Massachusetts Bookkeeper at work

Massachusetts Bookkeeper: Top 10 Financial Resolutions for Business Owners

Massachusetts Bookkeeper

Massachusetts Bookkeeper | Start your new year by setting realistic and achievable financial resolutions. It’s important for businesses to keep their plans flexible though.

One way of setting eyes on the prize is to create financial resolutions that work. Here are our recommended top 10 financial resolution for business owners.

1. Set Long-Term Financial Goals

Businesses need to set their vision and objectives first. If you don’t set the objectives for your long-term success, you cannot achieve business success in the short term as well.

All your financial goals will align with your long-term objectives. It’s time to revise and set realistic but ambitious financial goals for your business if you haven’t already. A Massachusetts Bookkeeper can assist.

2. Write and Stick to Your Monthly Budgets

All businesses make monthly budgets. Only a few of them make them in the right way. Further, only a fraction of businesses achieves their monthly budgets.

Variances in budgets are normal. However, failing to achieve the budgets consistently isn’t. This time you should set realistic budgets, and stick to them no matter what. Your Massachusetts Bookkeeper can help you stay on track.

3. Manage Your Cashflows with a Massachusetts Bookkeeper

Cash flow is pivotal for the success of any business in any industry. If you cannot manage the cashflows, you will run out of options soon.

Even the most profitable businesses can go down quickly due to liquidity issues. Thus, set this target as your top financial resolution of the year this time.

4. Assess your Business Expenses

Every business owner keeps an account of business expenses. However, you need to dig deeper. Evaluate your business expenses and see which one of them can be discarded.

Ask yourself questions that relate to business expenses. For example, are you spending the money on the right accounting technology? Do you need professional advice?

5. Separate your Personal and Business Expenses

A closely linked issue for many businesses to the one stated above is mixing up personal and business expenses. Self-employed and small business owners often incur joint expenses.

You need to account for these expenses separately. For tax purposes as well as for the performance appraisals. It will also help you in managing the retained earnings for your business. That eventually will lead you to reinvest in your business more effectively. A Massachusetts Bookkeeper will always recommend to separate these transactions.

6. Pay Down the High-Interest Debt

Debts are inevitable for all businesses. You cannot run a business without debt financing. However, it’s critical to manage your debts and keep the interest charges under control.

An important way of managing debts is to pay down the high-interest debt first. Set this point as one of your top financial resolutions of the year.

7. Secure Flexible Financing

We have all seen two consecutive years of economic recession. It is not unusual that many businesses find themselves under debt. However, raising too much debt financing can be risky for a business.

If you can afford it, find a flexible financing option. One way of doing it is to refinance your different small bank loans into one that has flexible payment terms for you.

8. Start Saving

Start saving!

It is an important financial resolution for individuals as well as businesses. If the current economic recession is going to teach us something, it is to save for the hard times.

Business owners are aware that economic recessions are inevitable. The best you can do is to prepare before the cycle returns to the current situation again.

9. Focus on the Accounting and Bookkeeping Records

Bookkeeping and accounting records set the foundation of any finance department. If you cannot focus on the accounting records, you wouldn’t be able to evaluate your financials.

Invest time and money in your accounting and bookkeeping records. You can start with a Massachusetts Bookkeeper. With the available technology, you can easily outsource the tasks to professional firms. It will set your financial statements on the right track.

10. Invest in the Future Technology

Finally, we would suggest investing in the future technology of your business. For instance, invest in financial technology for your business.

Small but innovative investments in future technology can bring your business on the right track in no time.

Bonus Tip: You can make an endless list of financial resolutions every year. One of the most important ones is to achieve the financial resolutions itself.

 

Learn more with our Massachusetts Bookkeeper Ash CPA today. Request an appointment here.

New Year's Resolution list

New Year’s Resolution: Top 10 Easy Financial Goals You Can Set Right Now

New Year’s Resolution

New Year’s Resolution | Business owners set different types of objectives and goals. Financial goals remain the priority for the success of any business.

Setting clear and achievable financial goals is the key to success. A business with smart financial goals can manage its money and progress properly.

Here are our chosen top 10 financial goals that you can set right now for your New Year’s Resolution.

1. Break your Financial Goals into Smaller Targets

Setting long-term financial goals is important for your New Year’s Resolution. However, you cannot achieve those targets immediately.

It’s important to break those large goals into smaller and achievable targets.

It will help you stay within the limits too. It means you’ll only plan for the business expansion that you can manage.

Often businesses fail with overambitious planning and setting too large goals to achieve.

2. Increase Your Sales

Increasing business sales will be on the list of financial objectives of any business regardless of the size or industry. The important part is how to achieve increased sales?

