People generally fall into 1 of 2 categories when it comes to spending – impulse or deliberate. Both types of spending have an important impact on your personal and/or business finances. The truth is that everyone makes an impulse buy from time to time. It’s only when it’s a consistent habit that you need to be concerned.

Impulse Spending

This is the type of spending that’s not pre-planned. An example is going into a store to buy a loaf of bread and leaving with $10 or more – usually more – of other items. Impulse spending it typically triggered by a reaction to something seen or an emotion. The mind is an expert at justifying these types of purchases.

Impulse buying is often a type of “retail therapy” to make yourself feel good. Try to find other activities that elevate your mood such as meditating or taking a walk. Impulse buying makes it more difficult to manage your money, can lead to excessive credit card debt, and leave you with insufficient funds to pay essential living expenses. It can lead to the failure of a business.

Deliberate Spending

These are purchases that are pre-planned, made with forethought, and for a specific reason. It applies to everything from food to office equipment if you have a business. You buy only what you need and with the features you’ll actually use.

Breaking the Habit

Kicking the habit of impulse buying can be extremely difficult. It can be very helpful to make a list and stick to it when you go shopping. It can take time to learn to be a deliberate spender. When tempted toward an impulse buy, take a step back and examine why you want to buy a specific item.

Your Accountant Can Help

An accountant is a valuable ally in helping you control your financial health. They can assist with personal and business finances, along with guidance on purchasing decisions. He/she can help with investments, savings income issues, and budgeting.

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!

A record number of people are turning to credit cards and/or taking hardship withdrawals from their 401(k) retirement funds. They’re doing so to pay for reasons ranging from medical bills and to prevent losing their homes to job loss and tp meet the basic expenses of everyday life. Inflation and the overall increase in the cost of living is a major motivator.

Hardship Distributions Rise

Taking early distributions is essentially prioritizing short-term needs over long-term saving goals. The number of people utilizing hardship distributions has increased 36 percent over the last quarter.

Credit Cards Aren’t the Answer

Credit card debt has risen dramatically, topping $4 trillion for the first time ever. A full 60 percent of Americans are living pay check to pay check and using credit cards to make up for deficits in income. Hiring is down and job seekers are relying on credit cards until they find new employment. Statistics show that 22 percent of the population doesn’t have any savings. The upcoming holidays are exacerbating the situation, as people struggle to purchase Christmas gifts.

Long-Term Consequences

Early withdrawal from retirement accounts don’t come without a price. The IRS imposes a 10 percent penalty on early distributions before the age of 59.5 years of age. That’s in addition to the tax an individual will pay on the income. That doesn’t even count the overall loss to your retirement funds that can be extremely difficult to make up.

Seek Professional Advice

Before deciding to hit your retirement fund, speak with your accountant or a financial adviser to fully understand the ramifications of an early distribution. The experts can provide advice on alternative solutions. In some circumstances the IRS may waive early withdrawal penalties for situations that include a federally declared disaster, terminal illness, long-term care insurance, and domestic abuse. There are limits to how much can be withdrawn and other terms can apply. The rules are complicated and complex, but an expert can help anyone navigate the intricacies.

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!

Expense fraud is a common occurrence in many enterprises and organizations. Owners may be unaware that it’s happening or even be aware that it could be a problem. The practice can cost you dearly, reducing your profitability and hindering future growth.

It occurs when someone manipulates or falsifies costs or expenses for personal gain. The culprit can be employees, vendors or volunteers. It’s done to avoid paying out of pocket or to receive a larger reimbursement. It’s unethical, illegal and a type of financial fraud. All businesses and organizations are at risk.

Common Schemes

Expense fraud occurs at all levels each year. Some of the most common ways it’s committed are:

• Claiming mileage that isn’t driven
• Fake receipts for food, gas or lodging
• Claiming a personal expense as one that’s work-related
• Submitting duplicate receipts
• Using company funds for personal expenses, usually in the form of a credit card)

Why People Do It

The most common reasons are for personal or financial gain. Sometimes the individual may not understand a company’s or organization’s procedures or policies. They may also falsify records to demonstrate they’re making quotas or target goals. It may be a form of rebellion against an employer they feel doesn’t value them. Others may simply feel that the company can “afford it.” Reasons aren’t excuses for essentially committing theft.

