byDillonFamily Finances, Investing, Personal Finance

Pay YOU First!

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VIDEO TRANSCRIPTION – I tell people the first person that you should be paying is who? Do you know that? Yourself. Now we got a couple of financial advisors here, insurance advisors, we got a CPA. So certain people are going to cheat, okay? Okay, they’re going to cheat a little bit.

I was told that almost 25 years ago. Didn’t get it. I get it now. If you don’t take care of yourself first, who else is going to take care of you? Think about that. So, as a man, I have to make sure that I’m governing myself correctly to make sure that Mrs. Cooper is taken care of properly.


Call now for your FREE Consultation – (562) 436-2600

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byDillonAccounting, Growing A Business, Personal Finance, Tax Preparation

The Difference Between Personal Taxes vs. Business Taxes

What Are Personal Taxes?
 
Personal taxes are imposed on an individual’s income. This includes things like dividends, wages, interest, and specific types of business income. In order to file personal taxes, a person must use the Form 1040 and choose whether they want to use standard deduction or itemization to reduce taxable income.

As an individual, you’re probably used to the Tax Day deadline of April 15. This is when your taxes must be completed and filed or postmarked.

Learn more about our ‘SMART Money’ Tax Preparation Solutions 

What Are Business Taxes?

Business taxes cover things like sales, profits, payroll, and other business activities. The type of form that is used to file business taxes will depend on the type of business. For example, Form 1065 is used for partnerships, Schedule C for sole proprietorships, and Form 1120 for C corporations.

There are deadlines in place for business taxes. When tax payments are needed, those payments must go through quarterly. The deadlines for these payments are January 15, April 15, June 15, and September 15. There are situations that warrant an extension. However, know what your specific deadlines are to avoid late payment penalties.

Regarding deductions, there are far more available for businesses than there are for personal use. Personal deductions don’t include much more than mortgage and student loan interest. There are a lot of options for business expenditures at play. If you work from home, your home office expenses may be tax deductible. Your office supplies, like paper, pencils, paperclips, and highlighters, are all tax deductible. The same applies if you have a personal vehicle that you use to get from one work site to another.

If you’re starting a business, startup costs are tax deductible up to $5,000. This includes 50% off business-related meals and entertainment.

Just make sure that you’re retaining proper documentation of your purchases. Store your receipts in case the IRS requests that you provide proof of your business expenses.

The Basics of Taxing Income

The tax rates used for personal taxes are progressive. As a person’s taxable income increases, they move into higher tax brackets. There are some income types that fall into preferential categories, like long-term capital gains.

A business tax rate is dependent on entity type. There are C corporations that are expected to pay corporate taxes for profits. There is a chance that they will face double taxation after dividends are distributed. In the case of S corps, sole proprietorships, and partnerships, profits and losses are passed to owners who are reporting them on their personal returns. This impacts tax liability from an individual perspective. 

Details of Timing, Credits, and Deductions

A business usually has a wider range of deductions that they can utilize that accounts for depreciation, cost of goods sold, and startup costs. This reduces taxable business income. Personal deductions would not apply in this scenario.

An individual will claim personal credits for things like earned income and child tax credits, with deductions that decrease personal tax liability. The filing and payment deadlines are typically different. In general, businesses must follow a quarterly payment schedule.

Tax Liability and Compliance

There is liability at play for both personal and business taxes. It’s important to retain records, especially for businesses. This includes payroll information, receipts, and separate bank accounts. Sole proprietors and general business partners will face personal liability for their business debt and taxes. Large corporations and LLCs use limited liability protection for different tax rules and administrative needs.

Business Payroll and Sales Taxes

Businesses have many more aspects to consider when it comes to taxes. Generally, a company will take care of payroll taxes, including those for Social Security and Medicare. Also, unemployment taxes and sales tax collection may be applicable. In many cases, the ongoing processes that are in place are not something individual taxpayers will encounter.

It’s beneficial to keep business and personal accounts separate from one another. This helps simplify record keeping, reporting, and filing of taxes. Educate yourself and plan for estimated taxes. If you know that there will be money owed once you file, have that money ready. It can be quite a financial burden to find out that you owe thousands of dollars’ worth of tax money, and you’ve already spent those funds. Reduce your risk of audit and mishap by documenting everything throughout the year. 

Refunds Versus Tax Liabilities Differences

There are key differences between business taxes and personal taxes regarding refunds and tax liabilities. Personal taxes are subject to a progressive tax system when based on individual income. This equates to higher income levels facing higher tax rates. However, business taxes are levied according to business profits.

