Why You Should Consult With a Tax Advisor

Tax Advisor

Tax advisors are professionals with qualifications and expertise in tax laws. They put in their extensive knowledge and experience in formulating your tax strategy. A tax advisor’s role depends on the client’s needs within the tax regulations.

A tax advisor can have a title of a CPA, an attorney, or an Enrollment Agent. The main role of the tax consultant remains to minimize the tax liability of a client within the permitted regulations. Compliance with tax laws is obligatory, not optional, hence is as important as reducing the tax burden.

Who Needs A Tax Advisor?

Individuals, businesses, trusts, and other types of entities, all need to comply with tax regulations. Even if you do not pay taxes, you may still need to file for tax refunds and credits. Individuals with dependents and joint tax filing require tax consultation. The complexities and changing regulations, demand for certain skills. A tax professional is well versed with taxation laws and changing impacts.

Businesses require tax consultation year round not just with the tax season. All businesses need to file for estimated taxes. They need advisory on tax planning, withholdings, VATs, Retirement planning, sales, and corporate taxes. Several financial aspectsrequire expert advice from a specialist.

You need a tax advisor, as an individual or a business owner if:

• In need of professional advice on tax planning
• Looking to save costs and time
• Need to reduce the tax liability with compliance with the regulations
• Could benefit from a year-round trusted partner
• Need mitigate the financial risk for your business
• Require industry specialists such as a Dental CPA’s expertise
• Want to outsource your tax filing to a trusted partner

Keeping up with the tax regulatory changes isn’t an easy task. For example, many businesses require to comply with current changes in IRS tax regulations with Covid 19 relief packages such as PPP relief options.

Why You Should Consult With A Tax Advisor?

If your business passes on taxes to you as a business owner, you should hire the same tax professional for both tasks. Before that,you should consult an expert on the right entity formation. That’s the reason we say, tax advisory starts well before filing taxes.

You need a tax consultant from tax planning, to the tax filing, and even after filing the returns. IRS may send you an audit mail requiring explanations on certain points. A professional will represent you in the IRS audits and provide the necessary explanations. The audit representations always require expertise and backing of records with proofs.

Here are a few compelling reasons to consult a tax advisor.

You Need Advice on Business Taxes

Business taxation is complex, unlike other laws, small changes in tax regulations may affect your tax returns quickly. Your business tax planning will begin well before the year-end tax season. Estimated taxes are filed quarterly or monthly. Your employer’s retirement plans will affect the year-end tax filings. Your pass-through income will affect your income taxes, and so on…

There are several ways a tax plan can affect your final returns. Say, your depreciation methodology will affect your business costs and returns, hence the tax liability. The itemized deductions and estimates will also affect your net tax returns by the year-end.

You must pay your business taxes as you earn income through estimated taxes. Underpayment of estimated taxes can result in penalties from the IRS. It means you need a dedicated tax professional who can advise you on tax minimization and NOT tax EVADING.

Outsource Tax Filing To an Expert

Well, perhaps you are not as well versed with IRS tax regulations as experts. You need to handle the state and local taxes as well. Then you’ll need an expert to handle the tax filings.

Outsourcing the tax filing remains the most popular choice for the US tax filers. The prime reason behind it is the expertise and skills required to comply with tax regulations are infrequent.

Save the Time, Money, and Hassle

Perhaps you are well versed with the taxation laws with federal and state regulations. Yet consulting a professional tax advisor will save you a lot of time. The final costs with professional fees and tax minimization will be lower. Not to forget escaping IRS penalties for errors in tax filings.

You should focus on the core business activity than tax calculations. As a business owner, you know it the best, “time ismoney”.

Talk to Your Tax Advisor

Finally, you definitely need to consult a tax advisor if you feel comfortable talking to a human rather than a robot. A professional advisor will be there for you whenever you need to consult. The human touch will make a whole lot of difference in your tax consultation program.

Schedule a consultation with Ash CPA. Call (617) 462- 6651.

