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The Value of Utilizing Private Accounting Services


There is an enormous amount of value in utilizing private accounting services, from reducing your business costs to adding greater financial protection to your business.

If you have been considering outsourcing your accounting needs but aren’t sure if it’s right for you, here are some reasons that may help you take the plunge and utilize the private accounting services of AA Tax & Accounting Services, LLC.  

Reduce Overhead Costs With Private Accounting

One of the main reasons businesses of all sizes opt for working with a private accounting firm is to reduce their overhead costs. Having even an in-house, part-time bookkeeper can be pricey, especially if you want one with any amount of experience. But when you turn your bookkeeping and accounting needs over to a private accountant, you can significantly reduce costs in several ways.  

  • You don’t need to train an out-of-house accountant like you would with an in-house bookkeeper and accountant.
  • No benefits, unemployment insurance, and other attendant costs are attached to hiring a private accounting firm, unlike an in-house employee.
  • Private financial matters such as employee salaries will remain private with the help of an accounting firm.

Tailor Exactly What Accounting Services You Need

By working with AA Tax & Accounting Services, LLC, you can determine exactly what accounting services your company needs.

Say that you run an ecommerce business with a few employees and are looking to grow. With our accountant, you may want to utilize our firm’s bookkeeping and payroll services, access our business consulting services which include entity restructuring, revenue recognition strategies, tax preparation, and more.

However, say instead that you are looking to start a new company but need help on the financial side of startup company planning. Our accountant can help with your business planning, from assessing startup costs to profit analysis information you will need to present to potential investors.  

With an accountant in-house, you may not have access to all the skills you may need for your growing business. But when you work with a private accounting firm like ours, you can make sure that we have the services you need to ensure your finances are on track.

Enjoy An Outside Perspective On Financial Matters

You know the old saying, “It’s hard to see the forest when you’re among the trees.” Well, running your own business can be like that. As you are involved in the day-to-day business of your operation, it can be difficult to see exactly what you need to do financially to ensure the future profitability of your business.

By working with our accountant, you can enjoy the clear view that comes with someone who isn’t personally with your business. Other people heavily involved in your business may not have the clarity and insight that a private accountant can provide.

Even if you aren’t a business owner, it can be difficult to project your future financial needs when you are busy with your immediate needs. If you need assistance in managing your portfolio or arrange your personal finances, our accountant has helped many individuals ensure that their finances are taken care of properly.   

Add A Layer Of Protection To Your Business

Business financial matters are only as safe as the competency of the person handling your accounting needs. By outsourcing your accounting needs to our private accounting firm, you can enjoy greater security and safety measure. Some of the financial protection benefits we provide your company with are:

  • Cash flow management
  • Embezzlement protection
  • Bank reconciliation
  • General ledger management
  • Payroll processing

Here at AA Tax & Accounting Services, LLC, you can enjoy all the benefits of private accounting services with the help of our experienced accountant. Contact us to discuss your accounting needs with our accountant.

Government Shutdown Might Mean Refund Delay, Let Your Accountant File It Quickly

When the government shutdown occurred earlier this year, the IRS was one of the main areas where funding stopped. As a result, the tax return process was in jeopardy. The question, at the time, was how quickly would tax refunds be processed, if at all, and how long would people have to wait to receive them.

But because of a few loopholes in the policy about government offices operating during a shutdown, the IRS has been able to stay the course, with some minor delays, in processing returns.

Prior Shutdowns and the Antideficiency Act

If a government shutdown occurs, some government areas still remain in operation. One of those areas is, of course, the IRS. In the past, the only contingency was while returns would be processed, refunds might be delayed until the government was again funded.

Your local Tax Accountant, however, is probably going to continue doing the work of helping people prepare their returns as most tax filers like to complete them as soon as the tax season starts.

Last year, 18.3 million people claimed around $12.6 billion in early refunds. This year, the IRS stated that tax filing season would begin on January 28th, despite the Antideficiency Act that states what type of work can be done during a government shutdown.

IRS Employees Still Worked

In spite of the shutdown, the Trump Administration vowed that the processing of returns and refunds would not be interrupted. This meant the IRS had to keep-on around 46,000 employees (57% of its workforce).

But those employees did their work without pay with the promise of back-pay as soon as the government was funded and operational again.

