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02/21/2015

How to Know When You Need a CPA

The DIY (Do It Yourself) industry is flourishing these days.  This trend also extends to accounting and income tax services.  The availability of affordable computing power, improved entry-level accounting and income tax software, and cloud-based applications and storage options are attractive because they may help you save money by doing it yourself.  Added to that is some very effective advertising claiming that at the push of a button your business accounting and income tax filings will be worry free.  However, be warned; our clients often turn to us when their experience with DIY solutions show the ease and efficiency of using these products has been oversold.

In today’s highly regulated environment, innocent omissions and mistakes from simply not knowing An-accountant-helping-clientshow transactions should be recorded, or how to properly comply with new federal, state or local tax
law, can be costly, and sometimes devastating.  Instead of spending time increasing sales, improving processes and growing their businesses, some business owners say they grow frustrated and waste time trying to learn to use and update the latest software as well as keep up with filing deadlines and regulations by themselves.  That’s when they call us.

Let’s consider how engaging professional help with your business accounting and finances can pay big benefits that will help your bottom line both short-term and long-term. 

For those business owners who have a solid accounting or bookkeeping background and a good understanding of business finances, with McRuer CPAs’ MyMcRuer/BackOffice service offering you may benefit by a combination of some DIY and some professional on-demand services.

MyMcRuer/BackOffice helps business owners control costs by personally managing their business’s books.  In addition, when a difficult issue or a question arises, they have access to a local experienced accounting professional who will view the issue real time to identify the problem and quickly provide a solution.  Then as the business grows and its operations need more of an owner's or manager’s time, a smooth transition can be made to full-time professional accountants and bookkeepers who already know the business.

If you intend to grow your business, the benefits of professional accounting services cannot be overestimated.  Is it time that you utilized a professional for your combined personal and business tax preparation?  When is it cost effective to hire an accounting firm’s experts to help with your business accounting and bookkeeping needs?

Consider the following as a mental checklist to help you find an answer to the question: 

How Do I Know When I Need a Professional Accountant or CPA?

You know you need a professional accountant or CPA when…

(circle the sentence numbers that apply to you and when finished add up the total number of sentences that describe your financial situation)

  1. You are considering investing significant time, money and passion into a business idea. Before you “take the leap” you want input about your business plan from an independent professional who will review the numbers and help you analyze your idea’s future growth potential.
  2. You are starting a new business and want to select the best business structure that fits the marketplace, your proficiency and your goals.  You have been told there are different types of business entities that may limit your personal liability for your business activities, but you don’t understand the tax consequences of this decision.
  3. Your income and deductions have changed and you no longer file a simple tax return, or you suspect you must make quarterly estimated tax payments.
  4. You need new or additional business financing, and your lender or insuror is requesting financial information that must be provided by a third party.
  5. You want to better understand your business’s financial information, and use it to improve profitability, inventory management, and cash flow.
  6. You need more information in order to prepare to sell your business.
  7. You are shutting down your business.
  8. You hire other people to help you, and you need information about employees versus independent contractors.
  9. You have become responsible for another person’s affairs, either during their life or after their passing.
  10. The IRS or another regulatory agency has contacted you about an upcoming audit or other collection actions.
  11. You wish to develop and act on a plan to provide for your financial future, including saving for retirement, your childrens’ education, and/or other obligations.
  12. You want to ensure you have the best estate plan in place by understanding the tax, financial and time-based consequences of that plan.
  13. You want to create a succession plan for passing your business on to the next person when you’re ready to retire or sell.
  14. You want to take responsibility for your business and personal financial affairs, and want a trusted advisor to help you succeed.
  15. You must prepare and file Forms W2 and 1099 annually.
  16. You need to understand your best choices on property purchase versus equipment leasing.

How many of the above statements apply to you?

These are just a few of the practical reasons that you need a professional accountant on your business’ financial team.  If you circled 3 to 5 of the above business and personal accounting points, it’s probably time you considered using an upgraded business accounting tool that provides a live accountant when you need one.  If you circled more than 5, it’s time you connect with a professional accountant long-term with comprehensive services and experience to ensure business success.

Accountant over shoulderConsider using a CPA (Certified Professional Accountant) that is experienced and trained specifically to be your business and personal financial planner, management consultant, management information specialist, business consultant and more. 

Yet, don’t forget to consider whether the professional you bring on board is someone you get along with personally.  Financial decisions are a reflection of the production and goals of real people like you who are working to make profits in order to enjoy the life you love.  It’s important to find an accountant who will work well with your business team and shares your concerns about accuracy, reliability, efficiency, and long-term effectiveness.

When you know you need an accountant, we’re here.

At McRuer CPAs, we know business “numbers” are personal and we make the extra effort to match the personalities of our professional accountants with you and your business team.  You may discover the latest online tools with the on-demand help of a CPA are the best choice for you and your business.  Maybe it's time to have a full-time accounting professional join your team?  How do you what to do?

