Bookkeeping Best Practices for Entrepreneurs

Bookkeeping is a crucial part of the accounting process that refers to recording a business’s financial transactions in organized financial accounts.  Although you can hire professionals for bookkeeping and tax preparation for entrepreneurs, here are some bookkeeping best practices you must know:

• Keep your personal and business finances separate and avoid using your business funds for personal use.

• Take the help of a professional to choose the right accounting method for your business and let them handle the accounts-related tasks of the business.

• Using good accounting software can also help make bookkeeping hassle-free.  So, take advantage of advanced technology to manage your business’s bookkeeping tasks.

Managing accounting and bookkeeping efficiently is crucial for the success of a small business.  You can reach out to Agro Accounting CPA to hire CPAs who can help manage the bookkeeping, accounting, and tax-related tasks of your business. 

Visit the website, agroaccounting.com, to learn more.

Top Tips to Stay in Control of Your Business Accounts

As an entrepreneur or a freelancer, you might find yourself overwhelmed by the different aspects of managing your company. Unfortunately, bookkeeping, invoicing, and accounting have a poor reputation as being one of the most time-consuming and monotonous parts of running a business. However, with the help of a few tips and an accountant specializing in income tax services for the self-employed, these tedious tasks can become well-managed.

Tips for Staying on Top of Your Business Accounts

1. Get your invoicing down

Invoicing is important for running a business. Ensure that you develop a business that works in the best ways for you. Take time out to evaluate the invoicing system that will be effective for your business.

2. Set up a different business bank account

Separating your business bank account from your personal one is an easy process. By doing this, you will be able to protect your accounts, and it will make it easy to manage the finances of your company.

3. Keep your income and finances up-to-date

It can take some time for business owners and freelancers to input all of their expenses. However, taking this simple step can help you stay away from countless headaches down the road.

4. Follow up with your customers

One of the biggest issues for small business owners is not receiving payments from their customers. For this, gently remind your customers that their payment is still pending.

5. Create a bad debt reserve or allowance

The unfortunate part of running a business is that you might come across a customer(s) who is unwilling to pay for your service/product! In such times, having a backup or a bad debt reserve will disallow this fact of life from having a larger impact on your overall business.

6. Connect with a professional accountant

It is important to get a professional overview of your business accounts. It ensures that they are all balanced and ready for tax reporting. In addition, an accountant can help you with tax preparation for entrepreneurs for you to stay ahead with the accounting, bookkeeping, and invoicing aspects of your business.

Conclusion

With these tips, you will be able to quickly and easily keep track of your business expenses and accounting. Plus, you will have extra time that you can use to focus on the more exciting parts of your business. For professional help, get in touch with Agro Accounting CPA.

How to Compare the Costs of Different Tax Preparation Options

Almost everyone who is making money in the U.S. has to pay taxes. The thing with taxes is they are a little complex to prepare, calculate, and file. Some people do their taxes by themselves, some people use tax preparation software, and others hire professional accountants or income tax services to prepare their taxes. All of these options are fine. However, each has its own pros and cons, and you have to choose the right option for you. For example, if you are a salaried employee who is earning income from a single source, you need to file your taxes using a W-2 form. There is no need to hire an accounting firm. On the other hand, if you are a freelancer who is earning income from multiple sources and needs to prepare a tax return with itemized deductions, it is a good idea to hire a specialized accountant for freelancers to prepare your tax returns. Similarly, some DIY taxpayers with reasonable knowledge of tax laws can easily prepare their taxes using tax preparation software.

Have a look at the cost comparison of tax preparation under all three options:

1. Hiring an Accountant for Tax Preparation

According to Investopedia, the average cost of hiring a Certified Public Accountant (CPA) to prepare and submit a Form 1040 and State tax return with no itemized deductions is $176, while the average fee for an itemized Form 1040 and a State tax return is $273. If you are a self-employed individual and need to hire a CPA to prepare an itemized Form 1040 with a Schedule C and a State tax return form, the average fee increases to $457. So you can expect to pay $146 to $457 for your tax preparation.

2. Using Accounting Software

The cost to prepare taxes using accounting software varies from $0 to $130. Some accounting software are free but provide only basic features. For complex tax preparation, you need a premium version.

3. DIY Tax Preparation

DIY tax preparation is almost free. It only costs you time! The IRS estimates that individuals will need to spend approximately 11 hours preparing their own returns in 2022.

Which option(s) do you prefer? Let us know in the comments section below.

How to Choose a Good CPA for Private Equity Accounting

 

Private equity accounting refers to the accounting operations that ensure the proper record-keeping and financial reporting of private equity firms. Firms, investors, and companies receiving financing must be in compliance with accounting standards issued by the Financial Accounting Standards Board (FASB) and the International Accounting Standards Board (IASB).

