<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.

Personal-Trainer-Tax-Deductions_blog-header (1)

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;]

Two hands against a sunset, one passing a heart to the other, with text overlay "non-profit taxes: a helpful guide.

Non-Profit-Taxes_blog-header

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

Navigating small business bookkeeping and recordkeeping can be a daunting task for many business owners. However, a well-structured financial system is vital to the growth and success of your business. In our latest blog article, we deep dive into bookkeeping and recordkeeping, explaining their roles in business operations and the benefits they can have on your small business.

You might be asking: <a class="link" href="https://1800accountant.com/blog/small-business-bookkeeping">What's bookkeeping?</a> How can I keep records for my small business? What type of records should I keep? Do I need to save all business expense receipts? How long should I keep business documents? We've got answers to these questions and more. Continue reading so you can turn that financial confusion into clarity!
<h2><span style="font-weight: 400;">What Is Bookkeeping?</span></h2>
<span style="font-weight: 400;">Bookkeeping is a method of </span><a class="link" href="https://smallbusiness.chron.com/master-bookkeeping-60937.html" target="_blank" rel="noopener"><span style="font-weight: 400;">tracking funds</span></a><span style="font-weight: 400;"> and business documents that flow in and out of your small business. There are two types of bookkeeping: single-entry bookkeeping (for transaction entries only) and double-entry bookkeeping (for transaction entries and company cash flow). As you track your funds, you’ll compile categories, including business expenses, payroll records, employee records, revenue, and taxes.</span>
<h2><span style="font-weight: 400;">How Do I Keep Books for a Small Business? </span></h2>
<span style="font-weight: 400;">There is a </span><a class="link" href="https://bizfluent.com/how-4967598-compile-corporation-record-book.html" target="_blank" rel="noopener"><span style="font-weight: 400;">relatively simple method</span></a><span style="font-weight: 400;"> that you can implement in financial record keeping for your small business with just two binders. One will contain documents required within your state, such as licenses and permits. It would be best if you keep the following in the official binder: </span>
<ul>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Articles of Incorporation or Articles of Organization </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Certificates </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Company seal</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Meeting Minutes </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Resolutions </span></li>
</ul>
<span style="font-weight: 400;">The second binder will contain daily records and most (if not all) financial transactions. Keep the following in your daily records binder:</span>
<ul>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Accounting records </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Applications and permits</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Contracts entered by the company</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Insurance policies held by the company</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Membership certificates</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Names and addresses of all members or shareholders</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">An operating agreement or by-laws and any amendments</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Share transactions</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Shareholder interests</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">State filings (such as annual reports)</span></li>
</ul>
<span style="font-weight: 400;">As your business decides what it will implement over time, attempt to record everything in print. Divide the above sections into specific areas in your binders to remain organized. It is important to note everything, whether it's formal and official (meetings and minutes) or unofficial (daily activities). You should also date the records for even more accuracy. </span>
<h2><span style="font-weight: 400;">What Kind of Records Should a Small Business Keep?</span></h2>
<span style="font-weight: 400;">Whether you are using an accounting software program or other forms of financial record keeping, it is essential to know what kind of records you should keep. Keep receipts that pertain to <a class="link" href="https://www.irs.gov/businesses/small-businesses-self-employed/what-kind-of-records-should-i-keep" target="_blank" rel="noopener">expenses, gross receipts, and purchases</a> to track your small business’s <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-debits-credits">debits and credits</a>, along with its income. </span>
<h3><span style="font-weight: 400;">Gross Receipts Documents: </span></h3>
<ul>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Cash register tapes </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Deposit information (cash and credit sales) </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Forms <a class="link" href="https://1800accountant.com/blog/what-is-a-1099">1099-MISC</a></span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Invoices </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Receipt books</span></li>
</ul>
<h3><span style="font-weight: 400;">Financial Statements: </span></h3>
<ul>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Canceled checks or other documents proving payment/electronic funds transferred </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Cash register tape receipts </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Credit card receipts and statements </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Invoices</span></li>
</ul>
<h3><span style="font-weight: 400;">Expense Documents:</span></h3>
<ul>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Bank account statements</span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Canceled checks or other documents proving payment/electronic funds transferred </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Cash register tape receipts </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Credit card receipts and statements </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Invoices</span></li>
</ul>
<h2><span style="font-weight: 400;">Do I Need Receipts for Business Expenses</span></h2>
<span style="font-weight: 400;">While you do not need receipts for filing taxes or proving business expenses, small business owners can still benefit by keeping receipts. This will facilitate <a class="link" href="https://1800accountant.com/blog/how-to-reduce-tax-liability">decreasing your tax liability</a>, or the amount you'll owe in taxes. Some receipts can cause tax deductions, allowing you to save when it is time to file taxes. </span>

