Excelsis Accounting Group – Page 6 – Accounting & Tax Tips Blog – Reno NV

5 Topics Every Business Owner Should Discuss with An Accountant

Your accountant or CPA is a business asset that you should put to good use year-round, not just at tax time. There are several topics beyond taxes that business owners should discuss with their trusted financial professionals. In this article, we cover five of them for you. While the new year is traditionally when business owners think of making financial, strategic, and other business-related plans, any time is the right time to speak to your accountant to discuss the following aspects of your business. You can’t begin the conversation too early, but it could be too late in some cases, so don’t put aside these five essential talking points.

1. Financial Planning

Budget is front of mind for business owners, but other financial issues impact your business, too. Consider a full portfolio review with your accountant to plan your financial future. Some critical topics to cover include strategies to improve cash flow, existing business loans, capital investment, charitable contributions, employee-related expenses like bonuses and health care, retirement planning, and asset management.

2. Company Growth

The goal of all businesses is growth. With growth comes change. As your business objectives shift, your valuation and tax liability often shift, too. Any changes you experience in your business should be conveyed to your accountant or CPA so that they can apprise you of liabilities or status changes. For example, suppose you plan to expand, add additional locations, make significant staffing changes, merge companies, acquire new businesses, or plan to sell your business. In that case, you should set up an appointment with your accountant to develop a logical strategy to address the change.

3. Inventory

If your business sells or resells tangible goods, inventory is vital. Sales tax laws and regulations can be challenging. Many states have rules about nexus (i.e., how much presence a business has in a city or state) related to where businesses warehouse inventory and fulfill orders. Your accountant can assess your order process to verify your restocking and ordering processes to maximize cash flow, ensure unsold inventory is accounted for, and ensure that sales tax is collected everywhere your company has nexus.

4. Risk Management

Do you have a plan in place to protect your business from disruption? Many do not. If that applies to your business, contact your accountant to discuss continuity planning to protect your business. They can provide professional insight regarding how to mitigate risks should a disruption occur. Some topics to address are whether your insurance policies are up to date, if all compliance, security, and privacy standards are met, whether your business has fraud protection in place, and if the existing internal controls protect your business. Given the time and capital small business owners invest in their passion, they must take time to manage any potential risk that could destroy what they worked so hard to create and build.

5. Tax Compliance

Lastly, as a business owner, you always want to be tax compliant. And this doesn’t apply only to federal taxes. It is just as essential to make sure state-imposed taxes are addressed on time. Regulations and tax laws change frequently, so it is vital to have a firm grasp on these. The best way to ensure you do this is to have your accountant guide you. They can inform you of any changes that affect your business and advise you on addressing them. Discuss collecting and filing W2s and 1099s for any contract employees; ensure exemption and resale certifications are collected and stored correctly; comply with online sales and nexus rules; and have an internal review to find any issues that might trigger a sale tax audit.

It helps to think of your business accountant as an extension of your team, an impartial adviser who will assess the risks and rewards associated with your business. They will answer your questions and illuminate unclear topics for you. They may bring up important points you’ve yet to consider, so make that call today and get a meeting on the calendar to discuss these critical points with your accountant. And remember, you can do your part by making sure you keep business and personal finances separate and maintaining complete, organized records.

The Top 3 Reasons to Outsource Your Accounting

While you may think it’s better to take care of your small business accounting tasks in-house, you may be surprised to know that your business can benefit from having a professional accountant or CPA handle the job for you. Here are the top three reasons to outsource your accounting.

1. Peace of Mind

The number one reason for outsourcing your accounting is the peace of mind you will get regarding managing your accounting records. A qualified accountant or CPA on your team allows you to gain access to their professional knowledge and experience. Further, you can even choose an accountant that specializes in your unique business needs. A professional can help you keep your business records accurate and up-to-date. For example, payroll and tax documents will be maintained appropriately and submitted promptly. Timely and accurate accounting reduces your risk of penalties resulting from inaccurate record-keeping or lack of knowledge regarding aspects of accounting like tax laws and deadlines.

2. Focus on Business Development

When you enlist the services of a qualified accountant or CPA to manage your small business accounting needs, you minimize the time that you or your senior staff must spend performing or micromanaging those tasks. Freeing up your time in those areas enhances your ability to maintain a keen focus on the day-to-day tasks your business faces and any additional business needs that arise. Being able to focus your time on managing and growing your business, you improve operational efficiency. As you develop strategic goals, you can convey those to your outsourced accountant to garner their professional guidance and support when executing and realizing those goals.

