<p>Bank reconciliation is a useful tool if you want to know <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-keep-good-financial-records">how to keep good financial records</a>. It can assist you in significant ways to protect your finances. It can also help you determine whether there are errors in your transactions and, if so, how you can correct them.</p>



<p>However, there are several things that you should know about bank reconciliations. Continue reading to learn about the bank reconciliation process and how it can help you.</p>



<h2>What is Bank Reconciliation?</h2>



<p>Bank reconciliations occur when you compare your financial statements to that of your banking institution. This will help you notice potential discrepancies, and it will also allow you to determine how the discrepancy occurred.&nbsp;</p>



<h2>The Benefits of Bank Reconciliation</h2>



<p>Bank reconciliation is essential for <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-crash-course-record-keeping-small-businesses">small business bookkeeping</a> and offers a myriad of benefits that contribute to the sound financial management of your accounts.</p>



<ul>
<li><strong>Detecting Errors and Discrepancies – </strong>Bank reconciliation acts as a detective, unveiling errors, and discrepancies between each bank record and bank statement. By identifying these discrepancies, you can rectify errors promptly and maintain the accuracy of your financial records.</li>



<li><strong>Preventing Fraud –</strong> Bank reconciliation serves as a powerful tool in the prevention and detection of fraudulent activities. By regularly comparing your records with the bank statement, you can identify unauthorized transactions and take immediate action to protect your finances.</li>



<li><strong>Ensuring Accuracy of Financial Statements – </strong>Accurate financial statements are essential for making informed business decisions. Through bank reconciliations, you ensure that your financial statements reflect the true financial position of your accounts, providing a reliable foundation for decision-making.</li>



<li><strong>Monitoring Cash Flow – </strong>Bank reconciliation allows you to monitor your cash flow effectively. By reconciling your bank transactions, you gain insights into inflows and outflows of funds, helping you make informed decisions regarding budgeting and cash management.</li>



<li><strong>Maintaining Trust and Transparency – </strong>Bank reconciliation demonstrates your commitment to financial integrity. By reconciling your accounts, you establish transparency and trust with stakeholders such as investors, creditors, and auditors, fostering positive relationships and instilling confidence in your financial management.</li>
</ul>



<h2>The Bank Reconciliation Process</h2>



<p>The bank reconciliation process comprises several steps:</p>



<h3>1. Gather Your Tools</h3>



<p>You’ll need each bank statement to complete a bank reconciliation. You should have statements for the most recent month, the previous month, and closing balances.</p>



<h3>2. Start with the Opening Balances</h3>



<p>Begin your bank reconciliation report by comparing your opening bank statement balance with the corresponding figure in your records. Any differences should be noted, as they may be crucial in identifying discrepancies later in the process.</p>



<h3>3. Record Deposits and Credits</h3>



<p>Dive into the sea of transactions, capturing each deposit and credit recorded in your bank statement balance. Compare them meticulously to your records, ensuring that no transaction goes unnoticed. Make an adjustment for any discrepancies, noting the reasons for variations.</p>



<h3>4. Account for Withdrawals and Debits</h3>



<p>With every deposit and credit accounted for, it's time to tackle the withdrawals and debits. Scrutinize each cleared transaction, matching it with your records to ensure accuracy. Don't let any discrepancies slip through.</p>



<h3>5. Reconcile Outstanding Checks</h3>



<p>Compare the outstanding checks in your records with those in your bank statement, marking off any that have since cleared. Note any discrepancies and make an adjustment accordingly.</p>



<h3>6. Factor in Bank Charges and Fees</h3>



<p>Take a close look at your bank statement, identifying any charges and fees imposed by the bank. Compare them with your records, adjusting the figures as necessary.</p>



<h3>7. Unveil the Closing Balance</h3>



<p>As the reconciliation process nears its end, compare the closing balance on your bank statement with your records. If the figures align, that’s great news. However, if discrepancies persist, delve deeper into the differences, ensuring no stone is left unturned.</p>



<h3>8. Make Necessary Adjustments</h3>



<p>With a keen eye for detail, scrutinize the discrepancies uncovered during the bank reconciliation process. Rectify any errors in your records, updating them to reflect the accurate financial state of your accounts. Remember, precision and accuracy are the pillars of financial stability.</p>



<h2><strong>Additional Bank Reconciliation Tips</strong></h2>



<p>As you complete the bank reconciliation report, you should look for any administrative problems. Administrative errors can cover a wide range of issues from banking institutions and customers. You’ll want to:</p>



<ul>
<li>Avoid bank fees for insufficient funds</li>



<li>Avoid using lines of credit</li>



<li>Avoid bounced checks</li>



<li>Catch any banking errors</li>



<li>Keep track of outstanding checks</li>



<li>Know if customer payments have bounced or failed</li>



<li>Know the cash balance in each bank account</li>
</ul>



<p>As you complete bank account reconciliation, you should look for potentially fraudulent activities. This may include:</p>



<ul>
<li>Changed checks</li>



<li>Duplicated checks</li>



<li>Missing deposits</li>



<li>Unauthorized cash withdrawals</li>



<li>Unauthorized transfers</li>
</ul>



<h2>Work with the Pros</h2>



<p>Bank reconciliation is one of the most critical bookkeeping duties. Work with<a class="link" href="https://1800accountant.com/products/bookkeeping"> </a>the pros who specialize in <a class="link" href="https://1800accountant.com/services/bookkeeping">bookkeeping for small businesses </a>to ensure that you don’t have and problems.</p>

Bank reconciliation is a useful tool if you want to know how to keep good financial records. It can assist you in significant ways to protect your finances. It can also help you determine whether there are errors in your transactions and, if so, how you can correct them. However, there are several things that [&hellip;]

A person doing paperwork with the title "bank reconciliation everything you need to know" displayed across the image.

bank-reconcilliation_blog-header

Bank Reconciliation: Everything You Need to Know

<p>Small business owners typically outsource many services that would otherwise be done in-house at larger companies, such as marketing, advertising, and accounting. But how can you ensure you're choosing the right professional to listen to your needs and provide trustworthy expertise? Some services are lower risk. After all, if you choose the wrong cleaning company for your store, it's easy to find an alternative quickly. However, other services like tax preparation are much more risky if you choose the wrong person.&nbsp;</p>



<p>It can be challenging to find the right professional, but we'll guide you through some tips on how to choose a tax preparer for your small business. Choosing a tax preparer is more than simply looking at the cheapest fees. Finding a professional who genuinely has your best interests in mind and can guide you through maximizing your tax benefits is essential. If you need help determining where to begin and what to look for, read on to learn how to find a tax preparer.</p>



<h2>Finding a good tax preparer in 8 steps</h2>



<h3>1. Define your business needs</h3>



<p>Tax preparation for small businesses can quickly become overwhelming, depending on the situation. One important thing to note is the <a class="link" href="https://1800accountant.com/blog/cpa-vs-tax-preparer">difference between tax advisors and tax preparers</a>. A certified public accountant (CPA) would fall under the category of tax advisor. These individuals hold a minimum of a bachelor's degree and are experts in taxes, litigation services, audits, etc. A tax preparer holds an IRS Preparer Tax Identification Number (PTIN), although they may or may not have a degree in higher education.</p>



<p>Some small businesses may have complex needs to help with issues like sorting out <a class="link" href="https://1800accountant.com/blog/reduce-business-debt">business debt</a> or <a class="link" href="https://1800accountant.com/blog/converting-llc-to-c-corp">converting from an LLC to a C corp</a>. Even payroll can be confusing when you factor in paying your employees that might be freelance or independent contractors. A <a class="link" href="https://1800accountant.com/services/business-tax-advisory">small business tax advisor</a> would be ideal to assist with these situations.&nbsp;</p>



<p>If your business is more straightforward without employees, a licensed tax preparer can still be a great asset to help you file the necessary tax documents. Remember that tax preparers may not represent you if <a class="link" href="https://1800accountant.com/blog/you-received-an-audit-notice-now-what">you receive an IRS audit</a>.</p>



<h3>2. Ask for referrals</h3>



<p>Another suggestion on how to find a tax advisor is to reach out to your network. It's always good to ask for references, assuming your network contains people you know and trust. You may know another small business owner with the same complex business need and successfully resolved it with a tax advisor.&nbsp;</p>



<p>When you request a referral, you'll get a first-hand account of that individual's reputation. You'll focus on positive experiences but don't forget about the negative ones. People in your network may be eager to share about tax advisors who need to be more professional or knowledgeable. Consider all feedback so you'll better understand how to choose a good tax preparer.&nbsp;</p>



<h3>3. Check their background</h3>



<p>Personal referrals are essential but remember to research when choosing a tax preparer. Experiences can vary, and it helps to look at outside reviews through the Better Business Bureau or another review site that you trust. As you check online reviews, you may discover several previous clients have similar complaints. Even if the reviews are generally positive, you might learn some helpful tips from others that have worked with this one tax professional.&nbsp;</p>



<h3>4. Verify qualifications and credentials</h3>



<p>A critical step in how to find a good tax preparer is remembering to verify the individual’s identity and qualifications. At a minimum, your tax preparer should have a PTIN, which can be verified through the <a class="link" href="https://irs.treasury.gov/rpo/rpo.jsf">IRS directory</a>. The specific qualifications and credentials will differ depending on the services you need. Here are a few other identifying features you may want to verify:</p>