<span style="font-weight: 400;">You'll need </span><a class="link" href="https://finance.zacks.com/must-receipt-deductions-3147.html" target="_blank" rel="noopener"><span style="font-weight: 400;">receipts</span></a><span style="font-weight: 400;"> related to:</span>
<ul>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Bills for a product or service  </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Meals and travel </span></li>
 	<li style="font-weight: 400;"><span style="font-weight: 400;">Other items such as bonds, depreciated equipment, real estate, and stocks</span></li>
</ul>
<span style="font-weight: 400;">The IRS doesn't require receipts for business expenses that cost under $75 except for lodging. If you use a Schedule C Form for your business to deduct health insurance premiums, you don't need a receipt. Provided that you save the receipts and </span><a class="link" href="https://bizfluent.com/info-12131745-lost-business-receipt.html" target="_blank" rel="noopener"><span style="font-weight: 400;">you don't lose them</span></a><span style="font-weight: 400;">, you'll have a better chance to receive deductions and even reimbursements for your business expenses. </span>
<h2><span style="font-weight: 400;">How Long Do You Have to Keep Business Documents?</span></h2>
<span style="font-weight: 400;">You should keep documents and </span><span style="font-weight: 400;">business</span><span style="font-weight: 400;"> receipts</span><span style="font-weight: 400;"> for </span><a class="link" href="https://finance.zacks.com/irs-requirements-receipts-9289.html" target="_blank" rel="noopener"><span style="font-weight: 400;">at least three years.</span></a>

<span style="font-weight: 400;">This time frame includes the potential for IRS audits, which is why you should save all of the documents and receipts that you need. Also, that time frame increases to six years if the IRS suspects that you underreported your income. </span>
<h2><span style="font-weight: 400;">Work with Professional Accounting Services</span></h2>
<span style="font-weight: 400;">Bookkeeping can help your company track various categories of expenses, income</span><span style="font-weight: 400;">, and </span><span style="font-weight: 400;">tax payments</span><span style="font-weight: 400;">. With your bookkeeping needs, it may be wise to consider reaching out </span><span style="font-weight: 400;">for</span> <a class="link" href="https://1800accountant.com/services/small-business-taxes"><span style="font-weight: 400;">small business</span><span style="font-weight: 400;"> account</span><span style="font-weight: 400;">ing services</span></a><span style="font-weight: 400;">. Don’t hesitate to seek advice from experts to guide your small business on a path to business success.</span>

Navigating small business bookkeeping and recordkeeping can be a daunting task for many business owners. However, a well-structured financial system is vital to the growth and success of your business. In our latest blog article, we deep dive into bookkeeping and recordkeeping, explaining their roles in business operations and the benefits they can have on [&hellip;]

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bookkeeping-101-a-crash-course-in-record-keeping-for-small-businesses-2

Small Business Record-Keeping: 3 Best Practices &#038; Tips

Simple Record Keeping for Small Businesses

<p>Transforming a dream into a thriving business requires ingenuity, planning, and tireless dedication. But to truly elevate your venture and foster growth, there's another essential skill to acquire – understanding the profit and loss (P&amp;L) statement. </p>



