Do you ignore your small business bookkeeping?

Bookkeeping is one area most business owners would love to leave piling up.

Unfortunately, those of you who actually do ignore it, results in mad scrambles for receipts and other financial information at tax time or loan application time. The trouble business owners have with bookkeeping is the time involved. If you are a small business owner typically you are wrapped up in attending to every other aspect of running the day to day operations (as you should be) of the company that there is simply no time left over for bookkeeping.

Inadequate bookkeeping is often the product of over-scheduled entrepreneurs. But in spite of the fact that it gets ignored completely so often, this area of small business management is among the most critical.

Getting bookkeeping help is one of the most liberating experiences you will have as an entrepreneur. Having a dedicated bookkeeper you will never again have to scramble for financial information in order to get a loan or file your taxes. If you routinely file an extension on your taxes, then you would be a good candidate for using inSouceBooks.com.

On a weekly, monthly or quarterly basis an insourcebooks.com bookkeeper will enter all of your transactions in to your Quickbooks company file on our secure server with right networks. This company file can be access by you from any computer with an internet connection so you have access to your accurate and up to date finacial information whenever you need it.

inSoucebooks.com is a local company servicing the greater rochster ny area. All of our bookkeepers are local citizens and are supervised by degreed accountants. Give inSouce a try!

Free Consultations always available.

What can professional bookkeeping do for your business?

for more information please visit: www.insourcebooks.com

 

inSouce bookkeeping services are customized to meet your needs.

 

Liberate yourself from your bookkeeping and consentrate on growing your business. At inSouceBooks.com we can take care of all or some of your bookkeeping, so you can focus on running your business and generating profits!

 

We can provide bookkeeping services to clients all over the U.S. Utilizing our secure servers through Right Networks, you will have access to your financial data 24/7 from any computer, at a cost that is less than what you would spend for an in-house employee performing bookkeeping functions.

 

We supply you with a degreed accountant/comptroller that will help you with forecasts and budgets and will oversee your bookkeeper. We are experts at accounting and bookkeeping and it is our only business.

 

All of your bookkeeping will be provided by a highly qualified and dedicated full-charge bookkeeper assigned to your account that lives and works in our local region. Your financial records are not passed on to subcontractors and no work is done overseas.

 

inSouceBooks.com also carries both professional insurance as well as employee dishonesty coverage.

 

Quickbooks – what version is right for you?

Outsource bookkeeping for your business in rochester ny or buffalo ny.

Quickbooks for Mac

• A desktop version of quickbooks that’s perfect for freelancers and artists on a mac. You can use on-line banking print check, and do all your invoicing and expense tracking. Once your business grows you can export the file and begin using inSource Bookkeeping’s Quickbooks in the cloud for outsource bookkeeping.

Quickbooks Pro

• Quickly view invoices, billing, and other important tasks in a new calendar format
• Export your QuickBooks data to Excel & save your formatting for future reports
• Set up Memorized Transactions for recurring invoices, estimates, & billing

Quickbooks Premier

• track inventory
• pay employees
• job costing
• time tracking
• process credit cards
• great for general business, contractors, retail and non profits

This version is a desktop application that runs on one computer. So, if you hire a bookkeeper they will need to come to you or you’d pass a file back and forth to your outsource bookkeeper.

Quickbooks Enterprise Solutions

• Multi-Location Inventory
• FIFO costing
• Serial or Lot Tracking
• Work Orders & Scheduling
• Billing & Mobile Payments
• Merchant Service for QuickBooks
• Check Solution for QuickBooks
• Enhanced Payroll
• Assisted Payroll 

Quickbooks Online

inSource Bookkeeping doesn’t recommend the use of this product, it costs a lot over time and we can offer a cloud solution where you have access to Quickbooks Accountant version from anywhere and has all of the features below and more. But, if you are interested in knowing about it then read the following about Quickbooks on-line version.

• online simple start
• sole proprietors, simple invoicing and expense tracking
• online essentials
• multi user, automated online banking, bill payments and estimates
• online plus
• multi user, inventory tracking, time tracking and 1099 reporting, purchase orders, budgeting
• online essentials with payroll
• multi user, inventory tracking, time tracking, 1099’s and payroll
• online plus with payroll
• multi user, inventory tracking, time tracking and 1099 reporting, purchase orders, budgeting, payroll

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A good Bookkeeper’s Characteristics

Outsource bookkeeping for your business in rochester ny or buffalo ny.

