Skip to main content Skip to search

small business tax services

Payroll managing Firm Conway South Carolina

Benefits of a Payroll Service Provider

A payroll service provider helps small business owners streamline the process of collecting payroll taxes and filing federal and state reports. Payroll services experts provide support to help make sure compliance with federal and state regulations and requirements governing payroll and paychecks in any state. Get the systems and resources you need to properly hire and manage employees, as well as pay employees when you grow.

Make the most of your employee base. Most small business owners don’t expect to encounter payroll headaches right away. If you plan to provide employees with paper reports, such as your paychecks and federal tax reports, you will probably be surprised at the number of errors that can pop up over time. The time savings gained from payroll services can more than outweigh the cost of providing paper reports for each individual employee. With electronic reports, there is no need to print out paper copies of documents that have been downloaded.

Your payroll services company can provide reports that include both payables. In general, the reports will contain summary information, which includes gross pay, deductions, and net income, as well as specific details about each employee’s pay, assets, and deductions. The information provided should be consistent with the types that are listed in your employee manual. To make sure the information is correct, it’s a good idea to have a payroll services company verify the information.

Prepare your financial reports properly. Payroll reports are not filed with federal tax forms; instead, they must be filed with W-2 form documentation. For some, this may mean an entirely new filing procedure. For others, simply making sure their payroll numbers match what they filed in the last year can make the difference between success and failure.

You can also take care of a lot of your tax-related worries by making direct deposit. Many companies today offer automatic direct deposit, meaning they deposit the employee’s paycheck directly into their bank account every payday. This saves them time and eliminates the need to write out checks, which saves money. It also makes it easier to track all of the employees’ expenses. If you do not currently have an automatic direct deposit program, talk to your payroll services provider. They may be able to recommend an option that you have not considered.

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

Read more
tax deductions

Why Hire a CPA For Your Taxes?

What is the reason to hire a CPA to handle your business taxes? CPA’s are highly experienced accountants who have gained valuable experience in the business world.  It is a very valuable tool for business owners to hire a CPA because a Certified Public Accountant (CPA) can negotiate with the IRS on your behalf to get you better tax benefits.

Hiring a CPA can save you money and hassle. A Certified Public Accountant (CPA) is trained and experienced in all aspects of small business accounting and tax laws. The Certified Public Accountant (CPA) is the person most qualified to interpret the complicated IRS instructions and other federal and state tax laws. They will be able to properly prepare your tax returns and advise you on the best option for taking advantage of every tax deduction available to you.

Small business owners can hire a CPA to handle their taxes due in April, July and October. Most accountants are already familiar with the complex procedures required to file an income tax return with the IRS. The IRS also requires small businesses to retain an accountant to manage their accounting and bookkeeping. Even if you do not currently use the CPA for your accounting needs it is still a wise decision to hire one to file your taxes for you.

One of the many benefits to business owners who fail to hire a CPA is the potential financial backlash from paying incorrect taxes. In 2021 the Internal Revenue Service audited more than 500 business owners for tax liability. The majority of these tax liability audits resulted in the taxpayer owing a penalty or interest amount. The majority of business owners were not even aware they had incurred taxes.

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

Read more

Bad Debt Tax Deduction

Practically every small business has receivables that it cannot obtain from clients. If your small business doesn’t have any such receivables, consider yourself lucky. For those small businesses that suffer from uncollected receivables, solace can be taken from the fact you can claim a tax deduction

A small business can write-off bad debt losses if it meets nominal requirements. To claim such a tax deduction, the following must be shown:  

  1. The existence of a legal relationship between the small business and the debtor
  2. The receivables are worthless
  3. The small business suffered an actual loss

Proving there is a legal relationship between the small business and debtor is fairly simple. You must simply show that the debtor has a legal obligation to make a payment. Most businesses issue invoices or sign contracts with debtors and these documents suffice to prove the legal relationship. If you are not putting your business relationships in writing, you should begin doing so immediately.

Proving receivables are worthless is slightly more complex. A small business is required to show that the debt has become both worthless and will remain so. You must also show that you took reasonable steps to collect the receivables, but you are not necessarily required to go to court to meet this requirement. A clear example of where you would meet this requirement is if the debtor filed bankruptcy.

While proving that you suffered a loss may sound like the easiest requirement to meet, the issue is a bit more complicated. The Tax Code defines the loss as an amount that is included in your books as income, but is never collected. A classic example of such a situation would be a manufacturer that provides products to retailers on credit. The manufacturer can show a real loss if the retailer files bankruptcy.