<p>Navigating the financial landscape is critical to keep your company thriving, and while you don't need to be an accounting expert, understanding the basics is vital to your business's success.</p>



<p>Even if you have trusted professionals in your corner, being well-equipped to decipher the information provided ensures you remain in control. By learning to read P&amp;L statements (also known as income statements), you'll have the foundation to confidently make informed decisions for your business.</p>



<p>Don't wait any longer! Read this quick and easy-to-follow guide to unlock the keys to understanding the profit and loss statement today.</p>



<h2>What is a P&amp;L statement?&nbsp;</h2>



<p>A P&amp;L statement is a key financial document that reports on the status of a company’s financial health. It’s regularly produced by accountants for owners, entrepreneurs, and investors to assess the health of a business.</p>



<h3>What Does P&amp;L Stand For?&nbsp;</h3>



<p>P&amp;L stands for profit and loss, which are the principal factors assessed in a P&amp;L statement. Knowing how to read a profit and loss statement simply requires looking for the net income of a business over time.&nbsp;&nbsp;</p>



<h3>What sets it apart from other financial statements?&nbsp;&nbsp;</h3>



<p>A profit and loss statement reports on a company’s overall revenue and expenses over a certain period of time, usually monthly, quarterly, or by fiscal year. It is an income statement reporting directly on a company’s net profits. A single look at a profit and loss statement should tell you if the company is profitable or not.</p>



<h4>Cash Flow Statements&nbsp;</h4>



<p>There are two other key financial statements businesses regularly use to report and assess their finances: the cash flow statement and the balance sheet. The cash flow statement, unlike the P&amp;L, is not interested in net income but in the regular flow of cash in and out of the business.&nbsp;</p>



<p>A business needs a reserve of cash on hand to make purchases and pay bills. Even with high net profits, a company with poor or inconsistent cash flow will run into trouble when bills are due, and they find themselves without any cash on hand to pay with.&nbsp;</p>



<h4>Profit and Loss vs. Balance Sheet</h4>



<p>While cash flow statements and P&amp;L statements both report on finances over time, a balance sheet is intended to report on a given moment in time. It’s a snapshot of the current chart of accounts.&nbsp;</p>



<p>The balance sheet includes a comprehensive report of the current state of a company’s finances, balancing assets and liabilities. <a class="link" href="https://www.apaservices.org/practice/business/finances/balance-sheet" target="_blank" rel="noreferrer noopener">Reading the balance sheet and the snapshot it provides</a> is most helpful when comparing it to previous balance sheets.&nbsp;</p>



<h2>What goes into a profit and loss statement?</h2>



<p>A lot of different ingredients go into a profit and loss statement. The document should give you a full picture of your income over a set period of time. Ensure you’re familiar with the <a class="link" href="https://1800accountant.com/blog/bookkeeping-101-30-common-bookkeeping-terms">common bookkeeping terms and financial language</a> you’ll find in a P&amp;L report.&nbsp;&nbsp;</p>



<h3>Revenue</h3>



<p>The top line of the P&amp;L statement should be your total revenue. This is the money you’ve received from all of your sales. How much money have you made?&nbsp;</p>



<h3>Cost of Goods Sold (COGS)</h3>



<p>The next step is the cost of goods sold, or COGS. COGS includes the raw materials and production costs of your products.</p>



<h3>Gross Profit</h3>



<p>To find your total gross margin of profits, subtract COGS from your revenue. This is the gross profit you’ve earned through sales.&nbsp;</p>



<h3>Operating Expenses</h3>



<p>After revenue, the P&amp;L statement reports on your operating expenses organized into various categories. This is where you include all your normal business expenditures outside the costs of the goods themselves.&nbsp;</p>



