<p>When you're in business for yourself, efficiency is everything. As an independent contractor, you can't afford to waste any time. You need someone else to share the load or to look over your shoulder and check your work. That goes for your bookkeeping as well!</p>



<p>Careful bookkeeping for independent contractors is essential to keep your small business healthy or sustainably grow your business. <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-crash-course-record-keeping-small-businesses">Record keeping for a small business</a> is necessary, but it can be hard to get it right when you don't have the time or professional assistance.&nbsp;</p>



<p>Your accounting needs will vary as an independent contractor, whether an electrician, a rideshare driver, or a freelancer. But whatever you do, you're effectively functioning as a small business owner, which gives you certain obligations and opportunities, and bookkeeping is crucial for all of it.</p>



<h2>What are the Differences Between an Independent Contractor and an Employee</h2>



<p>First things first: What is a contractor, and how do their needs differ from W-2 employees?&nbsp;</p>



<p>Employees work on a permanent basis for wages from their employer, and their salary is reported with a W-2. Contractors function as independent business owners, whether they contract with one larger business or multiple clients, and their payments are reported with an <a class="link" href="https://www.irs.gov/forms-pubs/about-form-1099-misc" target="_blank" rel="noreferrer noopener">IRS Form 1099</a>.&nbsp;</p>



<p>Employees may need to keep track of some things for tax preparation, but their employers are responsible for the essential records. Accounting for independent contractors, however, is a lot more complicated.&nbsp;</p>



<h2>What Accounting Methods Can an Independent Contractor Use?</h2>



<p>Independent contractor bookkeeping can be as simple as recording each transaction in a contractor <a class="link" href="https://1800accountant.com/blog/create-simple-bookkeeping-spreadsheet-business">bookkeeping spreadsheet</a>. Tracking income and expenses is the core of bookkeeping, so all you have to do is make a note of it every time you spend or receive money. </p>



<p>Logging every transaction in a general ledger, whether on paper or in a spreadsheet, is called single-entry bookkeeping and is the most basic method of accounting. It's sufficient for smaller operations, but if your business gets a little bigger or more complex, you may need to move to double-entry bookkeeping.&nbsp;</p>



<p>In <a class="link" href="https://www.investopedia.com/ask/answers/022615/what-double-entry-bookkeeping-and-how-does-it-work-general-ledger.asp" target="_blank" rel="noreferrer noopener">double-entry bookkeeping</a>, every transaction requires you to make two entries in your records. For example, when you make a sale, you would make one entry for the increase in revenue and one for the decrease in inventory. A single spreadsheet is no longer enough, and you may want to invest in accounting software to help you manage your books.&nbsp;&nbsp;&nbsp;&nbsp;</p>



<h2>Importance of Tracking Expenses as an Independent Contractor</h2>



<p>While it may seem like income is the first thing you want to follow with your independent contractor record-keeping process, expenses are the key. It's good to know how much money you're making, but it's also crucial to understand how much you're spending and where.</p>



<p>The more informed you are about what’s happening in your business, the better prepared you are for tax filing and even for everyday business decisions. Independent contractor expense tracking is necessary for a lot of essential accounting purposes:&nbsp;</p>



<ul>
<li><a class="link" href="https://1800accountant.com/blog/prepare-file-small-business-tax-return">Preparing and filing tax returns </a></li>



<li><a class="link" href="https://1800accountant.com/blog/maximize-small-business-tax-deductions">Maximizing tax deductions </a></li>



<li>Producing financial statements for investors</li>



<li>More informed long-term planning&nbsp;</li>



<li><a class="link" href="https://1800accountant.com/blog/cash-flow-management">Managing cash flow</a> </li>
</ul>



<h2>6 Examples of What to Keep Track of as an Independent Contractor</h2>



<p>Expenses are just one of the things you should be keeping track of with your independent contractor bookkeeping. Here are the <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-30-common-bookkeeping-terms">critical standard bookkeeping terms</a> you should be familiar with, and they should be your top priorities on the list of what to keep track of as an independent contractor.&nbsp;</p>



<h3>Revenue</h3>



<p>It should go without saying, but you certainly want to be keeping track of your revenue. How much money are you bringing in, and how? Do certain goods and services bring in much more revenue than others?&nbsp;&nbsp;&nbsp;</p>



<h3>Business Expenses</h3>



<p>While this has been mentioned already, keep track of all your business expenses. Doing so is especially important when it comes to bookkeeping for taxes since most business expenses will be tax deductible when it comes time to file.&nbsp;</p>



<h3>Profit</h3>



<p>If you track your revenue and expenses, you can now start monitoring your profit which is the bread and butter of bookkeeping for independent contractors. How much money are you making once you factor out your expenses? Tracking profitability lets you monitor and plan based on your profit margins over time.&nbsp;</p>



<h3>Tax Payments&nbsp;</h3>



<p>Tax payments are a specific category of expenses, and keeping track of them is essential. For one thing, you need to know where your money is going and when. As an independent contractor, you also need to track these payments to make sure they happen.&nbsp;</p>



<p>You should be paying payroll taxes, which include social security, medicare, and self-employment taxes. You also need to be paying <a class="link" href="https://www.sba.gov/blog/quarterly-taxes-basics" target="_blank" rel="noreferrer noopener">quarterly estimated income taxes</a> throughout the year. Keep track of these payments so you can be sure these payments happen on time.&nbsp;</p>



<h3>Accounts Payable</h3>



<p>Accounts payable refers to scheduled or planned expenses that have not yet occurred. Perhaps you owe the money, but the money has yet to leave your bank account. Good bookkeeping requires knowing how much money you owe and how much you have on hand at any given time.&nbsp;</p>



<h3>Accounts Receivable</h3>



<p>Accounts receivable refers to expected payments that still need to be completed. If you sell goods or services to a client on credit, those transactions will be identified in accounts receivable until you receive the cash for that purchase.&nbsp;</p>



<h2>Work With Our Certified Bookkeepers so You Can Focus on Your Business</h2>



<p>You don’t have to manage the bookkeeping all by yourself. Bookkeeping for independent contractors can be challenging and complex. It helps to consult with an accounting professional to help you set up your accounting system and establish a process for maintaining appropriate records.&nbsp;Making it up as you go is a recipe for disaster. Invest in bookkeeping services on the front end and help your freelance hustle to be efficient and thorough with its records right from the start. Find out what 1-800Accountant can do to <a class="link" href="https://1800accountant.com/services/bookkeeping">guide and improve your bookkeeping</a>.</p>

When you&#8217;re in business for yourself, efficiency is everything. As an independent contractor, you can&#8217;t afford to waste any time. You need someone else to share the load or to look over your shoulder and check your work. That goes for your bookkeeping as well! Careful bookkeeping for independent contractors is essential to keep your [&hellip;]

Top-down view of a workspace with documents, hands using a calculator, and a bold text overlay reading "bookkeeping for independent contractors.