In the interim, the IRS assigned staffing to functions it deemed a necessity, such as processing electronic returns, processing returns with payments, mailing tax forms, appeals, criminal law enforcement and investigations, and technical work to maintain computer systems. Other job functions like audits, returns, non-automated collections, and legal counsel, etc., were all temporarily stopped.

The IRS Tried to Serve Taxpayers

Despite the fact it only had half its workforce in place during the shutdown, the IRS still tried to help taxpayers with any concerns they might have. 38% of calls to its Automated Collection System were answered with callers waiting close to 50 minutes. As far as the IRS’s Installment Agreement/ Balance Due line, only seven percent of calls were answered with an over 80 minute wait time.

The IRS also had five million pieces of mail that needed to be processed. And it had over 80,000 responses to the fiscal year 2018’s Earned Income Tax Credit audits that went unanswered. Add to that the 87,000 amended returns that no one addressed.

The IRS’s Old Computer System

Although it is probably one of the most important areas of the government, the IRS is highly underfunded, and this point goes beyond normal funding the agency receives when the government is fully operational. One of the areas where it is behind the times is in its computer systems, which haven’t been updated since the 1960s.
Currently, taxpayer information is stored in 60 different case management systems that aren’t linked together and the agency lacks a central database. The problem is IRS employees are unsure if they are servicing the right taxpayer accounts or not. These antiquated systems also make the audit process highly imprecise and ineffective.

Tax Reform Questions Unanswered

In 2014, the IRS instituted a policy of answering tax law related questions in a specific fashion and only during the tax season months of January through April. But the Trump Administration’s tax reform changed that policy, especially in regard to questions about the Tax Cuts and Job Acts reform.

But callers were told those questions couldn’t be answered due to budget restrictions and instead were directed to an automated answering system where they were promptly disconnected. Those taxpayers who actually got a live person were told that IRS employees had not been trained on the reforms and apologized for not being able to answer their questions.

Tax Returns and Refunds Were Still Processed

With all the problems the IRS faces with old computer systems and insufficient training on new tax laws in addition to being short of staff during the shutdown, the agency was still able to process returns and refunds, although not at the same level as the prior year. In the first week of the tax season, the IRS was still able to process 13, 306, 000 returns with 4,672,000 refunds paid out. The average refund, however, went down from the prior year from $2,035 to $1,865.00.

Conclusion

The government shutdown finally did end, although President Trump threatened another one might follow. Thankfully, that didn’t happen. All IRS employees are most likely back at work, but the fact remains they are plagued with old systems and not enough training about tax reforms to answer taxpayer questions.

Have you done your 2018 taxes yet? Are you worried the tax reforms of last year might make doing your tax return difficult and negatively impact your refund? It’s not too late to contact your Cedar City Accountant to help you through your federal as well as with your Cedar City taxes.

Looking Forward To Your 2018 Tax Return – Tax Credits vs. Tax Deductions

A common question our Cedar City accountant is asked during tax season is whether tax credits or tax credits are better when it comes to improving your tax return. The answer is—it depends.

Difference Between Tax Credits vs. Tax Deductions

To help you determine whether tax credits or tax deductions are better, it is important you understand how they work. Both tax credits and tax deductions will work to help you save on your taxes, but they do it in different ways.

Tax credits – When you use a tax credit, it can reduce the amount of taxes you owe at a dollar-for-dollar rate reduction. So, say you owe $2,500 in taxes, a $1,000 tax credit will reduce that amount down to $1,500 owed. Also, some tax credits are refundable, so if you have enough tax credits to reduce your taxes below zero, you can have the remaining amount refunded to you. However, many tax credits are non-refundable, so you can only reduce your taxes owed to zero.

Tax deductions – On the other side, a tax reduction work to reduce the taxes you own by percentages. So, say you are in the 22% tax bracket and have a $1,000 tax deduction you can apply. For those in the 22% tax bracket, the $1,000 tax deduction actually will only save you $220 on the taxes you owe.

In some instances, you can use both tax credits and tax deductions on your tax return, though many are dependent on a variety of factors. Our accountant provides tax preparations services and can help you determine what combination will apply to your taxes.

How The Tax Cuts And Jobs Act Affect Tax Credits vs. Tax Deductions

The sweeping changes to the tax law by the Tax Cuts and Job Act passed in 2017 will now affect tax returns filed in 2019. One of the biggest changes is the raising of the standard deduction, which is now:

  • Single filer – $12,000
  • Married, filing jointly – $24,000
  • Married, filing separately – $12,000
  • Head of household – $18,000

With the higher standard deduction, most will not bother with itemized deductions, making tax deductions less useful than tax credits. However, if you want to discover if itemization is worth it for you or if the standard deduction is best, our accounting services are available to you.