<ul>
<li>CPA license for accountants</li>



<li>Enrolled agent license for tax preparers</li>



<li>Bar license for attorneys</li>
</ul>



<h3>5. Compare fees</h3>



<p>Like any other service or product, you'll want to compare the different fees when searching for a tax advisor. Some tax professionals may charge for individual services, while others are more inclusive with their pricing. A tax advisor might even discuss additional services you had yet to consider during your initial research, such as bookkeeping or payroll. Although you're probably looking to save money, don't let cost be the deciding factor. When you're trusting someone to <a class="link" href="https://1800accountant.com/blog/prepare-file-small-business-tax-return">prepare and file your small business tax return</a>, you generally don't want to have the viewpoint that "cheaper is better."</p>



<h3>6. Know how to spot red flags</h3>



<p>Understanding how to choose a good tax professional can be challenging, especially if this is your first experience. There are many details to consider, and you're probably under pressure to find someone quickly. However, rushing through the process is never a good idea, and you'll risk overlooking potential red flags. Here are just a few items that might indicate a low-quality tax professional:</p>



<ul>
<li><strong>Poor communication</strong>: If emails and phone calls are left unanswered, that's a sign that this tax advisor doesn't have your best interests in mind or is too busy with other duties to give you the attention you deserve.</li>



<li><strong>Unrealistic expectations</strong>: A good tax advisor will be realistic in providing tax estimates and timelines. If someone is making promises about speedy work and high tax refunds, you may look elsewhere for someone more realistic.</li>



<li><strong>Unethical fees</strong>: Tax advisors will charge a flat or hourly fee for their services. An advisor who estimates your return and calculates their fee is a huge red flag.&nbsp;</li>



<li><strong>Withholding a signature</strong>: Confirm that your tax advisor will sign your tax return first. All returns must be signed before filing, so it's generally a good sign if the advisor is willing to put his name on it.</li>
</ul>



<h3>7. Ensure they offer e-filing</h3>



<p>Filing an electronic tax return is a convenient and safe option for small businesses. Not only is it filed immediately, but you can have peace of mind with the electronic confirmation. Tax preparers who complete ten or more returns must offer e-filing for their clients.&nbsp;</p>



<h3>8. Review their year-round accessibility&nbsp;</h3>



<p>Tax season for the individual taxpayer is in April, but <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business taxes</a> are a year-round activity. Small business owners have more tax responsibilities, such as quarterly estimated taxes. When deciding how to choose a tax advisor, ask about their availability post-tax season. You'll want to make sure that your advisor is available to answer questions throughout the year and can guide you on best practices to ensure you can maximize your refund.</p>



<h2>FAQs</h2>



<h3>Is a CPA better than a tax preparer? </h3>



<p>CPAs and tax preparers are qualified to file small business taxes, although a CPA has the experience needed to advise on auditing, entity conversion, and more. A tax preparer might be acceptable if you have minimum needs for your tax return, but anything beyond a simple return is best left with a CPA.</p>



<h3>Is it worth hiring a tax preparer?</h3>



<p>A qualified tax preparer can be an excellent investment for any small business owner who wants to ensure that taxes are filed correctly. As your business grows and evolves, it helps to have a tax professional on your side who can advise you on best practices.</p>



<h3>What are the cons of a professional tax preparer? </h3>



<p>Often, hiring a tax preparer comes with peace of mind, but there's also a monetary cost that some small business owners might not want. Choosing a tax preparer is a big decision, and you should make sure you're investing wisely.</p>



<h3>Do tax preparers get you more money? </h3>



<p>Tax preparers can help determine how to <a class="link" href="https://1800accountant.com/blog/maximize-small-business-tax-deductions">maximize your deductions and credits</a> best, which can result in a larger refund. However, it would help if you were cautious against any tax preparer who promises a lot of money.</p>



<h2>Work with experts for all of your business tax needs</h2>



<p>Choosing a good tax preparer is an important task that helps set up your small business for success. Your financial health is critical to your business's longevity, so you'll want to make sure that you find a worthy professional who can help you stay on track with your taxes. At 1-800Accountant, we have a team of knowledgeable <a class="link" href="https://1800accountant.com/services/small-business-taxes">CPAs and tax professionals</a> who can help save you money and provide continued tax support throughout the year.</p>

Small business owners typically outsource many services that would otherwise be done in-house at larger companies, such as marketing, advertising, and accounting. But how can you ensure you&#8217;re choosing the right professional to listen to your needs and provide trustworthy expertise? Some services are lower risk. After all, if you choose the wrong cleaning company [&hellip;]

How to choose the right tax preparer of tax advisor for your business.

choose-the-right-tax-preparer-or-tax-advisor

How to Choose the Right Tax Preparer or Tax Advisor for Your Business

<p>It's a great idea to start a small business in Texas. The state offers everything a business owner could want: a diverse economy, a skilled workforce, and flourishing world-class cities that would make the perfect headquarters.</p>



<p>Whether you're in the planning stages or are nearing launch, there are a few steps you'll have to take to make your business official in the state. There are also fees and other vital details you should be familiar with before moving forward.</p>



<p>Use this blog as your free guide to starting your small business in the state of Texas.<br><br><strong>Why Start a Business in Texas?</strong></p>



<p>Some of the unique and compelling reasons to launch your small business in the state include:&nbsp;&nbsp;</p>



<ul>
<li>Texas ranks as<a class="link" href="https://gov.texas.gov/business/page/why-texas" target="_blank" rel="noreferrer noopener"> the best state</a> to start a business.&nbsp;</li>



<li>Texas has no corporate income tax or personal income tax.&nbsp;</li>



<li>Texas also has one of the largest workforces in the country.&nbsp;</li>
</ul>



<h2>How Much Does it Cost to Start a Business in Texas?</h2>



<p>Be prepared to spend a couple hundred dollars while setting up your small business in Texas. The exact cost will vary and depends if you use an optional expedited service, which has a fee.&nbsp;</p>



<h2>10 Steps to Starting a Business in Texas</h2>



<h3>Step 1: Business Idea</h3>



<p>The first step to starting your business in Texas is to develop your<a class="link" href="https://www.thebalancesmb.com/small-business-ideas-2951453" target="_blank" rel="noreferrer noopener"> business idea</a>. As you do this, envision how it will stand out from competitors and businesses in similar fields.&nbsp;</p>



<p>You can also write a<a class="link" href="https://www.sba.gov/business-guide/plan-your-business/write-your-business-plan" target="_blank" rel="noreferrer noopener"> business plan</a>. A business plan covers essential aspects of your business operation, such as a company description, company management, company organization, and funding.&nbsp;</p>



<p>There are two types of business plans used by small businesses: a lean startup plan and a traditional business plan. Either business plan will provide a structure that you can use to propel your small business from an idea to a reality.</p>



<h3>Step 2: Entity</h3>



<p>Second, you’ll want to select your business entity. This may be the most crucial step in the process because it will <a class="link" href="https://1800accountant.com/blog/6-tricks-to-choosing-the-best-entity-for-your-small-business">determine your business structure</a>. In Texas, you can choose from a:&nbsp;</p>



<ul>
<li><a class="link" href="https://1800accountant.com/blog/form-c-corp">C corporation</a> (also known as a C corp)</li>



<li><a class="link" href="https://1800accountant.com/blog/business-entity-llc">Limited liability company</a> (LLC)</li>



<li><a class="link" href="https://1800accountant.com/blog/business-entity-partnership">Partnership</a></li>



<li><a class="link" href="https://1800accountant.com/blog/business-entity-sole-proprietorship">Sole proprietorship</a></li>



<li><a class="link" href="https://1800accountant.com/blog/business-entity-s-corp">S corporation</a> (also known as an S corp)</li>
</ul>



<p>There are a few things to know about business entities that are unique to Texas. First, general partnerships don't require partnership agreements to be in writing; there’s also no requirement to file the partnership agreement with the state.&nbsp;</p>



<h3>Step 3: Name</h3>



<p>A name is one of the focal points of a small business, so it’s important to know the naming procedure within the state.</p>



<p>Naming your small business in Texas differs depending on the business structure you form as. For instance, the state allows you to operate a business using an assumed name, which doesn’t include a surname.&nbsp;</p>



<p>For sole proprietors, the assumed business name won’t include the sole proprietor’s surname, and for general partnerships, the assumed business name won’t include the surname of all the partners.&nbsp;</p>



<p>If you’re using an assumed name, you’ll file to receive the assumed name certificate with the county clerk where your business will operate. If you don’t operate your business in one location, you’ll file for the assumed name certificate in every county where you’ll operate.&nbsp;</p>



<p>There are fees to be aware of when naming your business in Texas:&nbsp;</p>



<ul>
<li>Name reservations within 120 days or a name renewal have a fee of $40.&nbsp;</li>



<li>An assumed name certificate has a fee of $25.&nbsp;</li>



<li>If you want an abandonment of an assumed name, there’s a fee of $10.&nbsp;</li>



<li>If you want a transfer of name reservation, there’s a fee of $15.&nbsp;</li>



<li>There’s no cost for a withdrawal of name reservation.</li>
</ul>



<p>Finding a unique brand name and a usable domain to go with it can be a time-sink for new business owners.<a class="link" href="https://businessnamezone.com/?partner=1800Accountant" target="_blank" rel="noreferrer noopener"> This free tool</a> from Business Name Zone generates name and domain combos for you based on your input – and it only takes a few minutes.</p>



<h3>Step 4: Registration</h3>



<p>Once you've decided on your business structure, you must register with the state of Texas. This is a crucial step as it legally establishes your business.</p>



<p>If you operate your small business as one of the following entities in Texas, you’ll complete a Certificate of Formation with the Texas Secretary of State:</p>