Plan for your increased revenues by going back to basics for your New Year’s Resolution. Consider the product or market expansions, one at a time. See which option suits your business style the best.

3. Profit Margins and ROI

Every business keeps an eye on the profit margins. Investors are keen observers of their return on investment. Both financial metrics are closely linked.

Once you plan for increased revenue as discussed above, you should now focus on fine profit margins. You can do that by reducing unnecessary costs and increasing operating efficiency. The increased profit margin will lead you to increased ROI for the investors as well.

4. Redefine Your Business Value Proposition

Defining the business value proposition is the key to success for any business and New Year’s Resolution. It is a business goal that aligns with any financial plan.

Create your product or service value proposition that differentiates you from the crowd. If you can create one, your business will flourish.

If your business is struggling for growth, it’s time to redefine the value proposition. Set your eyes again on your target customers and the products/services you’re going to offer precisely.

5. Improve Your Operational Efficiency

Operational efficiency is a key performance evaluation metric that is often planned with business strategic planning. However, it closely links the financial performance of any business.

Once you improve your operating efficiency, your profit margins will improve significantly. It will eventually mean better revenue and better net income for your business.

6. Discard Irrelevant Business Costs this New Year’s Resolution

Continuing with our previous point, discarding irrelevant business costs is important if you want to achieve efficiency. For many small businesses, the problem arises when personal and business expenses are combined.

You can evaluate each business expense category and appraise if you can eliminate any unnecessary business costs. For example, outsourcing tax services can save costs and time instead of hiring a full-time employee.

7. Forecasting Cash Flows

Cash flow is critical for the working capital management of all businesses. Forecasting cash needs is pivotal for managing the working capital for a business.

Setting clear cash flow goals can help you achieve overall financial success. You’ll save on debt financing and keep the cash flow smooth. Definitely, consider this for your New Year’s Resolution.

8. Managing Capital Financing

Keep a balance between the equity and debt financing for your capital projects. Both types of capital financing come with some benefits and limitations.

The key with capital financing is to maintain your debt ratio. It will help you keep the interest costs under control. Also, you’ll be able to secure cheaper financing if you have a low debt-to-equity ratio.

9. Invest in Employees

An often neglected business and financial goal is investing in employees. Even if you run a small business, you should invest in the welfare of your employees this New Year’s Resolution.

Every business has some key and irreplaceable employees. It could be you as well if you are a self-employed person. Thus, investing in employees will reward your high returns in the future.

10. Aim for the Financial Stability

Businesses around the globe have been through turmoil in the last couple of years. It means you should aim for financial sustainability for such unwanted economic cycles in the future.

Like individuals need an emergency fund, businesses must keep themselves afloat as well. Furthermore, it all begins with proper financial planning and setting smart financial goals for your business that you can achieve.

Achieve your New Year’s Resolution with Ash CPA. Learn more with a consultation.

tax audit form | Tax Accountant Firm

Tax Accountant Firm: Top Reasons You’ll Get an IRS Audit

Tax Accountant Firm

Tax Accountant Firm | From mathematical errors to unawareness, there are various reasons why taxpayers face an IRS audit. You can make mistakes in tax returns. Some taxpayers even try to manipulate the deductions and credits.

Let us briefly discuss what are some of the common reasons that you may face an IRS tax audit.

Top Reasons You’ll Get an IRS Audit

The IRS makes sure that you file correct tax returns. The IRS is on the hunt for any tax evasions, mistakes, or avoidance practices.

You may make mistakes in filing your tax returns. Often, a taxpayer files wrong returns due to a lack of awareness of the tax regulations and changes.

Only a small number of taxpayers get audited by the IRS. There are various reasons for the IRS to audit your returns. For this reason, hiring a Tax Accountant Firm is always recommended.

Here are our top-picked reasons that you must be careful of.

Failing to Report All Income

If you have more than one source of income, you must disclose all of them in your tax returns. Fortunately, your Tax Accountant Firm will help you with this. However, failing to report all income will get you an IRS audit call.

Suppose you run a small business. Meanwhile, you write as a freelancer and earn a few extra bucks regularly. You only show your business income in your tax returns. Skipping the freelancing income is a red flag that the IRS will catch for sure.

Wrong Self-Employment Returns

Self-employed persons do not receive a paycheck. Their business income passes through their accounts. They are also entitled to many deductions and tax credits that employees and other business types are not.

At the same time, self-employed persons take too many deductions and credits. Sometimes, they do not calculate the deductions in the right proportion. However, a Tax Accountant Firm can help to assure the proper expenses are reported.

Deducting Too Many Business Expenses

Small businesses often make this mistake. Without proper accounting practices or hiring a Tax Accountant Firm, they do not allocate business expenses properly.

