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!

Rental properties have always been a popular method of building wealth and creating an income. The cost of rent has increased significantly since the lockdowns of the pandemic ceased. That increase has motivated many to invest in rental properties of their own. However, before becoming a landlord its critical that individuals explore the pros and cons. Most people new to the rental industry don’t examine both side of the equation. It’s important to understand that operating rental properties is a business and is going to require the services of an accountant if the enterprise is to be profitable.

The Benefits

Being a landlord is a great job for those who are people persons. They interact with an array of interesting people. It’s also a good business for those who are retired. Benefits of a rental business include:

• Nearly passive income
• Long-term investment
• Tax deductible business expenses
• Can be operated in addition to a “day job”
• Can pay for itself on a monthly basis
• Property value increases
• Equity accrual

The Disadvantages

Operating rental property has some definite disadvantages, the most obvious of which are destructive or constantly complaining tenants. Other considerations include:

• Must be operated as a business
• Maintaining compliance with the law
• Tenant screening
• Time consuming investment
• Yearly upkeep and maintenance
• Tenant safety and security
• Appliance replacement
• Cost of contractors to perform repairs

Perhaps one of the most unpleasant tasks of a landlord is evictions. It can be a difficult, costly and time-consuming process, during which time the structure isn’t earning any income.

An Accountant Can Help

An accountant that specializes in real estate tax accounting is invaluable. He or she can help improve profitability, file accurate tax accountings, and do so at the appropriate time. The accountant can help property owners plan for the future and establish online rent paying. They’re experts at assisting rental property business owners minimize their tax liability, stay updated on pertinent laws, and maximize their business structure.

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!

As a business owner, you’re always looking for strategies to maximize your profitability. Many enterprises are reaping the benefits of outsourcing to accomplish financial goals. Even the smallest of companies can take advantage of outsourcing. The practice has been prevalent since the late 1980s and has given rise to an increasingly large gig economy.

What is Outsourcing

It’s a popular practice that many businesses utilize to save money. Business owners hire a third-party individual or firm outside the company structure to perform services, complete tasks, or provide products that would ordinarily be done in-house by regular employees. Outsourcing services are most often delegated to resources in other countries where labor costs are cheaper.

How it Can Save You Money

Unlike an on-site employee, there are no employee-based insurance costs or benefit packages the business must provide. Outsourcing enables businesses to provide high-quality services at a fraction of the cost. The practice enables business owners to focus on the core aspects of their enterprise, while delegating other tasks that they may not be able to provide as well as another.

Outsourcing can help businesses expand their range of services. It’s also helpful for providing enterprises with access to high-tech resources, eliminating the need to purchase expensive and specialized software or equipment.

Many Ways to Save

One of the most well-known examples of outsourcing is customer service call centers. Payroll and accounting are often outsourced instead of performed on-site. Products ranging from ties and hats to T-shirts are often outsourced. Other examples include:

• Marketing and advertising
• Information technology
• Legal services
• HR department duties
• Cleaning services

A great many services are regularly outsourced by companies without realizing what it’s called.

Solutions for Any Business

No matter what industry a business operates within, there are opportunities for outsourcing. Contracting with a third-party can help a business operate more effectively and cost efficiently.

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!

Many individuals dream of owning their own business, but don’t fully understand what their tax liabilities are depending on the type of enterprise they’re operating. Knowing your tax liabilities is essential for growth and profitability. Your accountant will play an integral role in every facet of your business.

Federal Taxes

Depending on the size and scope of your operation, you may need to pay quarterly taxes and meet specific reporting deadlines. Those conducting a side hustle or working in the gig economy can often report their income on their personal tax return to the IRS.

State and Local Taxes

Your business structure and the city within which you operate will dictate which taxes you’ll have to pay. Florida is a tax-friendly state. Corporations are subject to a 5.5 percent income tax. Sole proprietorships, limited liability corporations (LLCs), and S corporations are exempt from paying state taxes.

