• Budgets and Business Planning: Whether you’ve just launched a new business or own an existing corporation, seeking the advice of an experienced CPA can be very helpful in establishing realistic budgets and benchmarks for your business. A strategic plan can make the difference between success and failure in today’s marketplace; a CPA can help you set business goals, establish checkpoints to measure progress, and take measures to encourage growth within your company.
• Assistance with Bonding: Bonding and taxes have different objectives, and a CPA can help you navigate the two areas to achieve the consistency that is favored by bonding agents, increasing your chances of a money-saving tax return.
• Profit and Cost Assessment: In order to understand and improve upon your current business structure, it’s necessary to monitor your systems and consider the costs and benefits of various types of work. A CPA can be helpful in analyzing the profits and costs of various contracts, products, and services you offer, and can give advice on which of these services are most lucrative and which are costing more labor and overhead than they’re worth. This kind of assessment can help you streamline your work to focus on your most productive areas.
• Internal Controls: These can encompass anything from elaborate checks and balances to discourage fraud, to a simple streamlining of your company’s paperwork to make you more efficient. A CPA with experience in your industry can advise you on the best internal controls for your business.
• Technology and Software Support: Your CPA can be an important resource in advising you on any changes you need to make to the technology or software you need to run your business. He or she can suggest software that can improve your financial outlook, and may be able to tell you about compatible technology in other areas.

A CPA is an invaluable team member for any business. Tap into their diverse range of skills to support your company’s growth, stability, and success.

1.  Do you have the best clients?

Reevaluating your client list is probably the first thing to look at when planning your future year. Your marketing plan should focus on the best client fit for you. If the current client list does not fit your focus, think about whether or not you should keep particular clients. Follow the 80/20 rule in these matters. If 80% of your stress comes from 20% of a particular client then reevaluate whether keeping them is worth the trouble. You will need room for the new clients coming in 2010.

2. Are your products and services the best out there? If not, what should you do to improve?

Take a step back and ask a few of your valued customers. They are sure to be honest and will give you some insight into your business. Look at the services that produce the most return on their investment and focus on those. How do you know which products and services are doing the best? Financial analysis or reviewing your books for that information is the easiest and most efficient way.

3.  Are you losing time on different projects? Are we missing critical moments that are costing the company money and time?

Review current systems to see if there are inefficiencies. Flowchart them or put them on a piece of paper and then tear the system apart. Bring your team in to evaluate them with you. You never know what ideas will come out of this analysis that could save you thousands of dollars.

4.  Have you evaluated your strengths and weaknesses, opportunity and threats?

It’s called a SWOT analysis. This analysis can help you decide on which areas need to be focused on most. This should be done at least once a year.

5.  Are you totally lost at this point and feeling all alone? Do you have so many issues you don’t know where to begin?

You need a business coach to help you get through the hard stuff. Business or Executive Coaching is a great way to keep business owners motivated and moving. They keep you accountable for making progress and can give you tons of helpful hints, ideas and development opportunities.

In 2010, businesses that do the hard work now will definitely reap the benefits and will be more successful. Ultimately, you will have to ask a lot of questions of yourself and others before you can have a realistic view of the future. Your bookkeeping and financial records can answer the important ones that matter most. If you’re confused how they can help or don’t know where to begin, please give us a call. We can help.

If you’re a small business owner tasked with budgeting your resources for next year, keep the following tips in mind:

• Budget conservatively: It can be difficult to accurately predict income or expenses, so err on the side of caution. Assume that costs will be higher than anticipated and that income may be lower, and then craft a budget tailored to those pessimistic figures. You’ll be prepared for the worst, and if business in 2010 is as good as (or better than) you hope, it will come as a happy surprise.
• Be flexible: A budget is a plan, but it’s never set in stone. You may need to adapt or even rewrite your budget after the first quarter or half of the year. It’s important to factor in safety margins on spending. Set aside some money in an emergency fund, and try to assess each unexpected cost on an individual basis.
• Consider projected cash flow: Cash flow is the focus of your budget, and can usually be broken down into three categories:
  • Projected sales: How much income you expect to see this year
  • Direct cost of sales: The cost of each sale in terms of shipping, customer service, materials, and/or labor in production.
  • Fixed costs or overhead: These are costs that exist regardless of your sales, ranging from administrative expenses to office supplies and utilities.
• Use last year’s numbers as a basis: Last year’s figures can provide a rough scale for your 2010 budget estimates. Don’t get too attached to them, however, since costs and sales can vary widely from year to year.
• Involve the right people: Depending on the size of your company, it may be necessary to create or request budgets from each department. Even if you’re creating only one budget for the entire business, ask essential team members to contribute their thoughts and expertise. Getting the advice of a CPA or other financial expert can also help make your budget more realistic and viable.
• Be realistic: As you consider the advice of your department heads and your CPA, as well as last year’s figures, do your best to be realistic. It might be nice to assume that sales will rise by 50% next year, but it’s prudent to assume that’s not going to happen. If the unexpected occurs, either good or bad, will your business be prepared to sell more product or spend a little more than you had anticipated? Plan for as many contingencies as possible and do your best to use all the expertise and information available to you.