An owner of a business needs to pay taxes on income that is generated by their business. Tax structure considers business structure (LLCs, partnerships). While both taxes are contributing to government revenue, they are very different. It’s important to understand the difference between business tax and personal tax. This ensures compliance, maximum deductions, and ideal financial strategies.

Working With a Tax Professional

Depending on your situation, consider hiring a professional to help you with your taxes. There are situations that can be very complex when it comes to sales tax, payroll, and entity elections. Professionals are very knowledgeable and can help you determine the best route to take.

See more about our ‘SMART Money’ Tax Preparation Solutions

Personal and business taxes are very different from one another. They require the use of different forms, documentation, rates, and compliance requirements. It’s important that you understand their differences. You’ll be able to organize your finances in a way that reduces risk.

Professionals can also help keep you organized and on track so you meet your tax deadlines. In some cases, you can have your information filed for you and payments made on your behalf. This eliminates some of the burden that comes with being a taxpayer.

Want to know more about how we can help you get a BIGGER refund or minimize your taxes owed? 

Call now for your FREE ‘SMART Money’ Consultation at (562) 436-2600. 

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byDillonAccounting, Business and Tax Consulting, Growing A Business, Protecting Your Assets

What is the Best Business Entity For a Small Business?

For small business owners in any industry, choosing the right entity type is a critical decision. That’s because the structure of the organization determines so much else, like administrative requirements, personal liability, and taxes. In fact, the choice is one of the most important decisions for any small business. The legal structure of the enterprise affects taxes, personal liability, and administrative requirements.

But what is the best business entity for a small business in today’s complex economic environment? The information below answers that all-important question in plain language, with clear outlines about how each entity operates, pays its taxes, and more. Owners of small companies need to know how to select a path that aligns with their resources, goals, long-term vision, and risk tolerance.

Learn more about our CorpBuilderPRO Business Formation Solutions 

Answering the question, “What is the best business entity for a small business?” entails four general categories, namely the sole proprietorship, partnership, LLC (limited liability company), and corporation. Here are the pertinent details about how each one operates, deals with taxes, and handles legal liability. Plus, each section concludes with a brief listing of the pros and cons for each entity type.

Sole Proprietorship: For Solo Owners Who Prefer Simplicity & Flexibility

The beauty of the sole proprietorship is its simplicity. Every year, millions of entrepreneurs venture forth and start their own companies as solo owners. For them, knowing what the best business entity is for a small business is a simple question that has a simple answer: the sole proprietorship. One person can do all the work. There are no separate legal entities involved between the owner and the company. All income and losses from the enterprise are reported directly on personal income tax returns.

It’s no wonder the SP is so popular for people who want to test-drive a business idea or operate a side hustle to earn a few extra dollars. Startup costs are minimal, as is paperwork. Taxes are also a breeze; they’re subject to personal rates with an additional “self-employment tax” rate on net earnings of the business. What’s the downside? Owners are personally liable for losses, debts, and legal claims against the company. That means personal assets, like your private home or vehicles, could be at risk if you get sued and lose.

Pros:

  • There are no ongoing formalities after a quick setup..
  • Owners enjoy full decision-making power and 100% control.
  • There is no tax at the entity level; every dollar is passed through to the owner’s personal income tax return.
  • Easy to set up with minimal ongoing formalities.
  • Detailed records help owners minimize the tax bite by offsetting income with valid deductions and expenses.
  • Owners can avoid IRS penalties by paying their taxes quarterly.

Cons:

  • Owners hold unlimited legal, financial, and personal liability for the business’s lawsuits and debts.
  • It can be a challenge to raise money because the SP is not a separate legal entity.
  • Customers might view a sole proprietorship as a less credible type of entity compared to LLCs and corporations.
  • Owners pay SE (self-employment) tax on net earnings after deductions.
  • Partnerships: Shared Responsibility & Ownership

In legal parlance, a partnership is an entity operated by two or more people who share losses, profits, and ownership. While there are many kinds of partnerships, they all feature pass-through income, no tax at the entity level, shared management, and shared financial risk. Here are the pertinent pros and cons.

Pros:

  • Partners can combine their expertise and work hours.
  • Pass-through taxation can mean no tax at the entity level.
  • Profit-sharing arrangements and operating structures are very flexible.

Cons:

  • Without a clear operating agreement, disputes can arise.
  • General partners can have full personal liability.
  • With multiple partners, there can be a need for complex agreements.
  • Limited Liability Company (LLC): Flexible Liability and “Pass-Through” Taxation

LLCs are popular due to their flexibility. Owners can opt to be taxed as corporations. Single-member LLCs get taxed as sole proprietorships, and multi-member LLCs are treated as partnerships. Personal assets of owners are protected from business debts. Here are their relevant pros and cons.