Bookkeeping-for-Independent-Contractors

Bookkeeping for Independent Contractors: 6 Tips to Keep in Mind

<p>If you’ve been building a side hustle as an Etsy seller, and you’re wondering, “do I have to report Etsy income on my taxes?” you’ve come to the right place. Etsy is home to many artists and craftspeople selling their goods online – but you need to remember to report Etsy income when it’s time to file your returns. Some people work full-time as online sellers, making and distributing their products through online marketplace facilitators like Etsy, while others may only do it as a hobby in their spare time.</p><p>Whichever of those categories you fall into, you should be proud of yourself for the work you’ve put into becoming a small business owner. It’s not easy to find an audience and carve out a niche in the crowded world of internet commerce.</p><p>Whether you’re aware of it or not, you’re running a small business! That’s not a simple feat. And all of the money you make through selling your goods is income you’re earning as a self-employed <a class="link" href="https://1800accountant.com/blog/business-entity-sole-proprietorship">business owner of your sole proprietorship</a>.&nbsp;</p><p>Of course, running a business and earning income carry their own obligations, unfortunately. If you haven’t made very many Etsy sales yet, or if most of your income overall comes through an employer, your Etsy income is unlikely to have any effect on your situation for the tax year. However, you are required to report Etsy income to the IRS.&nbsp;</p><p>Do your due diligence to make sure you’re following the rules and avoiding any potential pitfalls! Here’s the process for reporting this income.</p><h2 class="wp-block-heading" id="h-lookout-for-form-1099-k-to-report-etsy-income"><strong>Lookout for Etsy Form 1099-K to Report Business Income</strong></h2><p>As the platform is processing your sales, Etsy is required to report those sales and give you a record of your overall income if you meet certain minimum sales amounts. Etsy will create and provide this report to you on form 1099-K. Receiving this tax form is the first important indicator that you will need to file all of your Etsy income on your tax return.&nbsp;</p><h2 class="wp-block-heading" id="h-what-is-a-1099-k">What is a 1099-K Form?</h2><p>The <a class="link" href="https://www.irs.gov/businesses/understanding-your-form-1099-k" target="_blank" rel="noreferrer noopener">IRS form 1099-K</a> is simply a report of the total gross sales that were paid to you on a platform. You might not have seen that same number released to you, depending on what the platform takes.&nbsp;</p><p>Etsy and similar platforms are required to create a 1099-K if you made more than a certain amount of online sales or received more than a set amount of money in business income. When they submit a 1099-K, they submit it simultaneously to you, the marketplace seller, and to the government. That means both you and the IRS are informed about the income you should be reporting on your taxes.</p><h3 class="wp-block-heading" id="h-can-you-deduct-business-expenses-when-you-report-etsy-income">Can you Deduct Business Expenses When You Report Etsy Income?&nbsp;</h3><p>You're required to report Etsy income on your income tax return. However, the good news is that you can claim deductions for business expenses as well. Because your Etsy shop is effectively a small business, you can deduct from your taxable income costs associated with operating your business.</p><p>Here are a few <a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">self-employment deductions</a> you may be able to claim as an Etsy merchant:&nbsp;</p><ul><li>Platform fees</li><li>Marketing costs</li><li>Supplies and materials used for making your products or running your business</li><li>A portion of rent/mortgage/utility costs if you <a class="link" href="https://1800accountant.com/blog/home-office-deduction">qualify for a home office deduction&nbsp;</a></li><li>Other professional fees and subscription costs, including continuing education and skill development&nbsp;</li><li>Healthcare premiums if you are not eligible for healthcare through an employer or a spouse&nbsp;</li><li>Retirement savings contributions&nbsp;</li><li>Self-employment taxes for Social Security and Medicare</li></ul><h2 class="wp-block-heading" id="h-what-taxes-do-etsy-sellers-pay">What Taxes Do Etsy Sellers Pay?&nbsp;</h2><p>Everything explained so far above has to do with income tax, which is the largest tax you’re responsible for as an individual taxpayer in the United States. However, there are a couple of separate but related taxes and tax issues that you should be aware of.&nbsp;</p><h3 class="wp-block-heading" id="h-self-employment-tax">Self-Employment Tax</h3><p>If you earn wages through an employer, you’re probably used to having a part of your salary withheld to pay for income taxes and something called FICA. Employers withhold 7.65% of your income to pay into Social Security and Medicare on your behalf, and then they pay another 7.65% of your income out of their money but in your name.&nbsp;</p><p>The self-employment tax refers to this second 7.65% which is usually paid by the employer. If you are in business for yourself, then you are responsible for paying both halves for a total of 15.3%.&nbsp;&nbsp;</p><h3 class="wp-block-heading" id="h-quarterly-estimated-taxes">Quarterly Estimated Taxes</h3><p><a class="link" href="https://1800accountant.com/services/quarterly-estimated-taxes">Quarterly estimated taxes</a> are actually a part of your taxable income obligations, but they’re also something you might not be used to if you’re accustomed to working for an employer.&nbsp;</p><p>Income taxes in the United States must be paid as you earn throughout the year and not at the end of the year. Employers usually handle this on their employees’ behalf. However, if you make most or all of your money as an independent small business, you will need to do this yourself.&nbsp;</p><p>You can pay your taxes as you go by making quarterly estimated tax payments. You estimate the total taxes you will owe, and then you pay a quarter of it at a time. The IRS sets four annual deadlines for these four tax installments. The four quarterly estimated tax deadlines are:&nbsp;</p><ul><li>First quarter tax deadline: April 15</li><li>Second quarter tax deadline: June 15</li><li>Third quarter tax deadline: September 15</li><li>Fourth quarter tax deadline: January 15 of the following year&nbsp;</li></ul><h3 class="wp-block-heading" id="h-sales-tax">State Sales Tax</h3><p>On top of the income and income-related taxes, Etsy sellers also have to be concerned about state sales tax. This is a tax on the customer transactions themselves, and the laws on these are set entirely at the state level.&nbsp;</p><p><a class="link" href="https://1800accountant.com/blog/etsy-store-sales-tax">Etsy store sales tax rules are complicated</a> because it depends on where each customer is located and the relationship your business has with that state. You must pay sales tax on purchases made in states where your business has a significant presence or “nexus” of business activity.&nbsp;</p><p>This means that if a single customer from a state buys a product of yours, and you aren’t located there, you probably won’t owe sales tax there. However, if you start selling to more customers there, you will likely have to remit some sales tax money to that state. Exact minimum requirements and sales tax percentages vary depending on the state.&nbsp;</p><p>Etsy and other similar online platforms have the infrastructure to collect and remit sales tax, but they don’t always do it automatically if you don’t instruct them to. Make sure you’re getting the right taxes taken out of your sales.&nbsp;&nbsp;</p><h2 class="wp-block-heading" id="h-1-800accountant-makes-reporting-etsy-income-a-breeze">1-800Accountant Makes Reporting Etsy Income a Breeze</h2><p>There are numerous requirements and challenges that come with <a class="link" href="https://1800accountant.com/services/small-business-taxes">doing small business taxes</a> and reporting Etsy income, but you don’t have to figure it out on your own. Work with a professional from 1-800Accountant and ensure that you’ll be prepared when tax season comes around.&nbsp;</p><p>An expert ecommerce tax accountant can make filing your tax return a simple and efficient process, and you’ll be able to rest easy knowing that you’re saving as much money as possible. Get help from an <a class="link" href="https://1800accountant.com/services/industry/ecommerce">Etsy accounting professional</a> and focus on the creative work you do that earned you this income in the first place!</p>

If you’ve been building a side hustle as an Etsy seller, and you’re wondering, “do I have to report Etsy income on my taxes?” you’ve come to the right place. Etsy is home to many artists and craftspeople selling their goods online – but you need to remember to report Etsy income when it’s time [&hellip;]

A person in a yellow sweater packaging a handmade soap bar at a craft table surrounded by various natural ingredients and materials.

report-etsy-income

How to Report Etsy Income to the IRS

<p>Influencers are tastemakers who shape what their dedicated audiences will embrace or avoid. In some industries, an influencer's word can mean much more than a celebrity spokesperson or a famous athlete, which isn't lost on companies engaged in a tight battle for consumer dollars.<br><br>The influx of money, access, and power to this emerging industry has turned hobbyists into professionals overnight. Whether it's what they signed up for or not, influencing can be a real business that comes with real responsibilities. And if you shirk those responsibilities related to your income or aren't proactive about it, IRS penalties and scrutiny could follow.<br><br>Whether you're an established influencer or a hobbyist aspiring to become one, use this guide for influencer taxes to help you with filing taxes as an influencer during the upcoming tax season.&nbsp;</p>