Why Business Owners Should Switch to Virtual Bookkeeping

Virtual Bookkeeping Framingham

Virtual Bookkeeping Framingham | It was inevitable to adopt virtual business conduct earlier this year when we all faced the Covid 19 hardships. Businesses of all sizes and all industries switched to remote working and virtual operations partially at some stage.

Bookkeeping and accounting are some of the core business tasks that businesses have been performing virtually for quite a while now.

As a business owner, you should analyze the cost-benefits of any important business decision not just outsourcing the bookkeeping function.

I have been offering my professional bookkeeping services in Framingham, Massachusetts for many years now. Business owners often ask me about the business benefits of shifting to virtual bookkeeping and accounting services.

Here are my top reasons why business owners should switch to virtual bookkeeping services.

What If The Coronavirus Second Wave Hits Us?

If you think coronavirus is over, give it a second thought. Even with Covid 19 vaccine optimism, it will take us a while to get rid of the deadly disease.

But what if there is a similar second wave of the coronavirus? What if we face a similar health and safety hazard in the future? Will we just wait and react to the situation again?

The costs of tolerating the safety risk and jeopardizing the employees’ health can become unbearable for any business. The health and safety standards that we’re following now will become industry standards sooner than later.

For this reason, more businesses will look for virtual employees and digital work environments that are safer and flexible.

The Cost of Falling Behind the Technology

The trends of remote working and virtual bookkeeping did not start with the current pandemic. The current work-from-home compulsion just boosted the pace and reminded us of the technological shift.

Small businesses in particular would bear the brunt of lagging behind this technological shift. As a result, more businesses are adapting to the virtual bookkeeping Framingham and finance function outsourcing.

Accounting and bookkeeping software development is now backed by artificial intelligence and machine learning. The newer versions of the bookkeeping and accounting software come embedded in advanced business analytics features.

Value Addition for Your Business with a Specialist

In short, the notion of bookkeeping services is limited to the record-keeping functions only. Practically, specialist bookkeeping adds much more value to a business than that.

In other words, compliant and consistent bookkeeping financial record forms the basis of the solid finance function for any business.

Furthermore, a professional bookkeeper will always offer your business unbiased and objective opinions. The correctness of the financial data does not limit to tax reductions and tax avoidance only.

Auditors (and computers) at the IRS are much smarter than that.

Compliance with Taxation Rules

A few months ago, you might have applied for the paycheck protection program (PPP) or the EIDL under the SBA offered schemes. Businesses will incur certain tax implications for these grants.

The loan forgiveness and tax deductions come with certain conditions. This is just one recent example where your business may need a specialist to do the job.

In addition, oayroll taxes, Employee retirement contributions, taxes withheld, and yearly tax compliance are a few tasks that you can outsource to a virtual assistant these days.

It will save your business time and money. You wouldn’t want to end up facing an IRS audit and tax penalty though, would you?

Cost Saving and Work Flexibility

Perhaps these are the most touted benefits of hiring a virtual bookkeeping specialist these days. The claims stand tall with facts though. A full-time bookkeeper costs your business anything between $ 50,000 (on average) annually.

You can hire a virtual bookkeeper on an hourly basis, rather than on an ongoing basis to save you more.

With online access to the business accounting and financial records, virtual bookkeepers can perform their tasks flexibly round the clock.

These are just a few of the broader categories of benefits that your business may harness with a virtual bookkeeper. Moreover, depending on your business industry and size, virtual bookkeeping Framingham services may yield other business advantages to you.

• Professional Bookkeepers bring industry knowledge and specialization with them
• You can focus on your business strategy and core activities
• Prevent your business from financial fraud and theft risks
• Hire the professional within the state of beyond the geographical boundaries
• Develop understanding and efficient workflow with a specialist
• Ultimately reduce business costs and join the industry trends

Learn More

If you have not already, switch to virtual bookkeeping today! Ash CPA offers virtual bookkeeping and accounting to meet the needs of all businesses. Call (617) 462- 6651 or request a consultation online.

