Accounting professionals use a variety of terms and acronyms that are common within the
industry. However, those terms may sound like a foreign language or a magical incantation to
those that aren’t familiar with them. Typically applied to businesses, they can also be relevant
in relation to individuals.
Accounts Receivable
Often abbreviated as AR, it’s the money that customers owe a business for products or services
that have been provided/delivered.
Accounts Payable
Abbreviated as AP, it’s the money a company or business owes their suppliers and vendors for
goods or services.
Assets
An asset is anything that has current or future monetary value, such as rental property, patents,
vehicles, and equipment.
Balance Sheet
It’s a financial report providing a summary of what a company owns, owes, and shareholder
equity.
Capital
Known as CAP, it represents the value of an asset such as goods or cash.
Cash Flow
CF is the revenue and anticipated expense a business expects to generate.
Equity
Referred to as QE, in its simplest form, equity is what a company has when debts (liabilities) are
subtracted from assets.
Liability
There are both long-term and short-term liabilities. A short-term liability (STL) is money owed
within a year. Long-term liabilities (LTL) are money owed over multiple years.
Limited Liability Company
LLCs have a business structure in which owners/members can’t be sued for debts or liabilities
the company incurs.

Net Income
Net income (NI) is also known as net profit. It’s the money a company makes after subtracting
all expenses from all income generated.
Return on Investment
ROI is the amount of financial gain/profit that’s expected to be made compared to the price
that was paid (invested).
IRA
An IRA or Roth IRA are retirement savings accounts. Individuals can divert pre-tax money to an
IRA and the funds aren’t taxed until they’re withdrawn. A Roth IRA isn’t tax deductible, but
funds aren’t taxed when withdrawn.

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!

Low overhead costs, greater scalability, and the ability to work from anywhere desired makes
an online business appealing. However, online business owners are subject to the same
requirements as brick-and-mortar stores.
Hire an Accountant
Many people are good at operating a business, but lack money management skills. Meeting tax
deadlines and having up-to-the-minute financial details are just some of the benefits of hiring
an accountant. The professionals have experience, strategies and highly specialized software.
They provide multiple financial services, relieve stress on owners, and enables individuals to
focus on operating their business.
Budgeting
A realistic budget is an integral part of operating any business endeavor. Doing so will tell
owners if they’re overspending, if collections are slow, and allows individuals to make
adjustments as needed.
Business Software
For those determined to take care of the financial aspects themselves, there are business
accounting software programs that can be used. However, they don’t have the specialization of
those utilized by accountants.
Entering Data
It’s critical to enter receipts, invoices and all transactions immediately to ensure accuracy. It’s
necessary to track income and expenses for tax purposes. It provides a record of business
health. Payroll will also need to be addressed if the business has employees.
Taxes
Business owners need an excellent grasp of their tax obligations and filing deadlines. There are
self-employment taxes and other expenses for which business owners are liable and for which
they must plan.
Financial Changes
Tax laws change quickly and they can adversely affect any business owner that doesn’t see
them coming. Staying informed of those changes will help individuals protect their enterprise.
Business owners must stay informed of issues affecting their industry.
Follow the Financials

Go over financial statements monthly to understand the financial state of the business. Those
statements will indicate areas where the company is doing well and where improvement is
needed.

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!

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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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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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.

Certified public accountants (CPAs) are in high demand and not just at tax time. They act as
trusted consultants on financial matters and maintain information on accounts for individuals,
businesses, and even non-profit organizations. CPAs assist clients in attaining their financial
goals. The professionals can choose to specialize in a particular area of accounting
encompassing taxation, personal finance, forensic accounting or environmental accounting.

College Level Accounting
CPAs in Florida are required to complete 150 semester hours of college-level education in
accounting by an accredited educational institution.

Acquire Experience
Those desiring to become a CPA must also complete a required 2,000 hours of experience over
12 months of work or a minimum of 20 hours per week. A CPA that’s currently licensed or an
approved chartered accountant must verify the hours. Individuals can begin working toward
the completion of their work experience after completing 120 hours of classwork from an
accredited educational institution.

CPA Exam
Prospective CPAs must pass the Uniform CPA Exam. Created and developed by the American
Institute of Certified Public Accountants (AICPA), it’s the only pathway to being able to practice
as a CPA. Candidates must apply to the Florida Dept. of Business and Professional Regulation
(DBPR), Division of Certified Public Accountants to receive authorization to take the exam. The
4-part exam must be passed within an 18-month time period.

Licensure
Licensing is required of CPAs to pursue their chosen profession. They must create an account
with the DBPR to apply for a license. Individuals must also provide documentation that they’ve
completed all the educational requirements; work experience; exam results; pay a fee; and
submit their application. This must be accomplished within 3 years of passing their exam via a
printable form or an online portal.

Licenses must be renewed every 2 years. CPAs are required to complete 80 hours of ongoing
education, of which 8 must be in accounting, auditing and technical business. In addition,
behavioral coursework must be completed, limited to no more than 20 hours, along with a
minimum of 4 hours in ethics.

The IRS is one of the few governmental agencies that has the ability to make people freeze in terror – and for good reason. The IRS has the authority to garnish wages, levy fines, take money from your bank accounts, and confiscate your car, home and other personal property. When the IRS notifies you of an audit, there are specific steps to take.

Don’t Panic

Difficult as it may be, you need to remain calm if you’re to discover the extent and reason for the audit. It may be the result of an innocent mistake and easily rectified. The IRS notification will explain why you’re being audited.

