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Tips to Achieve Financial Success

March 7, 2021March 7, 2021 by fasnew@fasnew@66541.6486513

Most people, if not all of us, aim to achieve financial success. Be it within our personal lives or business lives, we want to have that financial peace of mind that you have enough cash, that it is continuously flowing, and that you have the right amount of cash cushion to fall back into.

While the goal is clear as day, the journey to getting there is not. It is hard to know where to begin and how to traverse this journey towards this financial success. But worry not, it being difficult does not mean it is impossible!

To help you, here are a few tips to achieve financial success:

Add Value

The best place to start your journey to financial success is within yourself.

Many successful entrepreneurs add value to themselves or within their business first, then they proceed to add value to their specific industries. Invest in yourself and your business. Build a good and strong foundation that will make you different from others thus, adding value. This will not only help you reach financial success, but you can also help your industry by setting a good example and being a pioneer for being different.

Create a Plan and Follow It

Just like when you have a destination to an unfamiliar location where you would likely need to create a map and have a plan to reach that certain destination, the same thing applies to achieving financial goals or any other goals in general. It is always a best practice to have a plan and strictly follow it, but also be open to certain changes along the way.

When creating a plan, always remember to be realistic with it. Keep in mind the S.M.A.R.T. goals where your outline should be Specific, Measurable, Attainable, Relevant, and Time-based. A well-created plan will prevent you from going off track so be sure you have one while you achieve your financial success.

Develop Discipline and Patience

Nothing big is accomplished overnight, so if you are thinking that achieving financial success can happen within a snap of a finger, it’s time to change that mindset. Discipline and patience are two important personality traits you should have when reaching for financial success. Even if you have the perfect plan, best opportunities, and great strategic efforts, know that it could still take years for the success to fully manifest.

It’s easy to get frustrated early on, but having discipline and being patient can be extremely rewarding.

Take Calculated Risks

Whether it’s starting a business or investing in stocks, every avenue to making money requires some risk. To earn, you should take risks, but they should be calculated.

While having discipline and patience is a must, this doesn’t mean that you should just wait passively. You have to take a chance and take risks on ventures and ideas that you have that will help you reach financial success. But do keep in mind that it is important to think deeply and evaluate multiple outcomes before you decide that the risk is worth taking. Taking risks without thinking about them beforehand is an incredibly quick way to lose money.

These are just some of the many things you should think about as you make your way towards financial success. If ever you feel lost, know that there are professionals that can better assist you with this so be open to working with them.

FAS focuses on providing financial insights that can help you and your business. If you need assistance with bookkeeping, business and/or individual income tax return preparation or cross-border taxes, feel free to contact us! Reach us at admin@fas-accountingsolutions.com or at 713-855-8035.

Seasonal Workers and the Healthcare Law

November 12, 2020November 12, 2020 by fasnew@fasnew@66541.6486513

Businesses often need to hire workers on a seasonal or part-time basis. For example, some businesses may need seasonal help for holidays, harvest seasons, commercial fishing, or sporting events. Whether you are getting paid or paying someone else, questions often arise over whether these seasonal workers affect employers with regard to the Affordable Care Act (ACA).

For the purposes of the Affordable Care Act, the size of an employer is determined by the number of employees. As such, employer-offered benefits, opportunities, and requirements are dependent upon your organization’s size and the applicable rules. For instance, if you have at least 50 full-time employees, including full-time equivalent employees, on average during the prior year, you are an ALE (Applicable Large Employer) for the current calendar year.

If you hire seasonal or holiday workers, here’s what you should know about how these employees are counted under the health care law:

Seasonal worker

A seasonal worker is generally defined for this purpose as an employee who performs labor or services on a seasonal basis, generally for not more than four months (or 120 days). Retail workers employed exclusively during holiday seasons, for example, are seasonal workers.