<h2>Do Influencers Pay Taxes?</h2>



<p>If you're earning money from your efforts as an influencer, <a class="link" href="https://1800accountant.com/blog/influencer-accounting">you must pay taxes</a> on that income.&nbsp;<br>Like other professions, the amount of money you make will dictate how you file with the IRS.<br><br>Influencers typically work for themselves, so they are subject to a self-employment tax (SE tax) and an income tax. If you're an influencer making more than $600 per year, you must file Form 1099-NEC with the IRS. If you're making below that amount, you can file a Form 1040 with the IRS on your income tax return.&nbsp;<br></p>



<p>Remember that this is related to the money you bring in, not gifts or product samples you might receive. However, there are instances where you might have to report gifts and samples to the IRS.</p>



<h2>Do Influencers Pay Taxes on Gifts?</h2>



<p>Influencers regularly receive product samples and review materials from companies that wish to make inroads with a particular audience. The IRS views these materials as "gifts" on which you might have to pay taxes.</p>



<p>When a brand gifts a product and the value exceeds $100, you must include that in your tax filing to the IRS. If the total value of the product is less than $100, you do not need to declare this when filing your taxes. </p>



<p>It's important that influencers keep detailed records of every gift received and its value to avoid, this will help avoid stress during tax season. Remember brands often do not disclose the value of their gifts, and it's up to the influencer to declare during tax season. </p>



<h2>Do Influencers Need an LLC?</h2>



<p>Whether you need an LLC or not depends on timing. If you're starting and haven't cleared the $600 income threshold yet, it's best to wait.<br></p>



<p>But if the income from your influencer business is growing, it might be time to seriously consider making your business official by forming an LLC. But there are several different business entities for influencers to consider.&nbsp;</p>



<h2>What are the Different Influencer Business Entities?</h2>



<p>There are three main business entities influencers should consider forming as:</p>



<ul>
<li>Sole proprietorship</li>



<li>Independent contractor</li>



<li>LLC</li>
</ul>



<h3>Sole Proprietorship</h3>



<p>A sole proprietor is a self-employed individual who owns and operates a business. Influencers who form a sole proprietorship file their taxes using their personal income tax return and social security number.&nbsp;</p>



<p>Influencers will use <a class="link" href="https://www.irs.gov/forms-pubs/about-schedule-c-form-1040" target="_blank" rel="noreferrer noopener">Form 1040 and the Schedule C</a> supplement to disclose income and losses from their businesses.<br></p>



<h3>Independent Contractor</h3>



<p>There are similarities between sole proprietorships and independent contractors, with an important distinction. Independent contractors work for others on a contractual basis. Doctors and lawyers often operate as independent contractors, and influencers certainly can too.<br><br>The businesses influencers collaborate with will send a Form 1099 at the end of the fiscal year. This form will illustrate the exact amount of money you made that year working with that business or brand.&nbsp;</p>



<h3>LLC</h3>



<p>Forming as an LLC introduces influencers to a more formal business entity registered with their state.&nbsp;</p>



<p>Influencers who form an LLC enjoy simplicity and flexibility in taxing and protecting their personal assets, shielding them from business liabilities.<br><br>Once they form an LLC, Influencers will have 75 days to select a different business structure for their new company, such as an S corporation. They can also opt to stay as an LLC.&nbsp;&nbsp;</p>



<h2>Top five influencer tax write-offs</h2>



<p>There are several tax deductions influencers may be able to utilize. Some of the most popular deductions for influencers include:&nbsp;</p>



<h3>Work Phone</h3>



<p>Your phone bill is partially deductible if you're using it for work activities. Itemize work calls on your bill and provide a brief explanation of each charge.&nbsp;</p>



<h3>Office Supplies</h3>



<p>Stationery, photocopies, monitors, and more are tax deductible if used for business-related purposes.&nbsp;</p>



<h3>Business Website</h3>



<p>Your business's website hosting fee and associated assets, such as stock photos or a web theme, are tax-deductible.</p>



<h3>Advertising</h3>



<p>Your budget for ads, such as those found on social media and in search results, is tax-deductible for your business.</p>



<h3>Internet Access</h3>



<p>Accessing the internet is essential to most influencers' jobs, and you can write that recurring bill off.&nbsp;</p>



<h2>Work with experts that specialize in influencer taxes.</h2>



<p><a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">Influencer accounting</a> can be complicated, and choosing the right path to keep the most money in your pocket can be agonizing. That's why so many influencers decide to work with 1-800Accountant, America's leading virtual accounting firm for small business owners just like you. Our team of experts who specialize in working with influencers in your state will provide <a class="link" href="https://1800accountant.com/services/business-tax-advisory">periodic advisory</a> and a year-round strategy to maximize your tax savings. Working with 1-800Accoutant allows you to continue influencing while we handle the rest. All it takes is a quick call to get started!</p>

Influencers are tastemakers who shape what their dedicated audiences will embrace or avoid. In some industries, an influencer&#8217;s word can mean much more than a celebrity spokesperson or a famous athlete, which isn&#8217;t lost on companies engaged in a tight battle for consumer dollars. The influx of money, access, and power to this emerging industry [&hellip;]

Young man creating a video for his influencer business.

Influencer-Taxes-Everything-You-Need-to-Know

Influencer Taxes: Everything You Need to Know to Navigate Tax Season

<p>While most people don't think of tax season as an exciting time to look forward to, it doesn't have to be something you dread. You'll be okay if you know what you're getting into and prepare. And there's no better time to prepare than right now, especially as we start approaching the end of the year.&nbsp;</p>



<p>If you wait until the following year to gather your records and tax data, you will make it much harder for yourself than it needs to be. You can do a lot in your year-end accounting to optimize your tax savings, <a class="link" href="https://www.sba.gov/business-guide/manage-your-business/pay-taxes" target="_blank" rel="noreferrer noopener">prepare to pay taxes in April</a>, and improve your planning and accounting overall.&nbsp;&nbsp;</p>



<p>Use your time while you’ve got it in 2022. Find out more and develop a small business year-end accounting checklist for your company to use this December.</p>



<h2>What is Year-End Accounting?</h2>



<p>For your 2022 tax return, you are only responsible for your income and expenses between January 1, 2022, and December 31, 2022. So as the end of the 2022 tax year gets closer, you are approaching your final chance to change how you calculate your taxable income.</p>



<p>End-of-year accounting is about the specific management and bookkeeping involved in preparing your company's accounts for the end of the fiscal year. Whether a business owner or a tax professional, the year's end is essential for attending to company finances.</p>



<h2>When Does the Accounting Year End?</h2>



<p>The accounting year may vary for each different business owner. Most businesses follow the calendar year, which means their accounting year begins on January 1 and ends on December 31. Other companies may have their 12-month fiscal year adapted for their schedule.</p>



<h2>Why Should Small Businesses Create a Year-End Accounting Checklist?</h2>



<p>The end of the year is an excellent time to be proactive in managing your tax bill. You can do a lot in year-end preparation to ease your tax burden and take control of your liability before you’ve closed the books for 2022.&nbsp;</p>



<p>Developing an accounting checklist and going through it with your staff or an accountant will set your business up for success in the tax season and the new tax year ahead. You can close out the tax year on your terms and prepare yourself to shift into the next one.&nbsp;</p>



<p>If you take a step back to planning at these natural transition times, you'll always react at the moment instead of deliberately moving toward the future. Keeping an end-of-year checklist for small business owners makes planning an intentional part of your year.</p>



<h2>6 Items to Include in Your Small Business Year-End Checklist</h2>



<p>You’re taking the time to make sure your company is in good financial shape for the next year with your year-end accounting checklist, but where do you start? Here are some critical items you should attend to as you wrap up the year.</p>