Employment Taxes

Florida business owners will be responsible for paying federal and state employment taxes if they have employees. You’ll be required to pay a payroll tax and report wages, tips and other forms of compensation paid to an employee. There are special forms for doing so. You’ll typically be responsible for workers’ compensation insurance, unemployment insurance taxes, and temporary disability insurance. You’ll be required to report taxes that have been withheld from employee paychecks.

Why You Need an Accountant

The Florida tax code is a highly complex and complicated set of regulations. It can drive business owners to distraction trying to decipher the code, but an accountant is cognizant of all the intricacies. He or she can provide expert guidance on ways to reduce your federal, state and city tax liabilities.

An accountant will advise you of your tax responsibilities and be able to file at the appropriate time on the correct forms. The professionals help you work toward your individual goals, minimize costs, and maximize your 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 (843) 347-0849 and discover why our clients return to Peavy and Associates, PC year after year!

People can lower their federal and state tax obligation through credits and deductions. Credits typically produce a more favorable result, as they lower the taxes owed. However, in combination with deductions, they provide a way to reduce your taxable income and reduce your total tax bill.

Tax Credits

There are a number of tax credits available to individuals that reduce overall income and can put you in a different tax bracket, meaning your income is taxed at a lower rate They include the earned income credit, child tax credit, child and dependent care credit, and American Opportunity tax credit. These and others reduce the amount you owe the federal government and work to lower your income.

Retirement Savings

Income set aside for retirement purposes and company-sponsored 401(k) accounts can lower your taxable income. They include traditional IRAs, Roth IRAs, and 401(k) plans.

Health Savings Account

People contributing to an HSA for health care expenses can use those funds to lower their taxable income, as they’re made with pre-tax income.

529 Plans

As an educational savings plan, earnings and distributions aren’t subject to taxes – providing the funds are used for qualified educational costs. They’re not deductible on federal taxes, but can lower the state tax burden. Be aware that rules vary by state. Pre-paid tuition plans are another option for qualified institutions.

Charitable Contributions

Those who volunteer at a qualified non-profit organization can deduct travel expenses associated with volunteering. Cash and non-cash contributions can also be deducted – be sure to keep a receipt. Claiming a charitable contribution will lower income and tax burden, but itemization of deductions is required and there are limits on how much can be deducted.

Depreciation and Business Expenses

For those that operate a home business or farm, for example, a portion of equipment or machinery can be deducted as depreciation. A percentage of a home used exclusively for conducting business can also be deducted.

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!

Everyone dreads tax time, as evidenced by the number of people that wait until the last minute to file. Waiting until the deadline can be a costly mistake for individual filers and those that operate a home or small business. There’s an increased risk of mistakes, missing a deadline, and you may not catch deductions and credits for which you’re entitled.

Get Organized

You need to start thinking of tax time long before you’re ready to file. That means keeping and organizing receipts. Keep bills and receipts in folders according to type. If nothing else, at least keep them in a box. It will be a mess for you or a tax preparer to decipher, but worth it. If you utilize the services of a tax professional, you’ll typically have been sending them your receipts, which makes the process easier.

Know Your Obligations

There are plenty of resources online that provide all the information you’ll need for your individual circumstances to file local, state and federal taxes. Bear in mind that you could be audited at any time.

Credits and Deductions

Whether you’re an individual filing your taxes, operate a home business or a gig worker, there are numerous tax credits and potential deductions for which you may qualify. They can reduce your taxable income, the taxes you pay, and could place you in a tax bracket where you’ll be taxed at a lower rate.

Tax Software

Completing your taxes can be much easier with tax software. You’ll still need to keep track of your receipts, but tax software can make it easier to track expenditures and income.

Professional Expertise

A tax professional is well worth the money, especially for those with a home or small business. The professionals use software that’s highly specialized and sophisticated. They’re also cognizant of the constantly changing tax laws and can provide strategies for saving.

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!

Everyone wants to find ways to lower their tax burden each year. There are some everyday write offs that many individuals are eligible to take on their federal income tax and they don’t even know it. A tax write off is a deduction that taxpayers can use to reduce the amount of taxes they owe. Not everyone qualifies for each write off, but the following are some of the most popular.