Seasonal employee

In contrast, a seasonal employee is an employee who is hired into a position for which the customary annual employment is six months or less, where the term “customary employment” refers to an employee who typically works each calendar year in approximately the same part of the year, such as summer or winter.

The terms seasonal worker and seasonal employee are both used in the employer shared responsibility provisions but in two different contexts. Only the term seasonal worker is relevant for determining whether an employer is an applicable large employer subject to the employer shared responsibility provisions; however, there is an exception for seasonal workers:

Exception: If your workforce exceeds 50 full-time employees for 120 days or fewer during a calendar year, and the employees in excess of 50 during that period were seasonal workers, your organization is not considered an ALE.

For additional information on hiring seasonal workers and how it affects the employer shared responsibility provisions please call.

Tax Preparation vs. Tax Planning: What’s the Difference?

August 10, 2021November 3, 2020 by fasnew@fasnew@66541.6486513

Many people assume tax planning is the same as tax preparation, but the two are quite different. Let’s take a closer look:

What is Tax Preparation?

Tax preparation is the process of preparing and filing a tax return. Generally, it is a one-time event that culminates in signing your return and finding out whether you owe the IRS money or will be receiving a refund.

For most people, tax preparation involves one or two trips to your accountant (CPA), generally around tax time (i.e., between January and April), to hand over any financial documents necessary to prepare your return and then to sign your return. They will also make sure any tax reporting on your return complies with federal and state tax law.

Alternately, Individual taxpayers might use an enrolled agent, attorney, or a tax preparer who doesn’t necessarily have a professional credential. For simple returns, some individuals prepare tax returns themselves and file them with the IRS. No matter who prepares your tax return, however, you expect them to be trustworthy (you will be entrusting them with your personal financial details), skilled in tax preparation, and to accurately file your income tax return in a timely manner.

What is Tax Planning?

Tax planning is a year-round process (as opposed to a seasonal event) and is a separate service from tax preparation. Both individuals and business owners can take advantage of tax planning services, which are typically performed by a CPA and accounting firm or an Enrolled Agent (EA) with in-depth experience and knowledge of tax law, rather than a tax preparer.

Examples of tax planning include the following: Bunching expenses (e.g., medical) to maximize deductions, tax-loss harvesting to offset investment gains, increasing retirement plan contributions to defer income, and determining the best timing for capital expenditures to reap the tax benefits. Good recordkeeping is also an important part of tax planning and makes it easier to pay quarterly estimated taxes, for example, or prepare tax returns the following year.

Tax planning is something that most taxpayers do not take advantage of – but should – because it can help minimize their tax liability on next year’s tax return by planning ahead. While it may mean spending more time with an accountant, say quarterly – or even monthly – the tax benefit is usually worth it. By reviewing past returns, an accountant will have a more clear picture of what you can do this year to save money on next year’s tax return.

If you’re ready to learn more about what strategies you can use to do your taxes more efficiently and effectively, contact us and let our Enrolled Agent guide you!

Protect Tax Records Before Disaster Strikes

August 1, 2021August 3, 2020 by fasnew@fasnew@66541.6486513

As such, it’s always a good idea to plan for what to do in case of a disaster. Here are some simple steps you can take right now to prepare:

1. Backup Records Electronically.

Many people receive bank statements by email. This is a good way to secure your records. You can also scan tax records and insurance policies onto an electronic format. You can use an external hard drive, CD, or DVD to store important records. Be sure you back up your files and keep them in a safe place. If a disaster strikes your home, it may also affect a wide area. If that happens you may not be able to retrieve your records.

2. Document Valuables.

Take photos or videos of the contents of your home or business. These visual records can help you prove the value of your lost items. They may help with insurance claims or casualty loss deductions on your tax return. You should store them with a friend or relative who lives out of the area. The IRS has a disaster loss workbook, Publication 584, Casualty, Disaster, and Theft Loss Workbook (Personal-Use Property), which can help taxpayers compile a room-by-room list of belongings.