<ul>
<li>Tax deductions</li>



<li>Review and close out records for the year</li>



<li>Ensure you’re paying your quarterly estimated taxes</li>



<li>Estimate your tax liability</li>



<li>Get organized for the new year</li>



<li>Consult a tax professional</li>
</ul>



<h3>1. Maximize Your Deductions&nbsp;</h3>



<p>Tax deductions are an essential piece of your year-end accounting checklist. Claiming all your tax-deductible expenses will make a significant difference on your small business tax return, and all of those expenses need to happen before the accounting year ends.&nbsp;</p>



<p>Schedule your business expenses before the end of December if you want to be able to deduct them from your taxable income. On the other hand, you could postpone significant expenses until January if you expect to have more revenue to offset in the coming year.&nbsp;</p>



<h3>2. Review Your Books for the Year</h3>



<p>Your year-end closing process is about closing the books on the previous year's finances to be prepared for tax season. To get there, your bookkeeping for the last year needs to be thorough and complete.&nbsp;</p>



<p>Group similar transactions and set apart any major purchases made throughout the year. Identify refunds, income, and owner contributions. You should have a complete accounting of all your assets and liabilities, including accounts receivable and accounts payable that haven’t been processed yet, like unpaid debts or outstanding invoices. Double-check and update your inventory count of unsold goods.</p>



<p>Be sure to revisit and sort through these financial statements, too. If you let months go by before you go over these files, you will need to remember more to do this accurately and efficiently.</p>



<p><a class="link" href="https://1800accountant.com/services/bookkeeping">Bookkeeping for your small business</a> may initially seem manageable, but it can quickly become overwhelming. If you're struggling, reach out for assistance before submitting your information for tax preparation.&nbsp;</p>



<h3>3. Pay Quarterly Taxes</h3>



<p>Your year-end checklist should also remind you to<a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/estimated-taxes"> stay current on your quarterly estimated taxes</a>. These are pre-payments to your tax bill based on what you expect to owe in a final accounting.&nbsp;</p>



<p>Here are the quarterly estimated tax deadlines:&nbsp;</p>



<ul>
<li>Quarter 1 Deadline: April 15</li>



<li>Quarter 2 Deadline: June 15</li>



<li>Quarter 3 Deadline: September 15</li>



<li>Quarter 4 Deadline: January 15 of the following year</li>
</ul>



<p>It's better to pay more in estimated taxes than underpay. If you underestimate what you owe, you could leave yourself with a large tax balance at the end of the year and get hit with underpayment penalties. Ensure your business is tax compliant by working with a <a class="link" href="https://1800accountant.com/services/quarterly-estimated-taxes">quarterly estimated tax expert</a>.  </p>



<h3>4. Estimate Your Liability Ahead of Time</h3>



<p>Another crucial step in year-end closing accounting is to estimate what you’ll end up owing on your final return. Knowing more or less how much you’ll owe in advance can help you prepare for filing and paying.&nbsp;</p>



<p>Spend time calculating your total gross receipts. Overstated receipts lead to paying unnecessary taxes, while understated income numbers can mean penalties with the IRS further down the road. You don’t want either to happen to you. You can work off of your tax records from previous years to get started.&nbsp;</p>



<p>Plan for a year-end accountant consultation to ensure you're on top of all your income streams and possible deductions. You'll need all of that information to get an accurate estimate of your final liability.</p>



<h3>5. Get Organized for the Next Year</h3>



<p>Ending a year is like completing a chapter in your life or the life of your business. You can close that chapter and begin a new one in a way that sets you up for success with organized recordkeeping.&nbsp;</p>



<p>Use your year-end accounting checklist to ensure you're ready for the new year. It's the perfect time to make significant changes to your process, try out new accounting software, or <a class="link" href="https://1800accountant.com/blog/accounting-trends">update your system with other recent accounting trends</a>.&nbsp;</p>



<h3>6. Check in with an Expert Accountant</h3>



<p>Be sure to set up an appointment with a professional before the last minute in April. Take the time now to consult with your accountant on how to do year-end accounting for your business.&nbsp;</p>



<p>It is an excellent opportunity to get ahead of the game and ensure you're as informed and prepared as possible with your year-end accounting checklist. Consulting with your accountant for year-end planning is a smart way to ensure you cover your bases.&nbsp;However you decide to proceed, your company’s finances are in your hands. It takes time to <a class="link" href="https://1800accountant.com/services/small-business-taxes">get your small business taxes done right</a>, and there’s no better time than the present to invest in future savings.</p>

While most people don&#8217;t think of tax season as an exciting time to look forward to, it doesn&#8217;t have to be something you dread. You&#8217;ll be okay if you know what you&#8217;re getting into and prepare. And there&#8217;s no better time to prepare than right now, especially as we start approaching the end of the [&hellip;]

A calendar highlighting the importance of year end accounting.

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Year-End Accounting Checklist for Small Business Owners

<span style="font-weight: 400;">There are more ways to be a </span><span style="font-weight: 400;">self-employed personal trainer</span><span style="font-weight: 400;"> today than ever. You could be a </span><span style="font-weight: 400;">traveling personal trainer</span><span style="font-weight: 400;">, coach, or contractor for a larger fitness organization or even offer online training services!</span>

<span style="font-weight: 400;">Whatever your work looks like, you've put in tremendous time, money, and labor to make that work possible. When you're working for yourself, there's no one else but you to set up the structure and support your work.</span>

<span style="font-weight: 400;">Fortunately, there are </span><span style="font-weight: 400;">tax deductions for fitness professionals</span><span style="font-weight: 400;"> that will recognize your massive effort and expense. Explore this guide to </span><span style="font-weight: 400;">personal trainer tax deductions</span><span style="font-weight: 400;"> and ensure you get the tax savings you're eligible for.</span>
<h2><span style="font-weight: 400;">Can I Deduct Personal Trainer Expenses</span><span style="font-weight: 400;">?</span><b> </b></h2>
<span style="font-weight: 400;">You can deduct business expenses from your taxable income as a self-employed personal trainer, which is a crucial part of your </span><span style="font-weight: 400;">personal trainer taxes</span><span style="font-weight: 400;">. Money used to support your business shouldn't count as taxable profit. </span>

<span style="font-weight: 400;">Consider working with a professional if you’re concerned about deductions or you’ve never done your taxes before. The stakes are high, and you may </span><a class="link" href="https://1800accountant.com/blog/reasons-you-need-accountant-self-employment"><span style="font-weight: 400;">need an accountant to help you with your self-employed tax return</span></a><span style="font-weight: 400;"> before </span><span style="font-weight: 400;">tax time</span><span style="font-weight: 400;"> arrives.   </span>
<h2><span style="font-weight: 400;">5 Deductions You Can Claim as a Personal Trainer or Fitness Coach</span></h2>
<span style="font-weight: 400;">You can claim deductions for many of the costs of doing business as a personal trainer or fitness coach. Here are a few of the significant </span><span style="font-weight: 400;">tax deductions for personal trainers</span><span style="font-weight: 400;"> you can take advantage of:</span>
<h3><span style="font-weight: 400;">1. Exercise Equipment and Supplies</span></h3>
<span style="font-weight: 400;">Personal trainers often work with their clients using various equipment, from hand weights to treadmills and elliptical machines. If you purchase this equipment for your small business on your own, you should claim a tax deduction for it. </span>