Detail oriented

Attention to detail is a must! Imagine having a person who doesn’t read the fine print or always looks for shortcuts.

Must Love Numbers

Working with numbers requires that you have a clear understanding of math, and that you are not intimidated by its concepts. Math is such an exact science. There are no maybes in summing up totals or calculating balances.

Analytical

They must be able to understand what to look for and how it impacts the entire picture. The ability to create what-if scenarios will also come into play.

Time Management

A good Bookkeeper knows how to organize their time for optimum results.

A Love of Technology

Without a doubt, this proves to be one of the most important characteristics. Everything today is automated, and it doesn’t make sense to partner with someone who is not technologically inclined. Software is used in all aspects of business today.

 

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Questions to ask when hiring an outsource bookkeeper

Outsource bookkeeping for your business in rochester ny or buffalo ny.

In searching for the right Bookkeeper for your business, the answers given should be clear, precise, and these answers should reveal the truth of what they have to offer. Let’s take a closer look at the most important questions to ask.

• What services do you provide? inSource Bookkeeping provides basic bookkeeping all the way up to full comptroller.
• What industries do you have experience in? If we haven’t had experience in your field of work then we will conduct a detailed interview with you to make sure there’s a depth of understanding.
• What Software or applications are used? inSource  bookkeeping uses Quickbooks primarily, but one of our partners will also use Peachtree Accounting as well.
• Who will be working on my company files? Know who your primary servicer will be and that they are being supervised by a degreed accountant or CPA.
• What is your method of delivery and turnaround? inSource  bookkeeping uses Quickbooks in the cloud so both you and the bookkeeper can work on the file with no overlap.
• What is your review process? We make sure the entries made by the outsource bookkeeper are accurate with regular reviews of your file.
• Do you work closely with CPAs? Yes, inSource  knows several CPAs and will work closely with your CPA if you already have one.
• Do you have any guarantees? Yes, inSource  will guarantee the work performed by our bookkeepers. We are degreed Accountants in Rochester NY and will always right any wrongs at no charge.
• What security systems do you have in place? inSource  uses cloud computing that is house in a very secure data center, your files will have 2 passwords to get into them.

Your journey to finding the right Bookkeeper is not as difficult as it may seem. With good preparation and a little patience, you can be on your way to making the best choice for your needs.

 

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Stop panicking and get your finances under control!

Outsource bookkeeping for your business in rochester ny or buffalo ny.

The state of our economy hasn’t improved as fast as the experts originally thought. Hundred of businesses have gone belly up because of a poor cash flow or banks not lending as readily as they once did. So, are you making the right strides to make sure you aren’t the next casualty of this bad economy? Here are some steps you can take to make sure your business is sound finacially.

Bookkeeping for your business:

In order to run a business and know what, where, and when to take corrective actions requires business information. How do you get and where do you find this information? Hopefully you’ve been using a computerized accounting system to manage your finances. You don’t chances are you won’t find the information you need if you don’t keep accurate and current records about your business financial transactions through Bookkeeping.

What is Accounting and Bookkeeping?

Accounting is the art of analyzing, recording, summarizing, reporting, reviewing, and interpreting financial information. Bookkeeping is the process of recording and classifying business or personal financial transactions. We all need to do this every year before we file our taxes. But wouldn’t it be handy to make better business decisions to ride out the recession if you knew at the touch of a button where you stood financially. That’s the key to running a great business and making the right decisions when it counts the most.

Without these processes your business will most likely fail. The number one reasons for businesses to fail is bad finances. Using a bookkeeper who is supervised by a degreed accountant will give you the information you need to know whether this is a good time to invest in new equipment, when to hire a new employee, when you should lay-off an employee and so much more!

 

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Who is Self-Employed? (from IRS website)

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Even if you work solo from your home you need to consider the following:

Generally, you are self-employed if any of the following apply to you.

• You carry on a trade or business as a sole proprietor or an independent contractor.
• You are a member of a partnership that carries on a trade or business.
• You are otherwise in business for yourself (including a part-time business)

Self-Employed: Don’t Forget to Deduct Health Insurance Costs this Year
Under the Small Business Jobs Act of 2010, for 2010, you can reduce your net self-employment income by the amount of your self-employed health insurance deduction on Form 1040. See the Instructions for Schedule SE(PDF).

What are My Self-Employed Tax Obligations?

As a self-employed individual, generally you are required to file an annual return and pay estimated tax quarterly.

Self-employed individuals generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording “self-employment tax” is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax).