3. Save Money

Many small business owners feel that handling accounting tasks in-house is more cost-effective because they can utilize existing staff. However, consider the total cost involved in hiring or training a staff member to manage your business’s accounting needs. There is also the associated time expenditure related to supervising an employee who manages the accounting. For a dedicated in-house staff member to handle the task, you must consider the additional costs of payroll, payroll taxes, and employee benefits. There is also employee turnover to consider, which, if high, could lead to additional training and expenses. By not electing to have a full-time dedicated employee handle accounting in-house, you also save on space and technology required to accommodate that individual.

For these reasons – and more such as getting timely financial advice, understanding cash flow, and maximizing your tax savings opportunities – it’s time to outsource your business’s accounting needs. What you gain far outweighs the cost.

Contact our firm to find out how we can create a package of accounting services for your small business.

Let us know how our CPAs and business consultants can help your business navigate challenges and become more profitable. Contact us to request a consultation, or give us a call today at 775-332-4201 and ask for Mark Bailey for more information.

Storing Your Tax Records

Once you’ve filed your tax return, you may be tempted to clean house and get rid of some of your old records that are taking up space. The guidelines that follow will help you decide which items can go and which should stay in your files.¹

Income and Expenses

Keep for at least three years after the date you file your return (or its due date, if later) the records proving your income and expenses, such as:

Form(s) W-2
Form(s) 1099
Form(s) K-1
Bank and brokerage statements
Canceled checks or other proof of payment

Three years is generally considered a minimum. If you can, consider keeping these items six years, the IRS’s time limit for auditing a return when income is substantially understated and no fraud exists.

Investments

You’ll need your investment records to figure your gains and losses when you sell the investments. After you’ve sold an investment, continue to retain your records for as long as you keep the other items supporting the tax return on which you report the sale (three or six years). Investment records include statements showing when you purchased the investment, the purchase price, brokerage commissions, and any reinvested dividends.

Residence Purchases and Improvements

Hold on to closing statements and other paperwork related to the purchase of your principal residence for use when you eventually sell the home. Put records of any home improvements you’ve made in the file, too. While many homeowners won’t have a taxable gain when they sell their homes because of the $250,000 ($500,000 for married couples) exemption, special circumstances, such as renting out your home or having a home office, could result in a taxable profit.

Your Tax Returns

Maintain one or more permanent files with important personal documents, including your tax returns. If you don’t file a return, the IRS can assess tax at any time. You’ll need a copy of your return in case the IRS has no record of your filing.

¹This communication is not intended to be tax advice and should not be treated as such. Each individual’s tax situation is diferent. Contact your tax professional to discuss your personal situation.

Our team of tax planning and income tax preparation professionals can help you save on taxes. Contact us to request a consultation, or give us a call today at 775-332-4201 and ask for Mark Bailey for more information.

What is the Employee Retention Tax Credit (ERTC)?

Eligible employers are entitled to an Employee Retention Tax Credit (ERTC) of up to 70 percent of the first $10,000 in wages and certain health care plan expenses paid per employee for each of the first two quarters of 2021 according to the New Stimulus Act.

What is the Employee Retention Tax Credit (ERTC)?

Designed to incentivize businesses to keep employees on the payroll during the pandemic, the ERTC is a fully-refundable tax credit that is part of the federal government’s COVID-19 relief plan. As part of this plan, the New Stimulus Act includes the Taxpayer Certainty and Disaster Tax Relief Act of 2020, which became effective January 1, 2021. This Act amends and extends the former ERTC and the availability of advance payments of the tax credits under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

Is My Company Eligible for the ERTC?

Previously, employers could only take advantage of the Paycheck Protection Program (PPP) OR the ERTC, so the ERTC was not widely used. However, Congress revised this provision to make both plans available to qualifying businesses.

As of December 2020, small businesses (with 500 or fewer employees) that suffered a revenue reduction in 2020 can claim the ERTC. A revenue reduction specifically means a business experienced a decline in gross receipts by more than 20 percent in any quarter of 2020 compared to the same quarter in 2019. (Note this is a change from the previous ERTC rule that required a gross receipts decline of at least 50 percent.)