Many businesses share their home space for office use. Similarly, they share a vehicle and office equipment such as a PC or printer. They deduct too many of these expenses from their business income.

If you deduct these expenses in a larger proportion than the usage for business purposes, you can get caught. You may be doing it unintentionally but that may lead you to make an explanation to the IRS.

You Deal in a Lot of Cash

Some businesses usually deal in cash such as saloons, barbers, cafes, and other small retail businesses. It is fine to make all transactions in cash.

The problem arises when the IRS notices large cash transactions that do not match the revenue stream of your business. If you deal in a lot of cash, chances are you’ll get an IRS audit visit.

Reporting Too Many Losses

Another major mistake made by self-employed and small business owners is to report too many losses on the Schedule C form.

They do it by showing personal expenses as a business. It lowers the business income and eventually the taxes owed to the IRS. However, it is a major red flag for the IRS.

The wise thing is to deduct only the business proportion of expenses from the business income. Otherwise, you’re prompting the IRS to ponder why you would run a loss-making business continuously. Avoid this mistake with a Tax Accountant Firm.

Showing Too Many Deductions

Another common mistake made by small business owners is showing too many deductions on Schedule C. It is a similar practice to deducting too many business expenses.

For example, a self-employed person purchases a new laptop that is used for both personal and business purposes. Deducting the total cost of the laptop is inaccurate and such practices can get you an IRS audit mail as well.

Failing to Report Assets Abroad

Some large businesses and individuals place their assets abroad. These assets can be in the form of cash in foreign bank accounts or property abroad. In any case, if you do not disclose your foreign assets and income, it is a big red flag for the IRS.

The IRS is always on the hunt for such taxpayers. The US has double-tax treaties with several tax jurisdictions. You can take full advantage of these treaties. However, you need to disclose foreign income in your tax returns properly to avoid the IRS audit.

Learn more about audits with our Tax Accountant Firm, Ash CPA. Contact us here.

Audit | Person reviewing tax forms

What Happens if I Get an IRS Audit and Fail?

IRS Audit

It may give you shivers when you hear about the IRS tax audit. However, like any other judicial process, you own the right to defend against the IRS decision as well.

You may choose to settle for early payment of evaded taxes if feasible. Else, you can prepare the case and appeal against the IRS audit response.

Seeking professional help with the IRS audit can solve several issues for you. Understanding the process and filing an effective response in the case of a failed IRS audit requires knowledge and experience.

Let us briefly discuss what options do you have with an IRS audit.

What is an IRS Audit?

Only a small number of taxpayers receive an IRS audit call. However, you may face penalties and interest charges if you fail to address the issues in an IRS audit.

The IRS looks for certain red flags in tax returns. These red flags may be errors, omissions, negligence, or misuse of tax credits. In any case, the IRS is on the hunt to find any misconduct in the tax returns filed by taxpayers.

It’s important to remember that errors in tax returns can be due to negligence or fraud. The IRS develops the case according to the nature and size of the tax evasion.

What if You Fail?

The IRS sends an audit mail to a fraction of the total taxpayers. You may be one of these unwanted taxpayers as well.

The good thing is you can always file a defense against the IRS audit. The IRS seeks an explanation from taxpayers. You can send response according to the IRS audit requirements.

There are various options to choose from when you plan an IRS audit response. The first thing you should do is to seek a professional’s help here.

Initiate Your Appeal

Once the IRS completes the audit, it will send you a detailed report of the findings. The report will include penalties, fines, interest charges, and deadline details.

If you disagree with the IRS audit results, you wouldn’t sign the first letter received from the IRS. The initial letter has a deadline of 30 days. Instead, you’ll send an official response to the dispute.

If you do not respond within 30 days, you’ll receive another notice from the IRS. It is often called a taxpayer’s “ticket to tax court”.

Your appeal should accompany important supporting documents. Again, consulting a professional tax auditor can help you a great deal here.

IRS Representation

Once you receive the 90-day letter, you can appeal for a tax court representation. You will have at least 60 days to prepare your case after submitting the appeal.

The IRS representation or the tax court hearing your chance to present your defense case against the IRS findings in the audit report.

Your best chance is to prepare for your case with the help of a professional tax agent that has the experience and skills to represent you. You should also gather the documents, evidence, and other supporting items to make a strong case of your defense appeal.

Negotiating Settlement

During the IRS representation, the appeals officer will freshly look at the evidence presented by both sides. Both parties can settle at this stage through effective negotiations.

As a taxpayer, you must present your case effectively here. A professional representing your case can build a strong case for you. It will help you get the most out of the negotiation process. For instance, the first point will be to request the waiver of penalties by establishing that any audit omissions were not intentional or fraudulent activities.