What Is Tax Planning and Why It Is Important

Tax Planning

A common notion with tax planning is to minimize the tax liability, in reality, it is a broader aspect of the total financial management. Individuals and businesses alike, need to harmonize tax planning with their financial strategies to reap the best rewards.

In an evolving and ever-changing business market, the role of the CPAs and tax planners has become multi-faceted. For example, tax planning requires a comprehensive financial management approach rather than number crunching and accounting record-keeping.

Off-course that doesn’t mean undermining the importance of financial and accounting records accuracy.

What is Tax Planning?

For individuals and businesses alike, the financial aspect of tax planning remains similar. Compliance with regulatory authorities and minimizing tax liability remains an important objective to achieve.

The rapid evolution of accounting function with embedded technology and matured concepts like virtual accounting services means businesses now expect a broader context of advisory from their tax planners.

The empire of tax planning will build on strong accounting and financial records. Accurate and compliant financial records will lay a strong foundation for the client’s financial strategy.

Moreover, tax compliance regulations don’t change overnight, but the implications often change in different scenarios.

For example, the current pandemic caused recession has compelled regulatory authorities to amend several tax relaxations such as deferral of employee social securities or change in charitable donations.

Here are some key areas that modern tax planners and advisors must address with their clients.

• Advice on Entity Structure and type with tax implications
• Corporate or Income tax liabilities
• Tax credits and deductions
• Backing tax deductions with accounting records
• Managing the tax-brackets for the clients effectively
• Multi-year tax planning with a strategic approach
• Addressing the impacts of choices with Sources of finances, Employee Retirement plan contributions, and investments

Tax Obligation Management

Tax obligation management primarily concerns the identification and payments of all business taxes. Arranging the funds and managing the tax returns timing also play an important role in tax obligation management.

For businesses, tax obligation management will include:

• Managing Business (or self-employed) taxes including Income tax, Sales tax, Employment taxes, Excise taxes, local and state taxes.
• Managing funds for tax payments e.g. on monthly, quarterly, and annual tax obligations
• Filing the federal income tax returns with accurate income tax forms
• Tax relief and deductions with compliance

Importance of Tax Planning

You may need to plan for tax liability minimization, filing the right form, and providing accurate details on Schedule C for the cost of business operations. After all, the main purpose of tax planning is to pay whatever you due to the government (but not more than that) and to stay compliant with regulatory requirements.

In addition, you may seek last-minute advice from your tax planner on the year-end tax-saving tips, but if you plan ahead of time, you’ll make the most out of the resources. Every financial and strategic aspect of the business incurs tax implications.

Also, remember, your personal and business tax liability is directly linked. In a sense, your business tax planning will also affect your personal wealth management and retirement plans.

Here are a few key areas of your personal and business financial management, where effective tax planning may make things easier for you.

Business types and Tax Liability

It will primarily include the entity type and the effects of “pass-through taxes” on your annual tax liability. For example, a C corporation, an LLC, or a Partnership to incorporate as the filing entity.

The question isn’t a straightforward one though. It will also depend on how you plan to fund and operate the business.

Business Expenses and Deductions

Your direct business expenses will get reported on Schedule C to determine the business income. Business accounting records back that filing and the resulting income decides your tax bracket.

However, numerous tax deductions legally can reduce your tax liability burden.

For example:

• Research and Development costs of business
• Investing in green energy
• Asset depreciation and Amortization
• Maximizing the employee retirement contributions
• Business use of home and other personal assets
• Net operating Losses carry over

Cost of Financing and Taxes

You can fund business with either Equity or Debt. Interest paid on loans is tax-deductible, but a higher debt ratio means costly bank loans. The balancing of the financing structure directly implicates the tax management for your business.

Retirement Contribution and Savings

You can start an individual retirement plan such as a simple IRA and start investing in other saving plans to start with. Effective tax planning can bring you more benefits with a wiser retirement plan selection.