<ul>
<li>Corporation&nbsp;</li>



<li>LLC</li>



<li>Limited liability partnership</li>



<li>Limited partnership</li>



<li>S corp</li>
</ul>



<p>The Certificate of Formation must include your business name, the purpose of your business, the address of your registered office, and the names and addresses of your owners. There are a few <a class="link" href="https://direct.sos.state.tx.us/help/help-corp.asp?pg=fee" target="_blank" rel="noreferrer noopener">registration fees</a>, but those are dependent on your business entity.</p>



<ul>
<li>Certificates of formation for all entities except cooperative associations, limited partnerships, and professional associations have a $300 registration fee.</li>



<li>Certificates of formation for a limited partnership or professional association have a $750 registration fee.&nbsp;</li>



<li>Registration or renewal for limited liability partnerships has a fee of $200.</li>
</ul>



<h3>Step 5: Obtain an EIN</h3>



<p>Once you've filed your Certificate of Formation, you'll need to obtain an Employer Identification Number, also known as an EIN, from the IRS. This is like a social security number for your business and is necessary for filing taxes, hiring employees, and opening a business bank account.</p>



<h3>Step 6: Choose a Registered Agent</h3>



<p>Another requirement for starting a business in Texas is choosing a Registered Agent. This is a person or entity designated to receive legal documents on behalf of your business. Your Registered Agent must have a physical address in Texas and be available during regular business hours.</p>



<h3>Step 7: Licensing and Permits</h3>



<p>A Texas business license isn’t a requirement, but the state has other <a class="link" href="https://gov.texas.gov/business/page/business-permits-office#:~:text=General%20Business%20License%20The%20State%20of%20Texas%20does,the%20Secretary%20of%20State%20or%20county%20clerk%E2%80%99s%20office." target="_blank" rel="noreferrer noopener">license and permit requirements</a>.</p>



<p>If your business will specialize in certain industries, such as cosmetology or motor fuel quality, you’ll need a state license or permit. To receive a<a class="link" href="https://www.tdlr.texas.gov/licenses.htm" target="_blank" rel="noreferrer noopener"> license or permit</a> in these industries, you’ll work with the Texas Department of Licensing &amp; Regulation (TDLR).&nbsp;</p>



<p>A<a class="link" href="https://comptroller.texas.gov/help/sales-tax-registration/requirements.php/" target="_blank" rel="noreferrer noopener"> sales tax permit</a> is a requirement if your business:&nbsp;</p>



<ul>
<li>Leases, rents, or sells taxable goods</li>



<li>Provides taxable services; or,&nbsp;</li>



<li>Your business acquires taxable goods or services from out-of-state suppliers without a Texas Sales and Use Tax Permit</li>
</ul>



<p>Use tax is a requirement for small businesses under<a class="link" href="https://comptroller.texas.gov/taxes/sales/use-tax.php" target="_blank" rel="noreferrer noopener"> a few circumstances</a>. First, the buyer must consume, store, or use the goods or services in Texas, and the seller doesn’t charge sales tax in Texas.</p>



<h3>Step 8: Taxes</h3>



<p><a class="link" href="https://1800accountant.com/blog/texas-small-business-tax">Texas small business taxes</a> have a few requirements. First, there’s a Texas franchise tax, a tax that companies pay to conduct business within the state. This tax is one that varies according to the annual revenue a company receives. For the years 2022 and 2023, the<a class="link" href="https://comptroller.texas.gov/taxes/franchise/#skip-scroll"> franchise tax rates</a> are:</p>



<ul>
<li>Retail or wholesale businesses with more than $20 million in annual revenue pay a franchise tax rate of 0.375%.</li>



<li>Businesses other than retail or wholesale with more than $20 million in annual revenue pay a franchise tax rate of&nbsp; 0.75%.</li>
</ul>



<p>There are also tax-due thresholds which also differ according to annual revenue.&nbsp;</p>



<ul>
<li>Businesses with under $1,230,000 in annual revenue pay no franchise tax.</li>



<li>There’s an EZ Computation available for businesses under the $20 million total revenue threshold.</li>



<li>The EZ Computation Rate is 0.331%.</li>
</ul>



<p>Franchise taxes are due on May 15 unless the date falls on a holiday or weekend. Taxes are due the next business day if the due date falls on a holiday or weekend.</p>



<h3>Step 9: Open Bank Account</h3>



<p>Opening a business bank account lets you separate your personal finances from your business finances, making it easier to track expenses and income.</p>



<p>To open a business bank account in Texas, you will need to provide the bank with documentation that proves your business is registered, such as your Certificate of Formation or Certificate of Incorporation, your EIN, your business license, and other documents that the bank may require.</p>



<h3>Step 10: Insurance</h3>



<p>Business insurance in Texas is one of the last things to be aware of. The state doesn’t have a<a class="link" href="https://www.tdi.texas.gov/pubs/consumer/cb030.html" target="_blank" rel="noreferrer noopener"> workers’ compensation insurance</a> requirement. Commercial<a class="link" href="https://www.tdi.texas.gov/pubs/pc/pcgenliab.html" target="_blank" rel="noreferrer noopener"> general liability insurance</a> is also not a requirement, but it may be helpful to have as a business owner.&nbsp;</p>



<h2>Other Considerations&nbsp;</h2>



<p>There are other additional considerations to keep in mind before taking the steps to start a business in Texas.</p>



<h3>Business Grants &amp; Loans</h3>



<p>Texas offers loans on behalf of the U.S. Small Business Administration. Depending on your industry, you may apply for grants and loans from the following organizations:&nbsp;</p>



<ul>
<li>Non-Profit Lenders, such as BCL of Texas, LiftFund, and PeopleFund</li>



<li>Product Development and Small Business Incubator Fund (PDSBI)</li>



<li>Texas Angel Investors</li>



<li>Texas Workforce Commission</li>
</ul>



<h3>Additional Funding&nbsp;</h3>



<p>There are additional funding resources available for more specific<a class="link" href="https://gov.texas.gov/coronavirus" target="_blank" rel="noreferrer noopener"> industries within Texas</a>. For example, if your business works in the following industries, funding may be available with these Texas-based organizations: </p>



<ul>
<li>Texas Department of Agriculture (which may be helpful for farm and ranch producers)</li>



<li>Texas Film Commission (which may be helpful for the creative arts and film industries)</li>



<li>Texas Music Office (which may be helpful for artists and music industry professionals)</li>
</ul>



<h3>Business Location</h3>



<p>You may also want to think about your business location. For example, Texas is one of the largest states in the country, and certain areas specialize in certain industries. When considering your location, weigh how difficult it may be to source supplies within a region.&nbsp;</p>



<h2>Start Your Texas Business with 1-800Accountant</h2>



<p>Starting your small business in Texas is exciting. Still, it can also be nerve-racking if you're inexperienced or a little rusty. This is why so many owners and entrepreneurs trust 1-800Accountant, America's leading virtual accounting firm for small businesses, for their needs.&nbsp;</p>



<p>Whether it's <a class="link" href="https://1800accountant.com/services/small-business-taxes">small business taxes</a>, <a class="link" href="https://1800accountant.com/services/business-tax-advisory">tax advisory</a>, or any of our professional accounting services, we have the solution you need at a price that works within your budget. Schedule a quick consultation – usually 30 minutes or less – to learn how we can help your Texas small business.</p>

It&#8217;s a great idea to start a small business in Texas. The state offers everything a business owner could want: a diverse economy, a skilled workforce, and flourishing world-class cities that would make the perfect headquarters. Whether you&#8217;re in the planning stages or are nearing launch, there are a few steps you&#8217;ll have to take [&hellip;]

Graphic overlay reading '10 steps to starting a business in texas' on a background image of houston skyline with a pedestrian bridge and lush greenery.

starting-a-business-in-texas

How to Start a Business in Texas: 10 Steps

<p>Within the intricate realm of taxation, this article aims to shed light on the process of attaining tax-exempt status for nonprofit organizations and charitable entities. In this informative guide, we will navigate the complexities of tax exemption, offering valuable insights and step-by-step instructions to assist you in pursuing tax relief.</p>



<h2>Section 501(a) and Tax Exemption: An Overview</h2>



<p>Let's start by understanding Section 501(a) and the concept of tax exemption. Under Section 501(a), certain entities can be recognized as exempt from federal income tax.&nbsp;</p>



<p>The Internal Revenue Service (IRS) distinguishes several types of tax-exempt entities. These can include private foundations, public charities, social welfare organizations, and more. Each qualifying organization serves diverse purposes, from advancing education and relieving poverty to promoting social welfare and supporting charitable causes.</p>



<h2>How to File a 501 Tax Exempt Form</h2>



<p>Now that you grasp the essence of tax exemption, it's time to delve into filing for a 501 tax exempt form. This crucial document, officially known as <a class="link" href="https://1800accountant.com/blog/form-1023">Form 1023</a> or Form 1023-EZ, sets the wheels in motion for your nonprofit organization or charitable entity to secure that coveted tax-exempt status. To be exempt from tax under Section 501 a, here are the steps you should take:&nbsp;</p>



<h3>1. Determine Eligibility</h3>



<p>Before beginning the process, ensure that you have a qualifying organization that meets the criteria for tax exemption. Generally, organizations falling under Section 501(c) of the Internal Revenue Code are eligible. This includes nonprofit organizations, religious entities, educational institutions, and more. However, remember that certain political organizations and private foundations may face additional requirements.</p>