Pros:

  • Members enjoy limited liability.
  • Income passes through by default, but owners can opt to be taxed as corporations.
  • In most cases, there are minimal setup formalities.

Cons:

  • Owners who choose to be taxed as partnerships and SPs can be hit with self-employment tax rates.
  • Some states require franchise taxes and annual fees.
  • Disputes can arise if there are no clear-cut operating agreements.
  • Corporations: Possible Tax Benefits and Clear-Cut Structure

The shortest legal definition of the term “corporation,” is this: It’s a separate legal entity that is owned by its shareholders. However, there are two very common kinds of corporations that small business owners tend to prefer. They’re called C corporations and S corporations. In common parlance, people call them “C corps” and “S corps.”

What’s the difference? C corps are double taxed. In other words, the entity itself pays tax, and the shareholders also pay tax on the dividends they receive. C corps must file Form 1120 and pay tax on profits; dividends get taxed again at the shareholder level. S corps handle taxes in a completely different way. They are called pass-through entities because there is no tax at the entity level, only at the shareholder level.

Note that both profits and losses “pass through” to each shareholder’s personal tax returns if they meet eligibility requirements. Both S and C corps must adopt bylaws, hold regular meetings, issue stock, and keep detailed minutes of meetings. What is the best business entity for a small business? Sometimes, it’s either an S corp or a C corp.

Pros:

  • Excellent liability protection for owners.
  • Owners can issue stock or appeal to investors to boost the total amount of available capital.
  • At the corporate level, owners can legally create retirement plans and fringe benefits for themselves.

Cons:

  • Ongoing administrative and compliance expenses can be high.
  • If profits are distributed to shareholders, C corps are double-taxed.
  • For S corps, there are very strict rules about eligibility and ownership.
  • There are strict compensation rules for employees who are also shareholders.
  • Rules vary widely from state to state. Some enforce annual fees and minimum tax payments.

Essential Facts & Takeaways

So, what is the best business entity for a small business? In nearly all cases, the answer comes down to an owner’s goals, specifically in terms of liability, tax treatment of earnings, and long-term growth plans. However, in some states and jurisdictions, owners must abide by local laws when choosing an entity type. Always check with licensed, competent legal professionals to determine what the situation is.

Here are the main things to keep in mind:

  • Sole proprietorship is simple but comes with total personal liability.
  • For shared ownership and various degrees of liability protection, partnerships and LLCs are the way to go.
  • For the ultimate in liability protection and the chance for unlimited growth potential, corporations get the job done, but they also carry additional administrative expenses and complex tax considerations.

See more about our CorpBuilderPRO Business Formation Solutions 

Your own answer to the question, “What is the best business entity for a small business” depends on your risk tolerance, goals, plans for growth, and desire for simple or complex tax filing.

Need More Information?

Want to know more about how we can help you set up your business entity with our incorporation services? Call now for your FREE CorpBuilderPRO consultation—(562) 436-2600.

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byDillonBusiness and Tax Consulting, Tax Resolution

What Happens When Your Business Owes IRS And State Sales Tax?

If you owe the IRS or your state government money for business taxes, it is important to understand the consequences of delinquency and failure to pay as well as the options available to pay your taxes. It can be stressful to be in a situation where your business owes money to the government and is not able to pay the money that is owed. However, with a closer look at the ramifications of not paying the taxes as well as by reviewing the options available for settling the debt with the IRS or the state government, you may see that there are some reasonable options that may be useful to you.

Learn more about our Tax Help – Tax Resolution Solutions

What the Government Can Do to Collect the Money

Before you learn more about IRS tax relief options or state tax relief options, you should first gain a better idea about what the government can do when you owe taxes. In most cases, the government taxation authorities will charge interest on the outstanding balance until the balance is paid in full. The interest rate may be as high as 14 percent, and the interest will be compounded. Because of this, it is generally most affordable to pay your tax bill on time if possible. If you fail to pay the tax bill, the IRS has the authority by law to seize business property as well as personal property. It may also garnish your wages. Tax liens may also be placed on your property. The state collection measures vary by state, but they generally are equally as significant as the IRS methods.

A Look at the Payment Options Available

Whether you have IRS tax problems, state tax problems or both, you may be wondering what you can do to overcome your challenges. There are a few options available for taxpayers to consider. 

Pay Your Bill With A Business Loan Or Liquidate Some Of Your Assets

Here are one of the many uses of your business credit lines or credit cards. This is why it’s so important to have these set up as soon as you set up your business. They not only help you to acquire assets through your business yet also to rescue your business in the event that you get in trouble tax wise.