Before you can determine if you are subject to self-employment tax and income tax, you must figure your net profit or net loss from your business. You do this by subtracting your business expenses from your business income. If your expenses are less than your income, the difference is net profit and becomes part of your income on page 1 of Form 1040. If your expenses are more than your income, the difference is a net loss. You usually can deduct your loss from gross income on page 1 of Form 1040. But in some situations your loss is limited. See Pub. 334, Tax Guide for Small Business (For Individuals Who Use Schedule C or C-EZ) for more information.

You have to file an income tax return if your net earnings from self-employment were $400 or more. If your net earnings from self-employment were less than $400, you still have to file an income tax return if you meet any other filing requirement listed in the Form 1040 instructions.

How Do I Make My Quarterly Payments?

Estimated tax is the method used to pay Social Security and Medicare taxes and income tax, because you do not have an employer withholding these taxes for you. Form 1040-ES, Estimated Tax for Individuals (PDF), is used to figure these taxes. Form 1040-ES contains a worksheet that is similar to Form 1040. You will need your prior year’s annual tax return in order to fill out Form 1040-ES.

Use the worksheet found in Form 1040-ES, Estimated Tax for Individuals to find out if you are required to file quarterly estimated tax.

Form 1040-ES also contains blank vouchers you can use when you mail your estimated tax payments or you may make your payments using the Electronic Federal Tax Payment System (EFTPS). If this is your first year being self-employed, you will need to estimate the amount of income you expect to earn for the year. If you estimated your earnings too high, simply complete another Form 1040-ES worksheet to refigure your estimated tax for the next quarter. If you estimated your earnings too low, again complete another Form 1040-ES worksheet to recalculate your estimated taxes for the next quarter.

See the Estimated Taxes page for more information. The Self-Employment Tax page has more information on Social Security and Medicare taxes.

How Do I File My Annual Return?

To file your annual tax return, you will need to use Schedule C (PDF) or Schedule C – EZ (PDF) to report your income or loss from a business you operated or a profession you practiced as a sole proprietor. Schedule C Instructions (PDF) may be helpful in filling out this form.

Small businesses and statutory employees with expenses of $5,000 or less may be able to file Schedule C-EZ instead of Schedule C. To find out if you can use Schedule C-EZ, see the instructions in the Schedule C-EZ form.

In order to report your Social Security and Medicare taxes, you must file Schedule SE (Form 1040), Self-Employment Tax (PDF). Use the income or loss calculated on Schedule C or Schedule C-EZ to calculate the amount of Social Security and Medicare taxes you should have paid during the year. The Instructions (PDF) for Schedule SE may be helpful in filing out the form.

Business Structures

When beginning a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation. A Limited Liability Company (LLC) is a relatively new business structure allowed by state statute. Visit the Business Structures page to learn more about each type of entity and what forms to file.

Husband and Wife Business – What is a Qualified Joint Venture?

Husband and Wife Business
The employment tax requirements for family employees may vary from those that apply to other employees. On this page we point out some issues to consider when operating a husband and wife business.

Election for Husband and Wife Unincorporated Businesses
For tax years beginning after December 31, 2006, the Small Business and Work Opportunity Tax Act of 2007 (Public Law 110-28) provides that a “qualified joint venture,” whose only members are a husband and wife filing a joint return, can elect not to be treated as a partnership for Federal tax purposes.

Considering a Tax Professional

Tips for Choosing a Tax Preparer

Employment tax info from the IRS

if you need help sorting through this very important information visit www.insourcebooks.com and contact us today.