3. Update Emergency Plans.

Review your emergency plans every year. Personal and business situations change over time as do preparedness needs, so update them when your situation changes. Make sure you have a way to get severe weather information and have a plan for what to do if threatening weather approaches. In addition, when employers hire new employees or when a company or organization changes functions, plans should be updated accordingly and employees should be informed of the changes.

4. Get Copies of Tax Returns or Transcripts.

Use Form 4506, Request for Copy of Tax Return, to replace lost or destroyed tax returns or need information from your return. You can also file Form 4506T-EZ, Short Form Request for Individual Tax Return Transcript or Form 4506-T, Request for Transcript of Tax Return. If you need assistance filling this form out, please call.

5. Check on Fiduciary Bonds.

Employers who use payroll service providers should ask the provider if it has a fiduciary bond in place. The bond could protect the employer in the event of default by the payroll service provider.

If you fall victim to a disaster, help is just a phone call away. Don’t hesitate to call the office regarding any disaster-related tax questions or issues you might have.

Key Things to Know About Forms 1099

August 9, 2021January 26, 2020 by fasnew@fasnew@66541.6486513

Form 1040 is considered as the most important tax form and arguably IRS Forms 1099 comes a close second to this ranking. These 1099 Forms arrive in late January and the IRS sees these forms very important because it enables easy computer matching against tax returns. If you don’t report these forms, be ready to receive a tax notice.

Since it’s now late January, here are some key things to know about these 1099:

Generally, businesses must issue the forms to any payee (other than a corporation) who receives $600 or more during the year. That’s the basic rule but there are many different exceptions, make sure you are up to date with the tax rules. Every Form 1099 includes the payer’s employer identification number and the payee’s Social Security number. The IRS matches Forms 1099 with the payee’s tax return.

Any mistakes and discrepancies on Form 1099 should be reported and explained on your tax return and be sure to present evidence to back up your claims.

Forms 1099 should never be ignored, if you received one, be sure to complete it. There’s a 1099-INT for interest; 1099-DIV for dividends; 1099-G for state and local tax refunds and unemployment benefits; 1099-R for pensions and payouts from your individual retirement accounts; 1099-B for broker transactions and barter exchanges; 1099-S for real estate transactions, etc. There are many categories, but the Form 1099-MISC (for miscellaneous) seems to prompt the most questions and covers the biggest territory.

If you received income and didn’t receive a Form 1099, you’re not off the hook. Remember the general rule, if you have received an income, always report it.

Update your address directly with payers, as well as putting a forwarding order in with the U.S. Post Office. You’ll want to see any forms the IRS sees.

Any Form 1099 sent to you also goes to the IRS. The deadline is Jan. 31 for mailing Forms 1099 to taxpayers, but the payer generally has until the end of February to send all its Forms 1099 to the IRS.

Errors on Form 1099 must be addressed immediately. The payer must be notified to file the corrected form as soon as possible.

If you need assistance with your Form 1099 and preparing your tax returns, FAS has an enrolled agent that could help you! Contact us today at admin@fas-accountingsolutions.com or at 832-437-0385.

Starting a Home-Based Business

January 30, 2020January 23, 2020 by fasnew@fasnew@66541.6486513

More than half of all businesses today are home-based. Every day, people are striking out and achieving economic and creative independence by turning their skills into dollars. Garages, basements, and attics are being transformed into the corporate headquarters of the newest entrepreneurs – home-based business people.

And, with technological advances in smartphones, tablets, and iPads as well as rising demand for “service-oriented” businesses, the opportunities seem to be endless.

Is a Home-Based Business Right for You?

Choosing a home business is like choosing a spouse or partner: Think carefully before starting the business. Instead of plunging right in, take the time to learn as much about the market for any product or service as you can. Before you invest any time, effort, or money take a few moments to answer the following questions:

Can you describe in detail the business you plan on establishing?
What will be your product or service?
Is there a demand for your product or service?
Can you identify the target market for your product or service?
Do you have the talent and expertise needed to compete successfully?

