The Role of Accounting in Business and Why It is Important

The term accounting is common and is most heard during tax season. Before we get started on the importance of accounting, let us understand what it is.

What is Accounting?

Accounting comprises systematic and detailed records of the financial transactions of a business. There are several kinds of accounting, from the accounting of small businesses to the accounting of big corporations. This brief introduction now made, let us look into its importance.

What is the Importance of Accounting?

Accounting plays a crucial role in running a business. It helps businesses track their finances, allowing them to know where their money is going. The financial statements generated by your records offer the following:

- The income statement helps you to analyze the profit and loss of your business.

- With the help of a balance sheet, you get a clear picture of the financial position of your business on a particular date(s).

Keep your financial statements clean and up-to-date if you want your business to stay afloat. For professional help with maintaining this, you can find an accountant for the self-employed.

With professional services, you will be able to stay ahead financially, as they will help you in the following ways:

1. Income tax services for the self-employed can help you evaluate your business's performance.

2. Professionals can help you to create a budget and plan out future projections.

3. With the help of experts, you will be able to file your tax returns with accuracy.

4. You will get help with preparing and maintaining important financial reports.

5. A professional will be able to offer you the latest tax updates.

Conclusion

Accounting is a lot more than just “crunching numbers.” If you are looking to become prosperous in your business, then get in touch with Agro Accounting CPA to receive help with income tax services for businesses.

Taxes for Freelancers: All That You Need to Know

Freelancers are self-employed people who, basically, take up projects for various clients from the comfort of their home.  There are freelancers in various fields, including marketing, software design, social media handling, etc.  It becomes challenging for freelancers to take care of their finances and taxes on their own.  Furthermore, they barely have the time to collect financial data and to maintain a record of their expenses.  Consequently, freelancers can rely on an accountant for freelancers.

An accountant will be able to help a freelancer (like you!) in the most effective way. Not only will you get help with your bookkeeping and maintenance of financial records, but you will be able to get ahead of:

- Tax filing due dates

- New tax rules

- Filing an income tax return using the right forms

An accountant for freelancers will be able to help you. For professional help, you can rely on Agro Accounting CPA and get top-rated assistance.

All About the Airbnb 14-Day Tax Rule

If you are thinking about renting out your property and making some extra money but are worried it will cost you more than you will earn, then it is time to discuss taxes. No matter what is stopping you from renting out your property on Airbnb, there is a tax loophole that you need to know about.

The special 14-day rule will allow you the opportunity to not file taxes for your rental property. With this source of information in mind, you might not even need to report the income that you are making on Airbnb. This is the least you should know about Airbnb tax preparation and reporting.

Overview of the 14-Day Tax Rule

Tax rules are full of exceptions. But this exception is something you can refer to as a magical exception. To be precise, under this rule, you will not have to pay taxes on your income from short-term rentals. For this, you will have to meet a few conditions:

- You use the property as your residence for at least 14 days of the year

- You rent out the property for fewer than 15 days a year

There is also a drawback if you use this 14-day tax rule. It follows: if you happen to use this tax loophole, you will not be able to report or mention the expenses from renting out your place either. As such, you will not be able to reduce your taxable income in case of a rental loss.

This 14-day rule won't be applicable to someone who has a spare property and uses it as a rental regularly, but it is extremely helpful in other situations.

You can use this rule if you live in an area that hosts major events or attracts many tourists. It is one of the best Airbnb tax preparation tips that you can use to save some money. For more help with taxes, you can rely on the professional accountants from Agro Accounting CPA.

How Income Tax Services for the Self-employed Can Help Artists

Doing accounting for self-employed individuals is a challenging task. There are plenty of variables that come with it. More precisely, primarily self-employed individuals need the accounting services of a Certified Public Accountant. On the other hand, a regularly salaried person hardly needs an accountant beyond income tax preparation. However, if you are an artist who is considered a self-employed individual in the eyes of the IRS, find out how expert income tax services for the self-employed can help you.

Prepare optimized income tax returns

Your accountant can prepare optimized income tax returns for you. An expert accountant uses all the available qualified business deductions to reduce your taxable income. U.S. tax laws provide numerous leverages to self-employed individuals. They can write off various business expenses from your gross income in order to reduce your taxable income and save you money on taxes. An expert accountant maximizes the deductions on client income tax returns.

Prepare financial statements

This is something that is of prime importance to any business. An accountant can prepare financial statements for you. Financial statements include balance sheets, income statements, and cash flow statements. They provide the complete picture of how the business fares over the year. Any artist who wants to grow needs financial statements to make sensible financial decisions.

