Corneliuson Joins the Independent Payroll Providers Association (IPPA)

 

A handshake between two business people

At Corneliuson, we are dedicated to being as helpful to your business as possible and are always looking for ways to improve in every aspect of our operation.

To that effect, Corneliuson is excited to announce that we’ve joined the Independent Payroll Providers Association (IPPA). This partnership will add further resources to our business that we look forward to sharing with our clients.

Why the IPPA

The Independent Payroll Providers Association is a leading nationwide trade association that specializes in payroll services. The IPPA is made up of a group of privately held service bureaus that are dedicated to client service and providing results. Corneliuson perfectly aligns with those goals, so joining the IPPA was the right move for us.

IPPA describes itself as an ASSET:

A: Assisting industry entrepreneurs during startup

S: Strategies for growth and operations

S: Supporting member collaboration

E: Evaluation and benchmarking when it’s time to sell your business

T: Technical knowledge through vendor engagements and conferences

The IPPA is a highly respected association in the accounting industry, and their firms manage the payroll services for billions of dollars of tax deposits that pay millions of employees across the country. Being a part of one of the most respected payroll associations in the country is a big step in the right direction for Corneliuson’s payroll services.

A Strong Partnership for Stronger Client Results

By joining the IPPA, Corneliuson gains an expansive network of hundreds of organizations with access to thousands of industry professionals and a combined decades of experience. This will allow us to exchange ideas and resources while learning the most current best practices in our field. Having access to this knowledge will help us make the best judgements possible for you and your business to increase your profits, get you better results, and better protect your assets.
Learn more about our payroll services and get started on financial peace of mind for your business today.

The Difference between Bookkeeping and Accounting: Why Analysis Matters

 

An accountant reviewing financial reportsTo some business owners, accounting and bookkeeping are perceived as the same thing. The confusion is understandable — these two services are closely related, yet they have distinct purposes. These responsibilities are an essential part of any business, so it’s important to learn the difference between bookkeeping and accounting before choosing a team to handle your company’s finances. Read on for our breakdown of accounting vs. bookkeeping for business owners.

The Purpose of Bookkeeping

Daily monetary transactions are what keep many businesses moving, and it’s essential to record these exchanges closely. Without procedures in place to track transactions (including payroll), a business is left guessing where its money is coming from and going to.

In order to track transactions consistently and accurately, a bookkeeper will use a tool called a ledger. Today, most ledgers are completely software-based. This makes it easier to quickly record and access all payables and receivables.

Of course, anyone can claim to have made a purchase or sold an item, so it’s best to keep source documents, such as receipts, in case of an IRS audit. These documents provide proof that a transaction occurred, so they are the best way to back up the validity of a ledger. Common source documents include:

  • Invoices
  • Receipts
  • Credit memos for refunds
  • Employee time cards
  • Purchase orders
  • Deposit slips

The Purpose of Accounting

When compared to bookkeeping, accounting is more of a high-level business task. In fact, accounting cannot exist without solid bookkeeping to back it up. The main difference between these processes is the addition of analysis in accounting. While bookkeeping is more about plugging numbers in the right places, accounting analyzes and makes sense of those numbers. It is more of a subjective task, but one that is important in forecasting growth.

Accountants organize financial indicators and make sense of them. This is important for creating accurate financial statements that paint a picture of a company’s profitability and trajectory. In addition to profits, accounting analyzes a business’ current cost of operations. When a business owner is looking to cut costs but doesn’t know where to start, accounting services make decisions easier.

Some other accounting responsibilities include:

  • Revising inaccurate bookkeeping entries
  • Creating financial statements
  • Preparing income tax returns

Accountants use all the information they have to help companies become more profitable. This means they are qualified to provide financial advice when a business owner requests it. Whether you need help with profit forecasting or tax planning, an accountant is a sidekick worth turning to.

Bringing Both Services Together

Accounting and bookkeeping are designed to work in tandem, helping business owners tackle both transactional and analysis responsibilities. If you’re looking for a full-service financial solution that incorporates bookkeeping and accounting, our team can help you get all your ducks in a row.

No matter your industry, we understand your unique financial needs. To get started with expert accounting and bookkeeping services, reach out to our team today!

The Top 5 Craziest Tax Deductions Ever Attempted

Tax refund U-Turn sign.

