Frequently Asked Questions
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TAX Questions:
What documents do I need to file my taxes?
You will need your social security number or individual tax ID number (ITIN), any income documents, and documents related to credits or deductions to file your tax return. It varies for each business/individual and your preparer will be able to be more specific.
Do I have to pay my taxes when I file my returns?
No. Paying your taxes and filing your return are 2 different transactions. We strongly suggest you pay your taxes on the due date. You can file your return as early as you have all your information, but you do not have to pay until the deadline.
Why did I get a late payment penalty if I filed an extension and filed the returns on time?
Your taxes are due on the original filing date, even if you file an extension. If you think you may owe some tax it's best to send in an estimated payment when you file your extension.
How long do I have to keep all this paperwork - my receipts and tax forms?
Keep everything at least 3 years from the time you file your returns or pay the taxes, whichever is later. BUT there are several exceptions to this general rule that may apply to you. Please ask us after we've completed your returns.
Do I even need to file a return - my income is below the filing requirement for my filing status?
There are reasons you may choose to file anyway. Many people file because they are eligible for credits that may be refundable.
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PAYROLL Questions:
Is overtime pay calculated daily or weekly? What about if the pay period is every 2 weeks?
The Department of Labor defines overtime as "over 40 hours in a workweek." It specifies as "a fixed and regularly recurring period of 168 hours" which is 7 days. Some employers offer special pay for long workdays, but as of now those exceptions are not required.
Do I need to withhold taxes on my workers, or can I just pay them straight pay without treating them like "employees"?
There are very clear guidelines that determine whether a worker is an employee or an independent contractor, and the IRS does not rely on your discretion. You definitely want to speak to a professional about your specific situation. The penalties can be devastating to your business if the IRS determines that you should have been paying employment taxes and withholding for your workers.
What documents are needed for new employees to add them to payroll?
For us to add a new employee to your payroll, we need a W4, Direct Deposit Form, and Employee Payroll Information Form.
The current W2 can be found on the IRS website or requested from our office. The other 2 forms are located on our Forms page.
What documents are needed for new contractors to be paid?
If adding contractors to the system, we need a W9 and Direct Deposit Form.
The current W9 can be found on the IRS website and the other form is located on our Forms Page.
What should I do if there is an error on paycheck?
This isn't something we deal with often but if there is any issue or concern, please reach out as soon as possible. We upload a Payroll Summary Report when we submit payroll, and we highly recommend reviewing it for any errors. This helps us to amend any errors before the direct deposits are made.
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BOOKKEEPING Questions:
What's something I should do to keep better books?
Keep your personal and business spending separate. It can create chaos and more work later if you get into the habit of using the same card(s) for both business and personal spending.
What receipts should I save or have my employees save?
You should save receipts for all business expenses. This can include invoices form vendors, receipts for office/business supplies, travel expenses, utility bills, credit card statements, and any other documentation that shows a business purchase.
How can I get reports for my business and how much is it?
If you need a report, we can create that for you. We are able to upload reports to the Client Portal for easy access. If you need help analyzing the report, we're happy to schedule a call or meeting to review the data. In most cases there is no added fee for current bookkeeping clients.
How often should I reconcile my accounts?
Monthly. Reconciling your accounts can help identify and address fundamental objectives in the accounting process. It is vital to find and fix errors, whether it occurs in the data entry stage or on the bank's end, so that your records reflect an accurate picture of your current standing. It is also a pivotal tool in identifying fraud.
Why does my Income Statement (or Profit and Loss) not match my tax return?
There are several adjustments that might be made to your "book" income for the tax returns - including depreciation expense, vehicle mileage expense (rather than gas or actual expenses on the books), or a home office deduction if you're eligible for that. You may also have your financial statements prepared on an accrual basis, while your tax return may be calculated on a cash basis. So there are several reasons and it doesn't necessarily mean that anything is inaccurate on your books or returns. You should always document these differences somewhere in your records (there is a place to do that on the tax returns as well) for future reference.
If you have any questions that were not addressed here, give us a call. We're here and happy to help.