Tax guidance

Many self-employed individuals do not know about the tax benefits the government offers them. An expert accountant or accounting company that does income taxes for artists can provide you with tax guidance. It helps you do proper tax planning, establish the right structure for managing accounting and bookkeeping operations, and ensures tax compliance.

Apart from these three key services, your expert accountant can help you with audit representation, tax-saving investment options, choosing a business structure, and various other accounting services.

How Entrepreneurs can Make Their Tax Preparation Easy

Preparing taxes is a complex job for any type of self-employed person. Entrepreneurs who are new to the business world often need help with their taxes. They might be an expert in their field but, with taxes, they need the help of a tax professional. Also, ensuring the tax compliance of a business requires in-depth knowledge of tax laws. Most entrepreneurs partner with an expert accountant in tax preparation for entrepreneurs to make their taxes easy.

An expert Certified Public Accountant can prepare and report taxes for your business. Other than tax preparation, your accountant can help you with tax guidance, tax planning, and bookkeeping. If you are hiring employees, you need to fulfill their tax obligations as well.

If you are looking for a reliable partner to manage your company’s taxes, get in touch with Agro Accounting CPA. It is a leading accounting firm that provides accounting services for artists, freelancers, and entrepreneurs. Also, the company complies with the time-honored ethics of the CPA profession!

Tax Preparation Guide for Artists: Understand the Difference Between Self-Employed and Small Business Tax Categories

 Artists make a decent amount of money in the U.S. They have multiple sources of income, such as from shows, exhibitions, stage performances, and personal invites. Like everyone else in the country, they have to register themselves as some sort of business identity and to pay taxes. And when it comes to taxes, there are two categories: salaried and self-employed.

Now, within the self-employed category, there are multiple sub-categories. A small business is considered self-employed in the eyes of the IRS, as is a freelancer and corporation owner. Then what is the difference between the categories of self-employed and small business? Let's find out in this tax preparation guide for artists.

Difference Between Self-employed and Small Business

When someone says they are self-employed, they are most likely referring to themselves as a freelancer, an individual artist, or a sole business owner. On the other hand, when someone says they run a small business, they are likely referring to a business that hires employees. Both are considered self-employed, but a small business also employs other people. With that comes the obligation of collecting income taxes, paying the employer share of self-employment taxes, offering sick and vacation pay, carrying workers' compensation insurance, and so on.

How to Register Your Self-employed Status with Your State

When you work as a self-employed person, you need to choose a business structure in order to register your business with the state. Then, you get a tax ID number and file for the appropriate licenses and permits. You can register your self-employed status in four primary ways:

●        Sole proprietorship

●        Partnership

●        LLC

●        Corporation

These are the most common types of business structures. If you are working as a single, self-employed individual, a sole proprietorship is the best option for you. On the other hand, if you are planning to hire employees or have a business partner, it is best to register as a partnership or LLC.

A sole proprietorship does not provide any protection of personal assets against legal claims and debts. In certain partnerships, you are protected against your partner's debts, but you do not have personal asset protection against claims. However, LLCs and corporations offer you personal asset protection.

You need to get an Employee Identification Number, EIN, if you hire employees. You can partner with income tax services for the self-employed to apply for business licenses, an EIN, and more.

Essential Things You Should Know About the 2022 Tax Season

Filing an income tax return is an annual chore, and you can’t avoid it. Whether it’s a federal income tax return or a state or local return, you should start preparing for taxes as soon as possible. Along with it, consider hiring super tax services and stay updated on tax laws to reduce your tax season stress. Read this blog post to learn some important things about the 2022 tax season that can make your tax filing smoother!

● Income Tax Return Deadline - The federal income tax return deadline for individuals and C corporations is April 18, 2022. So, these taxpayers must file their 2021 income tax returns by this date to avoid late-filing penalties. The deadline for partnerships and S corporations is March 15, 2022.

● Pre-Pandemic Rules – Congress suspended various tax rules through 2020 because of the global pandemic. Now, everything is back to pre-pandemic rules. Taxpayers should be mindful of such new developments when filing in 2022. It is best to speak with a tax professional to ensure that your taxes are correctly filed.

● Extension for Business Taxes – If you cannot meet the filing deadline and want more time to file your return, file an extension. Taxpayers can obtain a six-month filing extension without providing a reason for the request. Individuals can use IRS Form 4868 and entities can use IRS Form 7004 to request a filing extension.

We hope this post helps you understand these basic things about the 2022 tax season. Even if you hire a tax preparation guide for the self-employed, a taxpayer should always know about changes in the tax law and about new IRS guidance. It can help avoid costly mistakes. Moreover, you can always consult with Agro Accounting CPA to handle the complexities of filing your taxes.