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What is a Corporation?

The terms business, company and corporation are often used interchangeably by the general public. However, there are some significant differences and definite benefits.

Most Important Benefit

Corporations enjoy a variety of benefits and perks. The greatest benefit of all is limited liability. It means that stockholders can reap the benefits of profits through dividends and stocks, but they can’t be held personally liable for the company’s debts or a product problem. The only real risk to stockholders is losing the money they invested in the corporation.

What it Is

A corporation is a legal entity that’s often referred to as a “legal person.” It’s completely distinct and separate from the founders or owners. The Supreme Court ruled in 1886 that corporations were entitled to many of the same rights and responsibilities as an individual under the Fourteenth Amendment. Corporations can:

  • Pay taxes
  • Sue and be sued
  • Own assets
  • Enter into contracts
  • Loan and borrow money
  • Hire employees

Anyone Can Form One

Individuals or a group of people with a shared goal can form a corporation. To be recognized as a legal entity, it must be incorporated. Most corporations are for the purpose of making a profit, but there are also profit and non-profit organizations, along with charities that operate as legal corporations.

A corporation can conduct business under its own name, but it can also conduct business under a completely different name or have subsidiaries with other names that are owned by the parent company.

The Definition Varies

Corporations are created under the laws of the state in which they’re formed, but the exact definition of a corporation can vary among jurisdictions. The founders must file articles of incorporation and issue stock. Stockholders must also elect a board of directors during an annual meeting. The Securities and Exchange Commission (SEC) and federal law regulate public corporations.

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 (843) 347-0849 and discover why our clients return to Peavy and Associates, PC year after year!

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The Tax Man Commeth – Are You Ready

Tax time is right around the corner and if you haven’t already filed your taxes, now is the time
to get your paperwork in order and get the deed done. No one enjoys filing their taxes, but
waiting until the last minute opens the door to mistakes and the potential for missed deadlines.
You’re going to need a variety of documents, depending on your filing status. The following are
just some of the most common forms that may apply.

W-2s
These detail all the income you had from employers throughout the year, whether you were
employed full- or part-time.

Form 1099
If you worked in the gig economy or had side hustles, the IRS considers that as being self-
employed. That makes you subject to a higher rate of taxation. Due to third-party payment
platforms, it can be difficult to differentiate self-employed income from gifts or repayments.
Form 1099 tells the IRS how much you made via self-employment. Be sure to keep accurate
records of expenses associated with self-employment or a small business.

Form 1098
This is provided by your mortgage company if you’re a homeowner. It will tell how much
mortgage interest was paid.

Form 1099-DIV
The form is for any income or dividends received from investment distributions. That includes
stocks and bonds, along with investment or rental properties.

Form 1098-E
Report student loan interest from this form. Depending on your income, it could potentially
qualify you for a deduction of up to $2,500.

Form 5498
Contributions throughout the year to your individual retirement account are reported on this
form. The amount may be tax deductible.

Form 1095-A
It’s a statement from the Health Insurance Marketplace. You can receive a tax credit for
premiums paid, offset by healthcare costs.

Letter 6419
Anyone who received advanced child tax credits will receive a letter outlining the amount they
received.

 

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 (843) 347-0849 and discover why our clients return to Peavy and Associates, PC year after year!

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Accountant near me

Why You Need a Certified CPA for Tax Season

The most important reason you need a certified CPA is that they can save you money. Tax
preparers typically undergo a basic course before embarking on tax preparation services. A
certified CPA has years of specialized education and experience to draw upon. There are many
levels and specialties in the realm of CPAs and its important to find the right professional for
the task.

More Money
A certified CPA utilizes specialized, sophisticated software and is cognizant of the changing tax
laws. They’re knowledgeable in credits, deductions, extensions, and amendments of which the
average individual wouldn’t be aware. They can even amend returns from previous years. The
experts are able to identify errors that could result in higher taxes or an audit and maximize
refunds.

IRS Representation
Everyone fears an IRS audit and it’s difficult to justify a tax return when you’re in a panic. A
certified CPA has the authority to represent you in an audit. The professionals deal in facts,
figures, and speak the same financial language as the IRS.

They can also aid in lowering the financial cost of an audit and negotiate on your behalf if the
findings go against you. Just remember that even if the return is completed by the CPA, you’re
still responsible for the information that it contains.