<h3>2. Choose the Right Form</h3>



<p>Once eligibility is confirmed, you must select the appropriate form for your application. The two primary options are Form 1023 and Form 1023-EZ. Form 1023 is more detailed and comprehensive, suited for larger tax-exempt entities. Form 1023-EZ is a streamlined version designed for smaller, less complex entities.&nbsp;</p>



<h3>3. Prepare the Necessary Documents</h3>



<p>Gather the documents required to support your application. These include your organization's articles of incorporation, bylaws, financial statements, a narrative description of your activities, and more. Ensure that your paperwork is complete and compelling, as it lays the foundation for a successful application.</p>



<h3>4. Fill Out the Form with Finesse</h3>



<p>Pay careful attention to every question, responding truthfully and accurately. Provide clear, concise explanations for your organization's mission, activities, and financial details. Remember, precision and clarity are your allies in this quest.</p>



<h3>5. Submit and Await the Verdict</h3>



<p>With your form completed, it's time to submit your application. Along with the form, enclose any required fees, as specified in the instructions. Now comes the waiting game. The IRS will carefully review your application, conducting due diligence to ensure your organization complies with the requirements for tax exemption.</p>



<h2>Important Things to Keep in Mind</h2>



<p>As you embark on the tax exemption process, keep a few essential points in mind:</p>



<ul>
<li><strong>Compliance is Key – </strong>Maintaining tax-exempt status requires ongoing compliance with IRS regulations. Stay informed about your obligations, such as filing annual information returns (Form 990) and adhering to specific restrictions on political activities and unrelated business income.</li>



<li><strong>Stay Up-to-Date with Changes – </strong>Tax laws are ever-evolving beasts. Keep a vigilant eye on updates and amendments to the tax code, ensuring that your tax-exempt organization remains in harmony with the latest requirements. The IRS website and publications, such as IRS Publication 557, will guide you on this ever-changing path.</li>



<li><strong>Utilize the Power of Contributions –</strong> Remember that tax exemption not only benefits your organization but also encourages others to contribute to your cause. Individuals and businesses are more likely to donate to a tax-exempt organization, as their contributions may be tax-deductible. Embrace the power of charitable contributions to fuel your mission.</li>
</ul>



<h2>Work with the Experts</h2>



<p>1-800Accountant is a virtual accounting firm merging the convenience of technology with live support from real professionals, making taxes easy and personable for individuals and small businesses. Focus on growing your bottom line while our team of accountants, certified public accountants, and enrolled agents perform the heavy lifting – tax advisory and preparation, payroll, bookkeeping, and audit defense. For professional, year-round services at an affordable price,&nbsp;get in touch&nbsp;with our <a class="link" href="https://1800accountant.com/services/industry/nonprofit">nonprofit tax experts</a> and schedule your consultation with America’s leading small business accounting firm.</p>

Within the intricate realm of taxation, this article aims to shed light on the process of attaining tax-exempt status for nonprofit organizations and charitable entities. In this informative guide, we will navigate the complexities of tax exemption, offering valuable insights and step-by-step instructions to assist you in pursuing tax relief. Section 501(a) and Tax Exemption: [&hellip;]

Text on a document titled "tax exemption" next to a pen and keyboard, with an overlay reading "how to file for tax exemption under section 501(a).

Tax-Exemption-Under-Section-501a

How To File for Tax Exemption Under Section 501(a)

<p>Employees can essentially trust their employers to handle much of the regular work of bookkeeping for them. Their employer keeps track of their income, withholds wages to pay taxes, and then sends regular reports on all of that.</p>



<p>Freelancers, on the other hand, are on their own. That’s why bookkeeping for freelancers is critical, even if it doesn’t seem like it. It’s the paperwork that lets the work happen and makes sure you get paid. No one else is going to make sure the numbers add up, and your account gets its deposit at the end of the day.</p>



<p>Freelance bookkeeping can be a challenge if it isn’t handled early and properly. Thankfully there are some supporting strategies freelancers can use to have a smooth bookkeeping experience. Finding an effective system and process for managing your accounting can help save time and money, not only for calculating expenses, compiling invoices, and paying quarterly taxes but throughout the year.</p>



<p>While there are many ways to go about bookkeeping for your independent business, freelancers should consider some things first. For example, keeping track of every financial transaction is crucial, and saving may be very helpful when it’s time to pay taxes. Here’s a quick guide to all of these basic things each freelancer should know about bookkeeping.</p>



<h2>Why is Bookkeeping Important for Freelancers?</h2>



<p>Bookkeeping allows freelancers to stay organized with their finances. If you <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-keep-good-financial-records">keep good financial records </a>and <a class="link" href="https://1800accountant.com/blog/cash-flow-management">monitor your cash flow</a>, you’ll be able to deal with problems that come up and easily prove your eligibility for any lines of credit you might need. </p>



<p>Keeping track of expenses, income, and invoices will save time when tax season approaches. For freelancers, like for all small businesses, you have regular obligations to pay income taxes quarterly and then file tax returns at the end of the year. Having all of that information accurately recorded and easy to find will make the process easy and efficient.</p>



<p>Bookkeeping is essential for a lot of different reasons. If you don’t get paid properly for your time, there’s no one else who will notice the issue and address it, and you need the records to give you that information and prove it to your customer. Bookkeeping can also help freelancers avoid penalties and have an easier experience finding documentation if audited.</p>



<h2>Essential Bookkeeping Tips for Freelancers</h2>



<p>These guidelines are the fundamental basis of any freelancer or small company’s bookkeeping. If you aren’t already using these guiding tips, you should implement them as soon as possible to decrease the chance of mistakes and to give your business a solid footing.&nbsp;</p>



<p>While what is best for you will vary depending on the size and type of your freelance business, every business owner should consider what these look like for their own work.&nbsp;&nbsp;&nbsp;</p>



<h3>Keep Financial Documents</h3>



<p>Don’t get rid of any financial documents. Your company’s records are built on the financial documents you keep, whether you keep them in physical or digital form.&nbsp;</p>



<p>Keeping critical financial statements and records can allow you to examine your finances in several ways, watching for trends and planning more efficiently for the future. Two of the most important documents for freelancers are <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-what-is-a-balance-sheet">balance sheets</a> and <a class="link" href="https://1800accountant.com/blog/how-to-read-profit-and-loss-statement">profit and loss statements</a>. Each <a class="link" href="https://1800accountant.com/blog/cash-flow-statement">cash flow statement</a> and invoice is also useful to keep.&nbsp;</p>



<h3>Separate Personal and Professional Assets</h3>



<p>It may be tempting for freelancers to simply use their personal bank accounts for business purposes. Still, it can be very useful to separate your business assets from your personal ones, and this is absolutely crucial if your business involves a lot of business expenses.&nbsp;</p>



<p>Opening a business bank account solely for professional assets lets you track professional expenses and income without constantly having to sort through both piled together. This will also help immensely during tax season. If all of your company costs are on your business credit card, it becomes simple and easy to <a class="link" href="https://www.keepertax.com/freelancer-tax-deductions">claim deductions for those expenses</a>.&nbsp;&nbsp;</p>



<h3>Track Your Income</h3>



<p>Freelancers should track everything, including their expenses and taxes, but you should track your income most of all. Track how much you are owed and how much you are paid so that you can ensure those numbers match up.&nbsp;</p>



<p>Then your income numbers will help you assess how to proceed with your business in the future, and you’ll have it ready for <a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes" target="_blank" rel="noreferrer noopener">paying quarterly estimated taxes to the IRS</a> and completing your tax return. You can use bank deposits, software, or spreadsheets to further track your income.</p>



<h2>Long-Term Bookkeeping Tips for Freelancers</h2>



<p>Now that you have the foundations for your bookkeeping system, you can move on to more detailed pieces of the process. These tips will help you improve your system and process to get the most out of your bookkeeping.&nbsp;</p>



<h3>Create an Organized System</h3>



<p>Freelance workers should create an organized system to track expenses and income, whether it’s a filing system or a set of spreadsheets on your computer. There needs to be a straightforward process you follow so that nothing falls through the cracks. In case of an audit, you’ll want to save pictures of receipts if at all possible as well.&nbsp;</p>



<p>If you get paid for your time, you need to find an organized and easy way to do time tracking to avoid wasting time or missing out on income.&nbsp;</p>



<h3>Improve Your Invoices&nbsp;</h3>



<p>You don’t get paid without invoices, so it’s essential to make sure your invoices and invoicing system are efficient and effective.</p>



<p>Each <a class="link" href="https://1800accountant.com/blog/invoice">small business invoice</a> should include your contact information, an invoice number, the issue date, and the due date. Other important things to include are the goods and services provided and the total due for those goods and services.</p>



<p>You should also provide information about how you'll accept payments (e.g., by check, through your bank, or via PayPal). You want your invoice to contain all the information necessary for the payment to happen. If getting payments on time is an issue, you should also include a clearly stated policy about incentives or penalties for payments before or after the deadline.&nbsp;</p>



<p>An easy way to make this process smoother is to set up invoicing software to put all this information together and send invoices for you. This will help keep you on schedule as well, because if you send out invoices late or at unpredictable times, then that’s the same way they’ll get paid.&nbsp;&nbsp;</p>



<h3>Record All Expenses</h3>



<p>It’s important to keep both income and expense reports as a part of your bookkeeping, as both will be essential for your tax returns. Keeping track of all your legitimate business expenses will let you <a class="link" href="https://1800accountant.com/blog/10-ways-to-deduct-business-expenses-as-a-freelancer">deduct business expenses as a freelancer</a> and reduce your tax liabilities.&nbsp;&nbsp;</p>