In most cases, the negotiation process results in an agreement between both parties. However, in a few cases, taxpayers may choose to opt for the tax court or tax litigation process as well.

Seek Professional Help

There are various steps. For example, you can choose to go for an early and quick settlement through the Fast Track Settlement program of the IRS.

Some other post-audit resolution types include:

  • Mutual Agreement Procedure
  • Accelerated Competent Authority Procedure
  • Accelerated Issue Resolution
  • Traditional Appeals Process
  • Early Referral to Appeal
  • Rapid Appeal Process

Preparing for the IRS audit representation and presenting an ideal case requires skills and expertise. A professional can help and represent your case effectively. The right course of action will depend on your tax returns filed and the IRS audit points.

Learn more about tax audit representation with Ash CPA. Call (617) 462-6651 or request an appointment here.

Tax Accountant Firm | woman reviewing her tax documents

Tax Accountant Firm: What is Tax Resolution?

Tax Accountant Firm

Tax Accountant Firm | Tax resolution is a blanket term that means solving your tax disputes with the IRS or the state tax agency. Usually, the term refers to IRS tax disputes.

Taxpayers can choose from a number of options to protect themselves. The aim should be to solve the dispute with the IRS before it turns into a legal proceeding.

Let us discuss what is tax resolution, which options you can choose from, and how does it and a Tax Accountant Firm benefit you.

What is Tax Resolution?

Tax resolution refers to a process of working with the IRS or a tax professional to solve your tax problems. The IRS can pose questions on your tax returns and you get a call for the audit as well. For this reason, it’s best to have a Tax Accountant Firm on your side.

Generally, a tax resolution is required when the IRS thinks you owe more in taxes than you filed for. In such situations, you can put a defense against the IRS directly or with the help of a professional tax agent such as a CPA.

Tax resolution is a general term, in practice, there are several routes that you can choose from to resolve your tax issues with the IRS.

Why You Should Consider Tax Resolution with a Tax Accountant Firm?

The foremost and important reason to go for tax resolution is to protect yourself against litigation. You would want to resolve any tax disputes as soon as possible before they turn into legal proceedings against you.

The IRS can take several actions against tax defaulters. Some common examples include:

  • Seizure of property
  • Garnishing wages
  • Levy bank accounts of defaulters
  • Imposing tax liens

In practice, many businesses and individuals consider tax resolution when they are in a predicament where they need to pay more taxes than they actually have. In other words, when taxpayers find themselves in trouble with settling tax obligations. Avoid these situation by having a reliable Tax Accountant Firm.

Common Types of Tax Resolution

There are various scenarios and reasons to opt for tax resolution. Each scenario demands a different approach and a plan of action to solve tax disputes.

Here are a few common scenarios or types of tax resolution.

Installment Agreement

This option allows taxpayers to settle their debt with the IRS in installment. Under this agreement, the taxpayer agrees to pay back tax obligations over the years in small and manageable installments.

In some cases, taxpayers cannot settle or pay all installments as agreed with the IRS. Both parties can reach a partial payment installment plan that favors taxpayers through the statute of limitation.

Offer in Compromise

The offer in compromise (OIC) is an agreement between the IRS and taxpayers to settle for a lower amount than is actually owed.

The OIC is a complex process and it can take one of the three routes. These options include doubt as to collectability, doubt as to liability, and effective tax administration.

Reasonable Cause

This option is chosen when taxpayers have a significant reason or “cause” that hindered their tax obligation duties. Simply put, if taxpayers can prove they tried their best but could not meet their tax obligation, they can opt for the reasonable cause option of tax resolution.

A taxpayer has to prove the reasonable cause, so it varies by applicant. Some of these include a serious injury, death of a family member, unavoidable absence, and so on.

Penalty Abatement

Some taxpayers can default on their tax obligations once in a while. They may face life hardships, joblessness, or any other circumstances that prevented them to make full or partial tax payments.

In such scenarios, taxpayers can opt for the first-time tax abatement option.

Lien Relief, Lien Release, and Lien Withdrawal

In some cases, taxpayers can face a lien on assets from the IRS. Then the IRS issues a lien, they announce to start a proceeding for the seizure of assets of the taxpayer in the dispute.

Taxpayers would find it harder to get credit to pay their obligations. They can apply for a lien release. It means the IRS does not hold possession or intend to seize the assets of the taxpayer.

A lien release is a case when the IRS drops all seizure claims against the taxpayer as if they never existed.

How Does Tax Resolution Benefit?

Settling tax obligations with the IRS can become a perplexing task. You wouldn’t want to end up in litigation with the IRS.

