It’s as predictable as the dawn: A new generation enters the workforce, they shake up the status quo and they push their coworkers outside their comfort zones. Some seasoned workers love the changes; others aren’t quite as thrilled. But somehow, from the Greatest Generation to the Boomers, from Gen X to Millennials, everyone manages to adapt—and most of the time, things end up being better for everyone.
Right now, Gen Z (those born between 1997 and 2012) is that generation, bursting onto the workforce scene with energy, ideas, and ideals. And although the oldest of these digital natives are just hitting their mid-twenties, they’re already affecting the way businesses operate, from flextime to the freedom of freelancing to working remotely.
So … how is Gen Z likely to shift the workforce until the next demographic group comes along? Here are our predictions:
Like their immediate predecessors, the Millennials, Gen Z are agents of change—and by 2025, they’ll make up about 27% of the workforce. Their individuality and their strong convictions about prioritizing purpose and quality of life over material gain can only improve the well-being of everyone in the workplace. Of course, like most change, there will be some push and pull. But in the long run, the generations are more alike than different. We all want happiness, security, appreciation, and fulfillment.
And if we’d bet on anyone to achieve that state of working and being, it’s this generation. Go forth and thrive, Gen Z!
Whew! Your tax return is signed and sent, and Uncle Sam has been paid (or has paid you). So now you can forget about taxes until next year, right?
Well … not quite yet. It’s a good idea to do a quick review each year of how the tax process went for you to see if there’s any wisdom you can tuck into your tax file for the next year. Here are five takeaways that could make next year’s tax time run much smoother—and possibly be even more financially rewarding.
Tax takeaway 1: Pay estimated taxes during the year
If you usually owe money to the government at tax time (and ouch, a large tax payment can be tough to come up with by April 15), consider paying your estimated federal taxes once per quarter, for a total of four payments. You can pay your entire tax bill, or just the portion that your paycheck withholding doesn’t cover. Either way, it will help avoid a nasty surprise come tax time.
Tax takeaway 2: Check your withholding
When taxes aren’t paid by April 15, you could owe the government penalties and interest. When you get a refund check, you’re giving the government an interest-free loan that could increase your paycheck instead. Why not aim for the sweet spot of neither owing nor receiving by adjusting the amount of tax withheld from your pay? Your tax professional can help you determine the right filing status and withholding amount for your situation. Then, you can work with your employer’s human resources department to file a new W-4 form that will adjust your per-pay withholding.
Tax takeaway 3: Seize your retirement savings opportunities
Whether you work for an employer or are self-employed, don’t let April 15 pass without adding to an IRA or your company’s retirement plan. You’ll get a deduction for IRA contributions (or an income exclusion for 401(k) contributions). And bonus, you’ll get a tax credit for making the contributions. If you haven’t done this yet, check with your tax advisor to make sure you have all the details.
Tax takeaway 4: Consider a Health Savings Account (HSA)
Healthcare costs are skyrocketing—and it doesn’t help that a) so many healthcare plans today have a high deductible; and b) most people never qualify for the medical deduction at tax time. If you have a high-deductible health insurance plan, it may pay to look into an HSA. The money accumulates tax-free, and you’re allowed to take tax-free withdrawals for qualified medical expenses. Check with your employer, or with a bank or brokerage in your community, to see if they offer HSAs.
Tax takeaway 5: Keep your tax records up to date all year long
As you go through the coming tax year, make sure you have the records for anything tax-related: receipts, canceled checks, donation acknowledgments, credit card statements, etc. It’s especially important in the following categories:
A minute here to set up a folder and a minute there to file receipts will help you avoid the tax-time scramble.
Summing it all up
If tax time was stressful this year, take some time now to look over this year’s tax return with an eye toward improving your situation next year. You might even want to consider working with a tax professional who can not only help you with your taxes but also minimize your tax obligations and set you on the road toward a more secure financial future.
Filing taxes for 2020 was…challenging. Yes, that’s a good way to put it. Not impossible, but not exactly fun, either. While your 2021 return hopefully won’t be quite as much of a challenge, there are still several unusual factors to be accounted for (e.g., Child Tax Credits and Economic Impact Payments).