<span style="font-weight: 400;">If you see clients in a training room, you should be able to write off any </span><span style="font-weight: 400;">personal training</span><span style="font-weight: 400;"> equipment costs incurred as business expenses. However, you can’t deduct expenses for your home gym if you don’t use it for a business-related purpose.</span>
<h3><span style="font-weight: 400;">2. Certification &amp; Education Costs</span></h3>
<span style="font-weight: 400;">Personal trainers</span><span style="font-weight: 400;"> can deduct all expenses for required licensing and continuing education, including obtaining official certificates or maintaining your expertise. </span>

<span style="font-weight: 400;">You can deduct expenses for business-related books, supplies, and subscriptions to fitness websites, publications, or journals relevant to your field. Plus, you can deduct specific membership fees if you belong to a professional association.</span>
<h3><span style="font-weight: 400;">3. Office Costs</span></h3>
<span style="font-weight: 400;">Where do you conduct your work? If you rent a gym or </span><span style="font-weight: 400;">office space</span><span style="font-weight: 400;">, all costs associated with that space can be claimed as </span><span style="font-weight: 400;">deductions on your taxes</span><span style="font-weight: 400;">. </span>

<span style="font-weight: 400;">If you keep a </span><span style="font-weight: 400;">home office</span><span style="font-weight: 400;"> where you </span><span style="font-weight: 400;">train clients</span><span style="font-weight: 400;"> in your own space, you can claim a corresponding portion of your home rent and utility costs, assuming that the home office space is used exclusively for business purposes.</span>

<span style="font-weight: 400;">Other varied office-related expenses are also deductible, including anything from paper and staplers to printer ink and accounting software.</span>
<h3><span style="font-weight: 400;">4. Travel Expenses</span></h3>
<span style="font-weight: 400;">If you travel to seminars, conferences, or events for personal trainers, you can claim your travel and hotel costs as part of your personal </span><span style="font-weight: 400;">trainer tax deductions</span><span style="font-weight: 400;">. </span>

<span style="font-weight: 400;">When traveling out of town for work or driving long distances to </span><span style="font-weight: 400;">training sessions</span><span style="font-weight: 400;">, you can also write off mileage on your personal vehicle. When you write off mileage, you can either add up actual vehicle expenses or </span><a class="link" href="https://www.irs.gov/tax-professionals/standard-mileage-rates" target="_blank" rel="noopener"><span style="font-weight: 400;">use the standard mileage rate set by the IRS</span></a><span style="font-weight: 400;">. </span>
<h3><span style="font-weight: 400;">5. Liability &amp; Health Insurance Premiums</span></h3>
<span style="font-weight: 400;">Tax deductions for athletic coaches</span><span style="font-weight: 400;"> and trainers include insurance. If you pay your liability insurance, that's a tax-deductible expense. Self-employed trainers can also claim </span><span style="font-weight: 400;">health insurance</span><span style="font-weight: 400;"> premiums as business expenses. </span>

<span style="font-weight: 400;">You can also deduct uninsured </span><span style="font-weight: 400;">medical expense</span><span style="font-weight: 400;">s, but they're not business expenses, which means you can only claim them if you're itemizing your personal deductions.</span>
<h2><span style="font-weight: 400;">What Else Qualifies as Tax-Deductible Expenses?</span></h2>
<span style="font-weight: 400;">What can I deduct from my taxes</span><span style="font-weight: 400;"> for my </span><span style="font-weight: 400;">fitness business</span><span style="font-weight: 400;">? You should be able to claim deductions for nearly any </span><span style="font-weight: 400;">business expense</span><span style="font-weight: 400;"> you can justify as being necessary for your work. However, this only applies to your </span><span style="font-weight: 400;">self-employed personal trainer taxes</span><span style="font-weight: 400;">. If you are a W-2 employee, you can only claim personal deductions if you are itemizing your deductions. </span>
<h2><span style="font-weight: 400;">How to Claim </span><span style="font-weight: 400;">Personal Trainer Tax Deductions</span></h2>
<span style="font-weight: 400;">As you </span><a class="link" href="https://1800accountant.com/blog/how-to-file-taxes-independent-contractor"><span style="font-weight: 400;">prepare to file taxes as an independent contractor</span></a><span style="font-weight: 400;">, keeping careful records of your </span><span style="font-weight: 400;">income and expenses</span><span style="font-weight: 400;"> is the most important thing. You need receipts testifying to the business expenses you'll be claiming. </span>

<span style="font-weight: 400;">You'll fill out your 1040 personal tax return as usual, and here you can claim the standard deduction or itemize your personal deductions. Then you'll move on to </span><a class="link" href="https://www.irs.gov/forms-pubs/about-schedule-c-form-1040" target="_blank" rel="noopener"><span style="font-weight: 400;">IRS 1040 Schedule C, Profit or Loss from Business</span></a><span style="font-weight: 400;">, which is the form you'll use to report your personal business income and deductions. Your business expenses count as losses associated with that business.   </span>

<span style="font-weight: 400;">Don’t hesitate to seek help from an accountant as you work on putting together your small business tax return. </span>
<h3><span style="font-weight: 400;">How We Can Help You Maximize Your Tax Deductions</span></h3>
<span style="font-weight: 400;">For more <a class="link" href="https://1800accountant.com/services/small-business-taxes">help with your small business taxes</a> and finding personal trainer tax deductions, turn to the accounting experts at 1-800Accountant. Whether you're a small business owner or a self-employed individual working on your <a class="link" href="https://1800accountant.com/services/industry/freelancer-self-employed">personal trainer tax return</a>, we can help you keep more of the money you work hard to make.</span>

There are more ways to be a self-employed personal trainer today than ever. You could be a traveling personal trainer, coach, or contractor for a larger fitness organization or even offer online training services! Whatever your work looks like, you&#8217;ve put in tremendous time, money, and labor to make that work possible. When you&#8217;re working [&hellip;]

Young woman performing a back squat with her personal trainer there for support.

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Getting Financially Fit: Top 5 Personal Trainer Tax Deductions

<p>For business owners, equity is a vital tool that you can use to your advantage. There are different equity types that serve different purposes within your business. Here’s an overview of what equity is and how to calculate equity in a business.</p>



<h2>What does equity mean in business?&nbsp;</h2>



<p>Equity comprises the net value of a business; it’s the result of a company's assets minus its liabilities. The bookkeeping term <a class="link" href="https://1800accountant.com/blog/common-bookkeeping-terms">equity</a> is important because it gives you an idea of:&nbsp;</p>



<ul><li>How much the shareholders would receive if they sold their stake in the company&nbsp;</li><li>Money left over for shareholders following asset liquidation and debt repayment</li><li>The net value of a business</li></ul>



<p>For businesses, equity can have multiple meanings for the value of their finances. Equity can refer to:&nbsp;</p>



<ul><li>Balance sheet</li><li>Liquidation</li><li>Real estate&nbsp;</li><li>Stocks&nbsp;</li></ul>



<p>When referencing the<a class="link" href="https://1800accountant.com/blog/bookkeeping-101-what-is-a-balance-sheet"> balance sheet</a>, equity refers to the total of common stock, paid-in capital, preferred stock, and retained earnings. This form of equity is shareholders’ equity.</p>



<p>Equity from liquidation is what remains following a business's bankruptcy and liquidation.&nbsp;</p>



<p>This form of equity is ownership equity. If your business is in a poor financial state before liquidation, there’s a chance that there won’t be ownership equity following debt repayment.</p>



<p>The third variation of equity in business is real estate. In this instance, equity is what remains after deducting the fair market value of your property from the balance you owe on your mortgage.</p>



<p>Finally, when referring to stocks, equity refers to the ownership interest that a business has. Investors can buy equity shares either as common stock or preferred stock. With stocks, equity represents the amount investors can receive as cash for the share.</p>



<h2>What are the different types of equity?</h2>



<p>Businesses use different types of equity, which illustrate what business owners, investors, and shareholders can learn about your company.&nbsp;</p>



