The Tax Goddess Blog

Bookkeeping

Q:  what program do you recommend for me to do my bookkeeping in?
A:  There are many programs out there: QuickBooks, Quicken, Excel.  Depending on what type of business you are operating, each one has it's goods and bads.  My recommendation is, if you are being taxed as a Partnership, S-Corporation, or C-Corporation you need to have at a minimum QuickBooks.  Otherwise, if you are a sole proprietorship, then excel or quicken works just fine!

Q:  How expensive are the programs?
A: QuickBooks can range from $180-$2000 depending on what version you decide you need, but normally, for a starting business, the basic version of QuickBooks Pro works just fine.

Q:  Do I need to hire a bookkeeper?
A:  Not necessarily.  Bookkeepers are great if you don't have the time to do the books yourself.  Otherwise, QuickBooks is VERY user friendly, and most often with a 2 hour training session, most people "get" the basics.  However, if you aren't very computer literate, a bookkeeper might take some serious stress out of your life!

Banking

Q: Do I need to have a separate bank account for my business?
A: in some cases you don't NEED to have one.  Should you?  YES!  Oh YES!  It makes the bookkeeping side so much easier!

Q: How does my business obtain credit?
A: Your business has an EIN #, just like you have a SSN.  It is important to maintain good credit for your business, like you did when you were young, by paying bills timely, handling and outstanding monies properly, and protecting your EIN for thieves and those who want to abuse your companies good credit!

Q:  Is it true that a bank won't lend my business any money for 2 years?
A:  It depends on the bank and also on your personal credit.  Some of the larger banks will lend you money (smaller Lines of Credit 25k or so) if you have good personal credit.  Other banks will wait for the 2 year period with good income and profits showing.

Payroll Woes!

More Q&A!

Q: Is it true that payroll audits are one of the top two most dreadful audits?
A: YES!  Think about it, no one understand payroll, yet most people try to do payroll on their own (on top of running their businesses, managing the staff, handling customers!  It's crazy to think that your brain (which I believe was built for creating, will remember all the details!  For CHEAP!  ($20/month in some cases) you can have another company handle the payroll and handle any problems with it!

Q: If I own an S-Corporation, do I have to take Salary?  What about a C-Corporation?  A Sole Proprietorship?
A:
S-Corp - YES!  At least 50% of your income needs to be salary or "reasonable compensation" depending on the level of income
C-Corp: YES!  Same as an S-Corp
Sole Proprietorship - IT DEPENDS!  (of course, our favorite answer in the tax code!)  so ASK YOUR CPA!

Q: What about Sales Taxes?  Do I need a special license?  How does that work?
A:  Well, that's a whole subject on it's own.  Depending on what you sell, in which state, if you have a store front, or sales people in that state, all these answers can change!  So again, ASK YOUR CPA!  Sales tax is the second worst audit, so be sure you have someone who you know is doing it right!

Opening a New Business?

Do you know how you are going to get new clients?  Have you thought about your location?  Are you a walk-in traffic kind of business, or a referral business?  What about your signage?  Have you thought about marketing space on your car?  What about networking and presenting in front of huge crowds?

There are so many different things to think about when you are looking at opening a new business.  Most of them revolve around the business itself, but what about the background stuff?

Below are some of the common "getting started" accounting and setup items that you will need in a Q&A format.

Q: What type of entity do I need?
A: Well, of course, you always want to consult with your lawyer for your state, but here in Arizona an LLC is the most flexible and versatile and easy to use entity.  It's cheap to setup (around $650'ish), there are no requirements after it's done being setup (no minutes, no board meetings, no annual fees, etc.).  Normally your Lawyer or CPA can set these up for you (so you know they are done right!)

Q: I've heard that LLC's are the "legal" side of it, what about the tax implications?
A: You are right!  LLC's can CHOOSE how they want to be taxed, depending on some specific items of course (so ask your CPA!).  They can be Sole Proprietorships, Partnerships, S-Corporations, or C-Corporations.  Each of the types has it's own set of tax consequences, so it would be good to check with your CPA as to how you should get yourself setup.

Q: How will you handle your bookkeeping?
A: I recommend and use QuickBooks.  it is a very user friendly, helpful, and well laid out accounting program that is specifically setup for business.  Quicken has a business/personal program, but I don't personally like the way it handles transactions and reporting for business only purposes.

Q: I've heard about an EIN or TIN, what is that?
A: an EIN or TIN is your Social Security Number for the Business, the employer identification number or the taxpayer identification number.  EIN and TIN are normally, in conversation, interchangeable.

Well, that's a good start for now,..  I will write a few Q&A session answers each day until I think you've got the full picture!  :)

Or, you can always email me if you have a specific question!  I would love to answer!

Always yours,

The Tax Goddess.

Amazing how you find out what's important,...

Yesterday I went in to the office a little grumpy. 

I was having one of those days where everything felt like it was going wrong and the whole day was looking to be that way.  Then, my dog, Thor, who comes to the office every day, started getting violently sick. 