However, there are some simple steps you can take now to help make filing those tax returns easier come January.
Gather your tax records
The best tax records are organized tax records. If your records aren’t quite there, now is the perfect time to get them together.
First, be sure to notify the IRS if your address has changed and notify the Social Security Administration of any legal name changes.
Next, you should have any year-end documents you’ve received from the IRS, such as:
Most income is taxable, including unemployment income, state tax refunds, gig economy income and virtual currencies. So, you’ll need the following documentation:
Don’t forget the other “usuals,” such as Form 1098 for mortgage interest you paid, receipts for deductible expenses, and your books and records for any business income and expenses.
Set up your online account
If you haven’t set up an online IRS account yet, do it now (you’ll find links and information at irs.gov/individuals). If you already have an online account, make sure you can still access your account. An online account is important because it allows you to securely:
If you always receive a paper check because you don’t have a financial institution, this is an excellent time to open an account at an FDIC-insured bank or an NCUA-insured credit union. That will enable you to receive your tax refund by direct deposit, which will get to you much faster than a paper check.
If you prefer not to work with a financial institution, you can even get a pay card from your local grocery store or a large retailer like Walmart and have the refund deposited to the card.
Also, check with your tax professional on a couple of important questions that may not make a difference in this year’s return but will give you a jump-start for the 2022 tax year:
In anticipation of a more “normal” tax season, the official tax deadline has reverted to April 15. So, we hope this information will get you started on prompt and easier filing.
If you’d like more information, irs.gov/filing has a library’s worth of information to help you prepare for filing your 2021 tax return. As always, our firm is current on the latest rules and regulations, and we’re available and ready to help. Here’s to a stressless tax season for us all!
In a financial transaction, it’s all about the paper trail.
As a small business owner, whenever you conduct a transaction—even something minor like purchasing a box of pens for your business—the receipt for that transaction and any supporting documentation become what’s known as source documents. Those original documents, in turn, become an essential piece of the paper trail your accountant follows to create accurate tax returns and other types of financial reporting for your business.
If you’d like to understand the importance of a paper trail for a business owner, this quick primer is for you. And if your accountant or bookkeeper’s smile turns the slightest bit strained when you tell them you don’t have documentation for all your transactions, you should definitely start reading. Right now.
Why are source documents so important?
Source documents detail the basic facts of a transaction—amount, date, payee and purpose. Without this information to back up your business transactions, your accountant doesn’t have the full financial picture needed to prove that you earned every bit of your tax refund or qualify for a small business loan. It’s your financial team’s job to be sure anything you report to the government and other institutions is thoroughly backed up by proof—especially in the case of a tax audit when your transaction trails must be impeccably documented.
What kinds of source documents should I be keeping?
Common source documents include:
Proof of both purchases and expenses, such as:
Do I need to store the originals, or can I make digital copies?
It depends. Once the information has been recorded in the appropriate accounting journal (which should be done as soon after the transaction as possible), the source documents should be filed away where they can be easily retrieved if needed. Some accountants prefer to manage the documents for their clients, which can be easily (and digitally) done via the online portal you use to communicate with the firm. That way, your financial team has all the information they need stored securely in the cloud, available at a click. It also ensures they are ready to provide you with more meaningful insights into your business at any time.
If you prefer managing, storing, photocopying or digitizing the originals yourself, you should still check with your accountant or bookkeeper to be sure any copies meet the information and legibility standards of any agencies that may need to see them.
How long do I need to keep all these documents?
Regulations on document retention vary. In general, the IRS recommends saving financial records that are necessary for tax filing and potential audits for up to seven years. Some documents should be saved longer than others, as this IRS schedule shows:
We know we’ve already said this, but your financial team can be your best friend in this very important aspect of owning a business. If you’d like to be sure your source documents are where they need to be, just complete the online contact form or give us a call. We’re here to help!
Owning a business is hard.
And yet many small business owners still try to handle everything themselves. Business planning? Check. Cash flow, revenue analysis, financial projections? Check—and double-check. (And triple-check, just to be sure.)