Talk with Your Accountant

No one can help your company or organization more effectively than your accountant. He/she will track all the expenses associated with your business, detect patterns of behavior, and bring it to your attention. It’s just one way that your accountant helps you efficiently and effectively manage your finances.

It’s essential to have a very specific reimbursement policy in place that spells out the consequences. It’s equally critical that someone is vetting all requests for reimbursement Make sure that the policy is included with the packet of papers that every employee receives when they’re hired.

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!

Contributions to non-profit organizations increase during the holidays. It’s an excellent way to support your favorite cause and the gifts are tax deductible on your income tax return.

The Revenue Act of 1917

Prior to the Act, charitable donations weren’t tax deductible. With passage of the Act, individuals were able to deduct their donations to tax-exempt organizations on their federal income tax for the first time. At that time, tax rates were increasing to fund the war effort during World War I. Making contributions tax deductible was a way to increase charitable giving at a time when it was decreasing.

Why They’re Tax Exempt

Non-profits work for the private and public good. They don’t seek to profit for their efforts or create personal gain. Organizations that qualify for 501(c)(3) status don’t have to pay taxes so that any money they raise or is donated can go back into the organization to further their work. They have a specific mission, such as churches, foundations and animal shelters.

Exclusions for Tax Exempt Status

If a non-profit organization earns too much income from activities unrelated to the organization’s mission, its tax-exempt status can be revoked. Charitable organizations have to file income tax returns each year to maintain their tax-exempt status. They have to provide information about donations received, their mission and board members. Their status can also be in jeopardy if the organization benefits any of the board members, officers, employees or other insiders.

5 Types of Non-Profits

Non-profit organizations fall into one of 5 categories.

• Charitable organization
• Churches and religious organizations
• Political organizations
• Private foundations
• Other non-profits

They’re operated for specific purposes and must meet IRS requirements. It’s important research any charitable organization before making a monetary donation. Scams are particularly prevalent during the holidays when people are in an especially giving frame of mind. Research them online and utilize a charity evaluator to ensure they’re legitimate.

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!

Millions of people fall victim to scams and fraud every year. It occurs when someone uses deceptive, misleading or illegal means to cheat you out of your money or jeopardizes your financial health. Financial fraud has increased by 70 percent during the past year, costing people billions. The threat can arrive in a variety of forms, via video, text, phone, mail and email. Artificial intelligence is exacerbating the problem.

Charity

Scammers often utilize names similar to authentic charitable organizations. The scams are especially prevalent during holidays, after a natural disaster or emergency.

Debt Collection

Fraudsters pose on the phone or via a letter, claiming you owe a debt that you don’t or one you’ve already paid.

Mortgages

The unscrupulous will ask for an upfront fee to provide a loan modification, prevent foreclosure, or for closing fees on a home.

Grandparents

One of the most effective scams targets grandparents with calls or messages saying a grandchild needs money for bail or other reason.

Imposter

A scammer pretends to be a trusted friend or family member. Sometimes it’s an authority figure threatening jail.

Lookalike Logos

Letters and websites. often contain official looking logos and insignias to confuse the unwary.

Jobs

Ads promising online employment or work from home jobs turn unsuspecting people into money mules that do the scammers’ work for them. They’re often not aware they’re being used.

Money Transfers

The availability of money apps makes it easy for scammers to conduct the fraud.

Lottery or Prize

In this scam, the perpetrator contacts you in any number of ways to say you’ve won a lottery or other large prize. You can only receive it after paying a fee.

Romance

Millions of people are looking for love and that’s how scammers find their victims. They steal images and profiles to commit the crime. They always need money to escape a foreign country, pay a fine, cover medical expenses, or other fake need.

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!

