by Blair Butters | Dec 27, 2022 | General Tax and Accounting Information, Tax Planning
It’s beginning to look a lot like … end-of-year project wrap-ups, holiday gatherings and celebrations, and time off to rest and reset for the new year. Before you log off, there are a few things to do as a small business owner to button up 2022 and prepare for your tax filing. Crossing these items off your list will bring peace of mind and give you more time to focus on those 2023 goals as soon as the ball drops. Here are four things you can do before the end of the year to make tax time less stressful: 1. Update your payroll records or hire out This is the time to verify all employee wages, benefits, and deductions. Be sure to double-check employment tax rates that tend to change annually. You or your payroll specialist should also make sure all paychecks, year-end bonuses, and payments have been recorded. 2. Gather or prepare financial documents for your accountant Year-End Balance Sheet: This statement includes assets, liabilities, and owner’s equity of your business. The Balance Sheet can help you determine if you may want to look at working on collecting receivables or paying down debt in the coming months. Year-End Income Statement: Here, you’ll see the comparison between earnings and spending throughout the year and will determine a company’s net income for the year. The sheet should have a clear list of revenue in one section and a list of expenses and losses in the other. Subtracting the expenses and losses from the revenue will show the net income. The Income Statement results can help you determine where to cut...
by Blair Butters | Dec 5, 2022 | student loans, Tax Planning
President Biden, Vice President Harris, and the U.S. Department of Education developed a three-part plan to help federal student loan borrowers transition back to making regular payments post-pandemic. As a part of this plan, the Administration introduced the Biden-Harris Student Debt Relief Plan in August, which would forgive a certain dollar amount of student loan debt for qualifying borrowers. There have been several updates to the plan since its introduction, which we will share with you today. Currently, the Student Debt Relief Plan has been blocked by multiple lawsuits. The plan is currently blocked pending a ruling in the Supreme Court which will hear oral arguments regarding the plan in February 2023 with a decision expected by June 2023. In the meantime, the Department of Education has extended the pandemic-era pause on federal student loan repayments until 60 days after the Department is permitted to implement the program or the litigation is resolved. If the program is not implemented and the litigation has not been resolved by June 30, 2023, payments will resume 60 days after that. Those who have already submitted applications for the program will receive communication from the Department of Education about whether the application qualifies, if the program is implemented. Until the final ruling is delivered by the courts, applications are closed. If the program is implemented, eligible borrowers that fall below income levels of $125,000 for individuals and $250,000 for married couples or heads of households could receive the following: Up to $20,000 of student debt cancellation for Pell Grant recipients Up to $10,000 of student debt cancellation for most other non-Pell Grant recipients ...
by Blair Butters | Oct 20, 2022 | General Tax and Accounting Information, Tax Planning
As the leaves begin to change and our focus shifts to Q4 goals, now is the perfect time to take a closer look at your business. Performing an end-of-summer business check-up can provide important insights into what you may want to change before the end of the year, or how to prepare for 2023. When reviewing the areas of your business that can determine its overall health, there are a few places you can dig deeper: Gather/Analyze Financial Statements Review your profit and loss statement, income and cash flow statements, and balance sheets so you can gain a better understanding of your company’s financial status. When you review your profit and loss (P&L) statement, you may also want to consider the following: If your business was profitable, determine if you have any needs for new equipment or upgrades, or improvements to property. Purchasing fixed assets and placing them in service prior to year-end may reduce your net income, which may reduce your tax liability. Bonus depreciation and Section 179 depreciation are tax incentives that allow you to claim a larger deprecation deduction in the year when a piece of equipment or certain improvements are placed in service. Talk with your accountant to see if bonus depreciation or Section 179 elective depreciation is available on potential equipment purchases or improvements. To take advantage of this incentive, we recommend speaking with your accountant now. In most years, those decisions could be made later in the year, but with supply chain issues in recent years you will need to make equipment purchase decisions earlier in the year so that your vendors...
by Blair Butters | Aug 29, 2022 | Client Features
When you step into Rejuvenation Spa, expect a retreat for relaxation and total wellness. As an Aveda Lifestyle salon, each treatment offered is held to a high standard using Aveda treatments and products, focusing on the client’s needs. Rejuvenation Spa came to be when long-time stylist Tina Morshauser stepped out from behind the chair and into life as an entrepreneur in 1998 after years of training that began when she was in high school. She purchased Yellowstone Day Spa and operated as the only stylist among a spa and support staff of 7 until her business partner, Gretchen Brown, joined her in 2000. Over the past two years, Morshauser and Brown have expanded the salon, adding an additional location in Sun Prairie, and have a team of 42 between their Madison and Sun Prairie locations. Brown noted that Rejuvenation Spa is a team-based pay salon, which includes a profit share when monthly goals are met. The spa has partnered with Green Circle, which aligns with the spa’s mission to be environmentally conscious in all they do. “Through Green Circle, we can recycle almost all that we use in the process of doing services. We have added a $1.50 environmental service fee to each service in order to help pay for the service,” Brown said. “We recycle ALL plastic, metal color tubes and aluminum foil used in highlighting services, all waxing waste (paper, sticks, etc.), and the hair that is left over after a cut is collected and sent to become oil booms (to soak up oil spills) or made into plastic bins that we use to collect everything that...
by Blair Butters | Jul 22, 2022 | Accounting, General Tax and Accounting Information, Tax Planning
If you keep inventory in stock, it’s important to ensure that it’s accounted for properly. Inventory can affect your company in many ways, impacting cash flow, cost of goods sold, and your profit. Today, we’re diving into two popular inventory accounting methods and the ways you can value your inventory or assets. What is Inventory Accounting Inventory accounting values and accounts for changes in the inventory a company holds during a given period. It determines the value of assets during the three stages of production: raw goods, in-progress goods, and finished goods ready for sale. Each item in stock has a value recorded separately. In manufacturing processes, the value of an item can change depending on the stage of production. The sum total of all inventory item values is recorded as a company asset. The accounting method you choose has a direct impact on the cost of goods sold calculation for the accounting period, and on net income earned. Companies use cost of goods sold (COGS) to determine the direct cost of producing the goods sold without taking overhead costs into account, and generally includes only direct materials and labor costs. To calculate the cost of goods sold, add the beginning inventory and purchases, then deduct the ending inventory from that number in the following way: Cost of goods sold = beginning inventory + purchases – ending inventory. Accounting Methods The method businesses use to cost their inventory directly guides the income and inventory value they report on their financial statements. Two popular methods to compute the cost of goods sold and ending inventory for a period are First...
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