If you’re an overworked business owner, you might defend your choice by saying:
“Hiring someone for all those functions costs money. I can’t afford that yet.”
Understandable. But what would you say if there was a way to have these functions handled for you? A way to free you up to concentrate on growing your business—and all for an affordable fee?
You may have thought of an accountant as someone you only see at tax time, but a growing number of accounting firms offer other valuable business services. And one of the most useful and in-demand for the small business owner is advisory services.
Think of advisory services as filling the function of a CFO, without the salary and benefits. Just like a CFO, an accounting professional can focus on the bigger picture to help you look to the future—monitoring the short- and long-term financial health of your business and guiding you with strategic business planning and financial projections.
It’s a great compromise for the business owner who prefers to do what they do best—be an entrepreneur and grow their business—instead of toiling over the day-to-day minutiae of running the business.
Your advisor/accountant meets with you regularly to discuss financials and offer insight into your data via reports on budgeting and tax planning/minimization. She or he will also help you track and analyze revenue and profit, general and payroll expenses, credit card fees, cash flow, and industry-specific Key Performance Indicators (KPIs). Because ongoing analysis is critical to the long-term success and sustainability of your business, these regular meetings help keep your business goals on track.
Your advisor/accountant can help you answer a number of important questions, such as:
Down the line, accounting professionals can also offer vital services like payroll and bookkeeping to a growing business, as well as advise you on the accounting software that works best for your situation. Plus, they’re well-versed in business situations that affect different phases of a business’s life—from improving internal controls and creating persuasive financial presentations for loan applications or potential investors to mergers and acquisitions, succession planning, and exit strategies.
If you’d like to free up your time to concentrate on growing your small business, ask us how we can assist you with advisory services that can give you a fresh perspective—and keep you focused firmly on the future.
A money-related trend to watch in 2022 is cryptocurrency. The IRS will be watching it, too, given the new reporting requirements for individuals trading and using cryptocurrency, which the agency has put in place effective January 1, 2023.
The passage of the Infrastructure Investments and Jobs Act (IIJA) shows that the IRS is serious about enforcing, strengthening, and standardizing requirements related to virtual currency. Here are some important tax-related facts to be aware of:
Although there are significant changes related to tax reporting and cryptocurrency, as long as you keep well-documented records of any virtual currency trading, buying, or selling activity and report it on your tax return, you should be in good standing with the IRS. Remember, these new reporting requirements are effective January 1, 2023, giving you ample time to prepare and make necessary adjustments.
Entrepreneurs tend to be cut from the same cloth—specifically in terms of multitasking. Many new business owners take on work from all areas of operation—including product/service development, customer service, sales, marketing…and even accounting. Best guess…you didn’t start your business because you are passionate about balancing the books. This work is time-consuming and complex. So, why not outsource it to a team of professionals so you can get back to the business you love?
There is a sure-fire solution to relieve you of never-ending bookkeeping work—and that solution is outsourced accounting services. Handing over your back-office compliance work is fairly easy and non-disruptive. Many accounting firms offer this service supported by an advanced online platform—which makes data, document, and communication exchange exceptionally easy and convenient.
When you outsource your accounting, you can expect to experience many benefits, including:
Accounting represents a major element in your business. Make sure you have time to focus on other critical operational areas of your business by outsourcing your accounting to a professional firm.
Need more information on the value of outsourcing accounting services?
Contact us today! Simply click Request for proposal and complete the brief form or give us a call. We are here to help.
As we get ready to ring in 2022, we’ve rounded up 22 tax deductions you’ll want to have on your radar as you gather receipts and documents and consider end-of-year tax write-offs.
These expenses are tax-deductible but don’t assume all of them apply to your business. Check the rules for each one at irs.gov or contact our firm for assistance so you can start planning ahead for next year, too.
When it’s a challenge to pay your basic expenses from month to month, it can seem impossible to set aside money for emergencies that may never happen. But you need only look at the effects of the COVID-19 pandemic on the U.S. economy to realize how abruptly things can fall apart.