The role of a private equity accountant or income taxs services for small businesses is to ensure smooth accounting operations for all the parties concerned. If you are looking for a good private equity accountant, here are four things that you need to keep in mind:

1. Specialization

The first thing you need to look for is the additional certifications of your accountant that show their specialization in private equity accounting and income tax services. A private equity accountant has expertise in investment fund accounting, corporate finance, and investment banking. An expert accountant with additional expertise helps facilitate dynamic decision-making in complex situations.

2. Experience

Experience plays a key role when choosing a private equity accountant. Look for an accountant that has two to five years of experience in private equity accounting. An experienced accountant has gained practical knowledge by working with clients in different industries, which helps them easily manage their financial accounts and cope with the challenges that come with it.

3. Client Base

Ask about the client base of your target private equity accountant. This will give you some idea about the reputation of the accountant. A good accountant has good clients and, above all, a good client retention rate.

4. Reviews

Read the reviews and testimonials of your target accountant. This helps you get an idea of their reputation. You will find that a good accountant usually has positive reviews and good ratings. It is always a good idea to find references from people that you already know.

If you are looking for any assistance with doing private equity accounting and/or taxes, you can contact Agro Accounting CPA to find answers to your queries!

How Agro Accounting CPA Has Simplified Company Income Taxes for Artists

Company income taxes for artists have always been a volatile topic of discussion. Whereas an artist tries to dedicate a considerable amount of time towards honing his/her skills, there is no possible excuse that, in order to do so, their company income taxes have to take a back seat. In such a situation, the ideal thing to do is to reach out to an online CPA platform that can offer accounting services to streamline your finances in the most efficient and stress-free manner. If you find yourself swarmed in a similar circumstance, then it is strongly recommended that you reach out to the official website of Agro Accounting CPA. The following is a list of points to support this emphatic recommendation. Read on in order to get the details. 

• Experience 

The online CPA platform has considerable experience in offering accounting services to artists, freelancers and creative entrepreneurs. This makes the online CPA platform well-versed in various creative industries, so it can provide you with the right accounting professionals to get the job done for you and to streamline your accounting well. 

• Budget-Friendly 

The accredited services offered by the online CPA platform are easy to fit within most people’s budget. You will be very impressed with the services you obtain, and you will find that they are worth every single penny that you spend with Agro Accounting CPA. 

• Easy Accessibility 

Agro Accounting CPA is an online CPA platform, which makes it easy for you to access the services they offer year-round, 24/7. 

Hopefully, all of the points presented in this article will persuade you to reach out to, and connect with, Agro Accounting CPA. Their online CPA platform can present you with a full-fledged tax preparation guide for entrepreneurs, freelance workers and artists. Connect with the official platform at agroaccounting.com in order to become familiar with the full details.

Bookkeeping Suggestions from an Accountant for Freelancers

You have recently been introduced to the world of freelancing and you are bound to commit some silly mistakes at first. The faster you learn, you will see, the better chances you will have at gaining success in your line of business. When you finally come across a large and continuous inflow of cash, it is likely that you will have a tough time keeping track of it! You would then realize how essential it is for you to level up your bookkeeping skills to meet the challenge at par. The following is a short list of cornerstone suggestions from a seasoned accountant for freelancers, to help you streamline your bookkeeping effectively and easily. Read on, as we get into the details: 

• Always have backup 

There always is a risk of losing data in the event of a hardware failure. Make sure that you have a backup of all essential data. 

• Online ledgers 

Offline records can not only be clumsy, but inaccurate as well. It is essential that you make use of various online applications and platforms to help you track your finances in the most reliable and efficient manner. 

Hopefully, the two pointers mentioned in this article will make your professional life a bit easier, as a freelancer. If you ever feel a need for expert support in streamlining your finances and accounting, reach out to Agro Accounting CPA with no hesitation. This is because their online CPA platform has been serving freelancers for nearly a decade. Hence, it can offer you the leverage of working in a new ‘way of work-life’ that you are not quite familiar with. Use the skills of a highly experienced accountant for freelancers to help your business grow. Connect with the official website of Agro Accounting CPA in order to learn more.

Tips to Help Small Businesses with Tax Preparation

The year 2020 can be labeled as a year of major change for the market. There have been many significant changes introduced by the IRS for businesses in order to help them survive the catastrophes of this… centennial year. The tax laws for income taxes for freelance workers and small businesses have been modified to a great extent. In order to save a significant amount of money through tax deductions and reporting them well, suspicion-free, it is important to familiarize yourself with these changes. The following is a list of helpful tips to support small-scale businesses in their tax filing endeavors. Go on and learn more. 