To work with an experienced tax accountant, contact us for an appointment. Our accountant will help you receive the best tax refund possible.

Cedar City Nonprofits: Donating to the Paiute Indian Tribe of Utah


When we move beyond amassing wealth for ourselves and give to others, we expand our worldview while setting an example of loving kindness for our children. As one notable child, diarist and Holocaust victim Anne Frank once wrote, “No one has ever become poor by giving.”

In fact, including charitable giving in your personal financial plan can yield significant savings on your tax return, particularly when you work with a skilled tax accountant. This leaves you with more money to live and to give, a truly healthful cycle.

It can be hard, though, to negotiate all of the worthy nonprofits to determine where to direct your charitable giving. At AA Tax & Accounting Services, we advise clients to start by looking for ways to help right in Cedar City and the surrounding communities.

The Paiute Indian Tribe Of Utah

One way to do this is to support the efforts of the local indigenous people, the Paiute Indian Tribute of Utah. These include the Indian Peaks Band of Paiute Indians, who count 2,000 acres in Cedar City as their home.

Near-Destruction

As of 2015, the Indian Peaks Band had 48 members. The small number is a testament to how the population of Utah Paiutes–who historians estimate arrived in Utah about 1100 AD–has been decimated over the years.

Once numbering in the thousands, Utah’s Paiute Indians were nearly extinguished, first by contact with European settlers and later with American pioneers. The devastation continued in 1954 when the US government terminated its recognition of the tribe. At one point, the number of Paiutes in Utah dwindled to 800. As of 2015, those numbers rested at 918.

The Long Climb Back

Created in 1980 by an act of Congress, the Paiute Indian Tribe of Utah is comprised of five constituent Bands, including:

  • Cedar
  • Indian Peaks
  • Kanosh
  • Koosharem
  • Shivwits

Each of these Bands has a longstanding independent identity. What they share in common, however, is the desire to climb back from near-destruction toward a better future.

In 1984, the Paiute Indian Tribe of Utah was granted 4,470 acres of Bureau of Land Management land and $2.5 million in seed money to kickstart economic development. Since then, Utah’s Paiutes have built houses, opened businesses and made strides in healthcare and educational opportunities.

Giving To Youth Education Helps Local Paiutes Move Forward

It’s generally agreed education is the best way to help a community move forward, and this holds true for the Paiute Indian Tribe of Utah.

Scholarship Program

You can invest in the future of neighboring Native Americans by contributing to the PITU Higher Education Fund. Your donations help provide young people in Cedar City and the surrounding areas with college and training. It’s hoped the scholarship program will yield desperately-needed graduates in fields like medicine, engineering and science.

Paiute Tribal Youth Camp

Regaining Paiute culture is as important as reclaiming tribal land. For the past 9 years, teens from Utah’s Paiute bands as well as youths from Nevada and Arizona Bands have been invited to the Paiute Tribal Youth Camp.

During the 4-day camp–held in public lands of traditional significance to Paiutes of the Southwest–participants receive guidance from tribal Elders and Grandmothers as well as indigenous people who’ve forged careers in public land stewardship. The camp is supported by Southern Utah University as well as agencies like the National Park Service, the Bureau of Land Management and the Forest Service.

Tribal elders expose teens to the Paiute language, songs, stories and native plant science. The heaping dose of native culture also includes participation in a traditional fire circle as well as an ancient stick game. Carmen Clark of the Shivwits Band of Paiutes says, “If they know just a little bit, they know where they come from, they’re not lost.”

The teens also get lessons in various areas of land stewardship that may lead to a future career.

Help Fund this Transformative Camp

The Zion Natl Park Forever Project aims to help raise the $15,000 needed to fund the 2019 Tribal Youth Camp. To contribute, click the “Pitch In” tab at the top of the project’s website. Select the amount you wish to contribute and click on the “Informing Tomorrow” button. As you complete your donation, you’re invited to leave a comment. You can note there that you’d like your contribution to go to the Paiute Tribal Youth Camp.

At AA Tax & Accounting Services, we’re happy to help you manage your finances, both business and personal, with a full array of services. If you’d like more information on worthy nonprofits or on thriving financially, contact us today for your appointment.

