these are taxes that are owed from a previous year. Causes for back taxes include failure to pay taxes by the deadline, failure to correctly report one’s income, or neglecting to file a tax return altogether.
Most of this happen because of lack or incomplete recording in the books that it is hard for the tax accountant to get the information it needs to complete the filing of return.
What are the implications of this?
If back taxes are owed, the taxpayer’s debt will continue to increase with the inclusion of interest and tax penalties. Late payment penalties include 1/2 of 1% for each month the taxes remain due past the due date. If the taxpayer never filed taxes, there is also a significant late filing penalty.
You will also risk losing your refund and other benefits if you don’t file your return. If you are due a refund for withholding or estimated taxes, you must file your return to claim it within 3 years of the return due date. The same rule applies to a right to claim tax credits such as the Earned Income Credit.
What do you need to do?
First, consult with your tax accountant what needs to be done.
Second, look for someone to complete your books.
(Hint: We are an expert when it comes to accounting and bookkeeping.)
Lastly, act now. The longer you delay filing, the larger your interest and penalties will be!
What is Profit First Method by Mike Michalowicz?
Profit First Method is based on the idea to pay yourself first before paying your expenses. The goal is to grow a more profitable business, not a cash-eating monster. To run your business based on what you can afford now, not what you hope you can afford someday.
Profit First Principles
By taking your profit first, the money available for expenses is artificially reduced. It flips the old adage accounting formula;
Sales – Expenses = Profit into Sales – Profit = Expenses. Hence, you are forced to be innovative, strategic and be mindful of your spending.
How Profit First Method Works
It was inspired by a fitness advertising on tv where in order to reach the goal, one must:
1. Use small plate
2. Serve sequentially
3. Remove temptation
4. Enforce a rhythm
Actionable steps:
1. Set up five different accounts for these purposes.
-Main income
-Profits
-Owner’s salary
-Taxes
-Operating expenses
2. Use those accounts for that purpose only.
Profit First method could be a tool to a more profitable business but the downside;
Maintaining the books of the business can sometimes be a daunting task. Having too many accounts to maintain can be burdensome. Not to mention that if the purpose of some of these accounts is served, you need to revert it to the business main depository account. And it is also important to note that Profit First method is not an accounting method but rather a more cash management system.
How to implement it in the books, particularly, Quickbooks Online and how often? It really depends on what type is your business and how often you want it to be.
How much percentage will you take from your business? This requires assessment of the health of your business. Remember that, money taken out of your business is money you cannot use for the business. You may adjust your percentages along the way should you find yourself unable to cover your expenses.
The biggest question is how will you use the profit you have saved? You decide.
Recommendation (Steps We Can Do)
Profit First can be very useful but let’s make it simple for books purposes, to save you time and money. We can talk about it, contact us now!
P.S. For now, Quickbooks Online is not integrated with Profit First method. Maybe because it is not an accounting method and used for internal purpose only.
File when ready, don’t wait until October 17 to file a 2021 tax return.
For people who requested an IRS extension to file, the October 17, 2022, deadline may seem far away, but it’s coming up fast.
Taxpayers who haven’t filed, whether they requested an extension or not, should file a complete and accurate return as soon as possible.
For people who have all their paperwork in hand, filing sooner and filing electronically could help them avoid possible processing delays later.
And for those who have not done their books for 2021, we can help!
Are you a new business owner or have been in business for so long but using other accounting software other than Quickbooks Online and would want to switch? Then this is for you!
Setting up or switching to Quickbooks Online is easy as long as you have the information you need. It becomes complicated though when old records are messy. It’s doable, here’s the way to do it.
1. Sign up for Quickbooks Online and choose the plan that suits your business. There is a 30-day free trial that you can try to get the hang of it.
2. Set up you company profile (new) or migrate (old) your files to Quickbooks Online .
3. Link your bank and credit card accounts to get automatic bank feeds. This will save you and your bookkeeper tons of time!