 

 

 

 

 

When it comes to taxes, most people try to get the most out of their deductions. Obviously, nobody wants to pay more than their fair share in taxes. The list of deductions can range from legitimate to unlikely to flat-out ridiculous. When it comes to crazy tax deductions, however, we think that these five take the cake.

 

Cat People

Sometimes we all go a little bit crazy for our pets. But what happens when your “pets” aren’t really your pets? Well, that was the case when one couple who owned a junkyard tried to claim cat food as a tax write-off. The problem? This was cat food they would routinely sprinkle around the junkyard to lure in stray cats. They claimed they were using the cats to ward off snakes and rats. Although it may be considered odd to feed dozens of stray cats, because the cats were getting rid of pests on their business property, the IRS lawyers in Tax Court came to the conclusion that this was in fact a valid tax deduction.

Verdict: Approved

 

You’re Fired

Desperation makes people do crazy things. For one struggling business owner, desperation drove him to hire an arsonist to burn his failing furniture store to the ground. The plan seemed to work. The building burned, the business owner was set to receive half a million dollars in insurance money, and it looked like he was going to get away scot-free. But, the business owner got a little too greedy. When filing for his taxes, he added the $10,000 that he paid the arsonist as a “consulting fee.” Needless to say, the IRS (and court system) did not approve. Since he voluntarily tied himself to a crime, he did not get approved for the tax write-off, nor did he get to collect the insurance money.

Verdict: Denied

 

Going Broke from Breaking Bad

The television drama Breaking Bad was a smash hit about a high school chemistry teacher who decides to start cooking meth to pay the bills. While many loved the show, one man took it much further. He decided to try to emulate the main character, Walter White, by starting a meth lab of his very own. While he was cooking one day, a hot plate ignited his chemicals and started a fire that destroyed the entire building. Upset, he attempted to write off $9,000 on his taxes as a casualty loss. Surprisingly, the Tax Court allowed him to claim the write-off, despite the fact that what he was doing was completely illegal.

Verdict: Approved

 

Free Beer Isn’t Always Free

Businesses are always thinking of new promotions that will help attract new customers. One gas station owner was no different, and he ran a promotion that offered free beer to customers if they bought gasoline. While this may seem like a red flag for the IRS (and the police), the deduction stood. Turns out, despite how dangerous and irresponsible it seems, it was considered a legitimate business expense.

Verdict: Approved

 

I Do … Not Think That’s a Business Expense

Everyone loves weddings, and why wouldn’t they? They’re a great time for everyone to come together and celebrate. But, all of this fun can end up being expensive, so one business owner had what he thought was a brilliant idea for his daughter’s upcoming wedding: invite some potential clients to the wedding and write off the wedding as a business entertainment expense. Unfortunately for him, the IRS did not buy it, and the claim did not work out.

Verdict: Denied

 

The Final Verdict

While it may be fun to laugh at these crazy tax claims, everyone can get confused by taxes at times. It’s hard to know exactly what you can and can’t write off as a tax claim. You don’t want to pay more than you have to, so it’s important that the people handling your taxes know what they’re doing.

Corneliuson & Associates can make sure you pay only what you have to while assuring the deductions you make are warranted. Contact us today to learn how we can help you manage your money.

Top 3 Challenges for Small Business Owners & How to Overcome Them

small business strategy plan

Getting a small business up and running and managing it efficiently can be very challenging. In most cases, small business owners know their respective industries well and are extremely passionate about their areas of expertise. However, it’s addressing the logistics that requires the most consideration.

Below we’ve identified three of the top challenges for small business owners and the paths that can be taken to overcome them.

Cash Flow

Financials and cash flow in particular can be an obvious stinger. Case in point: If a client is late on a payment, it can have a domino effect, thus making it harder for you to pay bills and setting you back.

The best route here is to use online invoicing that’s both courteous and persistent. For example, Intuit Quickbooks provides an invoicing software solution that features customization, automatic reminders, and the ability to integrate your billable hours into Google Calendar and other platforms.

Need a little help getting the most out of Quickbooks? We’re here for you. Check out our Quickbook services.

Hiring & Retention

Much of small business success depends on a company’s ability to find the right talent and to retain that talent. How do you hire the right amount of employees, while balancing that with the overall costs of your business?