Before you dive headfirst into a home-based business, you must know why you are doing it and how you will do it. To achieve success your business must be based on something greater than a desire to be your own boss and involves an honest assessment of your personality, an understanding of what’s involved, and a lot of hard work. You have to be willing to plan for the long-term and be willing to make improvements and adjustments along the way.

While there are no “best” or “right” reasons for starting a home-based business, it is vital to have a very clear idea of what you are getting into and why. Ask yourself these questions:

Are you a self-starter?
Can you stick to business if you’re working at home?
Do you have the necessary self-discipline to maintain schedules?
Can you deal with the isolation of working from home?

Working under the same roof that your family lives under may not prove to be as easy as it seems. It is important that you work in a professional environment. If at all possible, you should set up a separate office in your home. You must consider whether your home has space for a business and whether you can successfully run the business from your home. If so, you may qualify for a tax break called the home office deduction. Please call if you’d like more information about this tax break or to find out if you qualify for the deduction.

Compliance with Laws and Regulations

A home-based business is subject to many of the same laws and regulations affecting other businesses, and you will be responsible for complying with them. There are some general areas to watch out for, but be sure to consult an attorney and your state department of labor to find out which laws and regulations will affect your business.

Zoning

Be aware of your city’s zoning regulations. If your business operates in violation of them, you could be fined or closed down.

Restrictions on Certain Goods

Certain products may not be produced in the home. Most states outlaw home production of fireworks, drugs, poisons, sanitary or medical products, and toys. Some states also prohibit home-based businesses from making food, drink, or clothing.

Registration and Accounting Requirements

You may need the following:

Work certificate or a license from the state (your business’s name may also need to be registered with the state)
Sales tax number
Separate business telephone
Separate business bank account

If your business has employees, you are responsible for withholding income, social security, and Medicare taxes, as well as complying with minimum wage and employee health and safety laws.

Planning Techniques

Money fuels all businesses. With a little planning, you’ll find that you can avoid most financial difficulties. When drawing up a financial plan, don’t worry about using estimates. The process of thinking through these questions helps develop your business skills and leads to solid financial planning.

Estimating Start-Up Costs

To estimate your start-up costs include all initial expenses such as fees, licenses, permits, telephone deposit, tools, office equipment, and promotional expenses. In addition, business experts say you should not expect a profit for the first eight to ten months, so be sure to give yourself enough of a cushion if you need it.

Projecting Operating Expenses

Include salaries, utilities, office supplies, loan payments, taxes, legal services, and insurance premiums, and don’t forget to include your normal living expenses. Your business must not only meet its own needs but make sure it meets yours as well.

Projecting Income

One of the most important skills you will need is knowing how to estimate your sales on a daily and monthly basis. From the sales estimates, you can develop projected income statements, break-even points, and cash-flow statements. Use your marketing research to estimate the initial sales volume.

Determining Cash Flow

Working capital – not profits – pays your bills. Even though your assets may look great on the balance sheet, if your cash is tied up in receivables or equipment, your business is technically insolvent. In other words, you’re broke.

Make a list of all anticipated expenses and projected income for each week and month. If you see a cash-flow crisis developing, cut back on everything but the necessities.

If a home-based business is in your future, then a tax professional can help. Don’t hesitate to call if you need assistance setting-up your business or making sure you have the proper documentation in place to satisfy the IRS.

Quick Cybersecurity Tips to Keep in Mind to Keep Your Data Safe

August 10, 2021January 22, 2020 by fasnew@fasnew@66541.6486513

The war against cyber criminals is still going on and unfortunately, they are becoming more and more creative with their antics. Technology and software professionals are continuously releasing security tools and procedures to protect users from these criminals, but no matter how effective these tools are, there’s no way to predict the damage caused by a careless user.