Earlier this year, the American Recovery and Reinvestment Act (ARRA) outlined some new and expanded tax benefits for individuals and business owners who invest in energy-saving appliances, improvements, or alternate energy sources that result in reduced usage and conserved resources.

Homeowners can earn a tax credit of up to 10% of the cost of solar energy systems, energy-efficient construction, or other alternate energy sources. This isn’t just a deduction of your income—it’s a full credit that is deducted directly from the amount of taxes you’re required to pay.

Each individual improvement is subject to its own set of criteria. Below are some specific green tax incentives available to business owners:

• Commercial buildings: If you build or renovate a commercial building that uses 50% or more less energy than the national average, you may be entitled to a tax credit of up to $1.80 per square foot.
• Combined heat and power systems (CHPs): If you institute a CHP that meets the minimum efficiency specifications, you could be eligible for an investment tax credit of up to 10%.
• Commercial vehicles: If your business uses fuel-efficient hybrid vehicles, you can earn tax credits based on the weight, fuel economy, and purchase price of the vehicle.
• Fuel cells and microturbines: If you invested in these eco-friendly technologies this year to generate electricity and power for your business, you could be eligible for tax credits of 30% of the cost of fuel cells or 10% of the cost of microturbines.
• Solar energy systems: Businesses that use solar energy for lighting, water heating, or electricity can receive up to 30% of the cost of the system in the form of a tax credit.

It’s great that the IRS is taking steps to recognize and reward energy-saving measures, but the specific clauses are complex. Eligibility is dependent on where you live, whether your investment meets specific criteria, and when the energy-saving tactic was put into place. There are extensive provisions, changes, and limitations that can be confusing for the average taxpayer to decipher. To make sure you’re reaping the maximum benefit of the new “green” tax laws, it’s best to consult with your CPA.

It can happen to even the most meticulous filer: after sending off your e-return to the IRS or dropping it in the mail, you notice an error. After the initial flurry of panic, you can relax—your return may technically be out of your hands, but it’s not set in stone just yet.

The IRS has factored in a margin of error for busy taxpayers by providing the Form 1040X. The “X-file” allows you to specify what you reported on your original return, where the error was made, and what the correct figures are. You can even use the form to add or remove dependents or change your filing status. The IRS allows you to file an amendment up to three years after the original filing date.

Below are a few CPA-recommended tips for filing the Form 1040X:

• Indicate the year of the return you’re correcting and include detailed explanations on the back of the form.
• Be sure to include any additional forms or scheduled associated with the change you’re making.
• If you’re amending multiple returns, use a separate form for each year and mail them in separate envelopes.
• Check to make sure your correction doesn’t affect your state taxes; if so, you’ll need to file a separate correction.
• There’s no need to file a Form 1040X if you made a mathematical error on your return; this will be automatically detected and adjusted by the IRS.

Depending on the nature of your error, filing an amended return with the 1040X may work in your favor or could end up costing you. If you neglected to include a source of income in the original return, you’ll probably wind up paying more or receiving less of a refund. But if you’re using the Form 1040X to include an overlooked deductible, you’ll end up reaping some monetary rewards.

Either way, you’re legally bound to correct any errors. It can be tempting to let them slip by, but it’s likely that the IRS will find them sooner or later, and you could face steep interest fees.

There are some additional stipulations and exceptions surrounding tax return amendments. To make sure you cover all your bases, it’s best to consult with your CPA if you discover an error.