Confidentiality & Documentation
Home filing systems can be haphazard, incomplete, and completely unsuitable if they pertain to
a business endeavor. A certified CPA retains your records and treats them with the utmost
confidentiality.

Future Planning
A certified CPA is a licensed professional qualified to prepare your taxes, plan for future tax
returns, retirement, investments, and business success.

Peace of Mind
Tax returns are complex and complicated. The peace of mind that comes with a certified CPA is
worth the extra cost. Consumer software and even online preparation sites are essentially a
one-size-fits-all solution for “easy” tax returns. They don’t provide the same level of experience
and expertise that’s provided by a certified CPA.

 

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 (843) 347-0849 and discover why our clients return to Peavy and Associates, PC year after year!

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Raising Money Smart Kids

In days gone by, personal finance skills were taught in school. The courses went by the wayside
as other subjects were deemed more important. An example is algebra, which is a required
course, but one that few students use after leaving school. Be advised that youngsters tend to
emulate the financial attitudes of their parents and good financial habits can be learned.

Begin in Childhood
Parents shouldn’t be afraid to discuss money matters in front of the children. The age of 7 is a
good time to begin financial education by teaching children good spending habits. Young
children can be given a weekly amount, while teens can receive an amount at 2-week intervals.
It’s a good idea to tie the stipend to chores to encourage a work ethic.

Saving
The ability to save money rather than spending it for instant gratification is one of the best
lessons a child can learn. If the youngster wants something specific, suggest they save a portion
of their funds until they have the required amount.

Extra Earnings
The opportunity to earn extra money provides children with more control over how they earn,
save and spend. It also teaches a work ethic.

Philanthropy
Introduce children to the concept of philanthropy. Parents that give to charitable endeavors
should take their children with them when they contribute and talk about why they’re giving
back to the community.

Resist Temptation
It’s difficult for parents to see their children want something and struggle to achieve it. Resist
the temptation to give youngsters extra money before the allotted time. The negative
consequences of being careless with their money is a strong and powerful lesson. Be sure to
discuss spending habits with children and ways they can do better in the future.

Budgeting
The early foundation for budgeting as a child will help teens. Show them how to create a
budget that accounts for the things they need vs things they want. It’s a lesson in prioritization.

Pitfalls
It’s equally important to discuss the pitfalls of high-interest student loans and credit card debt,
along with paying bills on time, as youngsters mature into adults.

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Financial Goals

How to Develop a Financial Goal

Everyone has financial goals they’d like to accomplish, but many don’t know how to begin. The goal may be to eliminate credit card debt or save for retirement. There are short-term and long-term financial goals and they all begin with identifying what those goals are. People should make sure their financial goals are specific to them and not what others are doing.

Make a List

At its most basic level, individuals can begin by making a list of what they want to accomplish financially – and be realistic. When motivated to create a list, most people are surprised by the number of things they include. Individuals need to make sure their goals are always uppermost in their mind. Keep the list highly visible by placing it on the phone, using sticky notes, or tape a copy to the refrigerator.

Be Specific

Saving money or managing finances better is too vague. Individuals need to be specific. That can include purchasing a new car, taking a dream vacation, or living without credit cards.

Make a Budget

Budgeting is a skill that many have never learned. In one column, list all of the household’s monthly income. In another column, list all of the recurring monthly bills. Subtract the bills from income. The remaining number is how much disposable income is available to put toward financial goals.

People should be prepared to make adjustments. That can mean eliminating or reducing expensive coffee, the number of times they eat out, or the number of subscriptions to streaming services. Even small changes can make a difference.

Measurable Results

Everyone needs to be able to see measurable results. It keeps people from becoming discouraged and provides proof that what they’re doing is or isn’t working.

Set a Deadline

Individuals need to set a specific date for accomplishing their goal. Work on one goal at a time. The deadline will depend on what a person wants to achieve. It could take a matter of months or involve a multi-year plan.

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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accoutant

The Difference Between CPAs and Accounting Firms

One of the most pressing questions for individuals and businesses is whether to hire a certified public accountant (CPA) or an accounting firm. The most important difference is that CPAs are allowed to sign tax returns for clients and represent them during a tax audit. Accountants don’t have the same standing with the IRS. All CPAs are accountants, but not all accountants are CPAs. A CPA has an advanced level of rigorous training, expertise and certification.

