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Your Receipts are Important: Save Them!

Your Receipts are Important: Save Them!

When it comes to taking qualified deductions on your federal tax return, three things must happen: Recognize that an expense might be deductible on your tax return. Keep a record of the expense in an organized fashion. Obtain the proper (and timely) documentation to support your deduction.   This might be obvious to most people, but here are some typical…

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Tips On Tip Reporting

Tips On Tip Reporting

If you are like millions of taxpayers who work in the service industry, you may receive tips. The tax code is clear; if you receive tips you must report them as income. Some employers have systems to make this easy, while others do not. Here are some suggestions: Think 1-2-3 Proper tip reporting has three components. 1. Keeping a daily…

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How To Cut Car Maintenance Costs

How To Cut Car Maintenance Costs

Insurance, fuel, loan interest, maintenance, repairs, depreciation – all the expenses associated with owning and driving an automobile can take a huge bite out of your family budget. Some of these are sunk costs. Because the money is already spent – the down payment to purchase your car, for example – such costs are irrelevant when budgeting for the future.…

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Do A Business Valuation When You’re Ready To Sell Your Company

Do A Business Valuation When You’re Ready To Sell Your Company

Well before you’re ready to sell your company, you’ll want to determine its fair market value as a starting point for negotiations. Of course, obtaining a reasonably precise value for your business is often a complicated and time-consuming task. Accurate appraisals must weigh a variety of factors and incorporate numerous assumptions. The more precise the underlying numbers and suppositions, the…

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Four Tips For Building An Emergency Fund

Planning for business emergencies is like buying insurance: you pay into an account and hope you’ll never have to use it. But life happens. Equipment breaks down. Electrical problems occur. Employees leave. Having money in the bank to cover those unexpected expenses can reduce stress and keep you from relying on credit cards and loans to keep your business afloat.…

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Five Home Office Deduction Mistakes

If you operate a business out of your home, you may be able to deduct a wide variety of expenses. These may include part of your rent or mortgage costs, insurance, utilities, repairs, maintenance, and cleaning costs related to the space you use. It can be a tricky area of the tax code that’s full of pitfalls for the unwary.…

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Get to Know These Tax-Saving Terms

Get to Know These Tax-Saving Terms

As you begin to think about scheduling your midyear tax planning appointment, refresh your memory on the meanings of terms that can save you money. Here are three. Exclusion. Exclusions are items that would generally be included on your return, but are specifically excluded by a tax law provision. For example, gifts and inheritances you receive are excluded from your income…

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Five Reasons to Incorporate Your Business

Five Reasons to Incorporate Your Business

Most new businesses start with no thought about legal structure. In the eyes of the IRS, the default structure is a “sole proprietor,” in which your business profits are taxed on your personal tax return. This can serve you well to start, but there are several reasons you may want to consider incorporating as your business grows. To protect your…

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Don’t Underestimate the Power of Curb Appeal

Don’t Underestimate the Power of Curb Appeal

Curb appeal is often talked about when selling a residential home, however, it applies just as frequently to the commercial building or space. If you want to improve the market value, curb appeal matters. Locations with great curb appeal usually command higher prices and spend less time on the market. Luckily there are simple, inexpensive ways to help your building…

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How to Build Your Business Credit

How to Build Your Business Credit

Whether your firm has been operating for years, or you decided over last night’s coffee to start a new venture, you’re sure to face the need for business credit. Entrepreneurs often ask friends and family to invest in their start-up businesses, and many draw on personal funds to launch new firms. But to address ongoing business needs – such as…

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Disability Insurance – What You Need to Know

Disability Insurance – What You Need to Know

Say “insurance” to most people and auto, health, home, and life are the variants that spring to mind. But what if an illness or accident were to deprive you of your income? Even a temporary setback could create havoc with your financial affairs. Statistics show your chances of being disabled for three months or longer between ages 35 and 65…

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Considering Paying for Your Child’s College Education?

Should you pay for your child’s college education? Or should your child find the financing? There are compelling arguments for both sides, but ultimately, your family needs to do what’s best for your financial situation. Most families find that a combination of both works the best. Parents should pay. Arguments in favor of shelling out your hard-earned cash for a…

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Tax Filing Responsibilities of Estate Executors

Your role as an executor or personal administrator of an estate involves a number of responsibilities. Did you know that part of your responsibility involves making sure the necessary tax returns are filed? And there might be more of those than you expect. Here’s an overview: Personal income tax. You may need to file a federal income tax return for…

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Could the Coverdell ESA be the right fund for you?