QuickBooks is by far the most popular accounting software among small- to medium-sized businesses, sole proprietors, work-at-home moms, and anyone who wants to keep track of their own billing, invoicing, and finances. Although there are plenty of competitors out there, none come close to rivaling the stability and features of QuickBooks. It hooks in seamlessly to other applications, is compatible with virtually all computer systems, and has a simple, user-friendly interface.

Although it’s easy to get up and running with QuickBooks, you could just be scratching the surface of what it has to offer. Some basic training will help you uncover hidden features and capabilities, taking you beyond the basics to get the most out of your software.

QuickBooks training can serve as a significant benefit for administrative assistants, office managers, secretaries, virtual assistants, financial services professionals, independent entrepreneurs, and anyone who works with budgets. Training from a qualified CPA can help you use the software to:

• Increase productivity and efficiency when creating quotes and estimates, sending invoices, and performing other finance-related tasks
• Upload bank account information into your software
• Reduce overhead costs
• Train your accounting department to work more efficiently
• Improve your career prospects by enhancing your resume and demonstrating your commitment to learning new technologies
• Troubleshoot common issues and resolve them faster
• Find task shortcuts to streamline daily operations
• Create detailed reports of revenue and expenses, along with graphs and charts to track trends
• Keep all of your important tax and finance information current and in one centralized place, greatly reducing headache and hassle during the next tax season

At the office of Gabrielle Luoma, CPA, we offer in-depth QuickBooks training courses for all levels of users. Whether you’re just getting started and want to get familiar with the basics or you’re an intermediate user ready to master more advanced functions, we’ll provide you with customized curriculum to meet your needs. We know you’re busy, so we tailor our courses to meet your schedule and lifestyle. QuickBooks education is an affordable way to streamline daily operations, expand your client base, and boost your profits.

As a general rule, CPAs recommend hanging onto the past three years’ worth of tax records. That’s equivalent to the federal government’s statute of limitations for questioning or auditing your tax information. There are a few exceptions—some states have up to four years to examine your return, and the statute can be extended or removed in cases of fraud, significant income omission, or tax evasion. But taxpayers who have filed in a timely manner and paid any outstanding taxes by the due date can confidently purge any records three years after the date the return was filed.

It’s important to note that the three-year rule only applies to supporting documents and information related to your tax return. Other records, specifically those that detail capital assets, should be kept until the end of the statute period following their liquidation. Below are some examples:

• Tax returns: Although supporting documentation can usually be purged after the three-year mark, it’s wise to keep the actual returns themselves. These can prove invaluable in securing a loan or applying for insurance.
• Income and expenses: Hang onto any and all documents that verify your income for at least three years after you file. These include W-2s, 1099s, bank statements, and brokerage statements. Records of business-related expenses should also be kept.
• IRA contributions: Retain records of non-deductible contributions until the money is withdrawn, to avoid getting taxed twice on those funds.
• Stock information: Keep all records of stock ownership for at least four years after the sale of your shares. In the event of an audit, you’ll need these to verify any profit or loss resulting from the sale.
• Stock and mutual fund statements: Any stock dividends that are reinvested will reduce the amount of capital gain, thus lowering your taxable income. These statements should also be kept for at least four years after the sale, to provide a record of reinvested dividends.
• Home purchase and renovation receipts: If you’ve purchased a home or made significant improvements to a property you own, hang onto these records for at least four years after the sale of the property.

When in doubt as to whether to get rid of tax records, it’s best to give your CPA a call. He or she can help you determine the importance of the document and whether you’ll need to reference it down the road.

As we head into the heart of December, it’s time to start planning year-end tax strategies. There are several ways to maximize your 2009 savings by minimizing your taxable income through smart deductions. Below are a few tips:

