How to pay your estimated tax payments
If I am a W2 employee, am I able to write off mileage on my vehicle?
Due to the Tax Reform Act of 2018, the prior mileage deduction for W2 employees was removed entirely for tax years 2018-2025. However, employees can receive reimbursement from employers following the IRS Guidelines (Link IRS Mileage chart here: https://www.irs.gov/tax-professionals/standard-mileage-rates) for their actual business miles driven with personal vehicles. This does not include commuting miles driven (daily back and forth from work), but does include miles to and from client offices, job sites, etc. As long as the mileage reimbursement does not exceed the IRS guidelines linked above, the reimbursement cost is deductible to the employer and not recorded as income to the employee.
What happens if I trade or sell cryptocurrency?
Cryptocurrency trading is currently being treated the same as trading any other asset (Stocks, bonds, etc.) This means that whenever crypto is sold, the gains/losses will need to be reported on that year’s tax return. Much like other asset classes, crypto trades will need to be categorized as either short-term capital gains or long-term capital gains based on the amount of time the crypto was held before being sold. Many Crypto exchanges such as Coinbase and Binance are now furnishing end of year documents to help traders categorize their gains/losses correctly on their tax return. If you use an exchange that does not provide these documents, you will need to manually calculate your crypto income using the FIFO (First In First Out) method.
I’m an S Corp Officer and I pay my medical premiums myself (not through the company). Can I add these self-paid premiums to my wages via S Corp Medical and, therefore, create an expense for the company?
Yes, you can. You will need to let your accountant or payroll processor know that you are paying medical premiums personally and give them the monthly premium amount. They can then add S Corp Medical to your payroll as a company contribution which will be added to your wages.
How do I set up a budget in QuickBooks Desktop?
Home Office Expense: Can I write off home office or work supply related items?
Unfortunately, the IRS took away all deductions, including home office, for W-2 employees in 2018. In exchange they allowed the employer to give an employee an allowance for home office and other expenses. They, in essence, shifted the burden of paying you back for home expenses to the employer.
What is the difference between bookkeeping and accounting?
Bookkeeper vs Accountant
For most small business owners, the terms bookkeeping and accounting are used interchangeably. While the two roles share some tasks, they’re not synonymous. An accountant may be considered a bookkeeper, but a bookkeeper can’t be an accountant without some education and certifications.
A bookkeeper is typically in charge of the day-to-day recording of financial transactions for the business. This includes keeping thorough financial records of:
- Customer Invoices and payments
- Material supplier and subcontractor bills and payments
- Payroll and payroll taxes
For example, a bookkeeper for a construction company will need to record every financial transaction that occurs during the day, such as the purchase of lumber, materials, subcontractor bills, and employees working on a job need to have their time allocated properly to the job as well as the phase of the job.
A bookkeeper can be anyone who is good with numbers. No formal training or licensing is required to become a bookkeeper. As a result, it’s easier to become a bookkeeper than an accountant.
Hiring a bookkeeper or even using bookkeeping software will likely be less expensive than an accountant. Additionally, a bookkeeper can take on greater responsibilities by transitioning from an entry-level position into a role as a full-charge bookkeeper.
When most people think of an accountant, chances are tax return processing, tax planning and end of the month financials come to mind.
An accountant’s role can be viewed as less transactional and more analytical. Accountants take the financial data that’s been meticulously recorded and then extrapolate trends and information. By looking at the numbers, they can provide crucial business insights and advice for how to keep optimizing.
For many small businesses, not having a tight grasp on their finances was the cause of their demise.
Requirements to become an Accountant
There are educational and credential requirements to become an accountant. At the very least, they must earn a bachelor’s degree in accounting from an accredited college or university.
A certified public accountant (CPA) takes that a step further. They not only have to meet the schooling prerequisites but must also satisfy state requirements and pass the CPA exam. From there, they are expected to maintain their credentials and stay up-to-date with laws and regulations.
Common roles of an accountant include:
Controller Level Accounting
A good controller will:
- Teach the bookkeeper(s) to learn and enter data correctly
- Be in charge of the accounting system and proper maintenance of each account
- Provide monthly financial reporting to the owner and the bank
A partner to help the small business owner think strategically about your business. CFO and CPAs are generally well trained in your industry and can provide insight and guidance on:
- Better understanding of the financial side of your business
- Improved decision-making capabilities from clearly seeing the hard and true numbers of your business
- A readily available sounding board to help with tough business decisions and help you clarify your business plans
- Establish strong financial controls in your business to reduce employee theft and increase profits
- Training and managing your accounting staff
- Improved quality and timeliness of financial information
- Budget preparation and monitoring
- Profitability analysis by service or product line
- Tax saving strategies
- Trend analysis
- Assistance in defining long-range plans and the quantification of goals
- Assistance in obtaining financing from banks, including assistance with negotiations
- Development of company accounting procedure manuals
- Analysis of equipment purchases, expansions, etc.
- Mergers and acquisitions assistance
- More time to focus on new services, new customers and other core business issues.
What is the difference between bookkeeping and accounting?
To pay your Estimated Tax Payments, please click on your respective state (linked below). The link will take you to the site for your state’s income/revenue tax department. We have included instructions for pages without direct links to the payments page. No instructions are given if the page links directly to the payment page.
If your state is not listed below, please refer to the IRS website: https://us.aicpa.org/research/externallinks/taxesstatesdepartmentsofrevenue