As we approach graduation season, we have education costs on the brain! You’re probably familiar with 529 college savings plans. Named for Section 529 of the Internal Revenue Code, they’re also known as qualified tuition programs, and they offer tax benefits when you save for college expenses. But are you aware of a lesser-known cousin, established under Section 530 of…

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What you should do when the IRS contacts you

After you file your tax return, the last thing you want to see is a notice from the IRS questioning your return. Some IRS notices involve very minor changes, like a correction to a Social Security number. Some are for serious changes that could involve a lot of money, such as a billing for more taxes, interest, or penalties due…

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Find the best employees to contribute to your company

Turnover is an often overlooked cost of doing business. Sometimes it can run as high as 25% of salary and benefits. One way to reduce this cost is to hire wisely. It’s an oft-quoted cliché that employees are a company’s most valuable assets. Try generating revenue with unmotivated or unskilled employees, and you’ll soon discover that the cliché rings true.…

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2 Smart Tax Ideas for Your Refund

Are you looking forward to your tax refund? By now you know how much you’ll be getting and approximately when the cash will land in your bank account. The only question is, what’s the best way to put the money to work for you? Here are two tax-smart ideas. Tax Refund Tip #1 Fund your IRA. Depending on your income,…

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That’s Taxable?!?!

Have you ever wondered about the taxability of funds or services you receive? There are many areas in the tax code that cause confusion regarding what’s taxable. These are some of the most common. Alimony. Alimony is taxable to the person who receives it and deductible to the person who pays it. Special rules apply. Make sure you have proper…

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Building Customer Loyalty – A Few Basics

Studies have shown that businesses often spend five to six times more to attract a new customer than to keep an existing one. Over the long term, those dollars add up. In fact, a company’s ability to care for its customers often determines its survivability in the marketplace. Make customers happy and they’ll stick with you; disappoint them and they’ll…

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Tax Tips for Newlyweds

It’s the start of wedding season! If you are approaching your wedding date (congratulations!), the tax implications of marriage are probably not the first thing on your mind. But paying a little attention to it now can save time and even money later. Here are a few tips to help those who are about to embark on a new life…

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How to Prevent Identity Theft From Affecting You

The IRS has made great strides in protecting taxpayers from identity thieves, but you must still be diligent to protect your information. Identity thieves can steal a taxpayer’s personal information and use it to file a tax return claiming a refund under the taxpayer’s name. Then when the taxpayer actually files a return, the IRS won’t accept it and notifies…

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Grandparents can help reduce the cost of college

A growing number of grandparents are helping raise their grandchildren. Grandparents are giving their time and money, helping with the cost of toys, clothing, education and extracurricular activities. This can add up to thousands of dollars. Many millennials indicate they could not afford their lifestyle if it were not for the help their parents provide. While helping to support grandchildren…

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Tax bracket, tax rate, what’s the difference?

The difference between your tax bracket and your tax rate is more than a trick question. For example, knowing your tax rate gives you an accurate reflection of your tax liability in relation to your total income. Knowing your tax bracket is useful for planning purposes. For instance, you may want to spread a Roth conversion over several years in…

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Clean Your Financial House for the New Year

Out with the old, in with the new. No matter whether you apply the expression to changes in attitude or to life adjustments, the end of the year is a great time to assess your household finances and prepare for new opportunities. Here are suggestions. Review your credit report. Request a free copy of your credit report from each of…

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How social security benefits are taxed

Are you wondering if your social security retirement, survivor, and disability benefits will be subject to federal income tax on your 2016 return? Generally, when these benefits are taxed is determined by your “provisional income.” Provisional income (PI) is the product of a formula used for no other purpose than figuring out the taxable percentage of social security benefits. To…

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Avoid Hiring Mistakes in Your Start-Up

Staffing errors can spell disaster for your start-up. Here are three to watch out for. Staffing the firm with friends and family. While this strategy may work in some circumstances, hiring pals and relatives often spells trouble. For one thing, friends and family members often expect – even subconsciously – to be treated differently from other employees. A double standard,…

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Don’t include the IRS on your gift list

Suppose a relative gives you an expensive painting. Several years later, your relative dies and you decide to sell the painting. Your accountant says you’ll owe capital gain tax on the sale, and asks for your basis in order to reduce the amount on which you’ll pay tax. What’s your answer? When you sell property received as a gift, the…

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NJ’s Christie Keeps the NJ – PA Agreement !!!

