Feb 2 2017

Ask anyone who’s been in business for more than 10 years and you’ll get the same reaction when you bring up small business taxes: Please change the topic. It’s not just that the topic is mind-meltingly boring (it is) or a buzz-kill (it is). It’s because taxes are always the biggest expense we have and, unfortunately, the least controllable. We know this. And we know five other unarguable realities about taxes too.

1. Disorganization will cost you.
The messier or more disorganized you are, the more it’s going to cost you. Your administrative person is going to waste time tracking down the documentation you need to send to your accountant. Your accountant is going to waste more time figuring out your mess. You run the risk of missing an estimated tax payment. As you defer, delay and procrastinate, your anxiety will increase each day as you approach the filing deadline. And, if you get audited and are missing receipts, that’s the worst-case scenario.

None of this is healthy or profitable. Pretending that the IRS doesn’t exist won’t make it go away. At some point, we all just have to suck it up and make sure our files are accurate, complete and organized because it will cost us less over time.

2. Falling behind will sabotage you.
Please, please don’t skip a tax payment. It’s so tempting; I know. It’s just “estimated,” right? Who’s gonna know? It’s a bad precedent. Schedule your estimated payments in your accounting system – better yet, in your online banking application, and make it a required payment. Then forget about it.

Making these payments is as important as paying the electric company and your employees. Falling behind builds up a huge liability and subjects you to penalties and interest. I’ve learned to take these payments seriously. You should too.

3. There is no silver bullet.
Sure, if you’ve got operations around the world and an army of tax lawyers you can shift money here and there, take advantage of changing policies, invest in sheltered assets and leverage tax-preferred investments. But, if you’re reading this article, this is probably not your reality.

You, like me, run a smaller business and we don’t have those kinds of resources. For you, me and all those like us, our tax options are limited. There is no silver bullet that will magically cut our tax bill with a keystroke or signature. Planning, recordkeeping and paying attention to the tax effects of a significant transaction are what small business owners do to keep their taxes under control. That’s reality.

4. Your accountant doesn’t care as much as you think.
This is not a knock on accountants. They care. And they’re probably very good. But there are limits to how much you can lean on them. if They’re any good, each is likely serving hundreds of clients just like you . Which means they’re busy and overworked and likely can’t give everyone 100%. And just because they sign the ‘paid preparer’ line on your return doesn’t mean they’re responsible – unless there’s fraud.

In the end, it’s your tax return and you’re responsible for it. If there’s a problem, the IRS comes after you, not your accountant. So keep that in mind the next time you blindly sign the returns they send to you two hours before the filing is due. Know thy returns.

5. You are crazy to do your own taxes.
Having said the above, I still very strongly recommend that you have an accountant. Every business owner, at some point in their business careers, realizes that becoming an expert in taxes is like becoming fully fluent in a foreign language. Sounds nice, but it’s unlikely to happen. There is just too much to know, too many changes to keep up with.

And if you make a mistake, the punishment in the form of requests, summons, queries and other correspondences from the taxing authorities will make your life miserable … while taking you away from running your business. Hire an accountant to do the work. Just keep an eye on them.

These are the realities of taxes that any business owner will confirm. If you don’t believe me, just ask any of them.

~ Article by Gene Marks: Featured on The Hartford

Oct 31 2015

2016 Business Tax Return Checklist

Please find below of information necessary to complete your business tax return.


  • The date of incorporation
  • The State in which you incorporated
  • the name of your business
  • the Federal ID #
  • the address of your business
  • the number of shares of stock authorized
  • the number of shares issued
  • to whom (name, address, and social) they were issued (may all have been to you if you are the only owner)

The 2016 Gross revenue received from all operations

The 2016 expenses incurred listed by category.  Amount of money spent in each category (add categories as necessary)

  • advertising expenses
  • rent
  • telephone
  • cell phone
  • internet
  • office expense
  • supplies
  • professional fees
  • dues and subscriptions
  • meals & entertainment
  • subcontractors
  • commissions
  • wages paid to employees
  • what you paid yourself
  • year make model of vehicle
  • business miles driven
  • total miles driven

For your balance sheet and to calculate depreciation of assets I will need to know a list of all assets (any piece of equipment you purchased in 2016 worth more than 500)

  • your end of year bank balance
  • any account receivables (income you generated in 2011 but hadn’t received payment by 12/31)


  • credit card amount owed
  • any loans you took out and owe
  • any purchases you made but haven’t paid yet

This should be good to get your business return started.  For your personal return please complete the attached client interview sheet and send that back to me with any W2’s, 1099’s, or other tax related documents you have received.  We’ll start from there.