From the start, ensure that the hiring process is thorough. Online hiring platforms such as LinkedIn and Indeed allow for more in-depth vetting. Additionally, make sure to explain as much about the job as possible to potential hires from the get go. And before hiring, ensure that you can actually afford new employees (the Intuit Quickbooks website features some great tips).

Once hired, effective retention suggestions include: providing bonuses, benefits, PTO, promotion, and displays of appreciation.

Advertising & Marketing

Marketing your services to potential customers can present one the largest challenges you’ll face. You can have a spectacular service or product, but if it’s not marketed in the correct way, you’ll have trouble getting people to walk through the door or pick up the phone.

Cross all your t’s and dot all your i’s: Make sure to have a great social media presence, an easy-to-navigate website, local business listings on search engines like Google and Bing, and positive online reviews. Meanwhile, more traditional marketing techniques include: participation in community events, discounts, print ads, and more.

To see how Corneliuson & Associates can help your small business overcome its challenges, contact our experts today.

What to Know About Running a Food Truck: Tax Deductions & More

Female customer reaching food from vendor

Food trucks have proven to be a booming industry, not only in the Minneapolis-St. Paul area, but also across the country. If you’re thinking about opening a food truck business or have begun one already, it’s important to know that food truck tax deductions can be extremely helpful. By being familiar with what to deduct and some other important tax-related issues, you can run your food truck business in the most financially efficient way possible. Here’s what to know:

How Your Business Is Set Up

Most food truck businesses are set up as sole proprietorships, partnerships, or LLCs:

  • Sole Proprietors – Sole proprietors report all the income their businesses make and must file using Schedule C and Form 1040. In other words, your income will be taxed, but you will also be able to deduct applicable business expenses.
  • Partnerships – Partnerships don’t pay taxes on income, but are required to report their operating profits and losses to the IRS using Form 1065. Partnerships may be responsible for employment taxes (Social Security/Medicare – learn more via IRS.gov).
  • LLCs – Like partnerships, LLCs do not pay federal income taxes. Rather, they report profits and losses using their personal federal tax returns. LLCs can be treated by the IRS as either a partnership or a sole proprietorship dependent upon the number of members.

Tax Deductions

Dependent on how you have your food truck business set up, you may qualify for a number of worthwhile deductions, including:

  • Vehicle expenses – You can take the standard mile deduction here or simply deduct your business expenses. Make sure to keep track of the miles you travel, along with any parking fees.
  • Equipment – Like most other businesses, you can deduct business equipment purchases up to a certain limit. To learn about this, visit Section179.org.
  • Business Expenses – A number of business expenses can be deducted. These can be related to marketing, supplies, maintenance, advertising, and more.

Remember when it comes to deductions, keep track of everything, including receipts and other proofs of payment. For more information on business deductions contact the experts at Corneliuson & Associates today.

Offering Employee Benefits: Which Should You Provide?

EMPLOYEE BENEFITS, message on paper, smart phone and coffee on table
EMPLOYEE BENEFITS, message on paper, smart phone and coffee on table

When small businesses provide adequate benefits to their workforce, it not only helps employee morale, but it can also help retain quality employees for the long haul. But if you’re new to running a small business, how do you know exactly which benefits to provide? Not only that — how do you find the right balance, ensuring you can afford to provide the benefits and that they’re sufficient? Here are some things you need to know about small business employee benefits.

Required Benefits

Some benefits aren’t optional. As a business, you must provide things such as workers’ comp, unemployment (through taxes), and social security (also through taxes). And if you live in the states of California, Hawaii, New Jersey, New York, Rhode Island, or the U.S. territory of Puerto Rico, you must also provide disability insurance. Employers must also offer up to 12 weeks of family and medical leave in instances of required childcare, illness in the family, and when an employee is dealing with serious medical issues. For full details on required benefits, check out the U.S. Small Business Administration website.

Which Optional Employee Benefits Should I Offer?

Health Insurance

Providing health insurance is indeed an added cost overall, but it enables your business to attract and retain top talent and maintain workplace morale. Additionally, small businesses offering health insurance can take advantage of a number of benefits, including:

– Deducting health insurance costs as a business expense
– Qualification for a tax credit if you have fewer than 25 full-time employees (visit the IRS.gov webpage).
– Avoiding a tax penalty: Since 2015, businesses with over 50 employees must provide health insurance or face a tax penalty.