<p>You can claim tax deductions for supply costs, as well as rent, travel, and vehicle expenses related to your business. Any professional dues, employee wages, and healthcare premiums may be deductible. If you work from home, you may also be able to deduct many expenses related to your dedicated home office.&nbsp;</p>



<p>Freelancers can also benefit from setting a budget to monitor their spending. A carefully crafted budget gives you a clear framework for planning and assessing your income and expenses over time.&nbsp;&nbsp;</p>



<h3>Build Up Savings</h3>



<p>Saving money as a freelancer is important in case there is an unforeseen business expense or penalty. This is another way budgeting and monitoring your cash flow will help. By planning ahead, you can ensure you have money to spare when you need it.&nbsp;</p>



<p>It’s a healthy standard to save about 30% of your income if your tax bill is higher than expected. Freelancers may want to save money for tax payments early, if possible, to avoid saving more significant amounts later.</p>



<h3>Find Accounting Software</h3>



<p>For everything from sending invoices and payment processing to recording expenses and receipts, accounting software can help if you want to know <a class="link" href="https://1800accountant.com/blog/are-you-wasting-time-on-small-business-bookkeeping">how to streamline accounting processes</a> and reduce human error.&nbsp;</p>



<p>These software programs will help you collect payments, estimate and file quarterly taxes, track expenses, and more. Software for freelancers like this can also help you plan financial reports, invoicing, and payroll.</p>



<p>There are all sorts of accounting software programs available for self-employed business owners.&nbsp; Accounting software like Quickbooks Self-Employed usually requires a monthly or yearly subscription, so you should discuss with an accountant to see what kind of program fits your needs best before you commit.&nbsp;</p>



<h3>Set Up Tax Payments</h3>



<p>Having complete records will make filling out and filing tax returns a breeze, but that still leaves you with estimated quarterly income tax payments throughout the year. You should be planning ahead to make these payments on time and registering with the IRS to make the process smoother.&nbsp;</p>



<p>Estimated taxes are due quarterly, and there may be penalties if you underpay or pay after the deadline. If you owe a small enough amount at the end of the year, or you’ve paid enough income taxes elsewhere, you might be able to avoid these quarterly payments and pay an annual tax.&nbsp;</p>



<p><a class="link" href="https://1800accountant.com/blog/calculate-small-business-taxes">Calculate your small business taxes</a> ahead of time, so you know what you need to do to keep up with your obligations throughout the year.&nbsp;</p>



<h2>Work With a Professional Bookkeeper</h2>



<p>You don’t have to be a big business to hire an accountant. Even a freelancer can afford and benefit from working with a professional for your <a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">freelance accounting needs</a>. The expert doesn’t have to be your full-time employee to help you improve your system and get your bookkeeping process up and running.&nbsp;</p>



<p>You don’t have to figure it out on your own. <a class="link" href="https://1800accountant.com/services/bookkeeping">Bookkeeping for small businesses</a> can address all of your needs, along with the<a class="link" href="https://1800accountant.com/services/bookkeeping"> </a>professional bookkeepers at 1-800Accountant.</p>

Employees can essentially trust their employers to handle much of the regular work of bookkeeping for them. Their employer keeps track of their income, withholds wages to pay taxes, and then sends regular reports on all of that. Freelancers, on the other hand, are on their own. That’s why bookkeeping for freelancers is critical, even [&hellip;]

A person using a calculator with financial documents, a notepad, and a laptop, under the text "freelance bookkeeping: everything you need to know.

Freelance-Bookkeeping

Freelance Bookkeeping: Everything You Need to Know

<p>Payroll is most likely one of the largest expenses you’re responsible for as a business owner. It’s also one of the most important, as you’re the person responsible for ensuring that an employee and their family receive their salary or wages on time so they can pay <em>their</em> expenses.</p>



<p>Because payroll is so important to the employee, the IRS acts with the utmost urgency to ensure that payroll taxes<strong> </strong>are properly collected and timely remitted by businesses.</p>



<p>For both of these reasons - to be responsible to both your employees and the IRS and other taxing authorities - it’s a good idea for you and other small business owners to understand the importance of payroll taxes and <a class="link" href="https://1800accountant.com/blog/small-business-payroll">how the payroll tax system works</a>.</p>



<p>Here’s what you’ll learn in this article:</p>



<ul>
<li>What payroll taxes are and the different types of payroll taxes</li>



<li>Your payroll tax responsibilities as a business owner</li>



<li>How payroll taxes are calculated</li>



<li>Deadlines to file payroll tax returns and to remit payment</li>



<li>Different options to pay your payroll tax liability</li>



<li>How to make sure your business stays in compliance</li>
</ul>



<h2>Types of Payroll Taxes</h2>



<p>Payroll taxes are the federal, state, and local taxes associated with an employee’s taxable compensation that an employer is responsible for remitting to the proper taxing authority. Here’s a look at the different types of payroll taxes you’ll encounter as a business owner.</p>



<h3>Income taxes</h3>



<p>Employees owe income tax based on their wage or salary at the federal level and, if necessary, at the state and local levels. This income tax is withheld from the employee’s paycheck by the employer and paid to the respective taxing authority by the employer.</p>



<h3>Social Security taxes - employee portion*</h3>



<p>Employees pay Social Security taxes on 6.2% of their taxable income up to $162,200 in 2023. (This dollar amount is increased each year based on inflation.) The Social Security tax is officially called Old Age, Survivors, and Disability Insurance (OASDI). Social Security taxes are withheld from the employee’s paycheck by the employer and paid to the U.S. Treasury by the employer.</p>



<h3>Social Security taxes - employer portion*</h3>



<p>When an employer remits Social Security taxes withheld from an employee’s paycheck to the U.S. Treasury, the employer also makes a matching payment equal to the employee’s portion of Social Security taxes. For example, if an employee owes $1,500 in Social Security taxes, the employer must make a matching payment of $1,500 for a total of $3,000.</p>



<h3>Medicare taxes - employee portion*</h3>



<p>An employee pays Medicare taxes on 1.45% of their entire taxable income. Medicare taxes are withheld from the employee’s paycheck by the employer and paid to the U.S. Treasury by the employer.</p>



<h3>Medicare taxes - employer portion*</h3>



<p>Similar to Social Security taxes, an employer makes a matching payment equal to the employee’s portion of Medicare taxes.</p>



<h3>Additional Medicare Tax</h3>



<p>Employees pay an additional Medicare tax on 0.9% of their taxable income above an applicable threshold. An employer must withhold this Additional Medicare Tax from wages or salaries paid to an employee in excess of $200,000 during a calendar year without regard to that employee’s filing status or wages paid by another employer.</p>



<h3>Federal Unemployment Taxes (FUTA)</h3>



<p>The FUTA tax rate is 6.0% and applies to the first $7,000 paid to each employee as wages during the year.</p>



<h3>State Unemployment Taxes (SUTA)</h3>



<p>The SUTA tax is administered similarly to the FUTA tax but with differing tax rates and wage levels.</p>



<p><a class="link" href="https://www.sba.gov/business-guide/manage-your-business/pay-taxes">Read this article from the U.S. Small Business Administration’s website</a> to learn more about the different types of payroll taxes your business might have to pay.</p>



<p><strong><em>*NOTE:</em></strong> Social Security taxes and Medicare taxes are levied by the <a class="link" href="https://www.ssa.gov/thirdparty/materials/pdfs/educators/What-is-FICA-Infographic-EN-05-10297.pdf">Federal Insurance Contribution Act (FICA) of 1935</a>. Hence you may hear <strong>payroll taxes</strong> also referred to as FICA taxes.</p>



<h2>Employer responsibilities with payroll taxes</h2>



<p>There are several payroll tax-related tasks for which employers are responsible:</p>



<h3>Calculating and withholding</h3>



<p>Employers must calculate the amount each employee owes for all types of taxes. The IRS, state, local, and other taxing authorities publish booklets that walk you through this process.</p>



<p><strong>Timely remittance</strong></p>



<p>As a general rule for all types of federal taxes, you must deposit all withheld taxes either monthly or semi-weekly. Check with your jurisdiction about due dates for state and local taxes. Here are the different ways you can make a federal tax payment:</p>



<ul>
<li>Submit your payment electronically via the <a class="link" href="https://www.eftps.gov/eftps/direct/EftpsHome.page">Electronic Federal Tax Payment System</a> (EFTPS).</li>



<li>Submit your payment electronically via ACH through your financial institution.</li>



<li>Submit your payment electronically or by check if your tax liability is less than $2,500 for a particular quarter.</li>
</ul>



<p><strong>Timely filing of reports</strong></p>



<p>Employers must file a variety of tax returns to report payroll taxes to the respective taxing authorities.</p>



<h2>Payroll tax returns and filing deadlines</h2>



<p>Here’s a look at the <a class="link" href="https://1800accountant.com/blog/payroll-tax-return">payroll tax returns</a> that must be filed to report the different types of payroll taxes:</p>



<h3>Common federal forms and deadlines</h3>



<ul>
<li><a class="link" href="https://www.irs.gov/forms-pubs/about-form-940">Form 940</a>: Annual FUTA tax return. The due date is the last day of January following the end of the tax year.</li>



<li><a class="link" href="https://www.irs.gov/forms-pubs/about-form-941">Form 941</a>: A quarterly tax return that reports all federal withholdings, including the employer’s share of Social Security and Medicare taxes. The due date is by the last day of the month following the end of the quarter.</li>
</ul>