<p>This includes both direct and indirect costs of operation. Direct costs are the immediate operation costs, like employee wages and the materials associated with COGS. Indirect costs include everything else, from rental costs to utilities and insurance premiums.&nbsp;</p>



<h3>Net Operating Income&nbsp;</h3>



<p>Your net operating income represents your total income after you’ve taken out your operating expenses. These are your earnings before interest, taxes, depreciation, and amortization.&nbsp;</p>



<h3>Other Expenses</h3>



<p>Profit and loss statements should include other expenses like interest expense, income taxes, depreciation, and amortization, but they should be counted separately. These aren’t operating expenses, but they still have to get paid.&nbsp;</p>



<h3>Net Loss or Profit&nbsp;</h3>



<p>The bottom line of the P&amp;L statement is the final, most important total. This is your net loss or profit as a business. That means it’s the total revenue minus all of your expenditures.&nbsp;</p>



<h2>How to Read a P&amp;L Statement</h2>



<p>At first glance, a detailed P&amp;L statement may look intimidating. How do you figure out how to read a profit and loss statement when it’s just a long list of revenue and expenses?&nbsp;</p>



<p>The critical thing is to note the separate categories. Find the number totals at the end of each section before you get into the weeds and read the lists themselves.&nbsp;</p>



<p>You should be able to find the most essential takeaways at the beginning and the end of the statement as well. The top line will be your total revenue or sales, and the very bottom line of the P&amp;L statement will be your net income after all of your expenses have been subtracted from profits.&nbsp;</p>



<p>These are the essential sections you should find when reading a P&amp;L statement:&nbsp;</p>



<ul>
<li>Gross profits, which will be the total of your revenue minus the cost of goods sold (cogs)&nbsp;</li>



<li>Operating expenses split into separate categories</li>



<li>Non-operating costs like taxes and interest expenses</li>



<li>Net profits after subtracting total expenses.&nbsp;</li>
</ul>



<h2>Importance of Reading a P&amp;L Statement Accurately</h2>



<p>What is a profit and loss statement for if you don’t know how to read it? Your business plan is only as good as the data it’s based on, and the profit and loss statement is a key source of data for <a class="link" href="https://www.sba.gov/business-guide/manage-your-business/manage-your-finances" target="_blank" rel="noreferrer noopener">understanding your business</a>.&nbsp;</p>



<p>The bottom line of the P&amp;L statement tells you if your company is profitable or not. Once you have a sense of the larger picture, you can go into the details to see where you can trim expenditures or increase profits.&nbsp;</p>



<h3>How 1-800Accountant Can Help With Your Bookkeeping&nbsp;&nbsp;</h3>



<p>It’s important to know how to read a profit and loss statement, but you don’t have to know everything about accounting and bookkeeping. In fact, it’s better to have an expert who can help you review your financial situation.&nbsp;</p>



<p>Don’t hesitate to seek out professional <a class="link" href="https://1800accountant.com/services/bookkeeping">help with your small business bookkeeping</a> if you’re not sure how to read P&amp;L reports or if you want a second opinion. Get an expert from 1-800Accountant to show you how to analyze a profit and loss statement and make more efficient choices for your company.&nbsp;</p>

Transforming a dream into a thriving business requires ingenuity, planning, and tireless dedication. But to truly elevate your venture and foster growth, there&#8217;s another essential skill to acquire – understanding the profit and loss (P&amp;L) statement.  Navigating the financial landscape is critical to keep your company thriving, and while you don&#8217;t need to be an [&hellip;]

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How to Read a Profit and Loss (P&#038;L) Statement