If you don’t already have them in place, then reach out to your bank or lender and get some credit lines and business credit cards established so you can pay off the IRS or State. Once that’s done, you can then have your business pay down the credit lines and credit cards. This has a dual benefit of not just resolving your IRS or State tax debt yet also building up your business’s corporate credit as well.

Set Up Monthly Installments

Another option is to request a monthly installment payment plan with the government. This option is available through the IRS, and many states also have a payment plan option. There are rules and requirements in place, and the IRS will charge interest on the unpaid balance. Ultimately, you may end up paying more to the government with the installment plan due to the interest and fees, but it will keep you in good standing with the government as long as you make your payments on time.

Consider an Offer in Compromise 

An Offer in Compromise is available for IRS tax problems, and you will need to see if a similar option is available for state tax problems. This is a type of settlement agreement that is available to qualified individuals, and it essentially will reduce the amount of money that you owe to the IRS. If you are interested in this option, you should consider reviewing the checklist located in Form 656, which is the Offer in Compromise form, to learn about eligibility requirements. This option is usually only approved by the IRS if it is in the best interest of both the government and the taxpayer.

Pursue a Currently Not Collectible Status

One option available to taxpayers who are delinquent on taxes to the IRS is to pursue a Currently Not Collectible, or CNC, status. To be approved for this, you will need to file a collection information statement with the IRS, and they will need to approve the request to be granted this status. With CNC, you must prove that paying the taxes would create a financial hardship on you at this time. The amount owed to the IRS is not reduced, but the IRS essentially takes your case out of their active files. The account may remain in a CNC status for as long as ten years. If you are unable to pay the debt after this period of time, the IRS may permanently forgive the debt that is owed. 

These are only a few of the options available to you when you are facing a large tax bill to the state or federal government. You may also pay your taxes using a personal credit card, apply for a personal loan or make other arrangements. With the hefty penalties associated for not paying your taxes or making other arrangements, it is important to carefully analyze the options available to you and to make arrangements in a timely manner. 

What You Can Do Today

People will react in different ways after learning that they owe money to the IRS or to the state government that they cannot afford to pay. Some will immediately seek IRS tax relief or state tax relief. Others will put the issue on the back burner because they fail to understand the true significance of the situation and the ultimate impact that failure to pay taxes can have on their business and on their personal life.

See more about our Tax Help – Tax Resolution Solutions 

As soon as you learn that you have a tax bill that you cannot pay to the IRS or to the state government, it is important to explore the options and to develop a plan. The time to act is now, by either hiring an attorney, CPA or a tax resolution firm like Cooper’s Accounting Service to represent you in the matter.

Want to know more about how we can help you resolve your IRS or State Tax problem?

Call now for your FREE ‘Tax Help’ Consultation – (562) 436-2600

 

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byDillonAccounting, Bookkeeping, Growing A Business

How to Find the Right Accountant for Your Business

Running a small business comes with plenty of moving parts—from keeping customers happy to managing day-to-day operations. With so much going on, it’s easy for the financial side of your business to feel overwhelming. That’s where a good accountant can make a huge difference.

The right accountant can save you money on taxes, help you stay compliant with financial laws, and give you solid advice for growing your business. In a competitive market, smarter financial decisions aren’t just helpful—they’re essential. So how do you find the right accountant for your small business? Let’s walk through the steps to make your search easier and more productive.

Learn more about our ‘SMART Books’ Accounting Solutions 

1. Start by Understanding Your Needs

Before you begin calling accountants or browsing online directories, take a moment to get clear on what you actually need help with. Not all accountants offer the same services, and not every business requires the same level of support.

Start by writing down the specific tasks you want your accountant to handle. This list could include simple work like yearly tax filing or more ongoing help such as managing daily transactions or providing financial guidance.

Common services accountants provide for small businesses include:

  • Tracking and organizing expenses
  • Overseeing payroll
  • Preparing financial statements
  • Monthly bookkeeping
  • Managing invoices and accounts payable
  • Financial forecasting and budgeting
  • Managing day-to-day financial transactions
  • Preparing and filing state and federal taxes
  • Ensuring you stay legally compliant with financial regulation

Having clarity here sets you up for success because you’ll know exactly what skills to look for—and what kind of accountant will benefit your business the most.

2. Look for Accountants With Relevant Expertise

Experience matters, but the right kind of experience matters even more.

You want an accountant who understands small businesses, not just large corporations or niche industries unrelated to your own. Someone who has worked with companies similar to yours will already be familiar with the challenges, tax deductions, reporting requirements, and financial opportunities unique to your industry.