5 Ways An Accountant Can Help You Organize Your Business Finances

Filing Your Business Tax Return for 2016

As a small business owner, it is important to prioritize which area of your business requires more of your direct attention. Many times, this means you need to switch between being a marketing manager, salesperson, customer support representative, bookkeeper, and more. Business owners have limited time, and understanding the many laws and regulations surrounding business finances takes more time that business owners can devote. This lack of time and understanding can create difficulties later.

To help you avoid these difficulties and improve the organization of your business finances, an accountant can help you in multiple ways.

1. Work With AA Tax & Accounting Services To Develop An Efficient Bookkeeping System

Having an effective bookkeeping system is the lifeblood of any business. Without one, vendor payments can be missed, expenses unaccounted for, and other disasters which can easily topple a small business.

An accountant can significantly improve your bookkeeping by providing:

  • Bookkeeping software – Our accountant can advise you on which bookkeeping software would best suit your business and help you set up your account. However, this solution still requires a significant amount of oversight from you, to track to ensure things are recorded correctly and to upload various expense reports.
  • Outsourced to accountant – Many business owners choose to outsource their bookkeeping to our accountant to ensure an experienced eye is watching their accounts. You can also choose to hire an in-house bookkeeper, but often, this expense can be hard on a small business, while outsourcing your bookkeeping is significantly more affordable.

2. Receive Tailored Business Consulting

One of the many services accountants offer is business consulting. Depending on your accounting needs, this consultation can cover a range of topics. Some of what AA Tax & Accounting Services, LLC, can consult with you on are:

  • Business planning and development
  • Ideal entity structure for your organization
  • How to structure business finances (i.e., choosing a bank, separation of business and personal finance, etc.)
  • Revenue recognition strategies

3. Allow Our Accountant To Organize Your Payroll

Having even one employee on your payroll can increase the difficulty level of your bookkeeping, as payroll is not merely paying your workers on time, though that is important. You will need to:

  • Track payroll for your employer taxes
  • Liability insurance payments to cover your business in case something happens to your employees
  • Sick and vacation pay accrual
  • Payroll disbursement
  • Hourly and salaried employees hours tracking
  • Workman’s compensation
  • Unemployment payments

This payroll list will become more complicated as your business grows. Our accountant can be an invaluable asset, as he can organize and set up your entire payroll system to work seamlessly behind the scenes and ensure you and your employees are satisfied with your payroll.

4. Review Regular Reports With AA Tax & Accounting Services

With the help of an experienced accountant like Adrian D. Anderson, you can see real-time reports of all work-related financial standings. Outsourcing this time-consuming portion of running your own business frees you up to manage more enjoyable aspects of working for yourself.

Of course, you will not be cut off from how your company is doing financially. Adrian will supply a variety of reports to help you maintain an organized view of how your business is operating. Some of the reports offered by our accountant are:

  • Income statements
  • Balance sheets
  • Expense reports
  • Audits

Our accountant can also create customized reports to suit your business’ financial needs. Both the reports listed above and customized reports will greatly aid in your ability to make more beneficial decisions for the growth of your company.

5. Confidently Delegate Tax Prep And Filing

Organization is vital when it comes to filing your business taxes. Our accountant often acts as a tax consultant for small businesses. With his help, businesses can have their taxes calculated, have all their eligible deductions applied to their taxes, and have their taxes filed on time by our accountant.

Also, AA Tax & Accounting Services stands by its accounting work. If your taxes are audited, Adrian will work with you to resolve any issues and work with the IRS to correct your taxes.

If you feel you may need an accountant for your business or personal taxes, contact us to set up an appointment with our accountant and see how he can organize your finances.

Other services AA Tax & Accounting Services, LLC offers:

Bookkeeping Services For Your Southern Utah Business

“Deciding what not to do is as important as deciding what to do.” – Jessica Jackley, founder of the global micro-lending company Kiva.

The hallmark of a flourishing business is delegation. It’s about reserving your time for what you do best, maintaining the big-picture vision and day-to-day workings of an enterprise, while handing off other responsibilities.

If you’re ready to take some financial gruntwork off your plate but don’t have the budget for an in-house bookkeeper, you don’t have to look far for help. With offices in the Southern Utah cities of St. George and Cedar City, accounting professional Adrian D. Anderson, MAcc at AA Tax and Accounting Services is ready to crunch the numbers and attend to the paperwork piling up on your desk.

