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tax accountant

5 Reasons to Hire a Bookkeeper

Operating and growing a business is a full-time endeavor. There’s no reason for business owners to take on the responsibilities of another job when there are highly-trained professionals available who have the training and experience required to do so in an exemplary manner.

Time

One of a business owner’s most valuable assets is time. When individuals find themselves expending as much time working on the books as they do their business, it’s time to hire a bookkeeper. When individuals are overwhelmed and don’t have sufficient downtime, errors creep in and the business will suffer.

Receipts and Transactions

There are untold transactions that take place every day in the course of conducting business. Maintaining accurate records is essential for any business. Losing track of receipts, invoicing, employee-related expenses, and even when insurance is due opens the door to errors that can cost a business far more than the expense of hiring a bookkeeper.

Paying Penalties

There are numerous state and federal reports and taxes that must be filed each year, along with deadlines for submitting that information. Failure to do so results in financial penalties that increase the longer they go unpaid. Any business owner that finds themselves paying fines and facing penalties needs to hire a bookkeeper as soon as possible.

According to the IRS, approximately 47 percent of the penalties it collects is due to filing delinquencies. A bookkeeper can assist in eliminating that problem and help clients keep that money within their business.

Profits aren’t Increasing

Over time, business owners expect to see an increase in profits. Without accurate records, there’s no way to discern if advertising is working, if the business is acquiring new customers, areas of inefficiencies, and where the company is losing money. A bookkeeper can help determine that and assist individuals in maintaining their cash flow.

Planning for the Future

Eventually, every business owner wants to expand their business. Individuals may want to apply for financing or achieve a specific goal by a certain time. The services of a bookkeeper will show business owners where their finances stand at any point in time so they can accurately plan for future growth or even retirement.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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Tax Accountant

How can a Tax Accountant Help Me?

Approximately 33 percent of all taxpayers prepare their own taxes each year, thanks to online tax preparation software. What you may not know is that you could be leaving money on the table by not consulting with a tax accountant. Tax laws are highly complex and complicated. The following are just some of the ways that a tax accountant can help.

Minimize Audits

The odds of being audited increase the more you make and a tax accountant will considerably reduce the potential. If you make less than $200,000, the chances of being audited is 0.9 percent. That number increases to 3.7 percent if you make over $200,000 and 12.5 percent if your income exceeds $1 million.

Own a Business

If you own a business, are self-employed, or are in partnership, a tax accountant can determine how much you should pay in quarterly taxes. The benefit is that you won’t be faced with a huge tax bill at the end of the year.

Life Changes

Buying a house, getting married, having a child, getting a divorce, or investing in the stock market are all significant events in anyone’s life. A tax account is able to help you take advantage of the available tax breaks and even help you adjust your withholding to accommodate those changes.

Failure to Pay

If for any reason you failed to pay your taxes in the past or owe a balance, a tax accountant is able to help you file appropriately. He/she will also know about IRS programs designed to help people in these situations.

Other Situations

A tax accountant can help in a wide variety of situations, including if you’re anticipating a large capital gains tax, have investments and income from foreign sources, or if you have rental properties. You can utilize a like-kind-exchange to minimize taxes if you’re thinking of selling real estate. A tax accountant can also help you if you’re planning on making a large gift, putting away money for your kids’ college, or creating a trust.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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tax accountant

Top Tips for Hiring the Right Tax Accountant

In the digital age, a majority of individuals simply file their taxes through an online service that provides tax software. Others make use of tax preparers that can be found at kiosks located in malls and chain stores. The people that work in retail franchises such as H&R Block and Jackson Hewitt are competent for individuals that are filing a very straight forward tax return.

Individuals often find certified public accountants (CPAs) and enrolled agents (EAs) working at those kiosks. EAs are the elite by IRS standards and are allowed to represent clients before the IRS. For those that choose to utilize the experience and knowledge of a tax accountant, there’s some basic information individuals should ascertain before hiring them.

Qualifications

One of the best ways to find a reliable tax accountant is to seek recommendations and referrals from family, friends and business owners. Don’t be reticent about contacting the firm and asking questions. Contact the Better Business Bureau to see if any complaints may have been filed.

The tax accountant should be willing to provide their qualifications and any areas of specialization. Ask if they’ve ever been involved in an audit, how they handled the situation, and the outcome. Tax accountants can’t accept payment without a preparer tax ID number (PTIN). Make sure the tax accountant has one.

Due Diligence

After the initial interview with a tax accountant, individuals can contact the state’s board of accountancy to discover if they’re licensed, in good standing, and if they’ve had any disciplinary actions taken. It can also be helpful to search their name online.