How to Read a Profit and Loss (P&L) Statement

<p>If you drive trucks, sell trucks, or run any trucking-related business, you need to be familiar with all the taxes and fees associated with trucks. For truckers just starting, you may need to budget for these tax responsibilities ahead of time.&nbsp;</p>
<p>Truck drivers who drive big rigs on the highway must&nbsp;<a class="link" href="https://www.irs.gov/help/ita/do-i-need-to-pay-the-heavy-highway-vehicle-use-tax" target="_blank" rel="noreferrer noopener">pay the Heavy Highway Vehicle Use Tax</a>&nbsp;for their use of the highway each year. But the first tax a new truck driver will encounter is the federal excise tax on trucks.&nbsp; &nbsp;</p>
<h2>What is Federal Excise Tax on Trucks?</h2>
<p><a class="link" href="https://www.investopedia.com/terms/e/excisetax.asp">Federal Excise taxes</a> are taxes imposed on specific goods&nbsp;or products like gasoline or cigarettes. They are usually paid at the point of purchase and are usually included in the product's price.&nbsp;</p>
<p>The federal government imposes a specific excise tax on the sales of trucks and tractors. For the government's purposes, a truck is defined as a highway vehicle primarily designed to transport its load on the same chassis as the engine, even if it's equipped to tow a vehicle, such as a trailer or a semitrailer. That definition includes smaller trucks, but only trucks of a certain size require paying this tax.</p>
<p>Meanwhile, a tractor is defined as a highway vehicle designed to tow a vehicle, such as a trailer or a semitrailer. A tractor may carry incidental items of cargo when towing or limited amounts of cargo when not towing. A truck, truck trailer, or semitrailer is considered a sale of a chassis and a body.</p>
<p>The seller is liable for the tax. The seller may accept a statement from the buyer in good faith, stating that under penalties of perjury and executed in good faith, the purchaser intends to resell or lease on a long-term basis. The purchaser will be liable for the tax when the article is ultimately sold to a new buyer who will use it for its intended purpose.&nbsp;</p>
<h2>When Do You Pay Federal Excise Tax (FET) on Trucks?</h2>
<p><a class="link" target="_blank" href="https://www.irs.gov/pub/irs-pdf/p510.pdf" rel="noreferrer noopener">IRS Publication 510 on Excise Taxes</a>&nbsp;says that the Federal Excise Tax (FET) is imposed on the "first retail sale," meaning the first sale for a purpose other than resale or leasing in a long-term lease, after manufacture, production, or importation.</p>
<p>Form 720 must be filed with the IRS for each quarter if you were liable for or responsible for collecting Federal Excise Tax. The due date is on or before the end of the month following the close quarter.</p>
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    <thead>
      <tr class="table-data-container">
        <td class="cell-0">Quarter</td>
        <td class="cell-0">Period</td>
        <td class="cell-0">Due Date</td>
      </tr>
    </thead>
    <tbody>
      <tr class="table-data-container">
        <td>Q1</td>
        <td>January-March</td>
        <td>April 30</td>
      </tr>
      <tr class="table-data-container">
        <td>Q2</td>
        <td>April-June</td>
        <td>July 31</td>
      </tr>
      <tr class="table-data-container">
        <td>Q3</td>
        <td>July-September</td>
        <td>October 31</td>
      </tr>
      <tr class="table-data-container">
        <td>Q4</td>
        <td>October-December</td>
        <td>January 31</td>
      </tr>
    </tbody>
  </table>
</div>
<h2>How to Calculate Federal Excise Tax On Trucks</h2>
<p>Internal Revenue Code Section 4051 imposes a 12 percent federal excise tax on the first retail sale of the following: trucks chassis and bodies, truck trailer and semitrailer chassis and bodies, and tractors used mostly for highway haulage in combination with a trailer or semitrailer.</p>
<p>The FET does not apply to truck chassis and bodies suitable for use with a vehicle with a gross vehicle weight of 33,000 pounds or less. The FET also does not apply to a truck trailer and semitrailer chassis and bodies suitable for use with a trailer or semitrailer with a gross vehicle weight of 26,000 pounds or less.&nbsp;</p>