Whether you’re at the helm of a small startup or burgeoning corporation, a professional bookkeeper can assist you with a number of operational functions. These include

  • Accounts Payable
  • Accounts Receivable
  • Balance Sheets
  • Bank Reconciliations
  • Bookkeeping Cleanup
  • Customized Bookkeeping Reports
  • General Ledger Management
  • Income Statements

A Bookkeeping Service Can Help Business Owners Let Go

If you’ve founded your own business, chances are you’re a creative type rather than the proverbial “bean counter.” Unless you majored in accounting, your educational and life experiences may not lend themselves to the legal and organizational intricacies of business bookkeeping.

It’s all too easy to make errors in your calculations, miss paying bills or lose track of invoices. Over time, even small missteps can harm your business through consequences like late fees and loss of credit or income.

Even if you manage largely error-free bookkeeping, you may be investing an inordinate amount of time and worry into the job. Few things have a greater negative impact on your family life than spending all your time at work or carrying job stressors home with you.

Some people avoid sharing the financial responsibilities of their business out of mistrust or a fear of losing control. The greatest way to lose control, however, is through the chaos that ensues when you are over-extended.

Outsourcing your bookkeeping can let you focus on the countless other demands of your business, including marketing, strategy, funding and employee performance and relations. You’re also free to put out the inevitable fires that crop up, dealing with the minor crises that characterize any business undertaking.

Along with saving time, and your eyes, your professional bookkeeper can lend you an outside perspective on money matters. There are many pressing questions to consider regarding your business including

  • Is your spending threatening to exceed your earnings?
  • Are you being frugal enough, taking advantage of small ways to save that add up?
  • Are you making decisions that are “pennywise and pound-foolish”? There are many instances when a larger initial cash outlay can bring you long-term savings.
  • Are you maintaining the appearance of professionalism and fairness in your financial dealings? Clean and above-board accounting is key when it comes to maintaining the trust of business partners, vendors, clients and employees.

Time is money, as the saying goes. Why spend your greatest asset on routine tasks that are difficult, lengthy and boring when there are skilled and efficient bookkeepers who enjoy the left-brain puzzle of making operational ends meet?

 

Cedar City Nonprofit Organizations: Donating to The Happy Factory Inc.

When you incorporate giving into your budget, you reap significant benefits. The greatest reward is knowing you’re making a difference. It’s important to note, however, that there are also potential financial compensations. Your donations can make a noticeable difference in the size of your tax return, particularly if you’re guided by tax accountant specialists like those at the Cedar City-based accountant Adrian D Anderson, MAcc.

With countless nonprofits welcoming your tax-deductible donations, it can be hard to choose where to direct your resources and attention. You might want to start by taking bang-for-your-buck into consideration. Will your contribution go directly to a worthy cause or be funneled into bloated administrative salaries?

If you’re looking for a nonprofit with a streamlined overhead and a dedicated all-volunteer staff, there’s a local charity sure to put a smile on your face.

At The Happy Factory, Helping People Is Child’s Play

Cedar City may not be the North Pole, but it is the site of a workshop where a merry team of “elves” oversees the construction of homemade toys to be given to the boys and girls of the world.

Meet The Happy Factory, a Cedar City nonprofit that has shipped a staggering 1,495,481 toys to children across the globe.

Founders Charles and Donna Cooley started by donating wooden animal toys to the Primary Children’s Medical Center in Salt Lake City back in 1995. Following an enthusiastic response and a large donation of hardwood scraps, the Cooleys increased their efforts.

Charles started making small cars, which Donna painted. Soon the couple was also making toy deliveries to Shriner’s Hospital and the Humanitarian Center, a charitable arm of the Church of Jesus Christ of Latter-Day Saints. It was through the latter organization that they learned there are some 500 million children in the world without any toys.

Rather than taking this heartbreaking statistic standing down, Charles and Donna created The Happy Factory, named after the joyous smiles of children who receive the nonprofit’s toys.

Volunteers signed on to help and The Happy Factory expanded shipments to needy recipients in the United States and Beyond. The nonprofit delivers toys to young victims of natural disasters and to Native American organizations as well as to children at crisis centers, shelters, churches, schools, medical clinics and orphanages.