A tax dispute with the IRS prolonged can affect your overall financials as well. Seeking help from a professional Tax Accountant Firm can help you avoid these issues.

Moreover, you have the right to protect yourself against any charges put by the IRS. A professional tax resolution service provider can ensure your rights are protected.

Learn More with Our Tax Accountant Firm

Our Tax Accountant Firm, Ash CPA offers tax resolution assistance. Learn more by scheduling a consultation, in-person or virtual. Call (617) 462-6651 or book online.

tax preparation near me | business audit report

Tax Preparation Near Me: Business Audit Preparation

Tax Preparation Near Me

Tax Preparation Near Me: Preparing for audits can seem a daunting task at first. Getting financial statements and tax returns in order is only a small part of the equation.

Planning and choosing a proactive approach can help your business to prepare well for any kind of audit.

Let us discuss how you can do the audit preparations for your business.

Types of Audits

A business can go through different types of audits. These audits can be regular or special-purpose. Broadly, we can categorize the types of audits into three main categories.

Internal Audit

These audits are for internal use mostly. Businesses conduct these audits to verify the correctness and completeness of their financial records mainly.

Internal audits can be performed by company employees or third-party professional auditors.

External Audit

An external audit provides a fair opinion about the financial statements of a business. These audits are required by regulatory bodies for all companies.

External audits can only be performed by qualified auditors.

IRS Audit

Government regulatory audits, more commonly known as IRS audits are not mandatory for all businesses. The IRS chooses some businesses or individuals for auditing based on certain indicators and indicators to verify the financial records. For this reason, tax preparation near me services are essential.

How to Prepare for an Audit?

The external audit is a statutory requirement. Many businesses chose to conduct an internal audit as well. An IRS audit is mostly performed when a business fails to submit proper tax returns.

In either case, businesses can plan ahead and prepare for an audit with these useful tips.

Planning for an Audit

You can set aside financial resources and align your activities to prepare for an audit ahead of time. It will ease the pressure if you face an unwanted audit call such as in the case of an IRS audit.

The planning phase also includes identifying human resources and skills for audit preparations. Be prepared with professional tax preparation near me services.

Organize Data and Important Documents

The key to audit preparations is the organized financial data of a business. If you keep accounting and bookkeeping records in order, your audits will be smoother.

Accounting records turn raw data into financial statement line items. Also, it is important to organize key financial documents such as bills, invoices, receipts, purchase orders, and so on.

Review Previous Audit Reports

An effective way of preparing for audits is to review previous audit reports. Like tax filing, you can begin with the previous audit reports.

You can also talk to your financial advisor or auditing service provider for help at this stage.

Delegate Roles and Responsibilities

Even if you run a small business, you cannot assign all accounting and auditing tasks to one person. It is important to delegate roles and responsibilities clearly.

Assigning roles to capable persons means you’ll organize financial data properly. That in turn will lead to proper tax filing and accurate financial statements.

Talk to a Professional

Audit preparations can get daunting for many businesses in the absence of an auditor’s expertise. One way to fulfill the gap is to outsource the task to a professional and qualified person.

Seeking help from a professional with experience and prerequisite skills can ease the pressure from you. It will save you time and money, importantly, it will help you stay compliant.

Key Points to Remember

Since most businesses prepare and focus on IRS audits, we’ll mention a few key points to remember.

Keep Records

For IRS auditing purposes, you may need to keep the accounting and financial records for at least three to six years. In the broader legal context, you may need to keep your tax filing and return records forever.

Thus, it is significantly important to maintain accurate financial and accounting records backed by evidence. Organize your invoices, expenses, revenue receipts, and bills properly.

Avoid Underreporting Income with Tax Preparation Near Me Services

If you run a small cash business, it is often tempting to underreport income. This practice cannot save you taxes for long.

Further, underreporting income means you’ll always be covering up on the expense side as well. Thus, your chances of an IRS audit increase with such practice.

Do not overstate Losses

A very similar tactic to that of understating income is to overstate losses. Again, this practice cannot save you taxes in the long run.

You’ll need to back your loss claims with evidence. Any false claim can get you an IRS audit call as well as tax penalties.

Be Cautious with Deductions, Credits, and Donations | Tax Preparation Near Me

Finally, it is wise to stay cautious with tax deductions and credits. You should take full advantage of allowed tax deductions and credits. Just make sure to apply for qualified deductions/credits.

Similarly, pay attention to donations and do not overstate them. You may need qualified appraisals for large donations as well.

Learn More with Tax Preparation Near Me

Ash CPA offers business audit and tax preparation near me services. Learn more with a consultation today.