For example:

  • If you run a construction business, you want someone who understands contractor write-offs and project-based cash flow.
  • If you own an online store, an accountant with e-commerce experience can help you manage inventory costs and digital sales tax rules.
  • If you’ve been struggling with overspending, find someone skilled in budgeting and forecasting.

The more aligned their experience is with your needs, the smoother and more beneficial your working relationship will be.

3. Where to Find the Right Accountant

Once you have a sense of what you’re looking for, it’s time to start searching. Fortunately, there are several great places to find qualified accountants.

Ask for Referrals

If you’re part of a local business association or if you network with other entrepreneurs, start by asking people you trust. Referrals are powerful because you get honest, firsthand feedback about what working with a particular accountant is really like.

Ask questions such as:

  • How responsive are they?
  • Do they explain things clearly?
  • Are their rates reasonable?
  • Did they deliver results or improvements?

You may even discover accountants who specialize in your industry or local business regulations.

Check Online Reviews

Online review platforms are another excellent resource. People often leave detailed reviews when they’ve had an especially good or bad experience. These insights can help you get a feel for the accountant’s professionalism, communication style, and reliability before you ever reach out.

You can also check their website or online profiles to see testimonials, credentials, and areas of expertise.

4. Important Factors to Consider When Choosing an Accountant

When you’re comparing potential candidates, keep these key considerations in mind:

a. Qualifications

Not all accountants are required to have a degree in accounting or to pass state or federal licensing. If you’re only looking for simple bookkeeping or tax services, a bookkeeper or an enrolled agent might be a good fit, but if you need extensive accounting support or are looking for someone who can assist you through complicated tax affairs, a degreed and licensed accountant has stronger accounting qualifications for rigorous financial work.

b. Experience

Think about how much experience is necessary for your situation. More experience usually means higher costs, but also more knowledge and less room for error.

If your business is new and finances are simple, a less experienced accountant may be perfect for keeping costs manageable. If your business is scaling quickly, has multiple revenue streams, or needs help with tax strategy, choose someone with several years of experience in small business accounting.

c. References and Testimonials

Always ask for references. A reliable accountant should have satisfied clients who are willing to vouch for them. Try to get testimonials from businesses similar to yours—this will give you insight into whether the accountant understands your industry and can support your unique needs.

Don’t hesitate to reach out to references directly. Real, honest feedback is one of the best tools you have.

d. Availability and Cost

Before hiring anyone, make sure their availability aligns with your business needs. Some accountants are busy during tax season, while others may not offer year-round support.

Also discuss pricing upfront so there are no surprises later. Ask:

  • Do you charge hourly or a flat monthly rate?
  • Are there additional fees for tax filing, calls, or consulting?
  • Can you grow with my business as needs increase?

You want someone who fits your current budget and your long-term goals.

e. Personality and Communication

Don’t overlook this. Your accountant is someone you’ll work with regularly, so communication is key. You want someone who explains things clearly, responds promptly, and makes financial discussions feel manageable—not intimidating.
Meet or speak with potential candidates before deciding. A good personality fit can make the relationship much smoother.

5. Ask About the Technology and Software They Use

Financial software is an important part of your accountant’s workflow. Ideally, they should be familiar with whatever tools your business already uses—whether that’s QuickBooks, Xero, FreshBooks, Wave, or something else.
If you have to switch software just to work with them, it could add extra cost and hassle. The more aligned your systems are, the easier and more efficient the partnership will be.

6. Interview Multiple Candidates Before Choosing

Don’t feel like you need to hire the first person you talk to. Interviewing multiple accountants gives you a broader sense of what’s available and which qualities matter most to you.

During interviews, ask about:

  • Their background and education
  • Industries they’ve worked with
  • How they approach tax planning or solve financial problems
  • How they communicate and deliver reports
  • Their availability and turnaround times

This is also the right time to bring up any specific challenges you’re facing—maybe you’re spending too much on supplies, or maybe you’re unsure how to handle contractor payments. See how each accountant would tackle the issue, then compare their responses.

7. Do a Background Check

Before finalizing your decision, take the extra step to verify their credentials. Contact any licensing boards if they claim to be certified, and make sure their license is active and in good standing.

Then confirm that their references are legitimate. A simple call or email can save you from hiring someone who might not be as reliable as they seem online.

A thorough background check protects your business—especially if you’re trusting someone with tax filings, financial compliance, or communications with the IRS.

See more about our ‘SMART Books’ Accounting Solutions 

Conclusion

Finding the right accountant may take a little time, but it’s an investment that pays off. A knowledgeable accountant can help you manage day-to-day financial tasks, keep you compliant with tax laws, and offer valuable insights as your business grows.