Full Steam Ahead

Next, The Happy Foundation began creating large homemade wooden steam shovels that kids can sit on, using the manual controls to manipulate the bucket. These have proven to be invaluable for disabled children, who gain motor skills and confidence through “steam shovel therapy.” To date, 2,610 steam shovels have been delivered to kids around the world.

How You Can Help

If you’re moved by the mission of the Happy Factory, you can help with a financial donation of any size.

The Happy Factory is an all-volunteer organization and wood for the toys is donated. Still, money is needed for wheels and axles and to support factory operations. A little goes a long way, with a $5 donation funding the construction of roughly 10 toys.

You may also want to offer hands-on help, joining a robust task force of volunteers who have collectively donated 82,000 service hours to the nonprofit over the years. Helpers of all ages, from kindergarteners to senior citizens, are welcome to contribute, whether their efforts include toy-making, toy delivery or organizational tasks.

For more information on supporting this winning nonprofit, visit happyfactory.org.

5 Ways A Tax Accountant Can Make Your Job Easier

Tax Filing for Your Small Business

If you’re a business owner, have a complex financial portfolio or just get the jitters at the thought of Tax Day, you could greatly benefit from the services of a tax accountant.

People who engage a tax accountant find life easier for many reasons. Let’s discuss five of the biggest benefits.

1. A Tax Accountant Can Give You Peace of Mind

Business owners and individual taxpayers alike tend to stress over taxes, wondering whether they’ve dotted their I’s and crossed their T’s. The combination of paperwork, math and a looming deadline can be overwhelming. And there’s always that fear. Will this be the year you get dinged?

With stress comes procrastination. Some 20 to 25 percent of Americans put off tax preparation until the last 14 days before deadline. This last-minute cramming causes even more worry. It’s a vicious cycle, one that can be broken by bringing some fresh perspective into the picture.

A tax accountant approaches your taxes with expertise instead of dread. While you take taxes personally, they know that processing your return is just business as usual for the IRS.

They also have some reassuring information. Most of us owe no taxes and, in fact, eight out of ten refunds filed in 2013 yielded a refund, according to IRS data. Auditing fears are also largely unfounded. Only 1.1 percent of individuals who filed tax returns in 2010 were audited, and these were typically millionaires or very high-earning business owners.

A good tax accountant won’t put off preparing your taxes, because they know the outcome is likely to be in your favor. They’ll certainly never miss deadline, given their work life revolves around April 15!

2. A Tax Accountant Can Bring You Savings

A good tax accountant, like those at the Cedar City-based AA Tax & Accounting Services, LLC, knows exactly what you can use as a tax deduction or business write-off. In fact, if you’re a business owner, you can even write off the money you pay for tax strategy or tax preparation services.

Provide your tax accountant with thorough financial records and they’re likely to find expenses you never knew you could write off. Did you know, for instance, that you can write off any dry-cleaning fees you rack up during a business trip?

3. A Tax Accountant Can Create Clarity

Your tax accountant can help you navigate complex financial dealings. If you own a business or rental properties, or have a “side hustle” like driving for Uber,” you’ve likely moved beyond Turbotax territory. A tax knows how to depreciate business or real estate assets so as to decrease your tax burden.

4. A Tax Accountant Can Help You Reach Your Goals

Are you planning to sell some real estate? Your accountant can help you minimize the taxes you pay on the proceeds from property through mechanisms such as like-kind exchange.

If you want to put aside money for your children, either through a 529 plan to fund their education or through a trust, your accountant can help you decide the best methods for tax-deferred or tax-free saving. As an example, your tax accountant can help you categorize expenses charged to the trust fund in a way that nets the greatest tax benefit.

5. A Tax Accountant Can Help You Navigate Life Changes

Filing your tax return may have become relatively easy for you over the years. Divorce, however, can change a lot. A tax accountant can help you move from joint filing to individual, and incorporate any payments or expenses like alimony and child support. If you receive an inheritance after a loved-one’s death, your tax accountant can also help you work with the intricacies of settling their estate.

Whatever your portfolio and whatever your situation, there are countless ways a tax account can help you navigate your dealings with the IRS. Consider consulting an expert whose know-how can replace stress with success.

Tax Code Updates: Pass-Through Entities

The majority of business in America are structured as pass-through entities as pass-through business entities can be anything from a sole proprietorship to an S corporation. As such, these businesses need to understand how the Tax Cuts and Jobs Acts will affect their tax preparation.