The tax laws in the U.S. seldom make sense to most people. Taxes are complex, complicated, and individuals feel there are too many tax breaks for the wealthy and corporations, while the poor and middle class are being taxed to the point of poverty.

An increasing number of people feel they’re experiencing taxation without representation, despite electing the members of Congress that enact tax law within the Internal Revenue Service (IRS). Warren Buffet, chairperson of Berkshire Hathaway, famously said he paid less in taxes than his secretary due to tax breaks.

A Tilted System?

Tax laws have been written in favor of the wealthy for decades, by people who are themselves wealthy. The reasoning is that tax breaks for the highest earners give those launching their own business something to which they can aspire. Once business owners make enough, they can take advantage of the same tax breaks as a form of reward. However, that doesn’t take into account the millions of Americans who will never own their own enterprise or be able to take advantage of those tax breaks. The most common are:

• Depreciation
• Deduction of business expenses
• Hiring their children
• Selling inherited real estate
• Earn income from investments
• Deduct business expenses
• Roll forward business losses
• Purchase whole life insurance
• Purchase multiple homes or a yacht
• Contribute to a health savings account (HSA)
• Open a solo 401(k) Plan

There are a wide variety of more complicated methods and strategies that the wealthy can employ to reduce their tax burden.

That’s not to say that low- and middle-income earners don’t receive some credit or deduction opportunity on their taxes. They just aren’t on the same scale and include:

• Earned income tax credit (EIC) if they qualify

• Child tax credit (CTC)
• Child and dependent care credit
• Lifetime learning credit
• Adoption credit
• Student loan interest
• Medical expenses exceeding 75 percent of adjusted gross income
• Charitable contributions

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!

Consumer debt is at an all-time high and continues to rise as people use credit cards, payment plans and payday loans to make ends meet. Debt management is essential for maintaining financial health, but too many people don’t know where to start to achieve that goal. Good debt management increases your credit score and can open new avenues of opportunity. It also nets lower interest rates.

Pay Bills Promptly

Pay them as soon as they arrive. You won’t accidently forget a payment or incur late fees.

Prioritize Debt

Make paying high interest debt a priority. You’ll avoid exorbitant late fees. You can put that money on the next highest card when it’s paid off or into an emergency fund.

Always Pay at Least the Minimum Amount

You’ll avoid late fees that adds more to your debt. It pays the interest, but nothing on the principal, while demonstrating you’re trying to meet financial obligations.

Create An Overview

List all your debts and the monthly amount. Include credit cards, loans, car payment, mortgage or rent, and utilities. This tells you how much money you have going out each month. Compare it to your take-home pay.

Emergency Fund

An emergency fund is essential for eliminating unnecessary spending, debt, and to handle unexpected expenses such as medical bills, job loss, or home or car repairs Experts recommend saving 3 to 6 mos. worth of living expenses.

Pay What You Can Afford

If you can afford to pay more on credit cards or loans, do so.

Track Spending

Monitoring expenses tells you where money is being spent. unnecessarily.

Set Up Alerts

Sign up for low account alerts if your bank offers the service to avoid overdraft fees.

Bankruptcy

This is an option of last resort. It stays on your credit report for 10 years and will affect your ability to buy a car, rent or buy a home, and even obtain employment

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!

People have become accustomed to hearing the term forensic in connection with everything from elections to DNA results. Forensics also exists in the field of accounting

How is it Used?

Forensic accounting is utilized to investigate embezzlement or fraud, along with analyzing financial data. Forensic accountants use their powers of research, discovery and problem solving to detect irregularities, always keeping the intended goal in mind.

Famous Cases

Forensic accounting has solved dozens of crimes throughout history. Some of the most notable were the Bernie Madoff Ponzi scheme, Enron scandal, and the Barclays Bank fraud case. The accounting practices have been utilized to convict those involved in the banking, pharmacy, healthcare industries, and laundering of COVID-19 funds. Infamous Chicago gangster, Al Capone, was caught through the efforts of forensic accountants – he committed income tax fraud.