<h3>Less common federal forms and deadlines</h3>



<ul>
<li><a class="link" href="https://www.irs.gov/forms-pubs/about-form-943">Form 943</a>: Similar to Form 941, except Form 943 reports all federal withholdings for agricultural employees. The due date is the last day of January following the end of the tax year.</li>



<li><a class="link" href="https://www.irs.gov/forms-pubs/about-form-944">Form 944</a>: You can file Form 944 annually instead of Form 941 each quarter if your business has an annual payroll tax liability of $1,000 or less. The due date is the last day of January following the end of the tax year.</li>



<li><a class="link" href="https://www.irs.gov/forms-pubs/about-form-945">Form 945</a>: Use this form to report income taxes withheld from non-payroll payments, such as pensions, gambling winnings, or other mandatory backup withholdings. The due date is the last day of January following the end of the tax year.</li>
</ul>



<h3>State forms and deadlines</h3>



<p>State and local payroll tax return deadlines often, but not always, follow federal reporting due dates. Check with your jurisdiction about the types of tax returns and due dates for state and local taxes.</p>



<p><strong>*NOTE: </strong>If a due date for filing a return or making a payment falls on a Saturday, Sunday, or legal holiday, you generally have until the end of the next business day to timely file or pay.</p>



<h2>Ensure compliance with payroll taxes</h2>



<p>Here are some suggestions to help you stay in compliance with payroll tax rules.</p>



<ul>
<li><strong>Use software.</strong> Increase the accuracy of your payroll tax reports by using a reputable software program.</li>



<li><strong>Hire a payroll service provider.</strong> Even better, hire an expert in payroll taxes to do it for you.</li>



<li><strong>Keep current with tax law changes</strong>. Tax laws are constantly changing. You need to stay current with the latest changes to ensure you’re staying in compliance.</li>



<li><strong>Review employee information at regular intervals.</strong> Review your employee’s information at least once each year to check for significant life events that can affect their payroll taxes, such as getting divorced or married, having a child, or someone passing away.</li>
</ul>



<h2>Don’t tackle payroll taxes alone</h2>



<p>Properly calculating wages, salaries, and payroll taxes is your responsibility as a business owner. In this article, you learned the importance of understanding how payroll taxes work so you can keep your employees happy and avoid making <a class="link" href="https://1800accountant.com/blog/common-payroll-mistakes">common payroll mistakes</a> that can result in severe fines and penalties from the IRS.</p>



<p>While payroll may seem complicated and intimidating, remember you’ve got help whenever needed.</p>



<p>Working with a 1-800Accountant <a class="link" href="https://1800accountant.com/services/payroll">small business payroll expert</a>, you can rest easy knowing that you’ll have a helping hand to properly navigate every payroll tax hurdle that you’ll encounter.</p>

Payroll is most likely one of the largest expenses you’re responsible for as a business owner. It’s also one of the most important, as you’re the person responsible for ensuring that an employee and their family receive their salary or wages on time so they can pay their expenses. Because payroll is so important to [&hellip;]

A desk covered with financial documents, u.s. currency, a calculator, and a book titled "a comprehensive guide to payroll taxes.

comprehensive-guide-to-payroll-taxes

Everything You Need To Know About Payroll Taxes

<p>Do you ever wonder about the financial health of your business or how investors perceive your company's financial stability? This comprehensive guide on creating and understanding a business balance sheet helps answer these questions. We discuss the complexities of balance sheets, highlight their purpose, and the step-by-step process of creating one.</p>



<p>You'll discover how balance sheets are instrumental in tracking your company's assets, liabilities, and equity over time. This knowledge provides insights into your company's net worth and strengthens your strategy when applying for investment opportunities. Continue reading as we empower you with tools to elevate your business financial understanding.</p>



<h2>What Is a Business Balance Sheet?</h2>



<p>A balance sheet is a financial statement that provides a snapshot of a business's financial position at a specific moment in time. It details the company's assets (what it owns), liabilities (what it owes), and shareholders' equity (the net worth or capital of the company). These three components provide valuable insights into a company's financial health and operational efficiency.</p>



<p>Balance sheets can also serve as documentation if you are applying for investment opportunities.</p>



<h2>How Do You Create a Balance Sheet?</h2>



<p>There are several steps involved to create your <a class="link" href="https://online.hbs.edu/blog/post/how-to-prepare-a-balance-sheet" target="_blank" rel="noreferrer noopener">balance sheet</a>:</p>



<h3>Determine the reporting date and period</h3>



<p>In the first step, you'll determine the reporting date. For many companies, this is typically the last day of a <a class="link" href="https://www.investopedia.com/terms/q/quarter.asp" target="_blank" rel="noreferrer noopener">fiscal quarter</a>. For companies that report their earnings annually, this is usually December 31.</p>



<h3>Calculate assets</h3>



<p>In the second step, you'll calculate current and long-term assets. You should arrange both categories along with their sub-categories. After you write the amounts, add them together to determine your assets.</p>



<h3>Calculate liabilities</h3>



<p>In the third step, you'll calculate your liabilities, both current and long-term, by summing up the amounts.&nbsp;</p>



<h3>Calculate shareholder equity</h3>



<p>In the fourth step, you'll calculate shareholder equity. Like assets and liabilities, there are different sub-categories of equity that you'll reference, such as earnings and stocks. After you write the amounts, add them together to determine total equity.</p>



<h3>Compare equity and liabilities to assets</h3>



<p>In the fifth step, you'll combine equity and liabilities. The sum is the number that you'll compare against your assets to determine if your finances are balanced.</p>



<h2>Importance of a Balance Sheet?</h2>



<p>Creating and using balance sheets have<strong> </strong><a class="link" href="https://smallbusiness.chron.com/advantages-balance-sheet-11490.html" target="_blank" rel="noreferrer noopener">fundamental advantages</a>. After creating a balance sheet, you'll determine the financial status of your company. This can be helpful if you're planning to save additional funding for business needs or emergencies.&nbsp;</p>



<p>A second reason you'll need a balance sheet is that it is useful for potential lending opportunities. As you create balance sheets over consecutive quarters, you'll have detailed records showing your company's assets, equity, and liabilities. This will help lenders determine whether you're more likely to pay and receive investments from lenders.</p>



<p>Finally, the balance sheets structure allows you to see upcoming liabilities in the forms of short-term and long-term debt. If you create a balance sheet, you'll determine which liabilities you should address first, preventing current and future problems.</p>



<h2>What Is Included in a Balance Sheet?</h2>



<p>A balance sheet <a class="link" href="https://www.investopedia.com/terms/b/balancesheet.asp" target="_blank" rel="noreferrer noopener">includes four things</a>:&nbsp;</p>



<ul>
<li>Assets&nbsp;</li>



<li>Earnings</li>



<li>Equity&nbsp;</li>



<li>Liabilities</li>
</ul>



<p>An explanation of each element of a balance sheet follows below.</p>



<h3><strong>Equity</strong></h3>



<p>Equity is what will remain after you subtract liabilities from your assets. You'll also hear equity used interchangeably as shareholder's equity. The amount of equity that a business has is the net worth of the company.&nbsp;</p>



<h3><strong>Assets</strong></h3>



<p>Assets are what your company owns. You'll write this on the left side of your bookkeeping document. There are two types of assets: current assets and long-term assets.&nbsp;</p>



<p><a class="link" href="https://www.investopedia.com/terms/c/currentassets.asp#:~:text=Current%20assets%20represent%20all%20the%20assets%20of%20a,financial%20statements%20that%20must%20be%20completed%20each%20year." target="_blank" rel="noreferrer noopener">Current assets</a> are assets that you'll use within the next year. It comprises several categories, such as:&nbsp;</p>



<ul>
<li>Accounts receivable: Money that customers owe the company</li>



<li>Cash and cash equivalents: Assets that can become cash immediately</li>



<li>Inventory: Goods available for sale</li>



<li>Marketable securities: Assets that can become cash quickly, such as stock</li>



<li>Prepaid expenses: The value that has been paid for, such as advertising, insurance, and rent</li>
</ul>



<p><a class="link" href="https://www.investopedia.com/terms/l/longtermassets.asp" target="_blank" rel="noreferrer noopener">Long-term assets</a>, also known as non-current assets, are assets that you won't use within a year. Instead, long-term assets will benefit your company for several years.&nbsp;</p>



<p>Like current assets, long-term assets comprise several categories, such as:&nbsp;</p>



<ul>
<li>Client lists, patents, and trademarks&nbsp;</li>



<li>Fixed assets: Equipment, plant, and equipment (also known as PP&amp;E), including buildings, land, machinery, and vehicles</li>



<li>Intangible assets: Listed on balance sheets if acquired rather than developed</li>



<li>Long-term investments: Bonds, real estate, stocks (Long-term investments also include investments in other companies.)</li>
</ul>



<h3><strong>Liabilities</strong></h3>



<p>Liabilities are the money that a business owes to other parties. You'll write this on the right side of your balance sheet. This can include monthly bills, rental costs, and salaries to employees. Similar to assets, there are two types of liabilities: current liabilities and long-term liabilities.&nbsp;</p>



<p>Current liabilities are liabilities due within one year. You'll arrange these liabilities in the order of their due date. Current liabilities could include:</p>



<ul>
<li>Accounts payable</li>



<li>Bank indebtedness</li>



<li>Current portion of long-term debt</li>



<li>Customer prepayments</li>



<li>Dividends payable and others</li>



<li>Earned and unearned premiums</li>



<li>Interest payable</li>



<li>Wages payable</li>
</ul>



<p>Long-term liabilities are liabilities due beyond one year. These include:</p>



<ul>
<li>Deferred tax liability: Accrued taxes but taxes that you won't pay for another year</li>