 

 

 

 

taxes on net profit - for sale sign

Taxes On Net Profit: Taxes on Selling a Home

Taxes On Net Profit

Taxes On Net Profit | Most home sellers do not need to pay capital gains taxes. Some of them do not require to report the transaction as long as they qualify for the exclusion.

If you pass the residence and ownership test as prescribed by the IRS, you wouldn’t be paying taxes on profits up to $ 250,000 filed single and $ 500,000 filed jointly.

In certain situations, you may incur capital gains taxes. It is always preferable to consult a tax specialist when you plan to sell the home.

Let us discuss a few key points on taxes on profits from selling a home.

Types of Taxes on Selling a Home

Some home sellers will incur taxes on profits made from selling their homes. There are three types of taxes that you may owe the IRS.

  • Capital Gains taxes
  • Property Taxes
  • Real Estate Transfer Fee

Capital Gains Taxes

If your profits on selling a home exceed $ 250,000 filing singly or $ 500,000 when filing jointly, you’ll owe capital gains taxes.

Many home sellers meet the qualifications and exemptions so that they do not need to make capital gains taxes at all.

Property Taxes

You’ll need to pay property taxes on a prorated basis at the closing. Although the buyer will take over the property taxes once the deal is closed.

Property taxes vary by state, make sure to check the property tax rates and consult your tax professional to get advice on it.

Property Transfer Tax

Commonly known as ownership transfer tax is levied upon at different rates in different states. You’ll need to pay the property transfer tax at the deal closing as well.

Taxes on Net Profits from Selling a Home

First, you’ll need to calculate net profits (or losses) from the sale proceeds. Your net profit or loss can be calculated on a cost basis.

For example, you bought a house for $ 200,000 and you incurred qualified home improvements and renovation costs of $ 30,000. Your total cost will be $ 230,000. If you sell the house for $ 260,000, your net profit will be $ 30,000.

If your profit from the house sale exceeds $ 250,000 (or $ 500,000 for joint filers), you’ll owe capital gains taxes with the following tax brackets:

  • 0%: for profits up to $ 40,000 single, $ 80,000 Joint, and $ 53,600 as head of household.
  • 15%: from $ 40,001 to $ 440,450 single, $ 80,001 to 496,600, and from $ 53,601 to $ 469,050.
  • 20%: above profits on limits mentioned above for each category.

You wouldn’t pay any taxes on that profit if you qualify for the exclusion as explained below.

Qualification for Tax-Free Gains on Selling a Home

You’ll get the capital gains tax exclusions if you meet the IRS qualification criteria.

  • You owned the house for at least two years out of the last five years.
  • You used the house as the primary residence for at least two of the last five years.

If you pass the ownership and residence tests, you can qualify for the exemption. The two-year term does not need to be concurrent. However, the condition means you cannot claim exemption twice within two years.

Taxes on Selling a Second Home

The IRS tax exclusions are limited to the sale of the primary residence only. If you sell any other house or property, you’ll incur taxes for any profits.

Pro Tip: You can move to your second house to make it a primary residence. It will make you eligible to sell the second home to deduct capital gains exemptions.

As a professional tax consultant, we can help you plan further tax exemptions and deductions.

Tax Deductions to Reduce the Tax Payable

There are different types of deductions and exemptions available to reduce your tax burden from profits on selling a house.

Some of the widely used tax deductions include the following.

  • Selling Costs including real estate agent fees, escrow costs, advertising costs, etc.
  • Home Improvements and Repairs related to the primary residence only.
  • Mortgage Interest deduction on an itemized basis.
  • Capital Gains Tax Exemption as discussed above.
  • Property Tax deduction limited up to $ 10,000 maximum.

Consult a Tax Specialist

Taxes On Net Profit |Tax planning and preparation can save you money on taxes owed on profits from selling a house. We can help you through the process as a tax specialist.

In some cases, you don’t need to file for capital gains taxes. In other, you can reduce the tax liability by applying for tax deductions and exemptions properly.

Research Work:

Contact Ash CPA to learn more. Call (617) 462-6651 or request a call online.

top accounting firm | woman cpa smiling

How to Choose a Top Accounting Firm?

Top Accounting Firm

Investing your time and money in the right top accounting firm can bring you several benefits. You can improve business efficiency, plan well, and witness business growth over the long run.

It is important to set clear expectations from an accounting firm. You should first set clear objectives for partnering with the accounting firm. It can help build a sustainable partnership for both parties.

A professional organization offering accounting services will stay abreast of key compliance and legislative requirements all the time. An accounting firm can offer business advisory services beyond taxation and accounting tasks as well.

Choosing the Top Accounting Firm

Choices are abundant when it comes to working with an accountant or an accounting firm. However, not every one of them is qualified or offers the right advice to your business.

