by Blair Butters | Feb 15, 2022 | General Tax and Accounting Information, Payroll, Tax Planning
Payroll is one of the most important functions of your business, but it can be a daunting task to take on as a small business owner. Compliance with regulations, technology upgrades, and the detailed reporting requirements to Federal and state agencies is a lot for one person to perform, which is why many small businesses choose to outsource their payroll-related activities and reporting requirements to a third-party provider. Today, we’re covering four ways outsourcing your payroll can benefit your business. Frees up your time and resources. Payroll requires a lot of time, energy, and attention to detail. As a business owner, your time is better spent on the core tasks of the business rather than compiling hourly and salaried payroll information, calculating withholding deductions, generating reports, preparing checks or check stubs, filing related tax forms, and paying the amounts due. Outsourcing payroll gives you back your time so you can focus on growing your business. Reduces costs. By outsourcing payroll tasks, you can ensure they are managed seamlessly and in the most cost-efficient manner. You do not have to hire an employee to process your payroll and you can spend your time making your business more profitable instead of dealing with the details of payroll processing and reporting. If you’re curious about our payroll rates, please reach out to us and one of our experts will be happy to assist. Lowers risks. Many business owners struggle with complicated and often changing, payroll reporting requirements. At DMA, our team is well-versed and always up-to-date on payroll regulations and compliance mandates. Our goal is to help you avoid penalties for...
by Blair Butters | Dec 14, 2021 | General Tax and Accounting Information
As the year comes to an end, we can look forward to schedules filled with holiday parties, time off to spend with loved ones, and finding ways to circle back on projects in the new year. One project that will be especially important for small business owners is preparing for tax season. Some of the tasks take time but developing good habits regarding your taxes can potentially save you some cash. Many tax planning moves that can help lower your taxes owed may need to be made before the end of the current year. With this in mind, we’ve outlined a few end of year tax tips that you can do to prepare for the tax year ahead. Review deductions, including the home-office deduction. The COVID pandemic caused many to embrace the work-from-home life, and for sole proprietors, single-member LLC business owners, and gig workers, the home office deduction could mean saving hundreds of dollars (or more). If you’re unsure, check with a tax professional to see if you qualify and what information is needed to claim the deduction. Catch up on the previous quarter’s financials and prepare bookkeeping ahead of tax time. You may be able to better plan for the final quarter by taking a look at the first 3 quarters of the year or last year’s fourth quarter. Taking the extra time to update your books before signing off for the holidays will also make the preparations feel easier in the new year and help determine if you need to adjust your fourth quarter 2021 estimated tax payment. For cash basis taxpayers, be proactive with your...
by Blair Butters | Oct 26, 2021 | General Tax and Accounting Information, IRS, Tax Credits, Tax Planning
Now that the filing season for 2020 tax returns is over, it’s time to start thinking about next year’s tax return, which may look different from prior years because of the pandemic relief bills, tax law changes, updates, new rules, and annual inflation adjustments. The earlier you begin, the more you can potentially save, and to get a head start, we’re breaking down key tax changes to help you prepare for April 15. Check out this list of 6 tax changes so you can begin preparing today. Child tax credit For the tax year 2021, the child tax credit will be increased from $2,000 to $3,000 for children over age 5 and under age 18 and to $3,600 for children 5 and under. However, for those with modified adjusted gross income above $75,000 for individuals, $112,500 for heads-of-household, and $150,000 for married filing jointly, the credit is reduced gradually until the credit is $2,000 per dependent. The credit is further reduced for those with modified adjusted gross incomes of $400,000 for married filing jointly and $200,000 for all other filing statuses. The enhancement is that, generally, the credit is fully refundable and now includes children who are 17 years old. The credit is claimed on your tax return like in prior years. Another important change to note is that at least half of the credit is paid in advance with monthly installments that began in July and will end in December 2021. The other half of the credit is claimed on your 2021 tax return. You can opt out of the monthly payments using the tool at the IRS...
by Blair Butters | Sep 29, 2021 | Client Features
In a two-bay garage in 1986, Tom Schoenmann and his wife, Lisa, opened Tom’s Auto Center with the dream of providing quality maintenance and repairs for their neighbor’s vehicles. Soon after, they expanded to the back of a body shop on Terminal Drive before building their 12-bay garage in 2000. In that time, the shop has hired additional technicians and service advisors to keep up with demand. In 2018, Tom partnered with Tom Sumwalt, a technician who worked at the shop for more than 15 years. Tom Sumwalt will be the full owner in the next 5 years, allowing the original Tom and Lisa to enjoy a well-earned retirement. Little Town Feel, Big Time Service Tom’s Auto Center focuses on a “little town feel with big time service,” providing a trusted and reliable shop for the greater McFarland area. Technicians are available for maintenance, repair, and tire installation for automobiles and light trucks. “We’re here for our neighbors and the community really focusing on helping them maintain their vehicles to the level they want, and when they do have a break down, we can efficiently and effectively fix the issues,” said Mr. Sumwalt. “We pride ourselves on our service and taking care of your whole vehicle, and keeping it in the ideal condition for a long time.” Mr. Sumwalt is particularly proud of the Tom’s Auto team because of the way they handle nuances and updates in the automobile industry’s computer technology. Each vehicle, even those of the same make, operate 15-30 computers at a time, with updates coming out consistently. Technicians and service advisors at Tom’s Auto are committed to continued learning so they can provide the most accurate and efficient diagnoses for customers. “We make sure...
by Blair Butters | Aug 20, 2021 | IRS, Tax Planning
A quick tax guide for sole proprietors just starting out Starting a small business is exciting, however, if you’re used to working as a full-time employee, the transition to self-employment can be overwhelming when it comes to keeping track of your taxes. Understanding what the IRS expects from small business owners is a key piece in the success of keeping your business running. In today’s blog, we’ll focus on taxation for sole proprietorships, as this business structure is the simplest and the most common choice for many business owners who are transitioning from employee to self-employed to launch their first small business. A sole proprietorship is an unincorporated business that has just one owner. It is known as a “pass-through entity” for tax purposes because the business income passes through to the business owner, who then reports it on their personal income tax return. We will focus on sole proprietorships reported on Federal Schedule C. Sole proprietors that do farming activities are similar but are reported on Federal Schedule F. Sole proprietors with rental business activities reported on Schedule E will not be covered in today’s blog. As a sole proprietor, you are responsible for paying the following: State and federal income tax Self-employment tax Sales tax, if applicable We’ll dive into each of these items below. State and Federal Income Tax For Wisconsin sole proprietors, business income and expenses are generally reported on Federal Schedule C – Profit or Loss from Business. The revenues and expenses of the business are reported on this schedule with the net profit/loss carried to the first page of Form 1040, your personal...
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