Further, the tax credit applies to employers, including tax-exempt organizations, that conducted business during 2020 and were forced to fully or partially suspend operation during any quarter due to government orders related to COVID-19, according to the Internal Revenue Service (IRS).

How is the Maximum Amount of ERTC Determined?

As mentioned, under the New Stimulus Act, eligible employers are entitled to a tax credit equal to 70 percent of the first $10,000 in wages and qualifying health plan expenses paid per employee for each of the first two quarters of 2021 (up to $14,000).

Note that the combined maximum $14,000 credit for the first two quarters of 2021 is available even if the employer previously received the $5,000 maximum credit for wages paid in 2020.

In addition to the aforementioned changes to the ERTC, the wage period has been extended. Under the New Stimulus Act, qualified wages are those paid after March 12, 2020 up until July 1, 2021. The previous cutoff date was January 1, 2021.

What are Qualified Wages?

Qualified wages are wages, compensation, and qualified health plan expenses paid by an eligible employer after March 12, 2020 and before July 1, 2021 for time that the employee did not provide services due to a full or partial COVID-19-related government suspension of operations OR a 20 percent or greater decline in gross receipts.

For specific determinants, see sections 3121(a) and 3231(e) of the Internal Revenue Code.

The determination of qualified health plan expenses is the same as qualified health plan expenses for the Family and Medical Leave Tax Credit under the Families First Coronavirus Response Act.

Number of Employees Matters

Under the CARES Act, companies with 100 or fewer employees were eligible for the ERTC; however, under the New Stimulus Act, the threshold increased to 500 employees. In other words, for the first two quarters of 2021, a company with 500 or fewer employees is eligible for the ERTC. This is true whether those employees are working or not.

Other Notable Changes to the ERTC

Previously, governmental entities were not eligible for the ERTC under the CARES Act; however, under the New Stimulus Act this tax credit is available to state or local run colleges, universities, and organizations providing medical or hospital care.
While the New Stimulus Act allows businesses with a PPP loan to qualify for the ERTC, the tax credit may not be claimed on wages paid with the PPP loan that has been or will be forgiven.

As always, seek counsel from your trusted accountant, tax preparer, or CPA to be certain your business is in compliance with current laws related to the ERTC or any tax matter.

How Do You Add Users in QuickBooks Online?

If you have one or more people besides yourself using QuickBooks Online, you’ll need to know how to set up their accounts.

Your QuickBooks Online file contains a great deal of very sensitive information, like customers’ credit card numbers and employees’ Social Security numbers – data you don’t want to have fall into the wrong hands. You obviously trust your employees or you wouldn’t have hired them, but when it comes to security, you should implement all the safeguards you can.

QuickBooks Online can help you stay safe by limiting the access that other users have to your company file. Here’s how it works.

To get started, click the gear icon in the upper right and select Manage users. You should be listed there, of course, as the Master Administrator. Click Add user. The screen that opens will ask you what type of user you’re adding. There are four of them:

Standard user. You can assign full or limited access to standard users, but they won’t have administrator privileges.
Company admin. At this level, the user can see and do everything.
Reports only. These individuals have access to all reports except those that contain payroll or contact information.
Time tracking only. You’d assign this type to employees who only need to enter their own timesheets.

The first two count toward your user limit, but the second two do not. Make your selection and click Next. We’ll select standard user for this example.

On the screen that opens, you’ll be assigning actual access rights, telling QuickBooks Online what the user’s restrictions are. You can choose All (with or without payroll access), None (allows some activities), or Limited. Select Limited, then click in the box in front of Customer to create a check mark. You’ll see the list of specific actions that that individual can take (like creating invoices, sales receipts, and statements) and the screens that they can see (customer registers and reports, tax rates and agency settings, etc.).

There’s also a list of what they can’t do, including printing checks, viewing bank registers, and preparing a sales tax return.

Click in the box in front of Customer again to uncheck it and select Vendor. You’ll see a similar list here of what your new user can and can’t do, only its activities relate to your accounts payable.