Unfortunately, there is almost no way to claim a loss if you provide hourly services and use a cash accounting method. The IRS does not consider the expenditure of time and effort to be a sustained economic loss. 

Small businesses suffer all too often from uncollected receivables. If you failed to claim such losses as a tax deduction during your last three tax filing years, you should file amended tax returns to get a refund.

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

Read more

Top 7 Small Business Tax Tips

Here are seven ways for owners of small businesses to save money on their taxes.

 

  1. Incorporate Yourself: If you`re still a proprietor or partner of a business, it`s time to incorporate yourself. Not only will you limit your liability, but you may enjoy lower tax rates on small business income and other tax advantages as well. 

 

  1. Be Home Based: If possible, continue (or switch to) being a home based business. Not only will you keep your overhead down, but you will be able to write-off (or deduct) the business use of your home.

 

  1. Income Split: Pay reasonable wages to your spouse and children. In this way, you can legally divert income taxed at your higher rate to your family members that are in a lower tax bracket.

 

  1. Rearrange Your Affairs For Maximum Tax Savings: Can you make some changes to turn your hobby into a moneymaking business? Can you use that extra room in your house as a home office for your business? Can you arrange to use your car more for business purposes? Can you arrange for more of your entertainment expenses to be business-related? 

 

  1. Document Your Expenses Well: Do you document your expenses well so that they would survive a tax audit? Have you kept a mileage log so that you can prove the percentage of business use you claim for your vehicle? Have you kept receipts for all your entertainment expenses and listed the business purpose on the back of each receipt?

 

  1. Be Punctual: File all returns and pay all taxes due (income, payroll, sales, et cetera) on time. This way, you avoid expensive late filing (and payment) penalties and interest. 

 

  1. Develop a Tax Planning Mindset: Some people only worry about their taxes during tax season. However, you will save a fortune in taxes, legally, if you make tax planning your year-round concern. Do you make business and personal purchases, investments, and other expenditures with tax savings in mind?

 

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

 

Contact Us Today

Read more

What Does an Audit Report Contain?

Most audit reports on financial statements give the business a clean bill of health, or a clean opinion. At the other end of the spectrum, the auditor may state that the financial statements are misleading and should not be relied upon. This negative audit report is called an adverse opinion. That’s the big stick that auditors carry. They have the power to give a company’s financial statements an adverse opinion and no business wants that. The threat of an adverse opinion almost always motivates a business to give way to the auditor and change its accounting or disclosure in order to avoid getting the kiss of death of an adverse opinion. An adverse audit opinion says that the financial statements of the business are misleading. The SEC does not tolerate adverse opinions by auditors of public businesses; it would suspend trading in a company’s stock share if the company received an adverse opinion from its CPA auditor.

One modification to an auditor’s report is very serious – when the CPA firm says that it has substantial doubts about the capability of the business to continue as a going concern. A going concern is a business that has sufficient financial wherewithal and momentum to continue it normal operations into the foreseeable future and would be able to absorb a bad turn of events without having to default on its liabilities. A going concern does not face an imminent financial crisis or any pressing financial emergency. A business could be under some financial distress but overall still be judged a going concern. Unless there is evidence to the contrary, the CPA auditor assumes that the business is a going concern. If an auditor has serious concerns about whether the business is a going concern, these doubts are spelled out in the auditor’s report.

 

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

Read more

Top 7 Reasons To File Your Income Tax Returns On Time

  1. Avoid Late Filing Penalties

Late filing can result in substantial and continuing penalties. This is in addition to any interest that is due.

  1. Receive Better Service from Your Accountant

The earlier you get your paperwork to your accountant, the sooner he can start preparing your tax returns. More importantly, there will be more opportunities to explore and implement tax saving strategies. On the other hand, if you file late, you tie your accountant’s hands. For example, he may hesitate to retain profit in your corporation if such profit will be subject to substantial penalties.

  1. Avoid Criminal Charges

Of course, if you don’t file tax returns at all for a few years, you may also face charges of tax evasion.

  1. Prevent Bankruptcy

Generally speaking, persons who don’t file tax returns on a timely basis also lack adequate records for managing their business. Since they don’t keep their bookkeeping and accounting up-to-date, they only think they know how they’re doing and how they stand financially. This, of course, is a recipe for financial disaster.