Gov. Christie has decided to keep a decades-long agreement between New Jersey and Pennsylvania that allows residents to pay income tax where they live, regardless of where they work — just months after he announced he would end it. Christie said legislation passed Monday, among other recent measures, will help rein in health care costs for public employees, eliminating the need for…

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Ready to start year-end planning? Focus on the big picture

Some tax-cutting strategies make good financial sense. Others are simply bad ideas, often because tax considerations are allowed to override basic economics. Here’s one example of the tax tail wagging the economic dog. Let’s say that you operate an unincorporated consulting business. You want an additional tax write-off, so you decide to buy $10,000 of office furniture that you don’t…

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Downtime is not wasted time, Does a suggestion to boost productivity with time off sound counter intuitive?

  Research has shown that giving workers – and perhaps yourself, as a business owner – time off to recuperate from work demands can be energizing. Here are three ways your business can benefit. Read more. Does a suggestion to boost productivity with time off sound counter intuitive? Research has shown that giving workers – and perhaps yourself, as a…

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Higher self-employment taxes coming in 2017

  Did you know the national average wage index went up? You might have missed the news, but it’s likely you will notice one impact: higher self-employment taxes. How are the two related? The index is used to calculate the social security wage base, which is the amount of income subject to the 12.4% social security portion of the self-employment…

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Prepare in advance for required IRA distributions

  Once you reach age 70½, the required minimum distribution (RMD) rules say you have to withdraw at least a minimum amount from your retirement plans each year. Since the withdrawals are considered ordinary income, planning in advance can help you prepare for the impact on your federal income tax return. Here are two suggestions. Read more. Once you reach…

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Keep an eye on your company’s cash !!

Do you regularly monitor your company’s cash accounts? Being aware of where your cash is going can help prevent theft or improper expenditures, which are among the chief sources of loss for small companies. Do you regularly monitor your company’s cash accounts? Being aware of where your cash is going can help prevent theft or improper expenditures, which are among…

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Tax planning is good for corporations too

If you own a calendar-year corporation, you can benefit from planning moves you make before December 31.  For example, corporations can accelerate or defer income or deductions to stay within a certain tax bracket.  You’ll also want to look at your corporate alternative minimum tax exposure to determine whether you qualify for an exception to the tax.  Finally, reviewing estimated…

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Back to school? Check this tax credit

If you or a member of your family is off to college this fall, you may be eligible for the American Opportunity Tax Credit.  Eligible students may take this credit for the first four years of higher education.  The credit can be up to $2500 annually.  Expenses that qualify for the credit include tuition, fees, and related expenses. Forty percent…

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A Quick Recordkeeping Guide

Is your cabinet overflowing?  Do you hesitate to purge tax information because you’re not sure what to keep and what to discard?  Here’s a quick guide to help you cut through the clutter. Expenses.  Substantiation for deductions includes charitable donation acknowledgments, receipts for employee business expenses, and automobile mileage logs.  Retain these at least seven years after you file the…

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Business Tip: Don’t sell property; exchange it

A tax-deferred exchange is a tax planning technique which should be considered by any taxpayer that is relocating or disposing of property.  Often referred to as a “tax-free exchange,” the tax-deferred exchange allows you to exchange certain business or investment property for other “like-kind” business or investment property and pay no income taxes currently.  Your tax liability is deferred until…

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Don’t overlook above-the-line deductions

Even if you don’t itemize deductions on your tax return, you may be entitled to certain “above-the-line” deductions.  These deductions are subtracted from your income to arrive at your adjusted gross income, an important number because it determines your qualification for certain tax credits and various tax breaks.  Above-the-line deductions include such things as IRA contributions, health savings account contributions,…

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Summer job tax tip

If your child has a summer job, consider opening an IRA for him or her.  According to the tax rules, anyone under age 70 1/2 who has earned income can contribute to a traditional IRA.  There’s no age restriction for Roth accounts, though the amount of the contribution phases out at higher income levels.  The advantage of a Roth over…

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Midyear tax planning tip

Take time this summer to examine your investment portfolio for potential tax savings, such as selling stocks that are worth less than you paid to offset your capital gains.  You might also donate appreciated stock that you have held for more than one year to charity and avoid capital gains altogether – plus getting a deduction for the stock’s fair…

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Accurate inventory numbers are crucial for your business

