Listen to my podcast Benefits of Hiring a Bookkeeper with Christine Matlock. This podcast was done by my long-time friend and coach, Ben Florsheim. To check out more of his podcasts click here.
When it comes to owning a small business, every dollar that you save can help grow your company. One of the easiest ways you can retain more of your revenue is with tax deductions. Also called tax write-offs by many, tax deductions help lower your tax liability (reduces your taxable income) and lessens your tax bill at the end of the year.
Determining what meets the IRS’s definition of a tax deduction isn’t as cut and dry as some may think, however. A Reno bookkeeper can help your small business manage your financial statements and organize your tax write-offs for maximum savings. Learn more about tax deductions below, and connect with a Reno bookkeeper from Prosperity Concierge for small business bookkeeping services that are customized to meet your needs.
As stated above, tax deductions lower your taxable income and, as a result, the amount of taxes owed. Deductions, or write-offs, are expenses that a business owner incurs over the course of the fiscal year that can then be applied against their gross income. Typically, tax deductions are expenses that have been made to produce additional income. These tax write-offs are essentially subtracted from your taxable income to determine how much tax will be owed at the end of the year. It’s important to note that tax deductions are subtracted from your income before you calculate your tax and are not subtracted directly from the taxes you owe.
The IRS has determined that tax deductions must be deemed as either ordinary or necessary for the functionality of your business in order for it to pass as a legitimate write-off. Let’s clear up some of the ambiguities of tax deductions.
An ordinary business expense is one that’s classified as being “common and accepted” in your industry. This may include advertisement expenses, purchasing common supplies, and business travel costs. A majority of businesses in any industry have these types of expenses, making them ordinary.
A necessary business expense is classified as being “helpful and appropriate” for your trade or business. These are expenses that need to be made for you to operate your business but aren’t essential for all businesses. Each industry has different needs, so what might be necessary for one business may not be necessary for another. For instance, if your business is related to the construction industry, you’ll likely have to purchase expensive heavy-equipment to operate accordingly, whereas a hairstylist needs shears and hot tools to do their day-to-day job. Each example is used to help boost profits in their respective industry’s but wouldn’t be an appropriate expense in a different industry.
Many business owners are worried about what the IRS considers to be a plausible tax deduction that they simply don’t record any deductibles and wind up owing much more on their taxes than they should. If you have a legitimate business expense, don’t be afraid to claim it for your taxes. If the expense is truly ordinary or necessary for your business then taking the deduction is worth it. To determine what qualifies as an ordinary or necessary business expense, ask yourself a few questions:
Christine Matlock, owner and founder of Prosperity Concierge, knows just how important accurate financial management is for your small business. As a small business owner herself, Christine has spent much of her time prioritizing financial recording for maximized earnings.
Christine is a local Reno bookkeeper and financial coach who’s proficient in handling business expenses, creating budgets, using QuickBooks, and developing financial confidence. See how she can help your business improve its bottom line!
Anyone who runs their own business knows how much work, passion, and commitment goes into it. Though being a business owner isn’t easy, it’s 100% worth the perseverance and dedication that you give it. While you’re busy trying to build your empire, who’s focusing on your finances? If you’re doing it yourself, which most business owners are, how do you balance it all?
Creating a successful business takes a lot of time and effort from you, but it also requires some outside resources. For you to focus on important business objectives like creating new ideas and opportunities, you need to hire some professionals to help you maintain your other business essentials. Consider hiring Christine Matlock for Reno financial coaching and bookkeeping services. Here’s some more advice from the professional herself.
My best advice - hire a bookkeeper and a business coach right away. Be sure to have an attorney, CPA, and insurance agent relationship for those business needs and join a networking group like BNI to start making connections. At Prosperity Concierge, we offer Reno financial coaching and bookkeeping services tailored to meet your specific financial needs. Along with this, we’ll recommend preferred business partners for your business as well. Instead of searching for a CPA or an attorney yourself, let us do it for you. We can refer you to the right people to help your business run as smoothly as possible, giving you the gift of time while increasing your bottom line.
Choosing the right payroll service depends on many things, such as:
If you have one or two employees, then maybe an online payroll service like Gusto or Intuit Quickbooks payroll is the right fit for you. However, if you have ten or more employees, you may want to go with a specialized company such as BBSI, which offers more than just payroll. They can assist with recruiting, workers’ compensation, drug testing, and other human resource tasks. Prosperity Concierge is here to help you decide how to run your payroll by partnering with Gusto, Intuit, and BBSI for payroll and Reno bookkeeping services. Payroll services are not expensive and are highly recommended. Let Prosperity Concierge guide you to the right payroll and bookkeeping services in Reno, NV for your business.
“Budget” can be a dirty word - but it doesn’t have to be. To us, budgeting simply means telling your money where to go instead of wondering where it went. A budget doesn’t always have to be restrictive. We can help you find ways to save money and build wealth, all while still enjoying life with our Reno financial coaching services. We can certainly help you with an intense budget with strict guidelines to help you pay off debt fast and make some behavior modifications. Having a written budget with all of your monthly expenses listed and your monthly income accurately accounted for each month is key to financial success. And prioritizing the essentials like housing, utilities, clothing, transportation, and food is critical. Most of these categories have a consistent amount each month and leave you with peace of mind knowing what has to be paid and the money you will have left for other bills.
Prosperity Concierge can help you assess your finances to determine the best ways to use your hard-earned money. Do you have vacation goals? Want to buy a house? We can help with our financial coaching and bookkeeping services in Reno, NV. Let’s start building wealth and leave a legacy of financial literacy for your children and generations to come!