4. Import your list of employees, vendors and customers. Or you can add names along the way.
5. Set up your invoices, enable receipts, taxes and other stuff.
Follow these process and you’re ready to go but if you’re having trouble, contact us and we will help you on your first step to financial clarity!
Many businessowners wait until yearend to do their books rather than doing it consistently during the year. It’s a common problem, we know, because keeping the books updated is a tedious job in itself. It takes a lot of dedication and time to deal with it. It might be exhausting for some but it is rewarding in the end. Why? Here are some of the reasons your books needs to be updated:
Your Accountant Will Love You
Getting reports early for tax season is gold, especially for tax planning. That means your tax return will be prepared early and any benefits you can get early as well.
Peace Of Mind
This is priceless! Knowing that you are already prepared for any paperwork and documents, frees you from thinking about it.
Know The Actual Status Of Your Business On Time
This is vital for decision makers. Having an updated books anytime of the year means you can generate reports real time and make informed decisions about your business.
Availability To Third Parties
If you are applying for a loan, looking for more funding and investors, an updated books is essential to supply them with documents that are not outdated.
Bookkeeping is hard to keep up because there are far more important things to focus to keep the business going and profitable. Good thing, you don’t have to do it yourself. You can delegate it to someone in-house or outsource it to someone who is knowledgeable and has the dedication to do the bookkeeping. Better bookkeeping = better business!
One of the hardest industry when it comes to accounting and bookkeeping is eCommerce. Why? Because the market and trade is ever changing and has become complex overtime. It is better to have it setup by an expert for a clean start but if you want to do it yourself, then you got to start with something. The best route is to begin with your Profit and Loss Statement accounts because this will be the most used accounts in the course of your business.
What is a Profit and Loss Statement?
A P&L or Income Statement will show your Revenue, Costs and Expenses. The bottom line of this report will show you if you made a profit or a loss, hence, the name.
Here are the basic items you will get to see on a Profit and Loss Statement for ecommerce business.
This is not all-inclusive but this will go along way and you could add more accounts when needed. Just make sure to classify it correctly and be consistent with your recording.
If things get messy and you want to save time and money, contact us!
Dear Clients and Partners,
Just want to share with you some tax-related matters for your information, this is about 1099-NEC and 1099-MISC.
What are these forms?
Form 1099-MISC (Miscellaneous Information) or Form 1099-NEC (Nonemployee Compensation) to:
-simply put these are contractors, project-based or self-employed individuals
-examples are rent paid for the year and fees to attorneys
Note that these are for US-based contractors and payees only, if you are outsourcing from anywhere in the world other than the US then you don’t have to file or send out these forms.
Let us know if you have paid these kinds of payees, so that we can generate reports for you that you can use for your business or send to your accountant.
Deadlines for submission to IRS:
For your US-based employees, you need to fill out Form W-2 and submit to SSA, IRS and employees on or before January 31.
Hope this information will be helpful. Thank you!
All the best,
Melchie
There are several important dates taxpayers should keep in mind for this year’s filing season:
Tax season is here!
Time to prepare your Form 1099’s and W2’s and send to recipients on or before January 31, 2022.
You need to file Form 1099-MISC for each person to whom you have paid during the year:
*At least $10 in royalties or broker payments in lieu of dividends or tax-exempt interest.
*At least $600 in:
Rents.
Prizes and awards.
Other income payments.
Medical and health care payments.
Crop insurance proceeds.
Cash payments for fish (or other aquatic life) you purchase from anyone engaged in the trade or business of catching fish.
Generally, the cash paid from a notional principal contract to an individual, partnership, or estate.
Payments to an attorney.
Any fishing boat proceeds.
In addition, use Form 1099-MISC to report that you made direct sales of at least $5,000 of consumer products to a buyer for resale anywhere other than a permanent retail establishment.
Hope your books are already updated to be able to generate these reports. If not, we can help. Send us a message and let’s schedule a call.
Happy New Year!