Also, you can contribute towards your retirement plan as an employee of your own business. Some retirement plans offer more contributions than simple IRAs or Roth.

For example, with an FSA plan, both you and your business employees can contribute but it comes with a maximum contribution limit.

The HRA for your employees (including yourself) will require only employer contribution without any limit. Let’s talk about it with some other options for your long-term savings and retirement plans.

Learn More

Contact Ash CPA to learn more about tax planning. Every business is different and will need a customized approach. Call (617) 462- 6651 or request a consultation online.

Business Accountants: Tips On How To Streamline Your Business Around COVID-19

Business Accountants

Business Accountants | The unprecedented crisis surrounding the COVID-19 pandemic has really taken a toll on many businesses. Lockdowns and concerns related to public spaces has decreased profits and forced businesses to take a look at their expenses and ways that they can streamline their business to remain profitable.

Let’s look at a few ways that you can streamline your business during the time of COVID-19 so that you can survive and thrive when things get back to normal.

Create Habits

When undergoing streamlining processes, timing is of the essence. So make sure that you and your staff are in the habit of maintaining accounts on a consistent and regular basis. During stressful times like the ongoing COVID-19 pandemic, you may find that updating your financial data gets put on the back burner.

Consistent management is critical for proper streamlined bookkeeping. By establishing time periods dedicated to examining your accounts, you will be able to keep on top of any issues that develop. When you neglect this, missed invoices, miscalculations, and incorrect entries can rapidly accumulate. Fixing these problems can occupy much of your time later on, leading to extreme stress in locating the source of problems that may have occurred months earlier.

Hiring Business Accountants

The one thing your business has in common with every other business is that you must know your numbers. Time spent doing it yourself is often a waste of valuable resources Your books tend to only gather dust and remain unused until tax filing time. Or you may already have business accountants who provide tax preparation and bookkeeping, but only provides financial reports periodically. It does not have to be this way.

Automate Bookkeeping

You need a business accountant who is independent. Also, one that uses modern technology. Every resource needed by your bookkeeper should be available online. Provide your accountant with access that is “view-only” to statements, payroll reports, check copies and other relevant information. This ensures that they can regularly stay informed with your entries without needing you constantly for information.

Remain Informed About Industry Trends

Specialized business accountants can keep you abreast of industry trends that have an impact on your profitability. This helps you avoid paying more annual taxes than you need to. A good accountant should also be aware of changing tax laws. this helps to keep you compliant and avoid unnecessary audits.

The Bottom Line

Even if you are doing your own accounting, it can still help to have a consultation with a business accountant. They can provide advice on handling your daily bookkeeping operations to streamline it, or suggest accounting software that will make your job more efficient. They can also assist you in complying with all regulations associated with your business.

Learn more by scheduling a complimentary consultation with Ash CPA. Call (617) 462-6651. New clients are welcome!

Local Bookkeepers: Get Familiar With Common Bookkeeping Terms

Local Bookkeepers

Local Bookkeepers | It is important to have a firm grasp of common bookkeeping terms and accounting phrases and terms before starting work as a local bookkeeper. In short, local bookkeepers rely upon certain terms and phrases that they use on a daily basis in tracking and recording financial transactions, whether it be income statements, balance sheets, and accounts payable and receivable. The following are terms that you will need to get familiar with as you use them on a daily basis.

Balance Sheet Terms

Below are a number of items that you will want to be familiar with when dealing with balance sheets:

Balance Sheet

This is the main financial statement presenting a current picture of your business financial position at a certain date and time. It is known as a balance sheet because the assets owned by your company need to equal all of the claims against the assets.

Assets

An asset is everything that your business owns so that it can successfully operate, like buildings, land, cash, tools, vehicles, furniture and equipment.

Liabilities

The term liabilities refers to all debt owned by your business, like loans, bonds and unpaid bills.

Equity

This term describes all money invested in your business by the owners. If you have a sole proprietorship, or your company is owned by a small group of people, the equity of the owners is known as a Capital account. For larger businesses, the equity of the owners is in stock shares.