<p>There are <a class="link" href="https://www.investopedia.com/ask/answers/012115/what-are-components-shareholders-equity.asp" target="_blank" rel="noreferrer noopener">multiple equity types</a> that a business may use to determine its value:</p>



<ul><li>Common stock&nbsp;</li><li>Negative equity</li><li>Positive equity</li><li>Preferred stock</li><li>Retained earnings&nbsp;</li><li>Treasury stock</li></ul>



<p>Common stock indicates that a person owes shares in a corporation. These shareholders represent an ownership stake in a company that allows them to receive profits from its operations.&nbsp;</p>



<p>Common stock shareholders receive distributions made by the company through dividends or stock repurchases. As a common stock shareholder, you can:&nbsp;</p>



<ul><li>Elect board members with one vote per share&nbsp;</li><li>Meet with other investors to elect board members</li><li>Vote on major decisions affecting your business, including who sits on its board and what projects it pursues&nbsp;</li></ul>



<p>Preferred stock differs from common stock with dividends and voting procedures:</p>



<ul><li>Preferred stock has a set dividend rate, which can be fixed or variable based on company performance&nbsp;</li><li>These shareholders aren’t able to vote to elect a board of directors or for major company decisions</li><li>This type of stock also allows you to participate in distributions made by the company through dividends or stock repurchases</li></ul>



<p>Businesses can experience positive equity or negative equity. Negative equity is an indicator that a company has more liabilities than assets. Positive equity indicates that a company has sufficient assets to pay its liabilities.</p>



<p>Retained earnings are the percentage of net earnings not paid to shareholders as a dividend. Businesses can use these earnings to pay debts or to reinvest.</p>



<p>Treasury stock represents the number of shares that a business repurchases from investors. On a balance sheet, you’ll list this stock as a negative number within the equity section.</p>



<h2>How To Calculate Business Equity in Accounting</h2>



<p>Businesses can calculate equity accounting in a few steps:&nbsp;</p>



<ul><li>Calculate your total assets&nbsp;</li><li>Calculate your total liabilities&nbsp;</li><li>Subtract your total assets from your total liabilities&nbsp;</li></ul>



<p>To calculate what is equity in business, you first need to determine the value of all the assets:</p>



<ul><li>This includes current assets and long-term assets&nbsp;</li><li>Current assets are assets you can convert to cash in a year or less</li><li>Long-term assets are assets that can’t be converted to cash within one year</li></ul>



<p>Next, you’ll subtract assets from all of your liabilities:&nbsp;</p>



<ul><li>This includes current liabilities and long-term liabilities&nbsp;</li><li>Current liabilities are debts owed within one year</li><li>Long-term liabilities are debts that can’t be paid within one year</li></ul>



<p>The resulting number is equity.</p>



<p>Here’s an example of equity: A small business has total assets of $3 million and total liabilities of $500,000. From this, you would deduct the $3 million in total assets from the $500,000 in total liabilities to get an equity of $2.5 million.</p>



<h2>How Can You Use Equity To Grow Your Business</h2>



<p>If you want to grow your business, but don't have access to the capital required, then equity is an option. As a business owner, <a class="link" href="https://www.forbes.com/sites/forbesbusinesscouncil/2021/09/15/how-private-equity-can-help-build-your-business/?sh=6f6e115068b6" target="_blank" rel="noreferrer noopener">there are ways</a> you can use equity for business growth, or you can work with private equity investors for business growth.</p>



<p>Equity allows you to give away part of the ownership of your company for investing. You can then use this money to invest in a new product or service to make more money for both parties involved.</p>



<p>The next way you can use equity for business growth is to work with private equity investors. These investors can work with businesses to propel business growth, and there may be business advantages in doing so. By partnering with private equity investors, you’ll get liquidity. You can also choose to remain invested in your business as well.</p>



<h3>Work with a Professional&nbsp;</h3>



<p>Equity can be a useful tool for growing and sustaining business growth over time. It has several uses and provides a good overview of your business value.&nbsp;</p>



<p>When it’s time to determine your business equity, or receive help for your small business bookkeeping needs, work with the professionals. Work with an accounting professional at <a class="link" href="https://1800accountant.com/services/bookkeeping">1-800Accountant</a> for all of your bookkeeping and accounting needs.&nbsp;</p>

For business owners, equity is a vital tool that you can use to your advantage. There are different equity types that serve different purposes within your business. Here’s an overview of what equity is and how to calculate equity in a business. What does equity mean in business?&nbsp; Equity comprises the net value of a [&hellip;]

An equity chart displaying an increase over time.

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What Is Equity in Business and How to Calculate It

<h2>What is Small Business Saturday?</h2>



<p>Small Business Saturday is part of a trio of events that kick off the holiday shopping season. It's meant to encourage consumers to take a break from the Walmarts and Amazons of the world and embrace the businesses that make up the backbone of their communities. Small Business Saturday always happens on the Saturday after Black Friday, which falls on November 26th this year.</p>



<p>Small business owners should be prepared to maximize opportunities during this critical day. The additional revenue helps businesses end the holiday season strong, propelling them toward a fruitful new year. If you have yet to prepare or are searching for additional tips, check out these great Small Business Saturday ideas to help get the word out and engage your new customers!</p>



<h2>How to Promote Small Business Saturday</h2>



<h3><strong>1. Get the Word Out</strong></h3>



<p>Ramp up your communications with existing customers, so they remember not to spend their entire gift budget during Black Friday! Encourage word of mouth among them and reward their loyalty with a discount. Here are some other ideas to help you raise awareness among customers and prospects.&nbsp;&nbsp;&nbsp;&nbsp;</p>



<ul>
<li>Let them know you’ll be fully stocked with popular items.</li>



<li>Cross-promote your products with other small businesses.</li>



<li>Invest in paid social media campaigns.&nbsp;&nbsp;</li>



<li>Build an <a class="link" href="https://www.campaignmonitor.com/blog/email-marketing/2020/03/how-to-build-an-email-marketing-funnel-for-conversions/#:~:text=An%20email%20funnel%20is%20a,right%20time%20to%20elicit%20action." target="_blank" rel="noreferrer noopener">e-mail marketing funnel campaign</a> that leads up to Small Business Saturday.</li>
</ul>



<h3><strong>2. Extend Store Hours</strong></h3>



<p>Small Business Saturday takes place during a busy holiday weekend, so accommodate your customers and prospects by extending store hours. Make sure to display signage with the modified hours and let your customers know via every touchpoint available, including social media and email. They'll appreciate the heads-up.&nbsp;</p>



<h3><strong>3. Make Direct Contact with Customers</strong></h3>



<p>Most of the foot traffic you receive on Small Business Saturday will be local. A great way to raise awareness is to mail coupons and specials to consumers who live within a few miles of your business.</p>



<p>And if you have an existing mailing list, consider providing exclusive deals and discounts to your most loyal customers who support you throughout the year.&nbsp;</p>



<h3><strong>4. Invest in Extra Advertising</strong></h3>



<p>There are many ways to<a class="link" href="https://www.thebalancesmb.com/small-business-marketing-ideas-2951688" target="_blank" rel="noreferrer noopener"> advertise</a> before Small Business Saturday. We've identified great options for every budget. You can advertise via these impactful methods:&nbsp;</p>



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



<li>Online ads</li>



<li>Social media campaigns</li>



<li>Newspaper&nbsp;</li>



<li>Radio&nbsp;</li>



<li>TV</li>
</ul>



<h3><strong>5. Offer Special Discounts or Promotions</strong></h3>



<p>Everyone loves a deal, and your customers and prospects are no different. You can offer discounts and promotions that are good for a certain period during the holidays or are only valid during Small Business Saturday.<br><br>If you've run special discounts and promotions, look back to see what worked and amplify that approach. And make sure you keep track of what moves the needle in the aftermath of your efforts for Small Business Saturday 2022.&nbsp;&nbsp;</p>