Early Beginnings

The art of forensic accounting was known and used in ancient Egypt by the pharaohs. The father of modern-day forensic accounting is credited to CPA, Frank Wilson, who was working for the Internal Revenue Service (IRS). He was charged in 1930 with investigating the financials of Al Capone.

Multiple Categories

The use of forensic accounting can be found in multiple areas encompassing securities and tax fraud, breach of contract or warranties, and insolvency, bankruptcy and reorganization. It also comes into play in cases of business valuations, money laundering, fraud risk assessments, and computer forensics.

Special Certifications

Those working in the field of forensic accounting in the U.S. have earned the credentials of Certified Forensic Accountant (CRFAC). Candidates for the certification must have a bachelor’s or master’s and be a licensed certified public accountant (CPA) or an international equivalent.

Forensic Professionals Needed

There will always be a need for forensic accountants, as there will always be those that seek to cheat and defraud. The demand for the professionals continues to grow and offers opportunities with highly sophisticated data analytics, machine learning, and artificial intelligence tools.

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!

There are many subfields and specialties within the accounting industry. However, there are 4 basic types that individuals will encounter.

Individuals that operate a business or are self-employed may have an accountant that maintains the records for their business and personal account.

Financial Accounting

This has a focus on reporting the financial information of an organization. Statements are prepared for regulators, investors and suppliers.

Management Accounting

This is for internal use by management. It has an emphasis on analysis, measurement and reporting.

Tax accounting

In this type of accounting, the professional prepares tax returns, payments, and ensures that tax deadlines are met. They do this for individuals, small businesses, large corporations, and organizations. This is the type of accounting with which most individuals are familiar.

Cost Accounting

The accountant focuses on determining a company’s variable costs for production and services based on its organization’s structure.

Why Accounting is Important for Businesses

For an enterprise to survive and grow, owners must know how much they’re spending for expenses that include labor, production costs, overhead, and liabilities. These expenses determine profit and losses. An accountant keeps clients advised of these essential numbers, allowing them to control costs, make informed decisions and plan for the future.

Accounting for Individuals

Individuals don’t have to own a business to benefit from the services of an accountant. The professional is able to help clients take advantage of all the credits and deductions to which they’re entitled, thereby reducing the amount of taxes they owe.

Tax Preparers vs Accountants

A tax preparer isn’t necessarily an accountant. Tax preparers can’t perform all the same services as an accountant. Kiosks spring up everywhere during tax time. While these tax preparers are capable of completing and filing taxes for the average person, people with a business or are self-employed should consult an accountant.

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!

The world discovered during the pandemic the integral role that supply chains play in delivering goods around the globe. They also discovered the disastrous consequences when those supply chains are disrupted. Your accountant can play a major role in the management of your personal supply chain network.

Acquisition and Distribution

An effective supply chain management system for any business relies on three elements. The first is reducing costs, followed by increasing the speed of products from the source to the customer, and finally, compressing that cycle of acquisition and distribution. A variety of factors at any point in the process can affect any company’s bottom line, though it will hurt smaller enterprises first.

Accounting, Costs and Logistics

Accounting is a critical component of logistics, whether you’re operating a small mom-and-pop business or a billion-dollar company. One of the many services your accountant provides is helping you to lower your costs and operating more efficiently, which can be accomplished through supply chain management. The result is cutting of expenses, getting products from vendors to you quicker, and out to customers faster and at a lesser cost to you.

Good supply chain management reduces your cost, helps you remain competitive, and increases profitability.

Strategic Planning

Your account will provide you with analytics, an economic perspective, and help you create strategic financial plans – all from an objective viewpoint. You can then evaluate the information, anticipate challenges, and prioritize opportunities.

Final Outcomes

The ultimate decision on your supply chain is always yours. The job of your accountant is to assist you in reducing cost and waste, while increasing financial flexibility. Your accountant will provide you with the information you need to make informed decisions that are best for your company.

Some accountants also have specialized expertise in supply chain management. It enables them to be an active partner with others in the supply chain for its establishment and implementation. Most importantly, your accountant will provide you with options to reduce costs, operate more efficiently, and boost revenues.

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!