By understanding your needs, seeking out relevant experience, interviewing multiple candidates, and verifying credentials, you’ll be in a strong position to choose an accountant who truly supports your small business.

With the right financial partner, you’ll not only stay organized and stress-free—you’ll also set your business up for long-term success.

Want to know more about how we help you solve all your accounting needs? Call now for your FREE ‘SMART Books’ Accounting Consultation – (562) 436-2600

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byDillonBusiness and Tax Consulting, Investing, Personal Finance

The 80-20 Rule for Budgeting

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VIDEO TRANSCRIPTION – We’re talking about budgeting, stewardship first. Within budgeting, we’re going to talk about the 80-20 rule. How much money you should have put back in one reserve and then what you should be striving for in your second reserve.

What’s the 80-20 rule? If you make $100,000 a year doing this basic math, you should be able to live off of, I mean, you should be able to save $20,000 a year.

For my Christian brothers and sisters, 10 % Tithes, what you do with the other 10%, that should be going towards investing or retirement. You should be able to live off of $80,000 a year or 80%. If you cannot live off of 80%, that means you’re overspending. So you need to change your spending habits. Sometimes we want to be like the Joneses, the Smiths, the Williams. Be who you are.

I’m just a big old country boy from Oklahoma City. That God has placed purpose in me.

 

Got questions? Contact us for a FREE 20 minute Personal Finance Consultation.

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byDillonAccounting, Bookkeeping, Growing A Business

Should You Do Your Own Bookkeeping?

The question is a simple one: If you’re a business owner, should you do your own bookkeeping? The answer might seem obvious in the digital age of apps, AI, advanced software, and automated everything. But the truth is, in most cases, first-time and experienced owners should probably leave the bookkeeping function to professionals.

There are situations when the DIY route makes sense. For example, managers with a lot of time, the right skills, a rock-solid grasp of the basics, and who operate very small entities can, for a while anyway, do their own books before the business grows and becomes more complex.

Learn more about our ‘SMART Books’ Bookkeeping Solutions 

There’s an in-between phase, too, where owners can get training and use software to make a first draft of the books before handing them over to a professional accountant who can check for errors. The points below offer a starting point and knowledge base that help to answer the question, “Should you do your own bookkeeping?” 

  1. What’s Involved in a Thorough Bookkeeping Job

For starters, so-called “simple bookkeeping” involves much more than adding columns of numbers and balancing expenses against revenue. Modern accounting is about maintaining careful tax compliance with complex federal, state, and local regulations. Plus, those who do the job must possess an in-depth understanding of secure record-keeping, reconciliations, payroll protocols, proper data entry, and industry standards.

So, as an owner, should you do your own bookkeeping? Before answering, consider the following details about what’s involved in addition to the big-picture explanation above. One, a thorough job covers the entire accounting cycle. That means you’ll need to be meticulous if you do the work yourself about recording, classifying, and reconciling all financial events in order to get accurate and usable output. The whole thing begins with setting up what accountants call a clean set of books.

What’s that? The short answer is that it’s a chart of accounts alongside a reliable system for capturing every transaction, namely all sales, receipts, and payroll events. Daily chores include invoice management, data entry, bank reconciliations, and paying bills. Forget that last task, and your telephone will serve as a friendly reminder.

Recurring, non-daily duties of the company bookkeeper focus on filing taxes, processing payrolls, withholding taxes, and managing A/R and A/P (accounts receivable and accounts payable). Every few months, the bookkeeper must create balance sheets, income statements, and cash-flow documents to keep an eye on profitability and liquidity. Budgets, variance analyses, and cost-tracking chores round out the job responsibilities.

But you’re not done yet. Ongoing work includes record-keeping for tax purposes and setting up internal controls to protect the company from fraud. Secure data storage, approval workflows, and separation of duties are part of that mix. Yes, it’s a lot of work and not the kind of thing the average non-professional is prepared to do without extensive training, experience, and excellent software.

2. When Does Outsourcing Make Sense?

While there are rare cases where an owner can competently manage the books, a professional bookkeeper or CPA typically delivers the thoroughness, accuracy, and legality that protect the company and save a lot of time.

There are lots of scenarios in which outsourcing the entire ball of wax with regard to bookkeeping makes great sense. In most cases, hiring a pro is the wisest choice for anyone who cares about scalability, accuracy, and focus. If you don’t have the in-house talent or time to tackle daily financial chores, outsourcing is the natural solution for creating consistently up-to-date data and fully compliant reports.