<h3><strong>6. Reward Participation&nbsp;</strong></h3>



<p>Offer something special to your customers that is so irresistible that they have no choice but to stop in! Whether it’s doorbusters, a gift with a purchase of a certain amount, or a giveaway, you can find many ways to reward shopper participation. And word gets out fast. Make this a tradition, and customers will reward you with their loyalty.&nbsp;&nbsp;</p>



<h3><strong>7. Hold Contests</strong></h3>



<p>Contests build excitement and intrigue, especially if you're giving away a unique prize. Hold contests on Small Business Saturday or tease a grand prize that will be given away at the end of the holiday shopping season.&nbsp;&nbsp;</p>



<h2>Work With The Pros</h2>



<p>We hope these Small Business Saturday promotion ideas help! The right strategy for Small Business Saturday will increase profits and help you grow your business. The right <a class="link" href="https://1800accountant.com/services/small-business-taxes">tax strategy and services</a> can help you go even further. Schedule a call with <a class="link" href="https://1800accountant.com/">1-800Accountant</a>, America's leading virtual accounting firm, to learn what our suite of services can do for you!</p>

What is Small Business Saturday? Small Business Saturday is part of a trio of events that kick off the holiday shopping season. It&#8217;s meant to encourage consumers to take a break from the Walmarts and Amazons of the world and embrace the businesses that make up the backbone of their communities. Small Business Saturday always [&hellip;]

Small Business Saturday promotion ideas for 2022

Small-Business-Saturday-Promotion-Ideas-for-2022_blog-header

7 Small Business Saturday Promotion Ideas for 2022

<p>Tax law is complicated, especially for businesses, and there is no shortage of challenges and pitfalls business owners can run into if they’re not prepared. <a class="link" href="https://1800accountant.com/services/industry/nonprofit">Nonprofit taxes</a> and operations come with their own unique set of challenges as well.&nbsp;</p><p>The IRS regulates nonprofit organizations in the United States with very precise tax regulations. The rules and requirements for nonprofit taxes differ from other entity types, but the stakes for understanding them are just as high.&nbsp;</p><p>Take the time to read through this guide to figure out what your obligations are! If you know your requirements ahead of time, you can plan appropriately for tax compliance.&nbsp;&nbsp;</p><h2>Do Non-profits Pay Taxes?&nbsp;</h2><p>If you know anything about operating a nonprofit in the United States, you probably know they don’t have to pay taxes like other businesses. However, that doesn’t mean they can ignore IRS regulations.</p><p>Does a nonprofit organization pay taxes? The short answer is that they are exempt from many federal and state taxes, but not all of them. Nonprofits still make payments to Social Security and Medicare and must submit tax documentation annually according to specific IRS nonprofit filing requirements.&nbsp;&nbsp;</p><h3>Types of Non-profit Organizations</h3><p>Nonprofits in the United States include a variety of organizations classified under section 501(c) of the U.S. tax code. The most common nonprofits are 501(c)(3) organizations, including private foundations and other charitable organizations formed for some kind of public benefit.&nbsp;</p><h2>Benefits of a Non-profit Business</h2><p>Having officially <a class="link" href="https://www.irs.gov/charities-and-nonprofits" target="_blank" rel="noreferrer noopener">organized charities and nonprofits</a> offers their owners a lot of benefits. Some of these benefits are shared with other registered or incorporated businesses, and some are specific to nonprofits:</p><ul><li>Nonprofit tax exemptions</li><li>Private donations to qualifying nonprofits are tax-deductible</li><li>Shields individuals stakeholders from financial liability</li><li>Eligible for grants from private and government sources</li><li>Gives business a separate entity detached from any private individual&nbsp;&nbsp;</li></ul><h3>Nonprofit Tax Exemptions</h3><p>Likely the biggest benefit to <a class="link" href="https://1800accountant.com/blog/non-profit-business-entities" target="_self">running a nonprofit organization</a> is the tax-exempt status. Because the company is formed to benefit the public good and not produce profit for individual owners, it is not subject to the income taxes that apply to other business profits.&nbsp;</p><p>Nonprofits are essentially exempt from federal taxes outside payroll-related taxes, assuming they maintain their status with the IRS. Key nonprofit tax exemptions include:</p><ul><li>Federal income tax</li><li>Federal property tax</li><li>Federal sales tax&nbsp;</li><li>Many states offer exemptions for income tax and sometimes sales tax at the state level</li></ul><h3>How Do You Keep Tax Exempt Status?&nbsp;</h3><p>Nonprofit tax benefits make a big difference in supporting your company and its mission. However, preserving those benefits can take a lot of work. You must apply to initially receive tax-exempt status for your nonprofit. <a class="link" href="https://www.irs.gov/charities-non-profits/tax-law-compliance-before-exempt-status-is-recognized" target="_blank" rel="noreferrer noopener">Maintaining tax-exempt status</a> requires careful compliance with all IRS regulations:</p><ul><li>Nonprofit operations must clearly be directed toward qualifying exempt purposes under the law, such as education, religion, scientific advancement, or other well-defined charitable aims</li><li>No contributions directly to a political campaign</li><li>No advocacy on behalf of a particular political candidate</li><li>Business operations cannot produce profit directly for private interests or shareholders</li><li>Nonprofit organizations must submit annual information returns to the IRS reporting on all finances</li></ul><h2>Common Nonprofit Tax Forms</h2><p>To stay in compliance, nonprofits must submit an annual return report on their finances. This will usually involve some variation of <a class="link" href="https://www.irs.gov/charities-non-profits/form-990-resources-and-tools" target="_blank" rel="noreferrer noopener">IRS Form 990, an informational return</a> specifically designed for tax-exempt organizations.&nbsp;</p><p>State forms and exemption criteria vary. However, these are the principal tax forms you will need at the federal level:</p><ul><li><a class="link" href="https://www.irs.gov/pub/irs-pdf/f990.pdf" target="_blank" rel="noreferrer noopener">Form 990</a></li><li><a class="link" href="https://www.irs.gov/charities-non-profits/annual-electronic-filing-requirement-for-small-exempt-organizations-form-990-n-e-postcard" target="_blank" rel="noreferrer noopener">Form 990-N</a></li><li><a class="link" href="https://www.irs.gov/pub/irs-pdf/f990ez.pdf" target="_blank" rel="noreferrer noopener">Form 990-EZ</a></li><li><a class="link" href="https://www.irs.gov/pub/irs-pdf/f990pf.pdf" target="_blank" rel="noreferrer noopener">Form 990-PF</a></li></ul><h3>IRS Form 990&nbsp;</h3><p>IRS Form 990 is the primary document used for reporting nonprofit taxes. It is an annual information return (AIR) that demonstrates a nonprofit’s compliance with nonprofit regulations.&nbsp;</p><p>Form 990 briefly describes a company’s mission and structure, then makes a full report of revenue and expenses, making it clear that expenses are directed in line with the stated mission.&nbsp;&nbsp;</p><h3>IRS Form 990-N</h3><p>Any tax-exempt organization can meet its AIR requirements with a full 990. However, nonprofits below certain size limits can file substitute forms that require less thorough reporting.</p><p>Public charities and similar nonprofit organizations that normally receive less than $50,000 in gross receipts can file 990-N. IRS form 990-N is a simple e-postcard that can be filled out and submitted online.</p><h3>IRS Form 990-EZ</h3><p>Form 990-EZ is an intermediate return for organizations whose gross annual receipts are less than $200,000. The nonprofit’s total assets must add up to less than $500,000.&nbsp;&nbsp;</p><h3>IRS Form 990-PF</h3><p>Form 990-PF is the AIR form for all private foundations with tax-exempt status. This applies regardless of their actual financial status or total assets.&nbsp;</p><h2>When are non-profit tax returns due in 2023?</h2><p>Nonprofit tax deadlines vary depending on your organization’s fiscal year. You are required to file your 990 AIR by the 15th of the fifth month past the end of your established accounting period.&nbsp;</p><p>For most organizations that use the calendar year, the nonprofit tax return due date is May 15, 2023, for the 2022 tax year.&nbsp;&nbsp;&nbsp;&nbsp;</p><h2>How to File Your Nonprofit Tax Return</h2><p>As of July 2019, all 990 nonprofit tax returns must be submitted by electronic filing online. You must fill out the AIR with all relevant financial information and provide any supporting documentation required for transparency and establish that you are complying with nonprofit requirements.&nbsp;</p><p>You will receive a follow-up letter requesting more information if you fail to include any necessary pieces of information in your return.&nbsp;&nbsp;</p><h3>Filing on Your Own&nbsp;</h3><p>If you’re trying to figure out how to file Form 990 online for the first time on your own, you can find form instructions and <a class="link" href="https://www.irs.gov/e-file-providers/exempt-organizations-and-other-tax-exempt-entities-modernized-e-file-mef-providers" target="_blank" rel="noreferrer noopener">e-filing guidance for tax-exempt entities</a> through the IRS. You simply need to complete your 990 and file it online through the IRS platform.&nbsp;&nbsp;</p><h3>Hire an Accountant to Help with Nonprofit Taxes&nbsp;</h3><p>The number of steps and forms for nonprofits to complete is few, but the process can still be complex. If you make mistakes in your recording and reporting, your tax-exempt status could be at risk.&nbsp;</p><p>Consider working with a tax professional the first time you have to complete and file your nonprofit tax return. Nonprofit taxes don’t have to be a headache, and an accountant can help the whole process go much smoother. Count on the experts at 1-800Accountant to guide you through your <a class="link" href="https://1800accountant.com/services/industry/nonprofit">nonprofit small business taxes</a>.&nbsp;</p>