Click Next If the user will be entering his own her own timesheets in QuickBooks Online, click the button in front of Yes, then select the correct name from the drop-down list. Click Next. Answer the user settings questions on the next screen and click Next. Enter the user’s name and email address (user ID), then click Save. QuickBooks Online will return you to the Manage Users screen, where you’ll see that your new user has been added to the list. The individual you just invited will receive an email invitation to set up an account, with instructions on how to do so.

Other Security Tips

There are other ways you can keep all of your company’s data safe. Here are some suggestions to consider if your business has returned to its offices.

Always update your operating system and applications when prompted. These often contain security patches in addition to bug fixes and new features.
Keep backups out of reach of others. Cloud backups are best, but if you use a local device, don’t leave it out in the open.
Log out of QuickBooks Online when you’re not at your desk.
Shred anything you print from QuickBooks Online or store it in a locked drawer.
Protect your networks. Discourage excessive web browsing by employees. Don’t allow extraneous app downloading on company equipment and ask employees not to use company mobile devices on public networks. Consider network monitoring software if you can’t afford managed IT.

We follow security best practices in our own offices, and we hope you’ll do the same. Applying safeguards proactively will help prevent data theft that can be nearly impossible to recover from.

Intuit employs industry-standard security practices to keep your data safe, too, and it handles all backup and upgrades. Often, those updates include new features, like the recent addition of transaction “tags.” Let us know if you need our help with these or with any other element of QuickBooks Online.

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Are you taking on a new employee who will use QuickBooks Online? The site has a specialized setup process for this.

Did you know that you can create and use tags now in QuickBooks Online? We can show you how it’s done.

Are you concerned about the security of your QuickBooks data? Ask us how you can best protect it.

Are you considering using QuickBooks Online in 2021? We’d be happy to help you set it up for your business and learn to use it.

Employee Retention Tax Credit (ERTC)

What is the Employee Retention Tax Credit (ERTC)?

Is My Company Eligible for the ERTC?

How is the Maximum Amount of ERTC Determined?

Note that the combined maximum $14,000 credit for the first two quarters of 2021 is available even if the employer previously received the $5,000 maximum credit for wages paid in 2020.

What are Qualified Wages?

For specific determinants, see sections 3121(a) and 3231(e) of the Internal Revenue Code.

The determination of qualified health plan expenses is the same as qualified health plan expenses for the Family and Medical Leave Tax Credit under the Families First Coronavirus Response Act.

Number of Employees Matters

Other Notable Changes to the ERTC

Previously, governmental entities were not eligible for the ERTC under the CARES Act; however, under the New Stimulus Act this tax credit is available to state or local run colleges, universities, and organizations providing medical or hospital care.
While the New Stimulus Act allows businesses with a PPP loan to qualify for the ERTC, the tax credit may not be claimed on wages paid with the PPP loan that has been or will be forgiven.

As always, seek counsel from your trusted accountant, tax preparer, or CPA to be certain your business is in compliance with current laws related to the ERTC or any tax matter.

PPP Loan Forgiveness in 2021

REFRESHER: What is the Paycheck Protection Program?

The Paycheck Protection Program (PPP) is a Small Business Association (SBA)-backed loan to help businesses retain employees during the Coronavirus (COVID-19) pandemic enacted under the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Funds can be used for payroll expenses and benefits and some non-payroll related expenses such as mortgage interest, rent, and utilities.

There are first and second-draw PPP loans. First-draw loans are available for first-time applicants, and second-draw loans are for businesses who already took advantage of a first-draw PPP loan.

PPP Loan Forgiveness

PPP loans can be forgiven if the following criteria are met:

employee retention and compensation rates must be maintained
loan funds must be spent according to the loan terms
no less than 60 percent of loan funds are spent on payroll

When Congress passed the new spending bill at the end of 2020, the covered period for PPP loans was extended through March 31, 2021. With this extension, the SBA released new guidance for these loans and loan forgiveness.

Expanded PPP Loan Forgiveness

Eligible Forgivable Non-Payroll Expenses

Under these new guidelines, the number of eligible “forgivable” non-payroll expenses were expanded to cover payments for:

software and cloud computing services
property damage costs related to vandalism or looting not covered by insurance
supplier costs for contracted goods (including perishable goods) ordered before taking out the loan
expenses related to compliance with federal, state, or local health and safety guidelines related to the pandemic from March 1, 2020, until the national emergency declaration expiration

Covered Period for Forgiveness

The covered period for PPP loans is when a recipient can spend the funds and still qualify for loan forgiveness. The covered period was either eight or 24 weeks; however, recipients can choose when the covered period ends under the new guidelines. They can choose a date between 8 and 24 weeks after their loan origination date.