• Retirement contributions: If you haven’t already reached the limit, now is the time to max out your contribution to your corporate 401K account. If you don’t work for a company, you might also consider contributing to a traditional IRA or SEP (self-employed) IRA. Your CPA can help you identify which retirement plans must be funded before the end of 2009, and which can be funded after the New Year.
• New vehicle deductions: Are you planning to buy a new car, truck, motorcycle, or RV in the coming year? If you complete the purchase before the New Year, you may be eligible to write off the sales tax as a deduction, depending on the amount of your total household income.
• Homebuyer and homeowner credit: In 2009, legislature was passed that granted first-time home buyers up to $8,000 in tax credits. This deduction is limited to taxpayers who have not bought a home in the last three years and whose incomes are below the maximum limit. If you’re planning to purchase a home in the near future, doing so before the end of the year will increase your 2009 tax savings. In addition, current homeowners may be eligible to deduct up to $6,500 in tax credits.
• Eco-friendly appliances: Federally funded programs are offering special rebates for appliances—furnaces, dishwashers, refrigerators, and washers and dryers, among others—that have earned an Energy Star rating for environmentally friendly design. Rebate values vary by state, ranging from $50-$200 per product, so be sure to check with your CPA for details.
• Business expenses: If you own a business or do independent consulting work, now’s the time to tally up your receipts and determine the amount that can be deducted as work-related expenses. If you’re anticipating any large business purchases in the coming months, you might consider making them now to boost your deductions. Your CPA can also help you analyze how depreciation schedules might impact your tax situation.

Remember, every situation is different, and this is just a sampling of end-of-year tax considerations. To make sure you’re taking advantage of all eligible tax deductions, it’s best to consult with a qualified tax professional. With the proper planning and guidance, you can kick off the New Year with some extra cash to spare.

1. Medical expenses: If your annual medical bills add up to over 7.5% of your income, they can be written off as a tax deduction. While you can’t count portions that were paid by an insurance policy, any non-covered costs are eligible, including associated expenses like insurance premiums and mileage to and from a treatment facility.
2. Property taxes: As of 2008, married couples filing jointly can enter a standard deduction of up to $1,000 for real estate taxes, and single homeowners can deduct up to $500—even if they don’t have enough deductions to file an itemized return on a Schedule A.
3. Moving costs: It’s one of the most stressful ordeals a family can go through, but at least you can reap a tax benefit if the move was related to a job transfer. Your CPA can identify which moving costs are eligible to serve as deductions, such as mileage, truck rental, and storage fees.
4. Child care: You’ve already resigned yourself to this inevitable expense—but did you know that any child care, preschool, or even summer day camp fees qualify as tax credits if your children attend during your work hours?
5. Working from home: Even if you don’t feel comfortable writing off the corner of the bedroom as home office space, you can deduct any purchases you make that support the work you do at home, such as a laptop, planner, pens and notebooks, business cards, and possibly even Internet access.
6. Job hunting: With rampant layoffs and longer periods of unemployment, this oft-overlooked tax break can mean considerable savings for workers who are seeking a new position within the same field. Keep track of printing costs, travel expenses, recruiters’ agency fees, and any expenses related to your job hunt.

When you work with a CPA, you’ll enjoy the peace of mind that comes with having a fresh (and highly trained) pair of eyes to evaluate your financial situation. After all, wouldn’t you rather be focusing on your business or family than crunching numbers? Let a professional chase down hidden tax deductions, saving you valuable time and money.

Although there’s no surefire way to bullet-proof yourself against a tax audit, a good CPA can help make the process less painful by offering helpful tips like these:

1. Keep records for at least the past three years. The IRS typically initiates audits within 18 months of a filing, but by law they have up to three years before the statute of limitations ends. By having all of your forms and receipts organized and easily accessible, you’ll greatly reduce stress in the event of an audit. When you work with a CPA, you’ll receive all of the year’s tax documents neatly packaged for your files.
2. Avoid math mistakes. Although a numbers blunder doesn’t necessarily mean you’ll be audited, honest mistakes can result in increased attention from the IRS, which is rarely a good thing. A CPA will check all calculations meticulously before submitting your return.
3. Acknowledge red flags before the IRS does. If you have an unusually large deduction or another anomaly, include copies of all related documentation to head off any confusion or suspicion. The IRS agent examining your return will recognize your efforts to remain compliant.
4. Be cooperative. Remember, an auditor is just doing his or her job. If you react belligerently, you could be opening yourself up to closer scrutiny. Clearly and politely answer the questions that are asked of you, but don’t volunteer additional information. When you treat the auditor with respect, you’ll most likely find the experience to be less unpleasant than you anticipated. One of the bonuses of working with a CPA is that he or she will negotiate directly with the IRS on your behalf.

Facing a tax audit can be scary, but you don’t have to do it alone. Above all, the most effective tool you can have is a qualified CPA. A certified tax professional can guide you through the process, address your questions and concerns, and prevent common pitfalls, all of which will help you get through the ordeal with the least possible amount of pain and hassle.