When cash is scarce, which is a common problem for startups, professional bookkeeping firms or independent experts can put tighter controls in place, deliver on-time reports, and perform dollar-perfect reconciliations. But should you do your own bookkeeping if you own a small, seasonal business? When irregular workloads are the rule rather than the exception, there’s even more of a need for clean, audit-friendly books.

Accurate records prepared by a third party make it much easier to secure bank loans down the road and pass stringent audit requirements whenever bespectacled IRS agents come calling. And for companies with evolving tax requirements or that operate in more than one state, professional help is a must. In the end, outsourcing boosts efficiency, minimizes risk, and offers expert guidance without the cost of maintaining an in-house accounting team.

3. Getting Training & Using Software

Want to dip your toes into DIY bookkeeping? What about doing some work yourself and then handing the books over to an accountant for verification and error correction? If you do, it’s imperative to begin with the very best self-help resources, namely live training and/or software products specifically designed for the job. Try reputable online courses, community college classes, or small-business development centers for training.

Most courses focus on hands-on practice and real-world situations to give learners confidence before they attempt to handle their own books. At this point, “Should you do your own bookkeeping?” becomes a question with three possible responses: “Yes,” “No,” and “Partially.” Then, when choosing software to augment your newfound knowledge, be sure to get scalable, user-friendly products that suit the business’s industry and size.

4. The Downside of Doing the Job Yourself

The root of the problem is that non-accountants, even with decent training and expensive software, tend to fall victim to security vulnerabilities, data gaps, late filings, missed tax deductions, and dozens of other obvious and not-so-obvious pitfalls.

The root of the problem is that non-accountants, even with decent training and expensive software, tend to fall victim to security vulnerabilities, data gaps, late filings, missed tax deductions, and dozens of other obvious and not-so-obvious pitfalls. Those are just a sampling of the reasons for answering “No,” to the question, “Should you do your own bookkeeping?”

The DIY approach comes with dozens of backfire scenarios, can end up costing a ton of money, and has a way of producing high levels of stress. Even if you have good intentions, pitfalls for DIY enthusiasts include unwanted results like misclassified deductions, missing data, inaccurate tax filings that trigger audits, distorted cash-flow reports, and a lack of proper internal controls.

Finally, even the best software products on the market aren’t worth a dime if users misunderstand complex directions. That can lead to duplicate transactions, incomplete reconciliations, and audit trail gaps, to name just a few potential problems.

5. Clearing Up a Few Common Misconceptions

Beware of the common misconceptions about bookkeeping. First, don’t assume that “CPA” (certified public accountant) and “bookkeeper” are synonymous terms. CPAs are licensed accountants who handle highly complex chores like federal tax audits, estate planning, and corporate consulting. Bookkeeping represents a tiny piece of what a CPA does. Another myth is that bookkeepers must have college degrees; they don’t.

See more about our ‘SMART Books’ Bookkeeping Solutions 

Finally, the idea that pricey software products can thoroughly and perfectly manage a company’s books is a widespread falsehood. In the real world, software can assist, but there are too many judgment calls and qualitative decisions that require human input for compliance with industry standards, ethics, laws, and company policies. Should you do your own bookkeeping? The bottom-line answer is probably not. Outsourcing is almost always the smarter solution.

Want to know more about how we help you save time, money accurately claim 100% of the tax breaks you deserve? 

Call now for your FREE SMARTBooks Consultation – (562) 436-2600

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byDillonBusiness and Tax Consulting, Growing A Business, Protecting Your Assets

What Is Tax Consulting?

A field of work within the finance and accounting industries, tax consulting focuses on tax law, planning, and compliance. Professionals in this field are known as tax consultants or tax advisors. They are trained and experienced in tax regulations, helping guide clients so they structure their finances properly. 


The goal is to make tax-efficient decisions that benefit your finances in the long run. Some of these tax consultants are also accountants or hold another financial degree or position. It’s important that you do your due diligence and look into the qualifications of a tax consultant before trusting them with your financial information and future. 

Learn more about our Tax Consulting Solutions 

The Basics of a Tax Consultant


A tax consultant is quite different from an accountant. Accountants are typically responsible for recording and reporting a variety of financial transactions. Tax consultants focus more on strategic advice to help clients plan. For example, they’ll provide you with to help reduce your tax burdens and to avoid legal fees.

Professionals working as tax consultants or advisors are knowledgeable about things like corporate taxes, international taxes, indirect taxes, and income tax. Meeting legal obligations and representation during disputes and audits are part of the job as well.

While it may not seem worthwhile investing in the services of a tax consultant, it almost ALWAYS certainly is. You can end up saving a substantial amount of money over the course of many years or even a lifetime. Of course, you need to ensure you’re working with an experienced and knowledgeable professional that you can trust. 