Let’s find out what will work best for you.  Contact us for a strategic planning session by calling 816.741.7882 or contact us through our confidential online resource.  We’ll review your goals and help you make the best choice.

02/24/2014

Internet Sales Face New Tax Debate

Retailers report online sales were up 8% for the week of Valentine’s Day compared to 2013. More than a third of the internet-based purchases were made through mobile devices tallying up a total of nearly $14 Billion in online consumer spending for the romance-based holiday.  Upcoming debates will reveal how state and local authorities would ‘love’ to tax online revenue flow to compensate for declining income and real estate tax revenues.

Internet-Sales-TaxIn the next few weeks, heated debate is expected on the proposed Marketplace Fairness Act which gives states the authority to collect sales taxes and use taxes from remote online retailers. The legislation attempts to simplify state sales tax rules to make collections easier and more uniform.

Americans are using the internet to buy and sell products and services at an explosive rate.  Surveys show the top reasons they buy online include the ability to select from a wide variety of items, discounted pricing, free shipping and, in many cases, no sales tax.  Officials are targeting large Internet retailers who currently escape state and local sales taxes.  

Right now, retailers with no physical presence in a state (such as a store, office, warehouse or sales representative) are not required to collect sales tax for an internet-based sale to a consumer in that state.  Proposed legislation targets remote sales made by retailers with annual gross receipts exceeding $1 million.

Brick-and-mortar businesses pay property and income taxes that the online or remote-selling counterparts may not pay.  Their business associations support requiring sales tax collections for all online sales and other taxes on profits made by online retailers.  Amazon.com and Overstock.com are just a few of the large retailers that have been lobbying against the tax increases, saying, if they must pay a tax on their bottom line income, they will have to pass it on to consumers.  

The issue of collecting Internet taxes is complex. Retailers and taxing authorities disagree about who is responsible for collecting taxes.  Should states themselves collect both sales taxes on purchases and income taxes on retailers with headquarters or warehouses in their jurisdiction?  Are Internet service providers responsible for collecting taxes? Is the Internet itself to be considered a product or a service; and then what kind of taxes apply?

States and municipalities are lobbying with renewed intensity for the chance to collect Internet sales and use taxes arguing they are losing billions of dollars in badly needed revenues.  Opponents claim the benefits of the Internet contribute to economic growth and productivity that already boosts revenues.  They also say gearing up intermediary taxing authorities to collect and manage the new taxes would be too costly and ripe for corruption.

Meanwhile, since 1998, the Internet Tax Freedom Act has banned federal, state and local governments from imposing internet-only taxes such as taxing the bandwidth you use, the volume of data used (or bit use), and email usage.  It also prevents the imposition of multiple or layers of taxes on e-commerce.  It does not prevent the taxation of the sale of goods through the Internet.

When it was enacted, the legislation grandfathered existing taxes in ten states that were mostly access, franchise and telecommunications taxes, as the potential of the Internet sales base was not yet clearly understood.  The law has been extended three times, but is set to expire this October which could open another window for imposing new taxes.

In Kansas, an attempt last year to revise the out-of-state Internet sales tax law died in committee.  In Missouri, the physical-presence rule applies and has been a hotly debated matter.

For now, the national debate is gearing up again with lawmakers expected to call for a vote on the matter this Spring.

04/01/2011

Small Business Tax Deductions & Recordkeeping

We receive a lot of questions at this time of year about business deductions.  There are many expenses that business owners can deduct to reduce the amount of profit that that will be taxed.  But, for most of these business deductions, there are rules about recordkeeping that the IRS expects you to follow or the deduction may not be accepted.

Here is a short segment on McRuer Money Minutes explaining “Why Recordkeeping Matters”.

There are several common business deductions which have various recordkeeping requirements:

  • Auto Expenses
  • Expenses of Going Into Business
  • Books and Legal and Professional Fees
  • Bad Debts for Goods Sold
  • Business Entertaining
  • Travel Expenses
  • Interest on Credit
  • New Equipment
  • Moving Expenses
  • Charitable Contributions
  • Some Taxes
  • Education Expenses
  • Advertising and Promotions

Many small business owners don’t realize they can deduct the cost of learning more about how to be successful.  With receipts and a true business connection, some of those allowable deductions include:

  • audiotapes and videotapes related to business skills
  • business-related publications like magazines and books
  • seminars and trade shows
  • business association dues

Here are some business deductions that are easy to keep records of, but are often overlooked by business owners:

  • bank service charges and credit bureau fees
  • casualty and theft losses
  • on-site coffee and beverage service
  • consultant fees
  • office supplies
  • online computer services related to business
  • petty cash funds
  • postage
  • taxi and bus fare for business purposes
  • parking and meter fees

Business owners who properly track all of their expenses year round end up saving more on their tax bill.  That’s because they not only remember to list all their deductions, but they also have the documentation to prove their claims.

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