● Stay Organized 

To take good care of your accounting, it is essential that you make the best out of your organization skills. Whereas the market is chaotic in our unprecedented times, the more organized that you are, the more likely it is that you will find a way out of this chaos. 

● Use Accounting Software(s) 

There are multiple softwares available online for you to download your transactions into, so that you can keep a good track of your accounting. 

● Hire a Professional 

Simply put, a professional can guide you in the right manner to help your business grow well.

Sadly, there are many businesses that have succumbed to the economic atrocities brought by the Coronavirus pandemic. Also, there is a large number of businesses that are only hanging by a thread. Framed in this context, it is imperative that you make every effort possible to streamline your finances, such that your business can survive and succeed in these difficult times. It follows, experts strongly recommend that one reach out to an online CPA platform that can offer assistance with filing income taxes for freelance workers and for small businesses. Agro Accounting CPA is one such online CPA platform that can assist you through these tough times. Visit the official website of Agro Accounting CPA in order to get more details.

How to Choose the Right Accountant for Freelance Workers?

Need some help with income taxes for freelance workers? Well, an expert accountant for freelance workers can help. However, choosing one is not an easy task. There are so many accountants out there that you can easily get confused about which one to choose! 

In this blog post, we will look at the four key tips to help you choose the right accountant. 

1. Check Certification 

The first step is to look for a Certified Public Accountant, “CPA.” To become a CPA, one first needs to have a Master’s degree in Accounting. The next step is for one to obtain licensing from the state. A valid license means your CPA has the above mentioned education level, has passed the necessary tests for licensing and has been endorsed by a longstanding CPA - all of which are proof of adequate accounting skills and training. 

2. Expertise 

The next step is to look for expertise. Not all accountants are the same: some are experts in managing taxes for regular employees, some are experts in income tax preparation for creative entrepreneurs, while others are experts in managing the accounts of big firms. If you are looking for an accountant for freelance workers, then look for an accountant who deals with freelancers and has expertise in freelance and/or small business taxes. 

3. Experience 

Industry experience teaches things to a professional that textbooks can’t. Therefore, it is always recommended to look for an experienced accountant. Such a well seasoned accountant knows the income tax laws inside-out and understands how to deal with the IRS on complex issues. 

4. Reputation 

Last but not least, the reputation of an accountant also matters a lot. You can get a good idea of the reputation of an accountant by reading their online reviews on reputed web directories. A strong accountant has positive reviews, good ratings and continuous recommendations from clients. Also, ask your accountant about their client retention rate and for references, if any. 

So, these are our four simple tips to choosing the right accountant.

How Much Income Tax Do Freelancers Have to Pay?

In 2019, 57 million people in the US indulged in freelancing work, and most of them reported earning handsome amounts. Everything is good as a freelancer: no boss, no timing restrictions, no extra expenses, no office, etc. The only thing that can trouble freelancers is income taxes for freelance workers, which sometimes seem unfair. If your net income during the year, as a freelancer, is more than just $400, you are liable to pay tax. So, it can be tough being a freelancer in the US! 

Recently, President Trump issued an executive order guiding the US Department of the Treasury to defer payroll taxes from September 1, 2020, to December 31, 2020. The executive order announced a deferral on the 6.2% employee’s share of Social Security tax, but it does not clearly say anything about self-employed or freelance workers. 

Today, in this blog post, we will discuss how much income tax a freelancer has to pay, typical deduction categories for freelancers and, first of all, discuss, how US tax law sees a freelancer. 

Employed vs. Self-Employed 

There is no such term as “freelancer” existing in the eyes of the law. Workers are primarily divided into two categories: Employed and Self-Employed. 

Employed workers are regularly salaried people employed by an employer. The employer manages taxes for its employees. 

Self-employed workers are those people that are self-employed and work directly for clients. They are their own boss and manage their own taxes, usually by themselves or with the help of a specialized accountant for freelance workers. Freelancers and business owners fall into this category. 

Now, let's find out how much income tax freelancers have to pay. 

Taxes Paid by a Freelancer 

A freelancer has to pay two types of tax: regular income tax and self-employment tax. All workers pay (“regular”) income tax, but freelancers are also liable to pay self-employment tax. Freelancers have to pay 15.3% of self-employment tax, which includes Social Security tax and Medicare tax. To follow, a regularly salaried person who works for an employer is also liable to pay a payroll tax, which is usually shared by both employer and employee. An employee pays a 6.2% Social Security tax and 1.45% Medicare tax, and an equal share is paid by his or her employer. However, as a freelancer is considered both an employee and an employer, a freelancer has to pay both parts. 