The success of any business relies on its financial health and individuals need to choose the right professional for their needs. The terms CPA and accountant are often used interchangeably, but there are distinct differences.

Accountant

An accountant provides basic bookkeeping tasks and can verify the work of an in-house bookkeeper.  They create reports and analyze those documents to generate long-term business plans. The professionals file tax returns and provide tax planning advice. An accountant can perform cash flow management and provide projections, along with bookkeeping services.

Accountants record, maintain and interpret financial records. They ensure the accuracy of financial documents, evaluate operations and can recommend best practices for clients. Accountants can create forecasts, perform risk analysis, and provide guidance on reducing costs and enhancing revenues.

CPA

A CPA provides all the services of an accountant and more, especially forensic accounting. They’re able to detect irregularities ranging from embezzlement to tax evasion. In addition to passing the stringent CPA certification exam, to keep their license, CPAs must also complete yearly educational requirements.

CPAs can legally represent clients before the IRS in the event of an audit. A CPA can file taxes and they utilize the most advanced financial software on the market that’s not available to the average individual. They’re experts in financial planning, provide clients with profit and loss statements, and can assist with profit-sharing and employee benefit packages. CPAs provide the data that business owners need to make sound decisions for the future of their company.

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 firm

How to Choose an Accounting Firm

Choosing an accounting firm to handle business interests, personal finances and/or taxes can be confusing. Compounding the problem is the inability to discern which financial services are actually needed or an insufficient budget to hire an accountant. Instead, people often try to navigate their financials on their own and leave money on the table.

Identify Needs

Private individuals and businesses will typically have vastly different needs, though they can intersect. The same is true for startups, established businesses and sole proprietors. Cryptocurrency investors, those with lottery winnings, stocks, and rental properties will need an accountant with experience in those areas.

Qualifications

An accounting firm should be willing to provide their qualifications and areas of specialization in the services for which they’re being hired. Don’t be hesitant about asking questions to discover if they’ve been involved in audits and the outcomes. Seeking referrals from family, friends and/or other business owners is a good way to learn about accounting firms that may be right for an individual’s needs. Don’t forget to contact the Better Business Bureau to determine if there have been any complaints about the firm.

Experience and Support

Having experience in the specific areas for which an accountant is hired can’t be overstated. They’ll know about tax laws, deductions and credits available within specific industries. They’ll also have the expertise to assist with future planning and goal setting. Audits are always a potential event and the accountant should provide support and services that represent the client’s interests in that eventuality.

Near or Far

The location of the accountant relative to the client is important. Individuals may not have the time to drop everything to meet with their accountant. That’s especially true for people that frequently travel or have overseas holdings.

Making Connections

Clients should feel comfortable discussing any facet of their financial or business interests with their accountant. If they don’t, it’s time to find a new accountant. The chosen accountant should be able to explain things in clear and understandable language without jargon specific to the accounting industry.

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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Business Accounting For Small Businesses

Small businesses rely heavily on their books. Without them, they cannot make ends meet or successfully conduct day to day operations. Therefore, it is imperative that any accounting firm that wishes to be selected for any small to medium-sized business should have the ability to maintain the books of every individual client.

Not every accounting firm provides all types of accounting services, and therefore, business owners must interview different firms to find out which is the perfect match for the business’ specific needs. TIP. Many accounting firms provide bookkeeping and payroll services, with some offering only payroll, while others will also offer tax preparation, business valuation and other niche services only. It is important to know what services each bookkeeping firm provides before making a final decision.

Business owners often have a large number of invoices, monthly or yearly, that need to be processed. A good accounting firm services provider understands the importance of accurately preparing and filing financial reports so that these reports provide accurate, up-to-date information for decision makers. Without accurate financial reports, small business owners can make costly mistakes in their business decision making process. In addition, accounting firms perform additional services like providing payroll management, cash flow analysis and marketing tools for managing expenses. These additional services often make accounting firms well worth their initial investment.