Tax law is complicated, especially for businesses, and there is no shortage of challenges and pitfalls business owners can run into if they’re not prepared. Nonprofit taxes and operations come with their own unique set of challenges as well.&nbsp; The IRS regulates nonprofit organizations in the United States with very precise tax regulations. The rules [&hellip;]

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Non-profit Taxes: A Helpful Guide to Tax Compliance

<p>Understanding accounts receivable is an essential aspect of your business's finances and payment terms. Accounts receivable are legally enforceable claims for payment held by a company for goods supplied or services rendered that customers/clients have ordered but haven't yet been paid for.</p>



<h2>What is Accounts Receivable?</h2>



<p>Accounts receivable is goods, money, or services <a class="link" href="https://www.investopedia.com/terms/a/accountsreceivable.asp" target="_blank" rel="noreferrer noopener">owed</a> to a business. The accounts receivable process doesn't happen immediately. Instead, a company or small business will receive the goods or services after the transaction occurs.</p>



<p>You'll find accounts receivable in the assets section of a balance sheet.</p>



<h2>What is the Difference Between Accounts Receivable and Accounts Payable?</h2>



<p>Accounts payable and accounts receivable have <a class="link" href="https://keydifferences.com/difference-between-accounts-receivable-and-accounts-payable.html" target="_blank" rel="noreferrer noopener">several differences</a>.</p>



<p>&nbsp;Accounts payable is:</p>



<ul>
<li>A liability.</li>



<li>Considered cash outflows and credit purchases.</li>



<li>Money received by a company in the future for goods or services from suppliers on credit.</li>



<li>Relevant to bills payable and collectors.</li>
</ul>



<p>Accounts receivable is:&nbsp;&nbsp;</p>



<ul>
<li>An asset.&nbsp;</li>



<li>Considered cash inflows and credit sales.</li>



<li>Money received by a company in the future for goods or services rendered to customers on credit.</li>



<li>Relevant to bills receivable and debtors.</li>
</ul>



<h2>Is Accounts Receivable a Revenue?</h2>



<p>Your accounts receivable balance is <a class="link" href="https://smallbusiness.chron.com/accounts-receivable-revenue-33895.html" target="_blank" rel="noreferrer noopener">revenue</a>, depending on how you construct your balance sheet. If you use cash-based accounting, you shouldn’t include accounts receivable in the accrued revenue calculations of your <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-what-is-a-general-ledger">general ledger</a>.&nbsp;</p>



<p>However, if you use accrual-based accounting, you can include payments as revenue after transactions involving goods or services are complete. You'll record accounts receivable as revenue for accrual-based accounting on your balance sheet.</p>



<h2>Where Can I Find Accounts Receivable?</h2>



<p>You can find your accounts receivable on your <a class="link" href="https://www.thebalance.com/accounts-receivables-on-the-balance-sheet-357263" target="_blank" rel="noreferrer noopener">balance sheet.</a> You'll list it as a current asset on the balance sheet or a long-term asset, depending on the time in which the transaction occurred.</p>



<h2>What are the Other Types of Receivables?</h2>



<p>There are at least 4 types of receivables most business owners use. They are: interest receivable, nontrade receivable, notes receivable, and trade receivable.&nbsp;</p>



<h3><strong>Notes Receivable</strong></h3>



<p>Notes receivable, like accounts receivable, is an amount owed to a business. However, customers will sign a promissory note to provide proof of their debts. As a business owner, you can use a promissory note for legal purposes if the debt remains unpaid.&nbsp;</p>



<p>Notes receivable can either be a current asset or a long-term asset. If notes receivable are due in a year or less, it is a current asset. If notes receivable are due in more than one year, it is a long-term asset.&nbsp;</p>



<h3><strong>Other Receivables</strong></h3>



<p>Other receivables can be useful for your bookkeeping needs:&nbsp;</p>



<ul>
<li>Interest receivable&nbsp;&nbsp;</li>



<li>Nontrade receivable</li>



<li>Trade receivable</li>
</ul>



<p>Interest receivable is the amount of <a class="link" href="https://www.wisegeek.com/what-is-an-interest-receivable.htm" target="_blank" rel="noreferrer noopener">interest</a> owed to a company. Like notes receivable, interest receivable is an asset on a balance sheet.&nbsp;&nbsp;</p>



<p>Interest receivable payments aren't payments that a company has received. However, they are due at a later date. Recording interest receivable on your financial statements can help you determine the amount of interest owed to you.</p>



<p><a class="link" href="https://pecunica.com/knowledge-point/what-are-trade-and-nontrade-receivables/" target="_blank" rel="noreferrer noopener">Trade receivables</a> are amounts owed for goods and services, which include both accounts receivable and notes receivable. Nontrade receivables are amounts outside of business transactions that comprise:&nbsp;</p>



<ul>
<li>Advances to employees</li>



<li>Claims for losses or damages</li>



<li>Dividends&nbsp;</li>



<li>Interest receivable&nbsp;</li>
</ul>



<h2>Work with the Pros</h2>



<p>Recording accounts receivable is an essential part of <a class="link" href="https://1800accountant.com/services/bookkeeping">small business bookkeeping</a>. Work with the pros to avoid any problems with your <a class="link" href="https://1800accountant.com/">accounting and bookkeeping</a> needs.</p>

Understanding accounts receivable is an essential aspect of your business&#8217;s finances and payment terms. Accounts receivable are legally enforceable claims for payment held by a company for goods supplied or services rendered that customers/clients have ordered but haven&#8217;t yet been paid for. What is Accounts Receivable? Accounts receivable is goods, money, or services owed to [&hellip;]

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What is Considered Accounts Receivable: Everything You Need to Know

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