 

Tax Planning for the Future

Timing income and deductions are ways to reduce tax liability in a legal manner. Tax consultants know many different techniques to accomplish this. Guidance is also provided for things like acquisitions, mergers, estate planning, and financial investments.

International Support

Businesses and major corporations benefit from tax consulting regarding cross-border tax rules and treaties.

Focusing on Compliance

Tax returns must be prepared and filed on time to avoid fees and legal disputes. It’s also very important that information is recorded and reported accurately.

 

Who Uses Tax Consulting?


Tax consulting is beneficial for several types of people. Individuals with a high net worth should be carefully structuring their finances now and with the future in mind. People with complex income may have difficulty figuring out the best way to structure money to avoid excessive taxation issues. This includes investors with portfolios that include many different areas of business.

Businesses, corporations, partnerships, and startup companies benefit from tax consulting. Optimizing tax efficiency is ideal. Even nonprofit organizations need guidance that takes their tax-exempt status into consideration. Compliance is also very important for nonprofit organizations.

There may be times in your life when you benefit from speaking with a tax consultant. However, this isn’t necessarily a service you will need on an annual or ongoing basis. For example, one-time life scenarios like marriage, divorce, or real estate transactions can impact your financial situation for the time being. Making smart decisions during these situations can make or break you from a financial perspective.

 

Finding a Good Tax Consultant or Advisor


Not every tax consultant that you encounter will be qualified to handle your financial needs. Make sure that the professional you’re considering working with has a degree in the field of accounting, law, or finance. Just like the Tax Consultants here at Cooper’s Accounting Service. There are also certifications that these consultants can have. This includes being a certified public accountant (CPA) or enrolled agent (EA).

There are certain skills that set one tax consultant apart from another. Strong analytical thinking helps plan and come up with creative ways to plan and remain in compliance. Attention to detail helps a consultant spot small details that can make a big difference in your financial situation. Staying up to date on industry information, developments, and trends is important, as is knowledge of tax legislation.

There are various areas of specialization that tax consultants can focus on to provide a tailored approach to clients. Knowledge of corporate tax is beneficial to companies and businesses. International tax helps with global taxes and treaties. Clients who are navigating the stress of planning inheritance and the transfer of wealth benefit from an experienced tax consultant with knowledge of estate and trust taxation.

 

Tax Consultant Due Diligence


It is the responsibility of a tax consultant to ensure you can lower your tax bills and increase profits. However, strict compliance assurance will help you avoid costly penalties and inconvenient audits. Helping businesses and individuals allocate their financial resources properly is efficient and profitable. As a client, you should experience peace of mind knowing that you have a professional on your side that can handle even the most complex tax situations.

 

Where Can I Find a Tax Consultant?


Usually, you can find tax consultants working in accounting firms, credit unions, and banks. There are many higher-level positions, including partnerships and senior management roles, that exist for large corporations and individuals with substantial income.

This is an industry that is always changing as tax rules and trends develop. We’re also seeing a shift in compliance requirements becoming stricter. AI technology is helping tax consultants stay organized and offer highly customized plans to clients. Expect more digitalization as the industry progresses. We’re already enjoying the benefits of online tax filing. This process may become more automated and streamlined in the future. 


The government is tightening tax laws to catch evasion and prevent it from occurring. There are also green tax initiatives that support sustainability that tax consultants must stay abreast of. Tax consultants with experience stay abreast of these topics.

See more about our Tax Consulting Solutions 

By strategically organizing finances according to tax law, financial planning can support efficiency, compliance, and profitability. Tax consulting is a very beneficial service that protects you as an individual, business, or major corporation. As we experience tax systems becoming more complex at a state, national and even global level, this support becomes more important than ever.

If you would like to know more about how we can help you grow with our tax or business consulting solutions, give us a call today. 

Speak to someone from our team regarding your FREE SMART Money Consultation by calling (562) 436-2600. 

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byWebmasterFamily MattersNo Comments

Recently Lose A Loved One? Here’s 1 Way To Handle The Inheritance

Here’s a QUICK Financial Tip for those who recently lost a loved one. Do not disburse 100% of the inheritance money. Disburse it in two rounds. You can do 90% in the first round, but keep at least $100k for outstanding bills, taxes or sadly the possibility that one of your relatives may sue you.

We had a client that came into our office because he had to hire a lawyer to remove his sister as Trustee of their father’s estate. Our firm had to fix the tax side. He will never trust his sister and two brothers again. All because of money!

Got questions? Contact us for a FREE 20 minute Personal Finance Consultation.


 

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