Record Keeping Taxes by skm10786

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									Record Keeping & Taxes



          ROBIN HAYDEN, MBA, CPA

          Certified Fraud Examiner
          HOUCK & ASSOCIATES, PC CPA’s
          (360) 892-4348
          robin@houck-cpas.com
                Background
   Practicing   CPA
   Specializein businesses up to
     20 employees
   Certified   Fraud Examiner



ROBIN HAYDEN
                                    1/23/2010
       Separation requirements
   Separate   checking account
   Separate   business and personal
      – Finances, expenses
   Separate   charge card



ROBIN HAYDEN
                                  1/23/2010
                 Receipts
   Request     & keep all receipts
      – With notes
   Restaurant       receipts
      – Business purpose, people etc
   Separate    file for all fixed asset
     receipts
      – Equipment, furniture etc
ROBIN HAYDEN
                                           1/23/2010
                   Advice
   Business  income to business
     account not personal account
   Government      letters
      – Ignoring them will be painful
   Bookkeeper      does NOT sign
     checks

ROBIN HAYDEN
                                        1/23/2010
               Entity Choice
   Sole Proprietorship
   Partnership

   Limited Liability Company

   Corporation

   S-Corporation – tax planning
    opportunity

ROBIN HAYDEN
                                   1/23/2010
                 Entity Choice
   Attorneys      & Accountants
      – Differing viewpoints and priorities
   Need       to hear from both
   Then       make entity type selection



ROBIN HAYDEN
                                         1/23/2010
          Record Keeping - Why
   IRSrequirement and state law
   Business making money??

   Who owes and what is owed

   CPA needs them

   Business Trends

   1099’s and W2’s

ROBIN HAYDEN
                                   1/23/2010
          Record Keeping - How
     Computers
      – Quick Books, Peachtree, etc.
     Manually
      – General Ledger, check register
     Reports
      – Balance Sheet, Income Statement
     At least monthly updating
ROBIN HAYDEN
                                          1/23/2010
                    Inventory
   Items  made or bought to sell to
     others
   Take       inventory regularly
   Inventory      is an asset
      – On the balance sheet until sale
      – Moved to expense when sold

ROBIN HAYDEN
                                          1/23/2010
         Accrual vs Cash Basis
   Cash       basis is like checkbook
      – Money flow recorded as it happens
   Accrual
      – Money owed or owing recorded on
        date of transaction
      – Recommended if have inventory

ROBIN HAYDEN
                                         1/23/2010
        Income Taxes - General
   All    income taxable
   Usual  & customary expenses
     are deductible
   Keep       records 7 yrs or asset life
   Corporate   returns due earlier
     than individual
ROBIN HAYDEN
                                         1/23/2010
      Income Taxes - Deductions
   Health insurance – fully deductible
   Business meals and Entertainment
    at 50%
   Disability or Life insurance – very
    rarely deductible
   Fines and penalties – not deductible

   Owner draws are not an expense


ROBIN HAYDEN
                                      1/23/2010
          Income Taxes - Autos
     Standard Mileage $.445 per mile
     Standard mileage only for four
      vehicles otherwise use actual cost
     Record all costs plus mileage log
     Take percent of costs based on
      mileage for business


ROBIN HAYDEN
                                           1/23/2010
        Self Employment Taxes
   Paid by partner and sole
     proprietors
   Social  Security and Medicare
     equal to 15.3% net business
     income
   50%        deductible on 1040 page 1

ROBIN HAYDEN
                                           1/23/2010
  Payroll Taxes –Before Hiring
   File SS-4 for Federal ID number
   File revised Master Business
    Application with State
   W-4 and I-9 from each employee
   Get Circular E for withholding and
    deposit rules


ROBIN HAYDEN
                                         1/23/2010
      Payroll Taxes –Witholding
   Tax deposits usually on 15th of month
    after month paid
   Severe penalties for withholding
    incorrectly
   Never skip payroll tax deposits
      – Much more costly than credit card debt
     Special rules for family of sole
      proprietors and partnerships
ROBIN HAYDEN
                                            1/23/2010
                   Sales Tax
     Washington Department of Revenue
      class
     Collect the sales tax or you are
      liable (not the customer)
     Levied on Tangible Property
     Not levied on wholesale items
      – Need a reseller certificate on file

ROBIN HAYDEN
                                              1/23/2010
                Resources
     IRS: www.irs.gov
     WA Dept. of Revenue
      – www.dor.wa.gov
     Labor & Industries
      – www.lni.wa.gov
     Employment Security Department
      – www.fortress.wa.gov/esd/portal
ROBIN HAYDEN
                                         1/23/2010
       Doing Business in Other
               States
   Each    state has own laws: Find
     out first
   May        need to register
   May        need to pay various taxes
   May        need to collect sales tax


ROBIN HAYDEN
                                           1/23/2010
Questions?

								
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