Simplified Loan Forgiveness Application

For loans under $150,000, a simplified forgiveness application is available. For borrowers who submit a signed certification under one page in length to the lender, loans are forgiven in full. The certification must include:

the total loan amount
an estimate of the total loan amount spent on payroll costs
the number of employees the employer retained as a result of receiving their PPP loan

Applying for PPP Loan Forgiveness

Borrowers must wait until all PPP loan funds are used before applying for forgiveness. Forgiveness can be applied up to the maturity date of the loan. Forgiveness must be applied for within ten months after the last day of the covered period of the loan, or payments will no longer be deferred, and borrowers must begin repayment of the loan.

The appropriate loan form with all documentation for payroll and non-payroll expenses along with the forgiveness documentation should be submitted to the borrower’s lender to start the forgiveness process.

Excelsis Accounting Group is here to help you successfully navigate the unprecedented economic challenges you face, and get your business back to business as quickly as possible. We provide assistance with finding the right program(s) for your unique set of circumstances, filing necessary forms and documentation, and providing sound financial advice at a time when you need it most. Contact us today at 775-332-4201 or fill out our simple form to get started right away.

Keeping Up With Your IRA: Tax Season Checklist

If you’re one of the millions of American households who owns either a traditional individual retirement account (IRA) or a Roth IRA, then the onset of tax season should serve as a reminder to review your retirement savings strategies and make any changes that will enhance your prospects for long-term financial security. It’s also a good time to start an IRA if you don’t already have one. The IRS allows you to contribute to an IRA up to April 15, 2021, for the 2020 tax year.

This checklist will provide you with information to help you make informed decisions and implement a long-term retirement income strategy.

Which Account: Roth IRA or Traditional IRA?

There are two types of IRAs available: the traditional IRA and the Roth IRA. The primary difference between them is the tax treatment of contributions and distributions (withdrawals). Traditional IRAs may allow a tax deduction based on the amount of a contribution, depending on your income level. Any account earnings compound on a tax-deferred basis, and distributions are taxable at the time of withdrawal at then-current income tax rates. Roth IRAs do not allow a deduction for contributions, but account earnings and qualified withdrawals are tax free.¹

In choosing between a traditional and a Roth IRA, you should weigh the immediate tax benefits of a tax deduction this year against the benefits of tax-deferred or tax-free distributions in retirement.

If you need the immediate deduction this year — and if you qualify for it — then you may wish to opt for a traditional IRA. If you don’t qualify for the deduction, then it’s almost certainly a better idea to fund a Roth IRA.

Case in point: Your ability to deduct traditional IRA contributions may be limited not only by income, but by your participation in an employer-sponsored retirement plan. (See callout box below.) If that’s the case, a Roth IRA is likely to be the better solution.

On the other hand, if you expect your tax bracket to drop significantly after retirement, you may be better off with a traditional IRA if you qualify for the deduction. You could claim an immediate deduction now and pay taxes at the lower rate later. Nonetheless, if your anticipated holding period is long, a Roth IRA might still make more sense. That’s because a prolonged period of tax-free compounded earnings could more than make up for the lack of a deduction.

Traditional IRA Deductible Contribution Phase-Outs

Your ability to deduct contributions to a traditional IRA is affected by whether you are covered by a workplace retirement plan.

If you are covered by a retirement plan at work, your deduction for contributions to a traditional IRA will be reduced (phased out) if your modified adjusted gross income (MAGI) is:

Between $104,000 and $124,000 for a married couple filing a joint return for the 2020 tax year.
Between $65,000 and $75,000 for a single individual or head of household for the 2020 tax year.

If you are not covered by a retirement plan at work but your spouse is covered, your 2020 deduction for contributions to a traditional IRA will be reduced if your MAGI is between $196,000 and $206,000.

If your MAGI is higher than the phase-out ceilings listed above for your filing status, you cannot claim the deduction.

Roth IRA Contribution Phase-Outs

Your ability to contribute to a Roth IRA is affected by your MAGI. Contributions to a Roth IRA will be phased out if your MAGI is:

Between $196,000 and $206,000 for a married couple filing a joint return for the 2020 tax year.
Between $124,000 and $139,000 for a single individual or head of household for the 2020 tax year.