For many companies, inventory is a significant dollar amount on the company’s financial statements.  So it’s crucial that recorded inventory balances reflect actual values.  When such accounts aren’t properly stated, the cost of goods sold and current ratios – numbers that often matter to decision makers – may be skewed.  If banks discover that your company’s inventory accounts are overstated,…

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IRS launches new “misclassification initiative”

How you classify your workers – as “independent contractors” or “employees” – matters a great deal to the IRS.  The IRS is aware that employers prefer to treat workers as independent contractors to avoid paying fringe benefits and payroll taxes.  The IRS estimates that 80% of workers who are classified as independent contractors are actually employees.  About 100 new auditors…

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Filing deadline extended in 2016

Next year, taxpayers will get a few extra days to file their 2015 income tax returns.  The District of Columbia will be observing Emancipation Day on April 15, 2016, the usual filing deadline.  Because April 16 and 17 fall on a weekend, the 2016 filing deadline is moved to the next business day which is April 18.  Taxpayers in Maine…

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Public safety heroes law passed

A new law, the “Don’t Tax Our Fallen Public Safety Heroes Act,” was signed on May 22, 2015, to clarify the tax treatment of federal and state benefits for public safety officers killed or injured in the line of duty.  Under the law, such benefits will not be subject to federal income tax.

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Business survey identifies taxes as biggest burden

In a survey of small businesses conducted by the National Small Business Association, 59% of respondents said taxes were more of an administrative burden than a financial one.  Most businesses put payroll taxes at the top of the list of taxes with the greatest administrative burden.  Payroll taxes also outranked other taxes, such as income, property, and sales taxes, as…

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Summertime tax tip

If you itemize your deductions, you can deduct the mortgage interest and property taxes paid for your vacation home.  A boat or RV can qualify as a vacation home if it has sleeping quarters, cooking facilities, and a bathroom.  If a retreat also serves as rental property, you can control your tax deductions by changing the number of days you…

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Check out the current issue of South Jersey Biz magazine featuring Business Accounting Systems, P.C.

Business Forecast sjbiz jan2015 PDf South Jersey Biz January 2015 Our Vice President, L. Scott Elwell, MST, EA is currently featured in the January, 2015 edition of South Jersey Biz Magazine.  The article features predictions from local industry leaders on what 2015 has in store for the South Jersey business world.  Here is a copy of the article as well as…

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Not all “income” is taxable

There are several sources of revenue that are not subject to income tax. Here are the most common sources of money that are not taxed on your federal income tax return: Borrowed money such as from banks or personal loans. Money received as a gift or inheritance from family or friends. Money paid on your behalf directly to a school…

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Business Accounting Systems, P.C. named 2014 Small Business Award for Payroll Services

We are pleased to announce that Business Accounting Systems, P.C. has been named Best in Payroll Services, from the 2014 Small Business Awards, named by South Jersey Biz Magazine.  Click here for the list of 30 businesses who are recipients of the Small Business Awards this year: http://www.southjerseybiz.net/articles/?articleID=950 Congratulations to our fellow winners – and thanks to everyone for their…

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Year-End Tax Strategies for Businesses

YEAR-END TAX STRATEGIES FOR BUSINESSES Gift shares of stock to family members who are in a low tax bracket before declaring a dividend, as part of a larger plan to shift ownership of the business to younger family members. The owners of pass-through entities, such as S corporations and partnerships, have the income taxed on their personal tax returns.  The…

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IRS Impostors Phishing for Personal and Financial Information: Report them immediately

It is important to be aware of pop-ups or emails ‘phishing’ for personal information. They are transmitted electronically and done so very easily. You may even receive a text, SMS message or a personal message through social media platforms. These false requests are daily occurrences and are sent in hopes to lure innocent victims into disclosing personal and/or financial information.…

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Professional Payroll Services Simplifies Employee Compensation

Active business owners know that using a professional payroll service is a smart business decision. Busy owners and administrative employees adhere to the valuable benefits a good payroll service can bring to a company’s overall financials. Outsourced payroll services decreases payroll burdens and frees up administrators’ and owner’s time to focus on other important business aspects.

Seek Accountable and Compliant Payroll Services

Knowing what kinds of services to expect out of a payroll company will help in the search for one. 

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Welcome to our Business Accounting Systems, PC blog!

We’re excited to announce the official launch of our Business Accounting Systems, PC blog. We’ll be posting helpful news from the financial industry, updates from our practice, and more about the latest in keeping your personal and business finances in the best shape possible. We built our practice on the notion that we’re there for our clients when they need us…

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