It may not even be the result of an actual error. The IRS uses computer technology that screens and selects returns to be audited. They’re often chosen based on a statistical formula against what the IRS considers the “norm.”

People with incomes of 25,000 or less and those making $500,000 or more are the most likely to be audited. If the company you work for is audited, you might be, too.

The Process

Most IRS audits are conducted via mail and there’s no need to sit face-to-face with an auditor. However, if you receive a notice that you’re being audited, providing a timely response is critical. You should know that the IRS has up to three years in which it can start and conclude the audit process from one of your tax returns.

Hire a Professional

It’s an excellent idea to hire a tax professional that’s legally able to represent you in an audit. Collect all the documentation that you used to complete your return in the year for which you’re being audited. The more information you can provide to the tax professional, the better he/she can advocate for your interests.

Findings

You should know that if the auditor finds you at fault, you have the right to appeal within 30 days. The IRS will send a letter indicating the audit is closed, at which time you can appeal. Unfortunately, many people only see the decision rendered in the letter, not their ability to dispute the findings. You must appeal within 30 days of receiving the letter.

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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Retirement is a critical time in an individual’s life in financial terms. A retiree’s ability to live as they want will depend on their investments, the age they retire, and the lifestyle they want to maintain. It’s beneficial to consult with an accountant to take advantage of all the ways to save.

Diversification

Diversity in investments can help people manage their tax burden. Not all income is taxed the same. Some sources are taxed as long-term capital gains that don’t add to the yearly tax responsibility.

The 15 Percent

The 15 percent tax bracket is ideal for retirees. It’s possible for couples to make up to $100,000 after taking the standard deduction and still remain within the 15 percent bracket. They’ll receive zero tax on income sources as long as they qualify as long-term capital gains.

Roth IRA

This is one of the few resources that individuals can draw funds from that won’t add to taxable income, as it doesn’t involve pre-tax money. Traditional IRAs can be converted to a Roth IRA, though individuals will be taxed on the amount in the year that the IRA is converted.

Delay Withdrawals

Individuals may be able to draw on their retirement resources, but it’s best not to if they’re still working. After the age of 70, there’s no reason to delay withdrawing from retirement accounts. The SECURE Act resulted in changes to the Required Minimum Distribution. Waiting until age 72 to take the first distribution will result in paying a higher tax rate.

Social Security

Individuals may discover that up to 85 percent of their Social Security benefits are taxable, depending on the amount of money a person has from other resources.

No Tax States

Some retirees choose to relocate to states such as Florida and it’s not all about the climate. There are currently 39 states that provide tax exemptions on interest, dividends, pensions and/or Social Security benefits. Some don’t even charge state income tax.

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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An accounting service provides a variety of services that are an integral part of operating a financially solvent business and maintaining compliance. It’s essential that Individuals speak with several firms before choosing one to ensure that it will be able to meet business needs.

Some accounting firms offer a comprehensive range of services, while others specialize in one or more areas. Business owners may have requirements beyond bookkeeping, payroll and tax filing. It’s critical that the accounting service provide the services unique to a particular business operation.

Bookkeeping and Payroll

Owning a business doesn’t automatically mean that the owner is good with the financial responsibilities of operating an enterprise. Accounting firms can process payroll, issue checks, and provide the appropriate forms for onboarding new employees. The firms help business owners monitor cash flow and may offer services for accounts payable, receivable and past due.

Taxes

An accounting service will provide advice and assistance in planning for tax time, prepare the necessary documents, and file federal and state taxes. The firm can also represent a client in IRS audits and reviews. Accounting services work closely with clients to identify beneficial strategies and business structuring to take advantage of tax laws. Services ensure that clients are in compliance with state and federal regulatory and tax laws.

Valuation and Financing

Businesses want to grow and that may include obtaining a loan to purchase new equipment or expand a facility. It can also encompass mergers and business buyouts. An accounting firm can provide the documentation to prove the company’s valuation, worth and growth for banks or investors.

Estate Planning

Businesses have needs for estate planning that are unique An accounting firm is adept at identifying those needs. The firm will work with an attorney skilled in estate planning to establish a family trust or business ownership transfer.

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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A W-2 is essential for filing taxes, but in the frenzy to collect all the necessary documentation needed to file each year, the form can easily become lost. It’s not uncommon for the forms to get lost in the mail. It’s a very good reason why individuals should have a filing system and not wait until the last minute to file their federal tax return.

Contact the Employer

If the employer has already mailed a W-2 to an employee, the individual can contact their employer, human resources, or the person in charge of payroll to get a duplicate. It’s typically the easiest and fastest way to obtain a duplicate copy. The form may be mailed, but a copy may be able to be immediately supplied.

Online Access

In some instances, employers utilize systems that will allow an individual to access their own information, see their W-2 online, and download a duplicate copy. Employees may be required to contact their employer or the payroll service to get access. If all attempts to obtain a duplicate W-2 from an employer has failed to produce results, it’s time to contact the IRS.

IRS Website

Businesses must also file tax returns. That includes information about employees and their earnings. If the employer has already provided that information to the IRS, individuals may be able to obtain a transcript of the data. Individuals will need to visit the official IRS website, click on “Get Your Tax Record,” and complete the required IRS form online.

Be prepared to answer questions. In addition to the individual’s contact information and employment dates, they’ll have to provide an estimate of their wages and taxes withheld. Employer contact information will also be required.

Alternative Form

Individuals will still be required to file their federal income taxes on time and pay any amount they owe. The IRS has a “Substitute for Form W-2 Wage and Tax Statement” that can be filed. If a W-2 is received after the person has already filed their taxes and the information is different, an emended tax return must be filed.

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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