If your MAGI is higher than the phase-out ceilings listed above for your filing status, you cannot make a contribution.

Should You Convert to Roth?

The IRS allows you to convert — or change the designation of — a traditional IRA to a Roth IRA, regardless of your income level. As part of the conversion, you must pay taxes on any investment growth in — and on the amount of any deductible contributions previously made to — the traditional IRA. The withdrawal from your traditional IRA will not affect your eligibility for a Roth IRA or trigger the 10% additional federal tax normally imposed on early withdrawals.

The decision to convert or not ultimately depends on your timing and tax status. If you are near retirement and find yourself in the top income tax bracket this year, now may not be the time to convert. On the other hand, if your income is unusually low and you still have many years to retirement, you may want to convert.

Maximize Contributions

If possible, try to contribute the maximum amount allowed by the IRS: $6,000 per individual, plus an additional $1,000 annually for those age 50 and older for the 2020 tax year. Those limits are per individual, not per IRA.

Of course, not everyone can afford to contribute the maximum to an IRA, especially if they’re also contributing to an employer-sponsored retirement plan. If your workplace retirement plan offers an employer’s matching contribution, that additional money may be more valuable than the amount of your deduction. As a result, it might make sense to maximize plan contributions first and then try to maximize IRA contributions.

Review Distribution Strategies

If you’re ready to start making withdrawals from an IRA, you’ll need to choose the distribution strategy to use: a lump-sum distribution or periodic distributions. If you are at least age 72 and own a traditional IRA, you may need to take required minimum distributions every year, according to IRS rules. This age was increased from 70½, effective January 1, 2020. Account holders who turned 70½ before that date are subject to the old rules.

Don’t forget that your distribution strategy may have significant tax-time implications if you own a traditional IRA, because taxes will be due at the time of withdrawal. As a result, taking a lump-sum distribution will result in a much heftier tax bill this year than taking a minimum distribution.

The April filing deadline is never that far away, so don’t hesitate to use the remaining time to shore up the IRA strategies you’ll rely on to live comfortably in retirement.

¹Early withdrawals (before age 59½) from a traditional IRA may be subject to a 10% additional federal tax. Nonqualified withdrawals from a Roth IRA may be subject to ordinary income tax as well as the 10% additional tax.

5 Resolutions QuickBooks Online Users Should Make for 2021

New year, new challenges, and the potential for new successes. Here are five ways you can improve your financial management in 2021.

A painful year is drawing to a close. We’ll still be dealing with COVID-19 and a struggling economy in early 2021, but there’s hope on the horizon. There’s a lot you can’t control about the difficulties facing our country, but you can take control of your corner of it, especially in terms of how you manage your finances.

If you’re already using QuickBooks Online, you know how it’s solved the paperwork confusion of the past. But are you taking advantage of all of its capabilities? As you turn your digital calendar to January, consider expanding your use of the website to set yourself up for success in the new year. Here are five features to explore if you haven’t already.

Practice Proactive Reconciliation

QuickBooks Online’s Banking screen display registers for the bank and credit card transactions that have been posted by your banks. Do you review these frequently? It’s easy, and it’s important. It will save time when you do your monthly reconciliations with your bank statements. Hover over Transactions in the toolbar and select Banking. You can see some of your transaction management options in the image below.

When your statement comes and you’re ready to reconcile, you can use QuickBooks Online’s tools that take you step by step through the process. Hover over Accounting in the toolbar and select Reconcile. Let us know if you need help with reconciliation or with managing downloaded transactions.

Start Accepting Online Payments

This is probably the #1 way to encourage customers to pay you faster. When you set up a merchant account through QuickBooks Payments, you’re be able to accept credit cards, debit cards, and ACH bank transfers. Your invoices will include a Pay Now button and will contain the information your customers need to pay electronically. Their funds will go into your bank account.

There are other ways they can pay you directly. You can take their card numbers over the phone. You can also get a free card reader from Intuit and swipe their cards on your mobile device. And you can set up recurring payments that will occur automatically. There are no base fees – you just pay per transaction.