Always keep on top of cyber security measures to prevent coming across these unwanted criminals. Being a bookkeeping firm, we understand the importance of cyber security measures as we are handling our client’s sensitive financial information. We make it our duty to stay updated and always implement top-quality security measures for the sake of our firm and our clients. Remember, one single mistake could be the reason for a massive data loss which can definitely result in more serious problems.

Here are some quick and simple cyber security tips to keep in mind:

Practice good password management.

Avoid using common and easy-to-guess passwords, instead, use a strong mix of alpha-numerical characters and for added unique, you can also use lowercase and uppercase letters. Don’t use the same password for multiple, this will prevent a domino effect of hacking if one of your accounts had been compromised. Never share your passwords with others and don’t write it down on paper, but in cases that this will be necessary, make sure you trust the person and you shred the paper where you have written your password.

Be careful when clicking attachments or links in emails.

Viruses and malware can now slide in your inbox through links and attachments within a suspicious email. Always double check first before clicking anything on the email especially when the message is from an unknown sender. Spelling mistakes and fishy domain names are often dead giveaways of these tricks so keep your eyes open for that.

Sensitive browsing, such as banking or online shopping should only be done on a trusted device and protected network.

When accessing sensitive data online, always make sure that you are using your trusted device and network. Public devices and wi-fi networks are often unprotected and cybercriminals can easily steal your data while using them.

Use anti-virus software and VPNs.

There now exists a huge number of different security software for different devices and platforms. Anti-virus software protects devices from malware attacks and will always keep you notified if there is a suspicious data that entered your device. A VPN, on the other hand, will protect your data when you are connected to the internet. This security tool will keep you anonymous online so cyber criminals can’t track you and steal information from you. Make sure you do your research to find the right tool for your needs.

Eliminate the thought process of ‘It will never happen to me’.

If you are someone that is constantly using the internet, you are not 100% safe from cyber attacks. No matter how strong and effective your security tools and procedures are, you should never let your guards down against these cyber criminals. Exerting more extra precautions is always better than trying to clean up the mess these cyber attacks make.

We are pretty sure you have heard these tips before, but repetition helps with memorization. Always keep these tips in mind to keep your online data safe.

Need secured and safe bookkeeping and tax preparation services? Contact FAS Bookkeeping and Tax Services today at (832-437-0385) or admin@fas-accountingsolutions.com.

Got Debt? Tips to Improve Your Financial Situation

March 3, 2020January 16, 2020 by fasnew@fasnew@66541.6486513

If you are having trouble paying your debts, it is important to take action sooner rather than later. Doing nothing leads to much larger problems in the future, whether it’s a bad credit record or bankruptcy resulting in the loss of assets and even your home. If you’re in financial trouble, then these steps will help you to avoid financial ruin in the future.

If you’ve accumulated a large amount of debt and are having difficulty paying your bills each month, now is the time to take action – before the bill collectors start calling.

1. Review each debt. Make sure that the debt creditors claim you owe is actually what you owe and that the amount is correct. If you dispute a debt, first contact the creditor directly to resolve your questions. If you still have questions about the debt, contact your state or local consumer protection office or, in cases of serious creditor abuse, your state Attorney General.

2. Contact your creditors. Let your creditors know you are having difficulty making your payments. Tell them why you are having trouble, perhaps it is because you recently lost your job or have unexpected medical bills. Try to work out an acceptable payment schedule with your creditors. Most are willing to work with you and will appreciate your honesty and forthrightness.

3. Budget your expenses. Create a spending plan that allows you to reduce your debts. Itemize your necessary expenses (such as housing and healthcare) and optional expenses (such as entertainment and vacation travel). Stick to the plan.

4. Try to reduce your expenses. Cut out any unnecessary spending such as eating out and purchasing expensive entertainment. Consider taking public transportation or using a car-sharing service rather than owning a car. Clip coupons, purchase generic products at the supermarket and avoid impulse purchases. Above all, stop incurring new debt. Leave your credit cards at home. Pay for all purchases in cash or use a debit card instead of a credit card.