Red Flags

There are some red flags of which every individual should be aware. If a tax accountant promises a large refund before they’ve even looked at a person’s financial situation, look elsewhere. The same is true if they tell a client they can claim an excessive number of deductions.

Shop Around

Every taxpayer and tax accountant won’t be a good fit for each other. Individuals have the right to shop around, change their mind, or even take their return elsewhere if they desire. If necessary, individuals can always ask for an extension on filing their taxes. No one should trust their finances and tax returns to someone without the proper certifications and experience.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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accounting

Accounting 101: Assets and Liabilities

Making a profit in a business is derived from several different areas. It can get a little complicated because just as in our personal lives, business is run on credit as well. Many businesses sell their products to their customers on credit. Accountants use an asset account called accounts receivable to record the total amount owed to the business by its customers who haven’t paid the balance in full yet. Much of the time, a business hasn’t collected its receivables in full by the end of the fiscal year, especially for such credit sales that could be transacted near the end of the accounting period. 

The accountant records the sales revenue and the cost of goods sold for these sales in the year in which the sales were made and the products delivered to the customer. This is called accrual-based accounting, which records revenue when sales are made and records expenses when they’re incurred as well. When sales are made on credit, the accounts receivable asset account is increased. When cash is received from the customer, then the cash account is increased and the accounts receivable account is decreased. 

The cost of goods sold is one of the major expenses of businesses that sell goods, products or services. Even a service involves expenses. It means exactly what it says in that it’s the cost that a business pays for the products it sells to customers. A business makes its profit by selling its products at prices high enough to cover the cost of producing them, the costs of running the business, the interest on any money they’ve borrowed and income taxes, with money left over for profit.

When the business acquires products, the cost of them goes into what’s called an inventory asset account. The cost is deducted from the cash account, or added to the accounts payable liability account, depending on whether the business has paid with cash or credit.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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The Purpose of Your Accountant

An accountant is a licensed professional who has gone to hell and back to gain their designation as a certified public accountant. The testing for the certification is beyond brutal. If an accountant is certified, it means they are extremely versed in the tax code, finances and tax issues. 

 

Many people are under the mistaken belief that accountants simply provide tax return preparation services. The stereotypical view involves a person dropping off their receipts a month before tax returns are due and the accountant doing the best he or she can to prepare a tax return while limiting the amount of money you owe the government. This occurs, but people are wasting money if this is how they are using their accountant. 

 

Accountants have expertise in the tax code. You should use this. Ideally, an accountant will aware of all aspects of your financial life. They should also be aware of significant events in your private life, such as the fact you are about to have a child. The reason this is important is it gives the accountant the ability to solve your tax mystery. 

 

Solving a tax mystery simply refers to an accountant figuring out the best way to limit your taxes. As you know from police shows on television or mystery novels, finding as many clues as possible is the way to solve the mystery. The accountant needs to do the same with you and you need to help them. Each part of your finances represents a clue to solving the mystery of how to cut your tax bill. 

 

Once an accountant has all the clues, he or she can do their job. They will give you specific direction on the steps to be taken to save money on your tax bill this year. Equally important, they will give you advice on how you are going to save taxes in future years. Depending on your situation, they may even recommend a long-term tax strategy for stuffing away money to pay for your kids’ college tuition or your retirement. 

 

The purpose of using an accountant is not just to put tax returns together. They put together tax strategies to save you money this year, the next and throughout your life.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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What are Independent Auditors?

Independent CPA auditors are like referees in the financial reporting arena. The CPA comes in, does an audit of the business’s accounting system and methods and gives a report that is attached to the company’s financial statements. Publicly owned businesses are required to have their annual financial reports audited by independent CPA firms and any privately owned businesses have audits done as well because they know that an audit report will add credibility to their financial reports.

An auditor judges whether the business’s accounting methods are in accordance with generally accepted accounting principles (GAAP). Generally, everything is in place and the financial report is a reliable document. But at times an auditor will wave a yellow or red flag. Some indicators of potential trouble include when the business’s capability to continue normal operations is in doubt because of what are known as financial exigencies, which could mean a low cash balance, unpaid overdue liabilities, or major lawsuits that the business doesn’t have the cash to cover.

An auditor must exercise professional skepticism, meaning the auditor should challenge the accounting methods and reporting practices of the client in order to make sure that its financial statement conforms with accounting standards and are not misleading – in short, that the financial statement are fairly presented. Indeed, the words “fairly presented” are the exact words used in the auditor’s report.

A good auditor needs technical know-how, but also needs to know how to be tough on the accounting methods of the client. His job is to be the agent of the shareholders and other users of the business’s financial report. It’s incumbent on an auditor to strictly uphold GAAP, and not let any irregularities slide. 