Set Weekly and Monthly Report Schedules

You may just run reports in QuickBooks Online as you need them. Some reports, though, should be created every week at a minimum, like Accounts receivable aging (detail or summary), Accounts Payable Aging, Open invoices, and Unpaid Bills. There are many others, but you need to keep a close watch on what you owe and who owes you.

It’s important to run some other reports on a monthly (or, sometimes, quarterly) basis, including Balance Sheet, Profit and Loss, and Statement of Cash Flows. Rather than just providing snapshots of where you stand with money coming in and going out, they give you a more comprehensive view of your finances that can help you make better business decisions. They’re complex and often difficult to analyze, though, which is why QuickBooks Online categorizes them as For my accountant. We can create and interpret these for you.

Expand QuickBooks Online’s Features by Using Apps

QuickBooks Online is generic enough that it can be used by a wide variety of small businesses. But that flexibility may mean that it’s not quite robust enough in one area or another, like inventory management or time tracking. There are hundreds of apps that you can integrate with QuickBooks Online to fill in the gaps. Some are free. Click on Apps in the toolbar. Again, we’re available to help if you need assistance.

Evaluate the Cost-effectiveness of Your Vendors

It’s easy to stick with the same old suppliers because it’s a hassle to change. But so many companies are hurting because of the pandemic that you may find you can get what you need for less. To go over your whole list, hover over Expenses in the toolbar and click on Vendors. You might clean up your list while you’re at it. Click the down arrow at the end of each row and select Make inactive if you haven’t ordered from specific suppliers over the last year.

As we said earlier, we’re available to meet with you and explain any of the concepts discussed here in more depth. It’s still a hard time for so many small businesses, and we want to be of help wherever we can.

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Don’t have a budget set for your business? QuickBooks Online has tools that can simplify the process of creating one.

When you’re creating a budget, it’s helpful to distinguish between essential and non-essential expenses. QuickBooks Online has tools that can help you, including budgeting for necessities first.

When was the last time you shopped for new suppliers? Now is a good time to see if you could save some money and help with your budget. QuickBooks Online has many tools that can help both you and your business budget.

Did you know QuickBooks Online allows you to use existing income and expense data to create a budget? Here is how this is done.

Request a consultation through our website now or call us at 775-332-4201 to discuss your business valuation needs.

Are Opportunity Zones an Opportunity for You?

Created by the TCJA in 2017, opportunity zones are designed to help economically distressed areas by encouraging investments. This article contains an introduction to the complex details of how these zones work.

The IRS describes an opportunity zone as “an economically-distressed community where new investments, under certain conditions, may be eligible for preferential tax treatment.” How does a community become an opportunity zone? Localities qualify as opportunity zones when they’ve been nominated by their states. Then, the Secretary of the U.S. Treasury certifies the nomination. The Treasury Secretary delegates authority to the IRS.

The Tax Cuts and Jobs Act added opportunity zones to the tax code. The IRS says opportunity zones are new, although there have been other provisions in the past to help communities in need with tax incentives to spur business.

The new wrinkle is how opportunity zones are designed to stimulate economic development via tax benefits for investors.

A Qualified Opportunity Fund is an investment vehicle set up as a partnership or corporation for investing in eligible property located in a qualified opportunity zone. A limited liability company that chooses to be treated either as a partnership or corporation for federal tax purposes can organize as a QOF.
Investors can defer taxes on any prior gains invested in a QOF until whichever is earlier: the date the QOF investment is sold or exchanged or Dec. 31, 2026.
If the QOF investment is held longer than five years, there is a 10 percent exclusion of the deferred gain.
If the QOF investment is held for more than seven years, there is a 15 percent exclusion of the deferred gain.
If the QOF investment is held for at least 10 years, the investor is eligible for an increase in basis on the investment equal to its fair market value on the date that the QOF investment is sold or exchanged.
You don’t have to live, work or have a business in an opportunity zone to get the tax benefits. But you do need to invest a recognized gain in a QOF and elect to defer the tax on that gain.
To become a QOF, an eligible corporation or partnership self-certifies by filing Form 8996, Qualified Opportunity Fund, with its federal income tax return.

The first set of opportunity zones covers parts of 18 states and was designated on April 9, 2018. Since then, there have been opportunity zones added to parts of all 50 states, the District of Columbia and five U.S. territories. More details are available on the U.S. Treasury website. Or see the IRS website for more information.