<p>Tractors with a gross vehicle weight of 19,500 or less and a gross combined weight of 33,000 pounds or less are excluded from the 12% FET.</p>
<h2>Do You Pay Excise Tax on Used Trucks?</h2>
<p>The FET is paid on the initial sale or use of the truck. If the truck were bought and used previously, an excise tax would usually be unnecessary.&nbsp;</p>
<p>However, there may be some instances where a used truck may be subject to FET. If the truck were exported to another country, the export would be exempt from FET. However, when imported back to the US, and there is a subsequent sale, FET would be triggered as if it were an initial sale or use.&nbsp;</p>
<p>These sales are also ordinarily <strong>exempt from federal excise taxes</strong>:</p>
<div class="rte-table-container">
  <table>
    <tbody>
      <tr class="table-data-container">
        <td>Sales to a state or local government for its exclusive use.</td>
      </tr>
      <tr class="table-data-container">
        <td>Sales to Indian tribal governments, but only if the transaction involves the exercise of an essential tribal government function.</td>
      </tr>
      <tr class="table-data-container">
        <td>Sales to a nonprofit educational organization for its exclusive use</td>
      </tr>
      <tr class="table-data-container">
        <td>Sales to a qualified blood collector organization (as defined under&nbsp;<a class="link" href="https://www.irs.gov/pub/irs-pdf/p510.pdf" target="_blank" rel="noreferrer noopener">Communications Tax in chapter 4</a>) for collecting, storing, or transporting blood</td>
      </tr>
      <tr class="table-data-container">
        <td>Sales for use by the purchaser for further manufacture of other taxable articles</td>
      </tr>
      <tr class="table-data-container">
        <td>Sales for export or resale by the purchaser to a second purchaser for export</td>
      </tr>
      <tr class="table-data-container">
        <td>Sales to the United Nations for official use</td>
      </tr>
    </tbody>
  </table>
</div>
<h2>What Do Excise Taxes Fund?&nbsp;</h2>
<p>These taxes fund the Highway Trust Fund, and expenditures are generally used to repair and expand the federal highway system of the United States. Trucks and other heavy vehicles create a lot of extra wear and tear on roads, so these excise taxes contribute to ongoing road maintenance and infrastructure repair.&nbsp;</p>
<h2>The Heavy Vehicle Use Tax&nbsp;</h2>
<p>The seller is responsible for the retail FET due to a truck or trailer. The truck owner is responsible for filing and paying&nbsp;<a class="link" href="https://1800accountant.com/blog/form-2290">Form 2290</a> for Heavy Highway Vehicle Use. This is an annual tax on the continuing use of heavy load-bearing vehicles. If the truck isn't used frequently, you may be able to waive the tax.&nbsp;</p>
<p>Only trucks that weigh 55,000 pounds or more require their owners to pay this tax. The deadline to file for the first time is the last day of the next month after the truck's first use. See the form itself to find out how much your tax will be.&nbsp;</p>
<h2>Consult a Professional</h2>
<p>If you're unsure about your obligations as a truck driver or seller, speak to an <a class="link" href="https://1800accountant.com/services/industry/trucking">accountant with expertise in the trucking industry</a>. An accountant can also guide you through the paperwork and smooth out the process for you. It's important to be informed and know your obligations, but sometimes the smartest thing to do is to let an expert help out. Getting someone who knows their way through the system can help you save money and make your business more efficient.&nbsp;</p>

If you drive trucks, sell trucks, or run any trucking-related business, you need to be familiar with all the taxes and fees associated with trucks. For truckers just starting, you may need to budget for these tax responsibilities ahead of time.&nbsp; Truck drivers who drive big rigs on the highway must&nbsp;pay the Heavy Highway Vehicle [&hellip;]

Two trucks driving on a curvy road through a desert landscape with distant snow-capped mountains under a cloudy sky.

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Federal Excise Tax on Trucks: Everything You Need to Know

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