5. Pay down and consolidate your debts. Withdrawing savings from low-interest accounts to settle high-rate loans or credit card debt usually makes sense. In addition, there are several ways to pay off high-interest loans, such as credit cards, by getting a refinancing or consolidation loan, such as a second mortgage. Keep in mind, however, that second mortgages greatly increase the risk that you may lose your home.

Be wary of any loan consolidations or other refinancing that actually increase interest owed, or require payments of points or large fees.

You can regain financial health if you act responsibly. But don’t wait until bankruptcy court is your only option. If you’re having financial troubles, help is just a phone call away.

Reminder: Use Correct Forms to Pay Employment Taxes

August 9, 2021January 14, 2020 by fasnew@fasnew@66541.6486513

Small business owners are reminded to review the rules for filing two commonly-used employment tax returns: Form 944, Employer’s Annual Federal Tax Return and Form 941, Employer’s Quarterly Federal Tax Return.

A small business files one or the other; these two forms are not interchangeable and the employer should never flip-flop between the two forms on their own. They should always file in accordance with their designated filing requirements. Let’s take a look at the differences between these forms.

Form 944, Employer’s Annual Federal Tax Return

This form is for our smallest employers to file and pay the above-mentioned taxes only once a year, instead of quarterly. While this form is intended for employers who owe $1,000 or less, employers can’t file Form 944 unless they receive official IRS notification that they are eligible to do so.

Once the employer receives notice they can file Form 944, they must file this form every year. They must continue to file Form 944, regardless of the tax they owe, unless the IRS notifies them differently.

Form 941, Employer’s Quarterly Federal Tax Return

Employers use Form 941 to report income taxes withheld from employee’s paychecks and pay the employer’s portion of Social Security or Medicare tax. In addition, if the IRS advises the employer to file Form 941 quarterly return, they must do so.

If you’re a small business owner who isn’t sure which form they should file, don’t hesitate to call.

Must Know Things About 1099-MISC

March 3, 2020January 14, 2020 by fasnew@fasnew@66541.6486513

Form 1099 is a tax form used to report several kinds of income. There are many types of compensation, and businesses must report to the IRS the payments they made to individual taxpayers. If you are a business owner, you might have paid non-employee compensation during the taxable year. The IRS looks into the Form 1099-MISC to determine the tax liability of the individual taxpayer.

Form 1099-MISC is used to report payments made to independent contractors during the calendar year. They are usually a non-employee doing work for your business. Consequently, you will not pay for their payroll taxes.

In general Form 1099-MISC is filed for each person to whom the business has paid one or more of the following:

At least $10 in royalties.
Gross proceeds to an attorney.

Additionally, if you made payments of at least $600, you would be required to file Form 1099-MISC to your contractor. When you report the payments made for independent contractors, you will need a W-9 form. This form ensures the correctness of information about your contractors’ name, address, and tax ID number. It is not necessary to send Form W-9 to the IRS; however, you will need the completed and signed W-9 to issue 1099.

As a small business owner, you will also receive a Form 1099-MISC if you provide services to another business. You must report all amounts reported on your Form 1099-MISC as part of your gross income.

Upon receiving your Form 1099-MISC, you must check if the stated amount and information are correct. If you notice a mistake on the Form 1099-MISC you received, you should immediately take action to get it corrected. You must notify the business that issued Form 1099 before the deadline. Contact the issuer to give you a corrected one. If the issuer does not cooperate, you must address the problem yourself.

Take note of the different copies of your Form 1099-MISC and where to send it.

A physical form of copy A must be obtained, filled up, and mailed to the IRS. It is usually easier to file Forms 1099 electronically; you can use third-party service.

If you need assistance with your 1099-MISC, let our Enrolled Agent help you! Contact us today at admin@fas-accountingsolutions.com or 832-437-0385.

Add Value

Create a Plan and Follow It

Develop Discipline and Patience

Take Calculated Risks