There are a number of well-known companies that engaged in accounting fraud recently and that fraud was not discovered by the CPA auditors. Enron is one of these companies. In this case, the auditing firm, Arthur Anderson was found guilty of obstruction of justice because it destroyed audit evidence.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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accounting

When to Use a Certified Public Accountant

A Certified Public Accountant, or CPA, can help you make sure that your small business accounting or individual taxes are accurate and complete.  Some businesses are small enough, such as home-based businesses, that a Certified Public Accountant is not needed for most accounting tasks.  However, there are times when a business or individual should use a Certified Public Accountant.

If you have a small business, and you have discovered that an error in your bookkeeping exists, it can often be difficult to locate where and when the error was made to correct the mistake.  A Certified Public Accountant has special training and education to find these errors through an external audit process.  It is vital that these errors be corrected because the books you use in your business are used to determine taxes and business decisions. 

These records also allow investors to see how well your business is doing so that you can get more backing to help your business grow.  A Certified Public Accountant can find and correct any errors in your bookkeeping, and help you organize your bookkeeping so that you or the Certified Public Accountant can easily generate financial statements and reports.  These financial statements and reports prepared by a Certified Public Accountant are the documents that most banks and investors want to see before making any financing decisions.

If you are starting up a home-based or small business, you should seek the guidance of a Certified Public Accountant.  The Certified Public Accountant can help you set up a double-entry method of accounting with a journal and ledger, as well as a chart of accounts to help you use these tools effectively in your business.  The Certified Public Accountant can also advise you as to what taxes you will be responsible for paying throughout the year.  Quarterly taxes are often required of businesses and self-employed individuals.  To avoid penalties, late fees, and a large tax bill at the end of the year, you should contact a Certified Public Accountant for this information.

Any individual that is self-employed should seek out the services of a Certified Public Accountant when it is time for tax return preparation.  Tax laws change every year, and a Certified Public Accountant can help you make sure that you are receiving all of the deductions you have available as a self-employed individual.

Any individual with children, who is separated or newly divorced, or who may wish to itemize deductions based on mortgages, medical expenses, and charitable contributions should also seek out a Certified Public Accountant for assistance in income tax preparation.  This is because the tax laws are very complex, and change often.  If you make a mistake and claim a deduction that you could not legally claim, the IRS may audit your return and cause you to pay back the refund amount, with penalties.  Additionally, if you make a mistake and do not claim a deduction that you could legally claim, the IRS will not attempt to correct the mistake, causing you to receive a smaller refund.  Either way, you lose money.  The best way to avoid these and other errors is to have a Certified Public Accountant prepare your income tax return.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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tax accountant

How To Find A Good Accountant

Finding a good accountant does not always end up being a simple task. There are so many accountants that seem to appear every year, it is hard to know who to choose to put in charge of your finances. Finding an accountant is a very serious task that is never taken lightly, especially since it involves your business. Here are two simple steps of how to choose an accountant that you can trust with your business’s finances. 

The first thing you do to find a good accountant is to build a list of referrals from credible sources. To find resources for these referrals may seem like a daunting task at first, however, it is simpler to accomplish this goal than what you think. You can go to such resources such as your local bank, any type of financial planners that you may have, and you can even talk to your current insurance agent about people they know about to be your accountant. If you have any contacts or affiliations with other businesses, then you can ask them for accountant referrals as well. These are all trusted resources that can provide you with some good leads on who you can trust to be your accountant. Finding accountant candidates through trusted resources such as your business’s bank is one of the best ways to find an accountant.  Most professional referrals like this mean that the accountant has a good reputation. 

Once you have your accountant referrals, you then want to contact them and exchange information. Feel free to tell the accountant about your business as well as your accounting needs and expectations. While you give the accountant your information, also ask for theirs. Some key things you want to find out is if the accountant can handle a business in your industry and your size, as well as finding out all of the services they offer. Do not be afraid to look at their portfolio and get estimates for their services. Be sure you know what services the fees cover. You never want to select an accountant whose fees are too high for what you can afford. Make sure that you can maintain a good line of communication and determine if they are helpful and informative. The accountant who offers the most detail and takes the most time to not only tell you about the services they can offer you, but also listens to your concerns, is usually the type of accountant that you are looking for. 

After gathering all of the information about the accountants, then make the decision of who is the right accountant for you. Remember that you will be having a long business relationship with your accountant, so you want to select an accountant that you feel you can build a good rapport with as well as someone who will have you and your business’s best interest in mind.