Federal Income Tax and Social Security and Medicare Taxes You generally must withhold federal income tax from your employees’ wages. You withhold part of Social Security and Medicare taxes from your employees’ wages and you pay a matching amount yourself. To figure how much to withhold from each wage payment, use the employee’s Form W-4 and the methods described in Publication 15, Employer’s Tax Guide and Publication 15-A, Employer’s Supplemental Tax Guide (PDF). The Internal Revenue Service recently released instructions to help employers implement the 2011 cut in payroll taxes, along with new income-tax withholding tables that employers will use during 2011. Employers should start using the new withholding tables and reducing the amount of Social Security tax withheld as soon as possible in 2011, but not later than Jan. 31, 2011. Notice 1036 (PDF) contains the percentage method income tax withholding tables, the lower Social Security withholding rate, and related information that most employers need to implement these changes. Publication 15, (Circular E), Employers Tax Guide (PDF), contains the percentage method tables and the wage bracket tables that some employers use. Federal Unemployment (FUTA) Tax You report and pay FUTA tax separately from Federal Income tax, and Social Security and Medicare taxes. You pay FUTA tax only from your own funds. Employees do not pay this tax or have it withheld from their pay. Refer to Publication 15, Employer’s Tax Guide and Publication 15-A, Employer’s Supplemental Tax Guide (PDF) for more information on FUTA tax. Self-Employment Tax Self-employment tax (SE tax) is a social security and Medicare tax primarily for individuals who work for themselves. It is similar to the social security and Medicare taxes withheld from the pay of most wage earners. Depositing Employment Taxes The IRS has issued proposed regulations that provide that beginning January 1, 2011, taxpayers must deposit all depository taxes (such as employment tax, excise tax, and corporate income tax) electronically using the Electronic Federal Tax Payment System (EFTPS). Under these proposed regulations, which are expected to be finalized by December 31, 2010, Forms 8109 and 8109-B, Federal Tax Deposit Coupon, cannot be used after December 31, 2010. Reporting Employment Taxes In general, employers are responsible to report federal Income Taxes, Social Security, and Medicare taxes on Form 941, Employer’s Quarterly Federal Tax Return (PDF) and Instructions (PDF), or Form 943, Employer’s Annual Federal Tax Return for Agriculture Employees (PDF) and Instructions (PDF) (For use by farm employers). Note: Employers who have an employment tax liability of $1,000 or less for the year may file Form 944, Employer’s Annual Federal Tax Return (PDF) and Instructions (PDF), instead of Form 941, Employer’s Quarterly Federal Tax Return. Report FUTA taxes on Form 940, Employer’s Annual Federal Unemployment (FUTA) Tax Return (PDF) and Instructions (PDF). e-file for Business and Self-Employed Taxpayers Whether you’re a business, big or small, or are self-employed you’ll find an e-file for business filing option that meets your needs. Use IRS e-file for Employment Tax Returns, Information Returns, Partnerships, Corporations, Estates & Trusts, plus Exempt Organizations. Preparing and Filing Form W-2 At the end of the year, the employer must complete Form W-2, Wage and Tax Statement (PDF) to report wages, tips and other compensation paid to an employee. A copy of this form must be given to the employee by January 31st after the end of the year. You must also send a copy of the W-2 to the Social Security Administration (SSA). Employers can prepare and file up to 20 W-2s at a time at the Social Security Administration’s Web site. Using SSA’s online W-2 filing, employers can also print out all the necessary copies of the W-2 for their employees, state taxing agencies, etc. Correcting/Adjusting Employment Taxes If correcting employment tax errors on previously filed employment tax returns is required, refer to Correcting Employment Taxes. Voluntary Classification Settlement Program The Voluntary Classification Settlement Program (VCSP) is a new optional program that provides taxpayers with an opportunity to reclassify their workers as employees for future tax periods for employment tax purposes with partial relief from federal employment taxes for eligible taxpayers that agree to prospectively treat their workers (or a class or group of workers) as employees. To participate in this new voluntary program, the taxpayer must meet certain eligibility requirements, apply to participate in the VCSP by filing Form 8952, Application for Voluntary Classification Settlement Program, and enter into a closing agreement with the IRS. Outsourcing Payroll Duties If you outsource your payroll, refer to Outsourcing Payroll and Third Party Payers. Independent Contractor (Self-Employed) or Employee? Which workers are considered employees? Before you can know how to treat payments you make for services, you must first know the business relationship that exists between you and the person performing the services. Refer to Independent Contractor (Self-Employed) or Employee? for more information. Certain Taxpayers May Now File Their Employment Taxes Annually To reduce burden on small employers, the Internal Revenue Service (IRS) has simplified the rules for filing employment tax returns to report social security, Medicare, and withheld federal income taxes. If you have been filing Forms 941 and believe your yearly employment taxes will be $1,000 or less and would like to file Form 944 instead of Form 941, you can contact the IRS to request to file Form 944, Employers Annual Federal Tax Return, rather than Form 941, Employers Quarterly Federal Tax Return. Refer to Certain Taxpayers May Now File Their Employment Taxes Annually for more information. Combined Annual Wage Reporting (CAWR) Combined Annual Wage Reporting (CAWR) is a Document Matching Program that compares the Employee Wage Information reported by the employer to the Internal Revenue Service (IRS) and the Social Security Administration (SSA). If the amounts reported to the IRS do not match those from SSA, you may receive a notice asking for the reason for the discrepancy. If you do not respond timely, IRS may compute the additional taxes and/or penalties due and send you a bill. If you receive a notice CP253 or Letter 99C regarding missing Form(s) W-2, refer to Combined Annual Wage Reporting Missing Form W-2 Inquiries. If you receive a notice CP251 or Letter 99C regarding underreported employment taxes refer to Combined Annual Wage Reporting Employment Tax Problem Inquiries. References/Related Topics Businesses with Employees Employment Tax Forms Employment Tax Publications Virtual Small Business Tax Workshop, Lesson 9 – What you need to know about Federal Unemployment Taxes (FUTA) SSN Verification Tax Calendar for Small Businesses and Self-Employed Unemployment Insurance (UI) Taxes W-2 Online. Create, save, print, and submit Forms W-2 and W-2c online. Wage Reporting