Think of choosing the top accounting firm as finding an ideal business partner. The partnership must work that is formed based on trust and integrity.

Here are a few tips for you to choose the top accounting firm.

Qualification and Experience

You’ll start by exploring different options in your network. The first parameter is to evaluate the accounting firm’s licensing and qualification. Many accountants do not come with a professional qualification such as a CPA.

An accounting firm may also come short with licensing or expertise. Hence, you must carefully evaluate this first step. Do not hesitate to ask your potential partner about their professional qualification and experience in the industry.

Industry Expertise

Modern businesses face unique challenges every day. A business advisory has to consider the unique challenges in every industry. CPAs and accounting firms also come across these unique problems regularly.

One way of dealing with these issues is to partner with the top accounting firm that offers industry expertise. For instance, if your potential partner has a client base of dental practices, it will be an added advantage to your dental practice as well.

Location

Remote accounting and online accounting consultation are on the rise. Most firms can handle your accounting tasks online. All you need is to obtain suitable accounting software.

Having said that, the physical location of your potential partner still matters. For instance, if you are doing business in Massachusetts, you’ll be comfortable working with a firm in your locality.

Fees

Accounting firms come with different fee structures. Some of them charge per hour and others charge by the task they perform. You can compare the fee structure of different clients. However, always remember offering cheap services does not always mean savings.

Working with the top accounting firm can seem costly at a glance. Yet, you can reap the rewards of professional advisory services to improve business growth. Always look at the bigger picture with your business planning.

Advisory Services

Explore the range of advisory services offered by the firm. Some accountants limit their offerings to only tax filing and accounting functions only. When you partner with a firm, you can avail yourself of a wide range of business advisory services.

Some of the key business advisory services to expect include:

  • Business Plans
  • Financial modeling
  • Debt Restructuring
  • Cash flows and Working Capital Management
  • Business transaction Advisory
  • Tax Planning

Availability

Seasonal tax preparers and agents do not work year-round. You may need to consult the accountant for any reason during the year. Hence, it’s important to work with a firm that is available to you at any time and not just during the tax season.

Audit Support

Some accountants can offer IRS representation services. Not all accountants are qualified to fully represent your business before IRS audits. A key advantage of working with a top accounting firm is to secure audit support.

Choosing the top accounting firm can be overwhelming. Consider these key points to make the right decision. Let us know your thoughts on it, we’ll be happy to hear from your side.

Contact Ash CPA to learn more. Call (617) 462-6651 or request a call online.

cpa accounting professional

CPA Accounting: Take Your Business to The Next Level

CPA Accounting

CPA Accounting | The traditional role of CPAs has been to work as an accountant. Many businesses still consider the tasks of account books and financials as the primary job of a CPA. However, CPAs have been the trusted business advisors for decades.

If you facing challenging times, you can work with a CPA to take your business out of tangles.

Conventional Role of a CPA

In short, a CPA is a qualified professional who comes with a professional degree and industry experience. In addition, a conventional role of a CPA has been to manage the finance function of a business.

CPAs were supposed to look after the accounting, bookkeeping, tax reporting, and auditing function only. However, the role has evolved over the years drastically.

CPA as an Advisor

Modern CPAs are trusted business advisors. They are the change catalysts in any industry. In practice, CPAs are in a unique position to work as a key link between the finance function and other segments of a business.

Modern business challenges have also evolved. Today, businesses require complex problem-solving skills, solutions to cybersecurity issues, e-commerce challenges, and remote working problems to name a few.

How Your CPA Can Take Your Business to The Next Level?

If you can find a trusted business advisor, you can improve your business operations. For this reason, working with a qualified CPA can take your business to the next level through expertise and advisory services.

Here are a few key benefits of working with a CPA as your trusted business advisor.

Business Advisory

A trusted CPA accounting can be your business advisor. You can expect a diverse range of business advisory services from your partner.

Business advisory services can include:

  • Business plans
  • Financial modeling
  • Tax planning
  • Business Growth and Profitability
  • Business Buy or Sale Transactions

The business advisory role can expand according to your business needs. Every business faces unique challenges by the business cycle stage or industry.

Objective Advice

One of the core advantages of working with a professional is to receive objective advice. In other words, you cannot fix something unless you realize it’s broken. However, many businesses cannot identify the shortcomings in their strategic and operational planning.

A professional CPA will always give you the right and objective advice. Once you identify the shortcomings, you can only then plan to improve.

Industry Knowledge

Another key advantage of working with modern CPAs is to obtain in-depth industry knowledge. They come with industry specialization. For instance, a dental CPA will be in a better position to offer business advisory services if you are running a dental practice.