A December 2020 MagnifyMoney survey found that 43 percent of consumers with an emergency fund needed to tap their funds during the pandemic. That number jumped to 64 percent for those who were laid off or furloughed.
While a pandemic is a once-in-a-century occurrence, any financial emergency has the potential to devastate even the most carefully planned budget. If you’ve put off creating an emergency fund in the past, here are 5 compelling reasons to create one now.
As the pandemic showed, businesses close and jobs disappear without warning. Financial experts previously advised people to have three to six months’ worth of expenses saved to tide them over, but some experts are revising that figure to 12 months, to allow for increasingly longer periods of unemployment.
It only takes one ER trip or an impacted wisdom tooth to create financial havoc, especially if you don’t have health or dental insurance. Even with insurance, you may still have to cover deductible and co-pay costs that exceed what you have in your flexible spending account…if you have one.
Yes, you can use a credit card or a payday loan to cover car repairs, but then you’re saddled with debt that grows larger each month. And even if you have homeowners’ insurance, not everything may be covered—for instance, an old refrigerator that needs to be replaced ASAP.
What if your dog, cat, ferret, etc. has a medical emergency or needs surgery? Even today’s pet insurance policies don’t cover all costs. The emergency vet visit alone can cost several hundred dollars, and depending on the type of surgery, you could end up paying several thousand dollars.
If a family member or friend who lives far away is hospitalized or passes away, you may want/need to be there. Plane or train fare isn’t cheap, and hotel expenses can add up, too.
There are a number of smaller but important, reasons for accessing an emergency fund. A lost cell phone; a dying computer; sick days when you don’t get sick pay; broken eyeglasses; kids’ sports uniforms…every little expense adds up.
That’s why you’ll never make a better money move than starting an emergency fund, and here are some simple ways to kick your savings into gear:
The key is to get started, so you and your loved ones can enjoy the best benefit of all: Peace of mind that you’ll have something to fall back on if the worst happens. If you’d like help achieving that peace of mind, just complete the online contact form or give us a call. We’re here to help!
Scheduling “me time” used to be a luxury for those who could afford it—now it’s a necessity for everyone.
With the constant stress of daily life between work, home and everything in between, it’s gotten harder and harder to find time to focus on ourselves. And it doesn’t help that we seem to constantly be on the go and need to be productive during every waking hour.
That’s why it’s important to schedule time in your day—even if it’s just 15 or 20 minutes—with no distractions, to calm the world inside your mind. Those few minutes can help you feel more grounded and enable you to shut off outside distractions. Calming your mind from outside noise will help you feel better mentally and physically and will help shape how you react to the world around you.
In this article, we dive into why self-care is important and provide tips to help you get started.
“Me time” can sometimes be misconstrued as someone being selfish by putting their needs first. But the last several years have shown us that this is actually something everyone needs to schedule into their busy lives. “Me time” isn’t selfish—it’s a necessity for mental health.
Taking “me time” can help you gain better focus. It’s an opportunity for you to concentrate on you and your needs without worrying about everything else around you. When you take time to focus on relaxing your mind, you’ll be able to get back to the grind with a fresh perspective.
Additionally, you’re giving yourself the chance to recharge your mind and body. You’re focusing on what you need for yourself outside of work, family or any other external factors. It’s taking time to tackle your own to-do list that has nothing to do with anyone else. Things like finally finishing that book, starting that new blog, or jumping on the elliptical machine for 20 minutes—it’s all about you.
Scheduling time for yourself can be hard, but it’s important. It should become a daily habit, just like brushing your teeth or taking a shower. It’s good for your mind and your body, and it’s good for those around you. Here are some ideas to help you start making self-care a part of your daily routine.
We know that it can be hard to take time to focus on yourself, and you may not know exactly where to begin. That’s why we’ve curated these eight tips to help you on your way.
The first step is always the hardest. But remember that scheduling time for yourself is important. Even on airplanes, you’re supposed to put your oxygen mask on before helping others. It works the same way with self-care: You have to take care of yourself first. When the chaos of the world is tumbling down around you, put on that oxygen mask and take a deep breath.