Home Business Tax Deductions

Ask inSource Bookkeeping www.insourcebooks.com

While many people run home businesses so they can work in a more congenial environment, or for family-related reasons, there are also certain home business tax deductions that home business owners should be aware of.

To qualify for deducting business expenses related to using a work space for business in your home, your home must be your “principal place of business” or you must “use the space only to earn your business income, and you use it on a regular and ongoing basis to meet your clients, customers, or patients.”

If your home business meets this definition, you’ll want to check and be sure you’ve maximixed the following home business tax deductions on your income tax.

Have you deducted an appropriate portion of all of your home maintenance costs?

When we think about home maintenance costs, utilities such as heat and electricity spring to mind, but the cost of cleaning materials, for instance, is also a potential tax deduction. And what about house insurance? You can also deduct an appropriate portion of it as well.

How much can you claim as a home business tax deduction? The IRS advises taxpayers to “use a reasonable basis” to calculate the appropriate portion of home business expenses to claim; their formula of taking the area of the work space in your home and dividing it by the total area works well when calculating home business tax deductions.

If you own your home, have you deducted expenses related to home ownership?

For example, if you own your own home and are operating a home business, you can deduct a portion of your property taxes as a business expense. Your mortgage interest will also be a tax deduction, if applicable.

Bear in mind that you cannot deduct an amount that’s more than your net income from your business.

Home business owners, of course, can also claim any or all of the other small business tax deductions mentioned in this article, if they’re applicable to their particular business.

Income Tax Deductions and The Cost of Doing Business

For help sifting through these questions contact: www.insourcebooks.com

The cost of doing business is an important part of calculating your small business tax deductions. Use this checklist to ensure that you’re maximizing your income tax deductions in this category of business expenses.

1) Have you deducted all of your business taxes, and business-related dues, memberships and subscriptions?

No one forgets that business licensing fees or business taxes are an income tax deduction, but sometimes people overlook some of the annual membership dues they pay to business-related organizations. If you’re like me, you belong to several – so make sure you’re deducting all the appropriate fees on your income tax.

2) If you’ve borrowed money to run your business, have you deducted all the interest and all the related fees?

Generally, the interest you pay on the money you borrowed to run your business is tax deductible. You can also deduct related fees, such as a fee you’ve paid to reduce the interest rate on your loan, or a fee related to your purchase or improvement of a business property, if that’s what the loan was for, including application, appraisal, and relevant legal fees.

3) Have you deducted all your insurance business expenses?

Although life insurance premiums aren’t a permissible income tax deduction, you can deduct the insurance premiums you’ve paid for insurance on the building(s), machinery or equipment you use in your business.

4) Have you deducted all your management and administration business expenses?

Whatever management and administration charges you’ve incurred over the past year are legitimate business expenses and legitimate income tax deductions, and this includes bank charges!

5) Have you deducted all your relevant maintenance and repair business expenses?

You can deduct the cost of the maintenance and/or repairs you’ve made to the property you use to earn income over the past year. In most cases, the full cost of both labour and materials will qualify as a small business tax deduction, unless you did the work yourself, in which case you’ll only be able to deduct the cost of the materials on your income tax.

6) Have you deducted the full cost of all your office business expenses and supplies?

If you have a traditional office, the cost of all those paper clips, staplers, pens, and computer paper can really add up over the course of a year. Depending on your business, you may also have supplies expenses, such as the cost of film if you’re a photographer, or the cost of drugs if you’re a veterinarian. Generally, supplies are defined as items consumed indirectly to provide the goods or services a business provides, and should be part of your income tax deductions.

The next page of this article deals with home business tax deductions.