Income Statement Terms

The following are a few terms associated with income statements that you should be familiar with:

Income Statement

This document provides a summary of your financial activity over a certain span of time. It begins with Revenue earned, minus Expenses and Costs of Goods Sold, ending with your bottom line, which is your Net Profit or Loss.

Revenue

Revenue is all of the money that you have gathered when selling your businesses goods and services.

Costs of Goods Sold

This term refers to all expenditures to buy or make the services and products that you are planning to sell to your customers.

Expenses

This term describes all money spent to operate your company that does not involve the sale of goods or services.

Other bookkeeping terms include:

Accounts Payable

In short, accounts Payable refers to all outstanding bills from contractors, vendors, consultants and any other individuals or companies from whom you purchase goods or services.

Accounts Receivable

Used for tracking all customer sales due to store credit.

Depreciation

Used for tracking the use and aging of assets whose value tends to go down with time.

Interest

Interest is the money that your business must pay when borrowing money from a banking institution.

Inventory

Inventory refers to the account tracking all of your products that are being sold to your customers.

Payroll

The way that your business compensates its employees. Payroll management is a critical bookkeeping function, involving reporting many items to the government, such as information related to unemployment taxes or Workmen’s Compensation.

Local Bookkeepers | Learn More

Schedule a call with Ash CPA to learn more about bookkeeping and how it can improve your revenue and profits. Call (617) 462- 6651 or book an appointment online.

 

CPA | Adapting to the “New Normal”

CPA Framingham

It’s no question that COVID-19 has shifted the world in many ways. This includes businesses, small and large. Fortunately, today’s technology has allowed many business owners to readjust their norm and stay afloat. At Ash CPA, we’ve compiled a list of tips you can implement to your business. Learn more below and contact us today.

Virtual Communication

In-person communication can be difficult to have considering health risks. That’s why virtual communication is needed. There are many ways to implement this to your business. Your consumers, new and existing employees can go virtual! See how!

Consumer Interaction

Not all business can go completely virtual but any adaptation is great! For instance, offer video conferences and an online chatbox. Many industries can use these options. Whether you offer a service or product, you can limit contact by thinking outside the box. If you sell a product, schedule video conferences to showcase your product. If you offer a service, create high-quality videos of your service in action. 

The chatbox option is great too! You may have more calls on the line than normal. Having a chatbox allows more consumers to inquire about your product or service. As a result, you may want to consider designating a team to respond to online inquiries, while another set is answering phone calls. Definitely consult with a CPA to see how you should manage your funds to successfully implement these new virtual features.

Recruitment, Onboarding, and Training Process

Your business may be in need of new employees. How do you invite candidates and interview them? Consider marketing your business with high-quality video. Show prospective candidates what it’s like to work for your company. Perhaps, provide testimonials from current workers as well. Should you be interested in a candidate, have a virtual interview. 

Once you’ve selected and hired your new employees, do virtual onboarding and training. This part may vary between businesses. Therefore, it’s important to review how much of the onboarding and training can be done virtually. For example, if your new hire will work 100% virtually, then the onboarding and training process can also be 100% virtual. However, if the new hire will work in-person, you can still minimize contact by virtually converting as much of the onboarding and training process as possible.

Work From Home Transition

Your employees may have been working on-site and now need to work from home. Transitioning to this routine may be challenging. For example, your employees may not have an office space at home or find it difficult to be productive. Ways to overcome this is to discuss what hours work best for each employee. Some may prefer the morning shift, while others prefer evenings. Schedule virtual meetings at the beginning of each shift to assure everyone is accounted for and designate the workload. Meet again during the shift, if possible. Lastly, check on your employees and ask them how can the “work-from-home” situation improve? Their ideas may be helpful!

Learn More

Discover more ways your business can push forward during this unprecedented time by scheduling a consultation with Ash CPA. Our firm has over 20 years of experience assisting businesses of all sizes. Call (617) 462-6651 or book online here.