Vehicles and Mileage

People that use their own vehicle as part of their job can deduct the milage on their vehicle used strictly for work. It applies to people such as delivery drivers, reporters, and gig workers.

Mortgage Interest

Homeowners can deduct the interest paid on their home mortgage. Space used for a home office can’t be counted and deductions must be itemized.

Home Office

More people are operating a home business and a percentage of the space used for business can be deducted if the area is used exclusively for business purposes.

Student Loan Interest

The interest paid on a student loan is deductible for yourself, a spouse, or a dependent child. You can deduct up to $2,500 worth of interest, whether from a private or federal loan.

Charitable Donations

Cash and non-cash items donated to a qualifying charitable organization can be deducted if you itemize deductions. Volunteers can deduct the mileage they drive to the organization. Taxpayers that claim the standard deduction can no longer take the charitable contribution write off.

Medical and Dental Expenses

Any expenses greater than 7.5 percent of your adjusted gross income can be deducted – provided you itemize deductions.

State and Local Taxes

State and local income taxes paid can be claimed on your federal tax return, up to $10,000.

IRA and Retirement Contributions

To take this, you need to have had earned income from work. The amount that can be written off depends on age.

Health Savings Accounts

Setting aside money to cover medical expenses is a good idea. The amount you can set aside depends on age.

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!

When your small business has reached the point where you need even one employee, its time to hire a payroll service. The service takes the worry and headaches out of the entire process, allowing you to focus on building and growing your business.

A payroll service ensures that employees are paid accurately and on time, but not all services offer the same level of benefits. It pays to shop around for the company that best fits your needs now and in the future. Payroll services may help you with employee schedules, your accounting practices and even software. The company may also track overtime and employee benefits.

Compliance

One of the most important tasks that a payroll provider does is ensure that the business is in compliance with all relevant reporting requirements and changes in tax laws. They know what forms employers must file and when.

Accuracy and Security

Employers are required to withhold specific taxes and in certain amounts. The computations can be complex. Payroll services ensure the appropriate amount of withholding is calculated. They use highly specialized software and are dedicated to accuracy in every aspect. They can provide the appropriate financial information for any governmental query or request. All data is maintained securely and confidentially.

Employee Verification

There’s a lot of paperwork involved when hiring any employee. A payroll service streamlines the process of verifying a potential employee and gathering the necessary information about them, such as if they’re eligible to work in the U.S., if they have a criminal history, and past employment records. Self-service employee accounts are another benefit. Individuals can manage their employee account online to enroll in benefits and update their information when needed.

Scalability

Even if you only have 1 employee now, that will change as your company grows. The ability to handle payroll for any number of employees is essential. You’ll want a payroll service that’s able to keep up with your evolving company needs and the services it offers, along with flexible payment plans.

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!

Choosing an accountant isn’t a task to be taken lightly. An online search can be helpful for accountants in your area, but you’ll have no point of reference. It can be helpful to seek referrals from family, friends and associates when seeking an accountant. You’ll want an expert that’s nearby, responsive, and available to answer any questions that may arise. The professional will play a vital role in your business and should be selected carefully.

Know Your Needs

A small business or one that’s newly established will have very different needs than that of a larger and more complex enterprise. It’s important that you take a good look at your business and understand the services you need before hiring an accountant.

You may need bookkeeping, payroll or tax preparation services. An accountant can provide all of that, keep you informed of financial trends, identify inconsistencies, and aid in maintaining cash flow. He or she can also assist in helping you create business strategies, investment opportunities for the future, and a business structure that best benefits you.

Certification

Only work with a certified public accountant (CPA) and one with experience in the same industry as yours. The professionals have the extensive training and expertise required to assist with bookkeeping, tax preparation and planning to help you attain your goals.

Ask Question

Narrow down your candidates and set up a meeting to talk with each one. Ask about their qualifications, services offered, and how much they charge. Determine what types of businesses they work with and how they can help your company grow and thrive. One of the primary questions should be their recommendations for saving your company money.

Take your time choosing an accountant. He or she may be an integral member of your business for many years to come. The right accountant for your business will be one of your greatest assets.

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!