<li>Long-term debt: Interest and principal on bonds</li>



<li>Pension fund liability: Money that businesses pay into employees' retirement accounts</li>
</ul>



<h3><strong>Earnings</strong></h3>



<p>Earnings are the last thing that you record on your balance sheet. You'll write this under the liabilities section of your bookkeeping document.&nbsp;</p>



<p>There are <a class="link" href="https://www.thebalance.com/shareholders-equity-on-the-balance-sheet-357295" target="_blank" rel="noreferrer noopener">3 areas</a> in which you can report earnings on a balance sheet:&nbsp;</p>



<ul>
<li>Capital stock: Investments of cash or other assets in exchange for common stock or preferred stock</li>



<li>Paid-in surplus: Capital from investors in exchange for stock</li>



<li>Retained earnings: Profits not distributed to shareholders as dividends but profits you'll reinvest into the business</li>
</ul>



<h2>Partner With Bookkeeping Experts</h2>



<p>Creating a balance sheet is a crucial part of operating your business, but consider working with the pros if you need more help. If you're ready to take the next step, head over to our schedule a free call with our <a class="link" href="https://1800accountant.com/services/bookkeeping">bookkeeping experts</a> to assist you with the process.</p>

Do you ever wonder about the financial health of your business or how investors perceive your company&#8217;s financial stability? This comprehensive guide on creating and understanding a business balance sheet helps answer these questions. We discuss the complexities of balance sheets, highlight their purpose, and the step-by-step process of creating one. You&#8217;ll discover how balance [&hellip;]

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What a Balance Sheet Is and Steps to Create One

<p>Florida offers business owners a diverse economy, a large workforce, and several large cities to choose from to open a business. Starting an LLC in Florida can be a wise decision, but there are a few steps involved in the process.&nbsp;</p>



<p>There are also a few fees to know about and other important details you should know before starting the process. Here’s how to start an LLC in Florida.</p>



<h2>How to Form an LLC in Florida</h2>



<p>Forming an <a class="link" href="https://1800accountant.com/blog/business-entity-llc">LLC</a> in Florida comprises a few steps, but you’ll work with one department. The Florida <a class="link" href="https://dos.myflorida.com/sunbiz/start-business/efile/fl-llc/">Division of Corporations</a> is where you’ll apply for your LLC, send your documents, and wait for updates about your LLC application.</p>



<h2>How long does it take to form an LLC in Florida?</h2>



<p>It can take up to two weeks to form your LLC in Florida. The exact time will vary because you have two options for filing to form your LLC.&nbsp;</p>



<p>You have the option of e-filing to form your LLC, which offers several advantages:&nbsp;</p>



<ul>
<li>You’ll receive your filing confirmation by email at the address provided.&nbsp;</li>



<li>Your confirmation will be sent to you once the document is approved by the Division of Corporations.&nbsp;</li>



<li>If you file online, you won’t receive a confirmation by mail.</li>
</ul>



<p>If you file by mail instead, you’ll receive your confirmation by mail to the mailing address provided.</p>



<h2>How much is it to start an LLC in Florida?</h2>



<p>If you want to start an LLC in Florida, it’s essential to know the costs for different aspects of an  LLC. To form a new LLC in Florida, you’ll <a class="link" href="https://www.dos.myflorida.com/sunbiz/forms/fees/">pay at least four fees</a>. Two of the fees are optional, while the other two are required:</p>



<ul>
<li>There’s a required Filing Fee of $100.00.</li>



<li>There’s a required Registered Agent Fee of $25.00.&nbsp;</li>



<li>There’s a Certified Copy fee of $30.00, which is optional.</li>



<li>There’s a Certificate of Status fee of $5.00, which is also optional.</li>
</ul>



<p>The total fee for starting an LLC in Florida is $160.00.</p>



<h2>Do LLCs pay taxes in Florida?</h2>



<p>LLCs in Florida are <a class="link" href="https://www.investopedia.com/articles/personal-finance/101315/taxes-florida-small-businesses-basics.asp#llcs-in-florida">pass-through entities</a> that protect most LLC owners from paying individual taxes. Many LLCs in the state pay taxes as either disregarded entities or as a partnership.&nbsp;</p>



<p>State income taxes for incorporated LLCs are either 5.5% or the alternative minimum tax of 3.3%.&nbsp;</p>



<h2>List out steps to start an LLC in Florida</h2>



<p>Forming an LLC in Florida will take five steps.</p>



<h3>Step 1: Name Your LLC</h3>



<p>The first step in <a class="link" href="https://dos.myflorida.com/sunbiz/start-business/efile/fl-llc/instructions/">forming your LLC</a> in Florida is with your name. There are a few requirements for naming your business in the state of Florida:&nbsp;</p>



<ul>
<li>Your business name must be distinguishable if you search in the Department of State Records. You’ll want to <a class="link" href="http://search.sunbiz.org/Inquiry/CorporationSearch/ByName">search by name</a> before submitting your Articles of Organization document.</li>



<li>Your business name must include the terms: Limited Liability Company, LLC or L.L.C.&nbsp;</li>



<li>You won’t be able to use your LLC name until you receive a filing acknowledgment from the Florida Divisions of Corporations.</li>
</ul>



<p>Finding a unique brand name and (normal-looking) domain to go with it can be a bit of a time-sink for new business owners. <a class="link" href="https://businessnamezone.com/?partner=1800Accountant">This free tool</a> from Business Name Zone generates name and domain combos for you based on your input – and it only takes a few minutes.</p>



<h3>Step 2: Get an EIN</h3>



<p>The second step in starting your LLC in Florida involves getting an <a class="link" href="https://1800accountant.com/blog/ein">Employer Identification Number, or EIN</a>. </p>



<p>An EIN is free, and the IRS offers it to companies for tax purposes. There are several ways to <a class="link" href="https://1800accountant.com/services/ein-tax-id-filing">apply for an EIN</a>, but you’ll receive your EIN immediately by applying online.&nbsp;</p>



<h3>Step 3: Choose a Registered Agent&nbsp;</h3>



<p>Next, you’ll need a <a class="link" href="https://1800accountant.com/blog/small-business-need-registered-agent">Registered Agent</a>. Choosing a registered agent is one of the most essential parts of starting an LLC in Florida. The state has several recommendations and requirements for registered agents: </p>



<ul>
<li>An entity can’t serve as its own registered agent, but an individual or principal associated with the business can serve as the registered agent.</li>



<li>The registered agent must have a physical address in Florida.</li>
</ul>



<h3>Step 4: File Articles of Organization</h3>



<p>Whether you file online or pay by check or money order, it will take the same time for your Articles of Organization to be posted and processed. The state will process your order according to when it was received.&nbsp;</p>



<p>The registered agent must provide their signature on the Articles of Organization. If you’re planning on submitting the Articles of Organization online, the registered agent will provide their name in the signature in the signature block of the form.</p>



<p>After your Articles of Organization are accepted, you’ll receive a confirmation. You can receive it online or by mail.</p>



<h3>Step 5: Create an Operating Agreement</h3>



<p>The last step in creating an LLC in Florida is to create an operating agreement. An <a class="link" href="https://1800accountant.com/blog/operating-agreement">operating agreement</a> will contain information about your LLC, which will cover many aspects of your LLC.</p>



<p>An operating agreement may contain six sections:&nbsp;</p>



<ul>
<li>Introduction information</li>



<li>Membership information</li>



<li>LLC management information</li>



<li>LLC dissolution or member departure</li>



<li>Liability Clause</li>



<li>Other Provisions</li>
</ul>



<p><strong>The first section</strong> of the operating agreement will contain introduction information, such as the name, Articles of Organization, LLC duration, and Registered Agent information, LLCs in Florida aren’t required to list their purpose in the Operating Agreement, but they may do so if they choose.</p>



<p><strong>The second section</strong> will contain information about members. This includes the names of initial members, their ownership, how new members will contribute, how new members are added, how members receive profits and losses, and tax allocation and distribution.</p>



<p><strong>Third</strong>, you’ll provide information about LLC management. There are two options: a member-managed LLC (with a single managing member) or a hired manager that also works as an employee.</p>



<p><strong>Fourth</strong> in the operating agreement, you’ll provide information about what the LLC will do if a member departs the LLC. This information will cover:&nbsp;</p>



<ul>
<li>How and when members can leave and how they can leave</li>



<li>Liquidation procedures</li>



<li>Processes of buying back a member’s interest</li>



<li>Transferring member’s interest, including transfer restrictions</li>
</ul>



<p><strong>Fifth</strong>, the liability clause will cover limited liability for members. Finally, other provisions within the operating agreement will detail how the agreement can change over time. You may provide your members:&nbsp;</p>



<ul>
<li>A conflict of interest policy</li>



<li>A non-compete agreement</li>



<li>A non-disclosure agreement</li>
</ul>



<h2>We Can Help You Form Your LLC&nbsp;</h2>



<p>Forming an LLC in Florida can be a wise decision that can lead to success. It’s an easy way to provide liability protection while also ensuring your business grows in a thriving economy.</p>



<p>If you encounter difficulties forming your business entity, we’re here to help. Work with experienced professionals at 1-800Accountant for <a class="link" href="https://1800accountant.com/services/entity-formation">help with forming your business</a> entity today.</p>

Florida offers business owners a diverse economy, a large workforce, and several large cities to choose from to open a business. Starting an LLC in Florida can be a wise decision, but there are a few steps involved in the process.&nbsp; There are also a few fees to know about and other important details you [&hellip;]