As I was rushing around trying to clean up after him, have my admin call the vet's office to figure out what to do, my staff helping me handle him (taking him outside, getting water, etc.) I had two thoughts going thru my head:

1)  How do I fix my baby?  (My dog is currently my only child :)

2)  How do I reschedule my clients so that I can still fit them in (b/c they had appts, things that had to get done!)

I realized today, that no matter how grumpy of a mood I am in, only two things are really important to me (things I should get stressed out about) my family and my clients well-being.

I've been having a lot of realizations lately, and that one is pretty important.

So, if you are being grumpy, maybe sit back and figure out - what's important, really, to you?

A contemplative Tax Goddess
Helping your bottom line :)

Asking for Feedback - part II

Hi Everyone,

This is part II of a posting I wrote a few days ago re: Asking for Feedback -

2 things:

1) This worked GREAT!  I already have some feedback from some of my clients pointing out some issues that I didn't even know were happening (staff issues / Communication Issues that I can now correct!)

2)  I also asked for feedback from my staff and got some amazing results!  I have always done reviews on them, but never gotten reviews on how I was as a manager!  I learned a few very specific points that I am now implementing and am working with to try to make my internal clients (my staff) happier as well!

I REALLY recommend ASKING!  It has helped me in two ways and I am really looking forward to working on this new direction to grow not only the firm, but also myself as a person!

Your Tax Goddess,

Shauna~
PS - THANK YOU to those clients willing to take a chance and let me know how you really feel we are doing!  I am looking forward to taking your suggestions and running with them!

Divorces and $ - a Good, Bad, and the Ugly combination!

Hi All,

I can't say enough how important I feel that a good divorce lawyer / advisor can be.  There are so many situations that when one is in the middle of a divorce they don't think about.  There are simple things, like who gets the house, but there are many more complicated items like who gets to deduct the child on their tax return.

I have seen many cases where both parties decide to include who gets the child, but then forget about what year each person gets the child (2/3 to the mother, or every other year, etc.)

It is so important to have a good divorce person (be it a lawyer or financial advisor) that I cannot advise enough to get those people both in place before you decide to divorce, or ASAP after you find out you are getting divorced.

Just a comment from someone who has seen enough issues!

Shauna,
Your Tax Goddess.

Asking for Feedback -

Many businesses never remember to contact their own client base!  They will call on new, potential clients; spend tons of money on advertising; hire sales people to hunt for new prospects.  But what about your current, loyal, client base?  The ones that already love you and are willing to pay you money.  Have you thought about calling them?  Asking them how your service was?  Asking them how you can improve for THEM?

You might be surprised, but often I've found I get the best ideas and most honest feedback from my customers, and they are THRILLED that I call them to ask, to try and make their life better :)

Just a thought!

Your Tax Goddess
Shauna

And, How do you know what your Competitors are doing?

Have you ever wondered what you competitors are doing?  Most people work day in and day out in their own business, basically unaware of how their competitors are doing business, how they handle YOUR clients, how they market, how they have evolved, what strategies they have learned.

Did you ever think to go ask?

There is one marketing guru, and I am sure a few more, who believe that in order to learn, you need to become a customer!  Go to them, talk to them, become a client, learn how the process works. 

Some people, of course, believe this is a little underhanded, sneaky.  So, why not just go ask?  You are a lot less likely to get some "real" answers - trade secrets and all - but, you might find a great friend with whom you can learn and share ideas, making both your businesses better.

I am lucky in that I have a dear friend who also owns a CPA firm in another part of town - no real competition between us as we are far enough apart.  we grab lunch every few months, talk about happenings.  It's great!  I would recommend it to anyone!  But of course, you can't make friends if you don't ASK!  So, remember back to second grade:  There are no stupid questions!

As always, looking out for your bottom line! 

The Tax Goddess~
Shauna Wekherlien, CPA, MTax

Charity / Opportunity Fund - A Way to Help your Community (and yourself!)

As usual I was reading a book on how to help grow my business and how to make my firm more useful to the world around us.

The book pointed out the idea that every company should have a Charity / Opportunity fund.  A certain percentage that is put aside each month that is strictly for giving away.  No strings attached, giving away.  To a charity, or to a client in need, or to a person on the street.  Just an opportunity for you or someone else to make life better.

It's almost like Karma, do good things and good things come back to you.  Amazing how it all works, isn't it? 

Well, The Tax Goddess' Firm started doing this as of today.  I went back through our bank statements and put 1% of every month's gross deposits into a savings account built just for this,...  I am looking forward to our first use of some of these funds which will be helping a Rottie Rescue here in Phoenix (I am kind of partial since I own 2 rotties myself :).  I have already contacted them and asked for how we can make the most impact!

I have to tell you, the simple feeling of giving is already making me float on a cloud for today, and I am looking forward to seeing where else it takes us!

Your Tax Goddess (serving the world wide community)

Shauna~