We will be able to get all of this taken care of for you so don’t worry about a thing!

If you’re not sure about whether to include an expense or not, include it. I’ll let you know if you can’t deduct it.

Dec 16 2013

Your major expense, or emergency fund should be enough to cover your major expenses for 6 months to a year. Here are some important expenses to consider when determining how much you save…

The urge to spend all you make is called consumer mentality. Try to get investment mentality instead. – Edward H. Romney

  • Housing expenses: Your emergency fund should include savings for housing expenses such as rent or mortgage, property tax, insurance and utilities. Protecting the value and integrity of your home is of utmost importance, so it’s a good idea to also include savings for emergency home repairs.
  • Food: Estimate your monthly food expenses and include those costs in your emergency fund savings. You can build this savings and reduce your food expenses by cutting back on dining out at restaurants, building your shopping list around sale items and using coupons from your local newspaper.
  • Health care: Factor in the monthly cost for medical and dental insurance. In the event that you’re laid off, you may be eligible to stay on your former employer’s health plan for up to 18 months at your own expense through the Consolidated Omnibus Budget Reconciliation Act (COBRA).
  • Debt repayment: Your monthly payments for credit cards and other debt should be factored in to how much you save for an emergency fund in order to protect your credit score. Take steps now to get out of debt to avoid the stress of dealing with these expenses if you become unemployed or face a financial challenge.
  • Transportation: If you have a vehicle, your emergency savings should cover necessary costs such as your car loan, insurance, basic maintenance, fuel and emergency repairs.
  • Personal expenses: Costs related to household supplies, haircuts, clothes and toiletries may seem generally inexpensive but these expenses can add up. Remember to include these items, as well as life and disability insurance, when planning for how much you should save for an emergency fund.

Read more…

Dec 16 2013

Importance of Separating Personal & Business Finances

Maintain separate checking accounts

Start with your bank. Open a business checking account.

“If there’s ever a question as to whether it’s a hobby or a business, the IRS looks to see if you have a separate checking account,” says Richard Salmen, a certified financial planner with GTRUST Financial Partners in Overland Park, Kan.

  • If you use Quicken, Quickbooks or Microsoft Money, Salmen advises making sure you have two separate systems: one for personal and one for business.
  • Not only is having two accounts tax-smart, it will also improve your organization.
  • At the end of the year, all your income and expenses will be in one place, making record keeping and tax filing easier. If you try to separate all your records in March or April, you won’t be able to accurately remember all the money moves from the prior tax year. Keeping good records year-long will give you proof of your business expenses if you do get audited.

Use a business credit card

Lending requirements are quite strict for small businesses. Still, try to get a business credit card. Like the separate checking account, a credit card will help your record keeping and give you something to show the IRS if you’re audited.

The business credit card could give you an extra tax deduction too.

“If you need to carry a balance on a business credit card, that’s the only credit card interest that’s deductible as a business expense,” Salmen says.
Make it official

  • Consider establishing a limited liability company (LLC) or an S Corp for your business.
  • Sit down with your team of advisors–attorneys, CPAs, financial planners and insurance agents–and determine what entity makes the most sense, how this business will impact your taxes and financial plan and what insurance coverage you should consider, Heil says.
  • These business entities will also give your personal finances a new level of liability protection, which could come in very handy of your business is ever sued.

When it’s time to file

Having a checking account, credit card and record keeping software earmarked exclusively for business use will give you most of what you need to file your taxes and to prove to the IRS that your business really is a business.

Read more..