Pass-Through Business Entities And Qualified Business Income

The most important change for pass-through entities is the 20% qualified business income (QBI) deduction that business can use while filing their upcoming taxes. However, that 20% QBI deduction is not guaranteed.

Pass-through business can receive 20% QBI deduction if it is lower than the taxpayer’s business or trade. They potentially receive a different deduction, such as:

  • 50% of the total W-2 wages which the pass-through entity paid to employees.
  • 25% of the total W-2 wages and add 2.5% of the original purchase cost of the business’ actual property.

This deduction method can be difficult to visualize. To help you visualize how these deductions may affect your business, below our accountant has provided an example.


The bolded amounts are the appropriate deduction for each of the example companies.

Limitations For The New Tax Code QBI Deduction

There are some limitations when it comes to what qualifies as QBI. The types of income which don’t qualify as QBI are:

  • Annuity payments
  • Capital losses or gains
  • Payments to partners for services
  • Interest and dividends
  • Foreign currency losses or gains
  • Business owner compensation

For those pass-through entities which operate their businesses in the service industry, there are income limitations to receiving the 20% QBI deduction.

  • Consulting
  • Actuarial Science
  • Health
  • Law
  • Financial Services
  • Performing Arts
  • Athletics
  • Brokerage Service
  • Accounting

These service-oriented businesses begin to receive less of a QBI deduction when the income hits $157,500 for an individual filer and $315,000 for joint filers. There is no QBI deduction for individual filers who earn $207,000 or for joint filers who earn $415,000.

Another key limitation for pass-through entities to remember is that the deductions discussed above will only last until the end of the 2025 tax year.

It can be complicated for a small business to grasp all the tax changes and appropriately apply them to their pass-through business. To receive high-quality accounting assistance for your business, contact us to work with our accountant.

Bookkeeping For Nonprofit Organizations

Bookkeeping for a nonprofit has different requirements than for a for-profit business. An experienced accountant can easily provide bookkeeping services to a nonprofit as well as a for-profit.

Bookkeeping Needed For Nonprofit Financial Transparency

As nonprofits enjoy IRS tax-exempt status, they are required to have a very high level of financial transparency. Accurate bookkeeping is necessary to achieve this transparency, which can be difficult for a nonprofit to provide as they may not have the skilled professionals on staff.

It is not uncommon for nonprofits to outsource their bookkeeping to efficient accounting services which provide nonprofits their bookkeeping and tax return assistance.

Tracking Expenses And Renevue For Nonprofits

Part of the bookkeeping necessary for nonprofits is the tracking of expenses and revenue. Expenses made by a nonprofit may be reported by several different departments, such as:

  • Program
  • Fundraising
  • Management
  • Operations

As the information is coming from various sections of the nonprofit, it can be difficult for an inexperienced bookkeeper to stay on top of all the financial information. This becomes especially difficult as a nonprofit bookkeeper attempts to track the revenue. Some sources or revenue that nonprofits receive are:

  • Membership dues
  • Investment income
  • Fundraising events
  • Donor contributions
  • Grants
  • Program fees

Required Nonprofit Financial Statements

Nonprofit bookkeepers need to not only perform the day-to-day tasks but they also will need to provide tax preparation support and financial statements.

Due to the transparency requirements nonprofits have, they need to have yearly financial statements available for all to view. The key required financial statements are:

  • Statement of Functional Expenses
  • Statement of Financial Position
  • Statement of Cash Flow
  • Statement of Activities
  • Notes to Financial Statements

Outsource Your Nonprofit Bookkeeping

Above are just the basics of nonprofit organization bookkeeping. Nonprofits still labor under many of the bookkeeping needs of a for-profit business, such as:

  • Payroll
  • Bank reconciliations
  • Bill pay
  • Deposits
  • Invoicing

Nonprofits organizations have a mission to accomplish and dedicating time and resources to track their bookkeeping is not always the most effective use of their valuable resources. Yet, by outsourcing their bookkeeping, nonprofits can fulfill their legal obligations for financial transparency, enjoy the professional handling of their bookkeeping, and allow the nonprofits to focus on their mission instead of financial matters.

AA Tax & Accounting Services LLC is able to provide top-quality bookkeeping services to nonprofit organizations. Depending on your nonprofit’s needs, our accountant can tailor what services are offered. Contact us for a consultation with our accounting firm and see what we can do for your nonprofit.

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