Deduction Categories for Freelancers 

Tax laws may seem a little unfair toward freelancers, yet there are many deductions available for them as well, which a regular employee cannot avail. Here are four primary tax deduction categories for freelancers:

Home Office 

If you are working as a freelancer, most probably, you have a home office. The IRS allows you to write off the expenses related to your home office, such as rent and cost of utilities. Nonetheless, it is your responsibility to ensure you are not using home office space or utilities for personal use. Writing off personal expenses may incur penalties. For this reason, it is advisable to hire an accountant for freelance workers while filing your income taxes, to become familiar with specific IRS rules and to avoid making important mistakes. 

Equipment 

If you are purchasing equipment for work purposes, then it is eligible for tax deductions. Such tax benefits are not available to regular employees. 

Education 

The IRS also allows you to write off the education costs incurred in upskilling to meet your business’ requirements. Your continuing education and certification costs are tax-deductible! 

Travel and Meal Expenses 

Lastly for this blog, you can also include business-related food and travel expenses at a rate of 50% in your tax deductions. However, it is strictly advised to separate your personal and business expenses in order to avoid any potential conflict with the IRS. As it is actually quite easy to make mistakes while filing your taxes when freelancing, experts advocate hiring an accountant consultant for freelancers to avoid any surprises.

Advantages to Be Reaped by Creative Entrepreneurs from a CPA Audit

Along with having to determine strategies to enhance your business growth, tax preparation for entrepreneurs is an additional responsibility that, sometimes, can be too overwhelming to handle. However, rather than spending a copious amount of capital to manage your accounting, undergoing an external audit might be a better idea. It will help you review your accounting process and come up with different options to escalate the financial growth of your organization. The following is a list of advantages that can be reaped by creative entrepreneurs from an external audit. Plunge into the details. 

● Validate Financial Data 

If you opt for an external audit, you will receive a CPA’s objective opinion on the financial processes and data of your organization. Let’s face it: it is difficult to have in-depth understanding of accounting peculiarities without relevant educational qualifications. Thus, an external audit can provide you with insight that otherwise might have been practically impossible for you to obtain on your own, and this insight will enable you to get a hold of the accountability and validity of financial information in your business. This could also pave the way for financing opportunities from investors and lenders in the future. 

● Find Errors 

An external audit can pinpoint all significant errors in your existing accounting system, which may be restricting cash flow and possible monetary gains for you. Once you successfully find these errors, make the necessary changes to carry out your production output in the best possible manner. 

If you need an accountant consultant for freelancers and small businesses to look into the financial aspect of your business and to help you manage your accounting more efficiently, then it is strongly recommended you reach out to a qualified professional like the certified public accountants at Agro Accounting CPA. They offer an online CPA platform that will present you with exceptionally well-designed and affordable accounting services. Visit the official website of Agro Accounting CPA in order to learn more.

Save Money and Pay Less Taxes

Most people envy a freelancer's life: it seems unrestricted, commute-free and business attire -free. Also, freelancers get plenty of time to do the things they love. We think there is nothing that bothers them, and that simply isn’t true. There is at least one thing that bothers them: taxes!

During the first year, taxes seem so effortless to the uninitiated freelancer. There is no pressure to make any payment as it’s all presumably done after year-end, in the next spring. It would behoove such freelancer to seek the assistance of a professional who offers tax preparation to entrepreneurs as soon as possible. Let us go through the ways in which a freelancer can save money on taxes.

• Work with a Tax Professional. Freelancers should always have an accountant by their side. Hire one that deals with freelancers and small business owners. Having an accountant that can perform tax preparation for entrepreneurs can seem expensive versus DIY software, but it is an investment that will save you money, time and headaches in the long run. Someone who is not good with numbers and doesn’t want to pay more in taxes than necessary should get the help of such a tax professional.

• Know what you need to Pay and how much. Know the type of taxes you are required to pay along with their amounts. A full-time salaried person would have taxes deducted automatically from their pay-check. On the other hand, if you own a home, are married and have children, and/or you have income-related expenses the way a freelancer does, then you will be able to maximize your deductions and reduce your tax bill greatly.

• Keep Track of your Receipts. Keep email and digital receipts, and make a spreadsheet for each of your expense categories. A freelancer can easily track and provide, when needed, deductions in this manner. If you don’t have time to look after these things, then hire a bookkeeper who will work with your accounting expert in tax preparation for entrepreneurs.

Follow these tips and save your hard-earned money from overpaying on taxes. It would be best to consult with someone who does tax preparation for entrepreneurs in order to make this happen flawlessly.