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How to Start an LLC in Florida

<h2 class="wp-block-heading">What are capital gains on a rental property?</h2><iframe width="560" height="315" src="https://www.youtube.com/embed/EwUBSAay_rc?si=HCV-q-034SmWtVP1" title="YouTube video player" frameborder="0" allow="accelerometer; autoplay; clipboard-write; encrypted-media; gyroscope; picture-in-picture; web-share" allowfullscreen=""></iframe><p>Capital gains on a rental property are the profits made from selling real estate assets. When these transactions are not profitable, they’re referred to as capital losses. <a class="link" href="https://www.irs.gov/taxtopics/tc703" target="_blank" rel="noreferrer noopener">Special rules</a> apply in regard to the basis for your gain or loss when an asset is received as a gift or inheritance.&nbsp;</p><p>Capital gains and losses are considered either long-term or short-term. If you retain an asset for a year or more before selling or otherwise disposing of it, it’s considered long-term. Anything shorter than a year is short-term. Again, special rules apply for <a class="link" href="https://www.irs.gov/publications/p544" target="_blank" rel="noreferrer noopener">property acquired from a decedent or patent property</a>, <a class="link" href="https://www.irs.gov/forms-pubs/about-publication-550" target="_blank" rel="noreferrer noopener">commodity futures</a>, and <a class="link" href="https://www.irs.gov/forms-pubs/about-publication-541" target="_blank" rel="noreferrer noopener">applicable partnership interests</a>. Report the gain or loss on the sale of rental property on <a class="link" href="https://www.irs.gov/forms-pubs/about-form-4797" target="_blank" rel="noreferrer noopener">Form 4797</a>, Sales of Business Property, or on Form 8949, Sales and Other Dispositions of Capital Assets, depending on the purpose of the rental activity. Individuals typically use <a class="link" href="https://www.irs.gov/forms-pubs/about-schedule-d-form-1040" target="_blank" rel="noreferrer noopener">Schedule D (Form 1040)</a>, Capital Gains and Losses together with <a class="link" href="https://www.irs.gov/forms-pubs/about-form-4797" target="_blank" rel="noreferrer noopener">Form 4797</a> or <a class="link" href="https://www.irs.gov/forms-pubs/about-form-8949" target="_blank" rel="noreferrer noopener">Form 8949</a>.&nbsp;</p><p></p><div type="entry" class="embedded-entry redactor-component block-entry" data-sys-entry-uid="bltc41432616859c622" data-sys-entry-locale="en-us" data-sys-content-type-uid="rte_ad" sys-style-type="block"></div><h2 class="wp-block-heading">How are capital gains calculated on the sale of rental property?</h2><p>It can be tricky to determine the <a class="link" href="https://1800accountant.com/services/industry/real-estate">tax rates for capital gains on rental properties</a>. Your tax rate depends on several factors, such as:</p><ul><li>Income</li><li>Marital status</li><li>How long you’ve owned the property&nbsp;</li><li>If the property was a primary residence, investment property, or secondary residence&nbsp;</li></ul><p>If you need to calculate your capital gains tax, you’ll first determine your tax rate. This rate differs if you have a short-term capital gains tax or a long-term capital gains tax.</p><p><strong>2023</strong> <strong>Short-term capital gains</strong> <strong>tax rates</strong> are based on the normal income tax rate.</p><div class="rte-table-container"><table><thead><tr class="table-data-container"><td class="cell-0">Tax Rate</td><td class="cell-0">Single</td><td class="cell-0">Married Filing Jointly</td><td class="cell-0">Married Filing Separately</td><td class="cell-0">Head of Household</td></tr></thead><tbody><tr class="table-data-container"><td>10%</td><td>$0 to $11,000</td><td>$0 to $22,000</td><td>$0 to $11,000</td><td>$0 to $15,700</td></tr><tr class="table-data-container"><td>12%</td><td>$11,001 to $44,725</td><td>$22,001 to $89,450</td><td>$11,001 to $44,725</td><td>$15,701 to $59,850</td></tr><tr class="table-data-container"><td>22%</td><td>$44,726 to $95,375</td><td>$89,451 to $190,750</td><td>$44,726 to $95,375</td><td>$59,851 to $95,350</td></tr><tr class="table-data-container"><td>24%</td><td>$95,376 to $182,100</td><td>$190,751 to $364,200</td><td>$95,376 to $182,100</td><td>$95,351 to $182,100</td></tr><tr class="table-data-container"><td>32%</td><td>$182,101 to $231,250</td><td>$364,201 to $462,500</td><td>$182,101 to $231,250</td><td>$182,101 to $231,250</td></tr><tr class="table-data-container"><td>35%</td><td>$231,251 to $578,125</td><td>$462,501 to $693,750</td><td>$231,251 to $346,875</td><td>$231,251 to $578,100</td></tr><tr class="table-data-container"><td>37%</td><td>$578,126 or more</td><td>$693,751 or more</td><td>$346,876 or more</td><td>$578,101 or more</td></tr></tbody></table></div><p><strong>2023</strong> <strong>long-term capital gains tax rate</strong>s fall in a range of three percentage categories based on your income and filing status:</p><div class="rte-table-container"><table><thead><tr class="table-data-container"><td class="cell-0">Tax Filing Status</td><td class="cell-0">0% Rate</td><td class="cell-0">15% Rate</td><td class="cell-0">20% Rate</td></tr></thead><tbody><tr class="table-data-container"><td>Single</td><td>Up to $44,625</td><td>From $44,625 to $492,300</td><td>Over $492,300</td></tr><tr class="table-data-container"><td>Married filing jointly</td><td>Up to $89,250</td><td>From $89,250 to $553,850</td><td>Over $553,850</td></tr><tr class="table-data-container"><td>Married filing separately</td><td>Up to $44,625</td><td>From $44,625 to $276,900</td><td>Over $276,900</td></tr><tr class="table-data-container"><td>Head of household</td><td>Up to $59,750</td><td>From $59,750 to $523,050</td><td>Over $523,050</td></tr></tbody></table></div><h2 class="wp-block-heading">How to avoid capital gains tax when selling a rental property?</h2><p>Here are <a class="link" href="https://1800accountant.com/blog/lower-capital-gains-taxes-rental-property" target="_blank" rel="noreferrer noopener">three suggestions</a> for reducing or lowering capital gains on rental properties:</p><ul><li>1031 Exchanges</li><li>Offset Losses with Gains</li><li>Convert Your Rental to a Primary Residence</li></ul><h3 class="wp-block-heading">1031 Exchanges</h3><p>Section 1031 enables you to sell a rental property while purchasing a like-kind property. If you defer paying your capital gains taxes through a 1031 exchange, remember:</p><ul><li>You have 45 days after the property sale date to search for potential replacement properties</li><li>You have up to 180 days to close on a replacement property</li><li>If your tax return is due (with extensions) before 180 days, you need to close sooner&nbsp;</li></ul><h3 class="wp-block-heading">Offset Losses with Gains</h3><p>If you’ve had capital losses in a given tax year, consider subtracting your losses from realized capital gains on a rental property sale in an effort to offset any losses you might have.</p><h3 class="wp-block-heading">Convert Your Rental to a Primary Residence</h3><p>Convert your rental into a primary residence, and you can exclude up to $250,000 from the sale of the property or up to $500,000 if married and filing jointly. For your property to qualify as a primary residence, you must have lived in that property for two out of five years before selling. Those two years can be non-consecutive.&nbsp;If you meet the ownership and use tests under section 121 of the Internal Revenue Code, you may be able to exclude much of the gain from the sale of your main home that you also used for business or to produce rental income. However, you may not exclude gain from the sale or exchange of your main home if it's allocable to periods of nonqualified use.&nbsp;</p><h2 class="wp-block-heading">What deductions can I claim when selling a rental property?</h2><p>Many of your rental property <a class="link" href="https://1800accountant.com/blog/rental-property-tax-deductions">business expenses</a> qualify as tax deductions. Here are 10 common examples of rental property tax deductions:</p><ul><li>1. Real estate commission</li><li>2. Marketing and advertising expenses</li><li>3. Repairs and maintenance</li><li>4. Owner’s title insurance policy</li><li>5. Transfer taxes</li><li>6. Deed recording fees</li><li>7. Other closing costs</li><li>8. Home warranty costs</li><li>9. Legal and professional fees associated with the sale</li><li>10. Property taxes paid during the sale process</li></ul><p>Suppose a property serves as a principal residence prior to converting it to a rental and eventually selling it. In that case, you might be <a class="link" href="https://www.irs.gov/faqs/capital-gains-losses-and-sale-of-home/property-basis-sale-of-home-etc/property-basis-sale-of-home-etc-5" target="_blank" rel="noreferrer noopener">eligible</a> to exclude the capital gains from the sale on your tax return.&nbsp;</p><h3 class="wp-block-heading">Work with Tax Professionals&nbsp;</h3><p>Capital gains taxes on the sale of a rental property can be a complex matter to navigate. To ensure your taxes are filed properly while maximizing your deductions, consult a 1-800Accountant <a class="link" href="https://1800accountant.com/services/industry/real-estate">real estate tax professional</a>. Our accountants specialize in services for small businesses, including rental property taxation.&nbsp;</p>

What are capital gains on a rental property? Capital gains on a rental property are the profits made from selling real estate assets. When these transactions are not profitable, they’re referred to as capital losses. Special rules apply in regard to the basis for your gain or loss when an asset is received as a [&hellip;]

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Everything You Need to Know About Capital Gains Tax When Selling a Rental Property

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