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

Contact Us Today

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Preparing for tax audit

Why it’s a Good Idea to Hire a CPA

CPAs, or Certified Public Accountants, can help you in your individual or business accounting and tax preparation in many ways.  With the laws surrounding accountancy such as generally accepted accounting practices for businesses, and tax laws that change every year for individuals, hiring a CPA to perform your accounting services needs is the best way to ensure that your accounting is error free in case of IRS or other audit.

Having a CPA prepare your business or individual income tax return is a great way to avoid errors, not to mention the prying eyes of the IRS and an audit.  A CPA must undergo continuing education as accounting and tax laws change from year to year.  Therefore, only a CPA can ensure that your tax return is completely accurate.  Not only is accuracy important to the IRS and in case of an audit, but it is important to your immediate financial future as well.  Because a CPA has intimate knowledge of tax laws and available exemptions, a CPA can make sure you get the largest refund possible.

In the case that you are chosen for audit by the IRS, your best bet to come through the audit cleanly is to have a CPA by your side.  A CPA is as familiar with tax law as the IRS representative performing the audit.  Because of this, the CPA can negotiate a lower penalty, help you avoid penalties, and help you claim the deductions you deserve.  You should contact a CPA as soon as you have received an audit notice from the IRS, because the CPA can help you prepare for your audit and gather the necessary information.  Then, the CPA can walk into the audit interview by your side, completely in charge and confident of the outcome of your audit.

If you own a small business, a CPA can also help you determine what business taxes are required by your local, state, and federal government.  In addition, the CPA can help you set up a double entry accounting system that includes a journal and ledger.  The CPA can also help you to set up a standard chart of accounts for use with your ledger.  All of these tools will help you stay organized and ready for tax time and any possible audits.  The CPA can also use the information from these tools to create financial statements for your business, which will then help you to make business decisions, make comparisons with competitors, discover industry and company financial trends, and prepare financial reports and business plans for purposes of investors and bank loans.

Whatever the financial service required, a CPA is your best bet.  With a CPA, you have the security of a licensed, monitored professional along with the peace of mind that all of your accounting is accurate and ready for any possible

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

 

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All About UK Accountancy

UK accountancy is somewhat different from American accountancy, in that there are more regulatory standards for accounting in the UK than in America.  In America, companies must follow the Generally Accepted Accounting Principles (GAAP) set down by the Financial Accounting Standards Board. The UK uses the generally accepted accounting principles as a standard for accounting in UK companies.  However, there are other guidelines accountants in the UK must consider.

UK accountants must also consider the International Financial Reporting Standards (IFRS) set forth by the European Union (EU).  These international financial reporting standards were developed in an attempt to streamline the financial reports from UK companies as well as companies in other European nations.  This makes financial reporting easier to understand by everyone. The international financial reporting standards also allow UK businesses to more easily compare their financial statements to those of companies in other nations for the purpose of determining competition and industry standards.

In addition to the generally accepted accounting principles (GAAP) and the international financial reporting standards (IFRS), UK businesses must also adhere to UK law, such as the Companies Act 1985, as amended by the Companies Act 1989. These UK laws incorporate both the GAAP and the IFRS, as well as other European laws. The UK Companies Act 1985 also requires UK companies to file their accounts with the Registrar of Companies, which makes the financial reports available to the UK and worldwide public.

The Companies Act 1985 will soon be superseded by the Companies Act 2006, which is not yet in effect in the UK.  This UK Companies Act 2006 will restate in varying fashions the provisions laid down in the Companies Act 1985, and the amendments of the Companies Act 1989.  However, changes are being made to incorporate the European Union’s takeover of financial standards, and the laws regarding international trade and financial reporting that are now necessary for UK companies to follow.  It will also put into codified law the UK common law that was previously used in regards to UK companies and accountancy.

Any UK accountancy issues that require immediate attention but are not covered by the generally accepted accounting principles (GAAP), international financial reporting standards (IFRS), or Companies Act 1989 are brought before the Urgent Issues Task Force.  This group determines solutions to issues of UK accountancy, and publish Abstracts which are binding immediately for UK companies. These additional standards must also be followed by UK companies.

As you can see, accountancy in the UK is much more complex than that of the United States of America.  There are many UK laws, European Laws, and accounting standards to follow for UK companies. While Americans must only adhere to the generally accepted accounting principles (GAAP) set down by the Financial Accounting Standards Board (FASB), UK companies must adhere also to the International Financial Reporting Standards (IFRS) set down by the European Union.  If you have any question about standard accounting practices for UK companies, you should contact an accountant to help you with your UK accountancy as soon as possible

 

At Peavy and Associates PC our mission is to assist you with all your tax preparations, payroll and accounting needs.  We provide our clients with professional, personalized accounting services and guidance in a wide range of financial and business needs. Give us a call today and discover why our clients return to Peavy and Associates, PC year after year!

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