taxes | Dunham Tax Professionals

Why Tax Professionals are Important for your Business

by Michelle Roberts | Jul 27, 2020 | Taxes

Why is a tax professional so important to your business? It’s a sad fact that a lot of small businesses can and do fail within the first two years of starting, and that’s due to poor financial management. Since small businesses have a limited budget and other resources, accounting plays a crucial role in providing information that helps businesses in its growth and development.

Keep a track of the cash flow.
To understand what you spend,
Accounting gives you a better grasp of the well-being of the business. You can do this by learning to read a balance sheet, income statement, and cash flow statement
Helps you detect and avoid frauds and theft by customers, employees and suppliers

When you understand the business finance and dealings, you are better equipped with facing audits.

3 Things Truck Drivers Need to Know

by Michelle Roberts | Jul 20, 2020 | Taxes

In any business, it’s important to be aware of which expenses are tax deductible and which are not, however, when you are part of the trucking industry, every tax return is unique. Drivers are subject to specific requirements.

Here are some things every driver needs to know:

You Need a Tax Home – This is not necessarily where you live, but rather the city or general area in which you work. For many drivers, this may be a base or dispatch center. If you are an owner-operator using a residence as a tax home, make sure you help maintain the property while you are on the road.
Filing Taxes – If you are a driver, you will receive a W-2 form that reports your wages and income. Employers must mail these forms to the employees by the end of January. You will report this income on Form 1040 or 1040A. Owner-operators have a couple different options for reporting income. You may rely on your detailed records. However, if you have worked as an independent contractor for a company, you will receive Form 1099.
Deductions – The IRS allows for deductions designated as “ordinary and necessary” business expenses. These include but are not limited to: Truck maintenance; Union Dues and Fees; Licensing and regulatory fees and drug testing; Uniform equipment used and paid for out-of-pocket, e.g., GPS units, gloves or boots; Sleeper Berth accoutrements like bedding and alarm clocks – and in some cases even a dog that travels with you that you may use as security; Travel expenses and per diems including hotel stays and meals not reimbursed by your employer.

Tips for Having a Less Stressful Tax Year

by Michelle Roberts | Jul 17, 2020 | Taxes

Accounting for individuals and small business entrepreneurs is not just about that dreaded tax deadline. It’s important to think of it as an ongoing process for the entire year. This way, it becomes less overwhelming when you’re in that tax crunch in April. Here are some tips that will help you in the long run:

Save Your Documents – Basically, whether you spent money on it or monies were remitted to you, save the financial record of it, e.g., receipts, cancelled checks, invoices, all need to be easily accessible. Make this a habit. It’ll be far less stressful for you to set aside a regular time to go over the records you have.
Categorize Your Expenses – Keep your business and personal expenditures separate.
Understand Your Tax Bracket – Tax brackets show you the tax rate you will pay on each portion of your income.
Ask for Help – Hire an accountant or Tax Professional to assist you. It may be long term, but it may also be on a consultancy basis; someone to reach out to and ask specific questions or touch base with as your financial picture changes.

These things will help you build an effective and realistic budget for the foreseeable future.

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Importance of Tax Professionals during COVID-19

by Michelle Roberts | Jul 16, 2020 | Taxes

The COVID-19 pandemic has affected us all. So many of us are struggling with our finances as our work hours dwindle, our furloughs persist, and we’re left wondering how to stay afloat.

In times of crisis, we may not think of tax professionals as essential to our lives, but they are, and if you own a small business, a tax professional – if you don’t already have one – can be a lifeline.

Tax professionals can and do:

Help you figure it all out — tax professionals can help determine your next move how much by looking at what you have versus what you need. They can tell you what programs you’re eligible for, and which options might make the most sense.
Help you focus – if your business qualifies for and applies for a loan with the Small Business Association, an tax professional will be able to help you compile all the data you need to submit, e.g., ledgers, profit and loss statements and sales records, as well as any follow-up required, freeing you up to tackle other critical issues that need your full attention.
Manage what you have left – by helping you adjust your costs and keeping your books in order; optimize your cash flow by identifying what is and isn’t working right now; renegotiate your contracts.
Help you keep your employees – by suggesting things that prevent layoffs or furloughs, managerial and Human Resources concerns like drafting new policies that protect your workers.

Everyone needs help at some point, and experienced advisors like tax professionals and bookkeepers can help get you through the tough times.

4 Reasons Bookkeeping is Critical for Small Business

by Michelle Roberts | Jul 15, 2020 | Bookkeeping

Why is proper bookkeeping critical to your small business? Here are four essential reasons:

Bookkeeping Helps You Catch More Tax Deductions – Simply put: If you track and record everything, you’ll find more deductions from things you did throughout the year, e.g., business lunches you had with a client six months ago, that laptop you bought in October. It’s easy for these things to slip through the cracks if they are not properly documented.
Bookkeeping Helps You Get a Business Loan – Banks need detailed financial records and income statements you can prove.
Bookkeeping Catches Any Mistakes – You need to pay attention to every transaction your business has to avoid and/or correct common financial mistakes including double payments, invoices that were not collected or other things that may be easily missed.
Bookkeeping Tells You Where Your Money Goes – This may sound obvious but keeping good track of your expenses so you can budget more effectively. You need to understand your cash flow, expenses and payments to plan for the future of your business.

Tax Professionals Can Assist With Tax Planning

by Michelle Roberts | Jul 1, 2020 | Taxes

Everyone is – or at least should be – aware of the deadline to pay our taxes, but you may not be aware that there are some long-term benefits of an overall analysis of your financial situation throughout the year in order to receive the maximum tax breaks. This is known as Tax Planning, and it can ultimately shrink your tax bill, but first, here are some things you need to know, and that a tax professional can help you with:

Understand Your Tax Bracket – The United States has a progressive tax system. That means people with higher taxable incomes are subject to higher tax rates. People with lower taxable incomes are subject to lower tax rates.
The Difference Between Tax Deductions and Tax Credits – Tax deductions are specific expenses you’ve incurred that you can subtract from your taxable income. They reduce how much of your income is subject to taxes. Tax credits give you a dollar-for-dollar reduction in your tax bill.
What Kind of Deductions to Make – Deciding whether to itemize or take the standard deduction is a big part of tax planning, because the choice can make a huge difference in your tax bill.
Knowing What Tax Records to Keep (And for How Long?) – Keeping tax returns and the documents you used to complete them is critical if you’re ever audited. Typically, it’s advised that you keep them for a period of 6 or 7 years, but it may vary depending on circumstances. A tax professional or tax preparer can help in this area.
Move Your Money – A tax professional can advise you on a number of strategies to protect your assets from IRAs to 401ks and Flexible Spending Accounts – as well as Health Savings Accounts.