What is the role of accounting in wealth management?

Accounting plays a crucial role in wealth management by providing accurate financial information, tracking income and expenses, evaluating investment performance, and ensuring compliance with tax laws. This allows for informed decision-making regarding asset allocation, tax planning, and long-term financial strategy.

How does tax law impact business accounting practices?

Tax law dictates how businesses must record and report their financial transactions to taxation authorities. Businesses must follow specific regulations regarding deductions, taxable income calculation, and reporting deadlines to remain compliant and minimize tax liabilities.

What are the key considerations for accounting when preparing for taxes?

Key considerations include accurately recording all financial transactions throughout the year, understanding applicable deductions and credits to reduce taxable income, staying updated on changes in tax laws, maintaining organized records for audit purposes, and planning ahead to manage cash flow for upcoming tax payments.

How can effective accounting strategies minimize tax liabilities for businesses?

Effective accounting strategies that can minimize tax liabilities include taking advantage of all allowable deductions and credits; employing deferral tactics such as postponing income or accelerating expenses; choosing the right business structure; leveraging retirement plans; optimizing inventory management; making charitable contributions strategically; and seeking out professional advice for complex situations.

What are some common mistakes made in business accounting that can lead to issues with wealth preservation or taxation?

Common mistakes include failing to keep meticulous records leading to missed deductions or errors in filing; not staying current with changing tax legislation which may result in non-compliance penalties or missed saving opportunities; mixing personal finances with business accounts which complicates accurate reporting; neglecting quarterly estimated tax payments causing underpayment penalties; and inadequate planning for large expenditures or revenue shifts impacting cash flow during tax periods.

S-Corp Tax Services

Tax refunds totaled $3,925,074 for our valued clients last year.

If you’re a small business owner, March 15th may feel like it’s approaching too quickly. Maybe you already have your financials ready, or need Insogna CPA to help with bookkeeping, but is either enough to ensure that your maximizing your 1120S taxes?

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What is an S-Corp?

An S-Corporation (S-Corp) is a tax election made with the IRS that allows a sole proprietor or partnership to be taxed as an S-Corp. S-Corps elect to pass corporate income, losses, deductions, and credits through to their shareholders for federal tax purposes. Because of this, many often refer to them as a ‘pass-through’ entity.

There are a few other requirements:

Can’t consist of more than 100 shareholders.
All shareholders in an S-Corp must be individuals and legal residents of the United States. (This means shareholders cannot be legal entities)
Only one class of stock units. All shareholders need to pay taxes based on their percentage of ownership in the S-Corp

Should I be an S-Corp?

If you are making a net profit (after expenses) of more than $30,000 per year, you should consider electing to be taxed as an S-Corp. Why? You’ll pay less taxes overall versus filing as a SchC and paying self-employment taxes on all of your net profits.

Now, obviously an S-Corp doesn’t make sense in every business situation, so Contact Us if you’re not sure and need a professional look at your potential tax savings strategy.

How Does an S-Corp Get Taxed?

One of the largest benefits to filing as an S-Corp is that you escape the “double tax” bind that many C-Corps face. If an S-Corp loses money, that loss typically offsets the shareholder’s individual taxable income on their IRS1040. This can be a significant tax savings. And what about an S-Corp owners “reasonable” salary? Want to know what “reasonable” is…? Contact Us to engage our specialized software to find out exactly what you should pay yourself.

How Do I Get Started?

Insogna CPA’s tax experts can help you determine whether making the S-Corp election makes sense or not, as well as ensure and identify exactly what you should be paying yourself to avoid over-paying payroll taxes.

Don’t pay more tax than you need too—our goal is to make sure you keep as much as you deserve and maximize your tax savings.