  1. Enjoy Better Relations with Tax Authorities

Late filers also receive the unwanted attention of the taxation departments. Non-compliance can result in audits, aggressive collection action and legal proceedings. In addition, if you ever do have extenuating circumstances that might call for some leniency or extraordinary consideration on the part of the tax department, you are more likely to receive it if you have a flawless history of co-operation and compliance.

  1. Obtain Financing

You’ll have difficulty obtaining financing if you can’t provide your financial institution with current income information. Assessment Notices from taxation authorities give banks more assurance that the income claims you make are true. As well, if you haven’t filed your current income tax returns, what hidden tax liabilities exist? What is the state of your record-keeping? How do you run your business without adequate financial information? Your bank may hesitate to loan you money or refinance under these circumstances.

  1. Reduce Stress and Worry

Many people who are late filing their tax returns feel guilty about it. At the back of their minds, they worry about taxation authorities contacting them, audits, asset seizures, criminal prosecution, penalties and interest, and so on. Some of these worries can become magnified beyond what the actual situation warrants. Save yourself unnecessary stress by filing your income tax returns on time.

By following these simple steps, you can have confidence in finding an accountant who will work hard to help you direct your company into a positive direction for financial growth and expansion.  

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

Read more

The Importance of Keeping Good Records

Every business owner knows the value of maintaining accurate records for tax purposes, but keeping good records also provides individuals with a measure of the health of their enterprise. It doesn’t matter if it’s a brick and mortar store or operated completely online through e-commerce, good record keeping is critical.

It’s recommended that individuals keep pertinent records for three years and that includes tax returns. Most business owners envision boxes and file cabinets full of paper documents and that can seem overwhelming. Welcoming the digital age and appropriate software programs into a business will eliminate the clutter and keep records immediately available should they be needed for any contingency.

Keeping good records provides business owners with the knowledge required to know if their endeavor is failing or flourishing. It also tells them which products are selling well, where their largest expenditures are, and any areas where changes may need to be made.

Business owners have a legal obligation to maintain full and accurate records about their enterprise. They’ll need those records if they’re audited by the Internal Revenue Service (IRS) or asked to explain any items on their tax returns.

Maintaining detailed records enables individuals to prove income, deductible expenses for tax purposes, and make projections about their tax liability. Those records will also be utilized to prepare a variety of financial statements and balance sheets that will be essential when working with banks and creditors.

Good record keeping allows business owners to ascertain where the majority of purchases are originating, along with the reliability of the vendors with which they regularly conduct business. The receipts provide a record of who pays promptly and who doesn’t.

All of those records provide a health check on the business, allowing owners to make critical decisions about issues such as expansions, new product lines, vendors, and employees. Keeping good records is the key to operating any business more efficiently, effectively, and profitably.

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

Read more

Keeping your Business up to Date with Tax Laws

Tax laws change quickly and often with very little warning. It can seem like an impossibility to keep track of all the changes and utilize them to your business advantage. You have three choices when preparing your taxes – do them yourself, use tax preparation software, or have a professional do them.

No matter which option you choose, changes in tax laws will ultimately affect your business in some way. It’s much better to engage the services of a professional accountant than be surprised at tax time. It’s an accountant’s business to know about changes, inform clients, and help them develop a strategy to minimize tax liability.

Your business will need to remain legally compliant with all state laws – which will depend on where you live – along with federal tax laws. There will be different requirements, depending upon your business structure and you’ll need to ensure all certificates, licenses, and permits are current.

As a small business owner, you’ll be subject to a variety of different taxes unless you’re in a partnership – in which case you’ll be required to file an information return. You’ll be required to pay self-employment taxes and employment taxes on employees. Sole proprietors, S corporation shareholders, and partners will pay estimated taxes and you’ll need to have withheld a sufficient amount to meet tax liabilities.

There are also excise taxes, which can often seem very vague but cut across multiple industries. You’ll be liable for these if you operate certain types of businesses, sell specific products, offer certain types of services, or use specific types of equipment, facilities or products. Some classic examples are alcohol, fuel and tobacco, but the list is extensive.

Of special interest for business owners are changes for net operating losses, first-year depreciation, pass-throughs that include sole proprietorships, S corporations, and LLCs, and those that have significant operations overseas. Many individuals outsource their marketing and other functions when applicable through the gig economy and accounting for that can be a headache for you and the person that provided the services.

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

Read more