Industry knowledge and expertise can come in handy in several situations. Thus, you can get valuable information in key business matters like practice benchmarking, operational efficiency, regulatory and compliance, and standardization.

Improved Business Operations

Your business growth and profitability are directly linked with the efficiency of business operations. Moreover, qualified CPAs can help you improve operational efficiency as well.

You can devise a plan to improve business operations through:

  • Improved staff skills through training
  • Replacing obsolete equipment
  • Hiring or firing staff
  • Increasing operational efficiency
  • Managing cash flows and working capital
  • Debt refinancing
  • Cost-effective measures

Overall, operational efficiency is a key element when you think of taking your business to the next level.

Staying Proactive with Your Business Planning

Many businesses struggle with their plans because they do not stay proactive. Thus, They react to the situation and even fail to implement the action plan effectively.

Once you partner with a trusted CPA, you’ll learn to stay proactive with your business planning. For example, you can plan ahead of your competitors to introduce new technology in your business operations. Similarly, effective tax planning is a common example of proactive business planning.

Learn More

Contact Ash CPA to learn more. Call (617) 462-6651 or request a call online.

certified business accountant

What is a Certified Business Accountant?

Certified Business Accountant

A certified business accountant offers several services to a business beyond bookkeeping and accounting. You can perform these tasks by yourself as a business owner as well. However, certain financial services require special skills and expertise.

Let us guide you on how to hire a professional and certified business accountant.

What is a Certified Business Accountant?

A certified business accountant is a professional with a chartered or certified public accounting certificate. A certified body such as AICPA awards the certified public accountant’s license. Certified accountants need to pass the exam and complete experience requirements to obtain the certification.

A certified accountant such as a CPA is a qualified professional offering a wide range of services. These services can range from accounting, auditing, tax planning, and business consultation.

How is a Certified Business Accountant Different from an Accountant?

An accountant can perform all the bookkeeping and accounting tasks that a business requires. These tasks can range from bookkeeping, tax preparation, tax filing, financial statements, and accounting reviews.

A certified accountant on the other hand is a qualified professional with the ability to offer more than an accountant offers. A CPA can offer business consultation, transaction advisory, tax planning, estate planning, mergers and acquisition, business valuations, and tax representation to name a few key services.

A key difference between the two is the IRS audit representation too. A certified accountant can represent your business with unlimited representation rights.

How to Hire the Right CPA for your Business?

Hiring the right certified accountant can be a pivotal decision for your business. Outsourcing accounting and finance services is an important decision that will eventually affect your business in the long run.

Here are a few key aspects to consider when you hire a professional and certified accountant for your business.

Services Offered

That’s the first question that you should ask your outsourcing accountant. A certified accountant is capable of offering a wide range of accounting services. However, not every CPA offers all of these services.

You can expand the scope of partnership as your business grows. Thus, it’s important to start an outsourcing partnership with a certified business accountant offering comprehensive services.

Industry Experience

A certified accountant having industry experience matching yours will be an added advantage. Every industry comes with unique challenges and opportunities. Hence, an experienced accountant with expertise in your industry would be able to offer tailor-made advice for your business.

For instance, if you are running a dental practice, a dental CPA would be in a position to understand your business needs. You’ll then be able to formulate an effective financial matching your business objectives.

Accessibility

Online collaboration tools have made it easier to communicate with outsourcing accounting partners. However, you should ask whether your CPA will be available for customized tasks or not. Also, confirm the available working hours that match your business hours.

A certified business accountant in your locality would be an added advantage.

IRS Representation

The IRS offers two types of audit representation rights to accountants. Limited representation rights for non-certified accountants and seasonal agents. Unlimited audit representation rights for qualified professionals such as certified accountants, attorneys, and enrolled agents.

When you outsource the accounting tasks, you feel the comfort of full representation rights. You may find an IRS audit mail for various reasons. Hence, working with a certified accountant would offer an added advantage here.

Business Consultation

The role of certified accountants has evolved and become challenging. One of these challenges is offering advisory and business consultation services. Certified accountants offer business consultation and advisory services through their experience and skill set.

Advisory services and business consultation are prime factors to consider when outsourcing the accounting function. For instance, a dental CPA would be in a position to offer advice on medical equipment leasing or buying considerations. Similarly, debt restructuring, cash flow management, tax advisory, payroll taxes, and transaction advisory are key services that you can obtain from a qualified CPA.

Tax Planning

Managing the tax liability is the ultimate goal for outsourcing the accounting function for many businesses. However, tax liability management starts with long-term tax planning. Consulting a professional can help you manage the tax liability in the long run.

Learn More

Contact Ash CPA , Certified Business Accountant. New clients are always welcome. Book a call online here.