Financial Planning

Not all accounting firms offer financial planners. Small business owners often prefer to deal with an accountant or financial planner to help them successfully achieve their business goals.  In addition, even with accounting help, small business owners may be at a loss when it comes to effectively identifying potential opportunities for growth or expansion. A financial planner can assist them in this process by providing them with advice about which projects should be initiated first, how long they should take to complete each task and what resources should be dedicated to each project.

In order for accounting firms to become successful, they must be able to provide excellent client service.  Good accounting clients should be interested in learning more about your business model, goals and objectives, the current financial situation and what obstacles you expect to come up. With these goals and objectives in mind, they will be able to create a customized CPA accounting plan to meet all of your requirements.

Tax Benefits

The best accounting firms are also aware of the various tax benefits that they can provide to their clients. They often offer tax planning services to their clients in order to help them minimize the potential tax liability that they face in their business operations. In addition, they may also provide assistance with estate planning, assistance with retirement plans and other financial issues. All of these services can make great business sense for small businesses. When accounting professionals are hired by small businesses, they are able to focus on the most critical aspects of their business while their team provides outstanding support, guidance and services that help grow their clientele and increase profitability.

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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CPA Consultant Conway South Carolina

Top Qualities of a Good Accounting Firm

An accounting firm is a great way to relieve the stress of tax time and it’s a real time saver for individuals already pressed for time. Hiring the right firm may not be so easy, though. In today’s world, being “good with numbers” or the least expensive option isn’t enough. One little mistake in this field can have serious and expensive repercussions.

A good accounting firm does more than simply keep the books and file your taxes. It will be able to effectively communicate a wide range of business information and opportunities. The following are the top qualities that an accounting firm should exhibit.

Personalized Service

Each business is different and a superior accounting firm understands that. A full service tax firm will be able to help you develop tax strategies, create plans to meet financial goals, and help you manage your assets. Your accounting firm should meet with you several times a year, not just at tax time.

Experience and Education

The accounting firm should have experience in your particular industry. That means they’ll know your business and any applicable deadlines. Tax laws change frequently and without notice. An accounting firm will be cognizant of current tax laws and how they impact your business. The firm’s accountants will have extensive education and should have met the licensing requirements of a certified public accountant (CPA).

Accuracy and Detail

You’ll obviously want a firm that’s accurate, which means it will be detail oriented. The firm will prepare reports to keep you informed of your financial status, identify potential issues and suggest solutions, and provide guidance to reduce costs, enhance revenues, and maximize profitability.

Technology Literate

The days of accountants laboring with paper and pencil are long gone. An accounting firm should be utilizing state-of-the-art technology, advanced accounting software, and other technology-based tools.

Business Strategies

An accounting firm will be able to provide effective advice and strategies whether the business is a start-up or an established company of long standing. The firm will be able to provide you with the information you need to make sound and informed business decisions that helps your enterprise grow and evolve.

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 Software can Save you Time

Time is your most valuable asset. Accounting software can save you time that can be invested back into the business or on pleasurable pursuits. The software provides greater accuracy and multiple record types that can be recalled at any time for any reason. Accounting software is equally applicable whether you’re operating a large corporation, small business, brick and mortar store, or online enterprise.

Even your accountant utilizes software to minimize the potential for errors and automate tasks. You’ll find that today’s options for accounting software is affordable, easy to use, and provides capabilities and functionalities of which you may not be aware. It’s ready to use straight out of the box and typically doesn’t require much in terms of setting it up.

One of the great things about accounting software is the ability to automate the repetitive tasks that take up your time. The software is able to automate invoicing, payment reminders, collections and budgeting, just to name a few. The software is also able to integrate with multiple departments.

Invoicing, statements and other documents can be created automatically and sent to clients electronically via email or printed out and faxed. The feature saves you a substantial amount of time and facilitates payment collection without the need to rely upon time-consuming Excel spreadsheets.

Most accounting software will allow you to automatically transfer and import data from spreadsheets into the program. If you offer credit accounts, the software can identify contact information for those that owe you money and provide a detailed account of the transaction. Financial reports can be prepared for yourself and you’ll have the option of being able to send them to other recipients as needed.

Today’s modern accounting software will have powerful analytics, the ability to create custom reports, and delve deep within your company’s structure to determine where any improvements or changes should be made. With accounting software, you’ll spend less time on repetitive tasks and have the tools to plan for your company’s health and future.

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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