Retirement Savings Accounts

Retirement savings accounts such as 401(k)s give employees peace of mind in terms of their long-term financial futures. Employees are able to decide how much to contribute towards retirement from their paychecks. Additionally, employers can choose to match a percentage of what employees are putting away.

Aside from 401(k)s, employers may also want to consider the following retirement savings options:

Simple IRAs – Tax-deferred savings accounts provided by employers for employees to contribute towards retirement.
Employee Pensions – An investment fund that employees and/or employers contribute money to for the future benefit of employees. Upon retirement, employees then regularly receive money from their pension.
Payroll deduction IRA – An individual IRA set up by an employee with a financial institution funded through a payroll deduction set up with their employer.

Less Common Benefits

Less common benefits may include: Incentives for workplace performance, bonuses, flex time (ability to work from home or at different hours), dental and vision insurance, vacation time, life insurance, child care subsidies and more.

While many benefits are indeed optional, making them available gives your small business the ability to attract and retain top talent that will pay off in the long-term. Simply said, investing in your employees is investing in your business.

For more information on how you can set up a solid benefits package for prospective employees, contact the experts at Corneliuson & Associates.

Staying on Track with a Small Business Expense Tracking Spreadsheet

Happy man entering data from home on laptop an office work placeManaging small business financials is a critical task. When it comes to expenses, it’s important to organize and track everything, so when it’s tax time you report everything correctly. This allows you not only to pay no more than absolutely necessary, it also protects you in the event of an audit and helps you plan for the next fiscal year. When you’re managing small business expense tracking, there are a few things you’ll want to keep in mind:

Recording expenses can help your small business qualify for a number of important tax credits, including deductions related to startup expenses, financial losses, tax and legal fees, home office, travel, insurance, and more. For more on exactly which small business expenses can be deducted, check out the IRS.gov Deducting Business Expenses webpage.

Keep and organize receipts physically or electronically

One of the most important aspects of expense tracking is keeping proof of payments for every aspect of your business. This can include everything from advertising costs, all the way to interest. Make sure all expense categories are tracked via a spreadsheet.

Use software

Tracking expenses may seem painstaking, but it’s easier than ever before thanks to the availability of software options, such as solutions from QuickBooks, to streamline the process.

Organize by quarter

Dividing the year into quarters and adding up totals gives you the ability to organize and plan more effectively, especially if you expect to pay estimated taxes on a quarterly basis.

Utilize what’s available for free

You can find small business expense tracking spreadsheet templates available for download online, including via the Microsoft Office website (visit templates.office.com here). Templates are easy to customize to fit your business’s unique needs.

Keep personal and business expenses separate

Make sure your business has its own credit cards and bank accounts. When you need to go back and retrieve statements for record keeping, this will make them easier to find and record.

For more information on how you can better track your small business expenses, contact the experts at Corneliuson & Associates today.

5 Questions to Ask a Tax Accountant Before Working with Them

cornblog1When you look to hire someone to handle your small business’s finances, it’s important to find someone you can trust so you can focus on the things you’re most passionate about. Spending too much time on issues like company taxes can take your focus off of the things that matter most – typically, bettering your company’s products and/or services. But rather than trust just anyone, there are some important questions to ask a tax accountant before working with them: 

What software do they rely on? Are they using a good software platform that’s extremely reputable? If they’re using Intuit QuickBooks, for example, the program’s ability to share financial data with you in a way that’s easy to understand is an advantage.

How do you need to pay them? Different accounting firms take different approaches to billing. Do they charge a flat rate or by the hour? Ask yourself, which is easier for me to pay? If possible, ask them to give you a quote.

What’s your experience with businesses such as mine? Every business has unique needs, but if they’ve dealt with your industry before, they could be a better fit. For example, some industries have unique deductions that can be made.

Have you represented clients during IRS audits? Hopefully you’re in for some smooth sailing with the IRS. However, even if you do nothing wrong, sometimes you can still be audited. What’s your CPA’s experience representing clients in front of the IRS? A firm that already has experience doing so could make the process that much easier.

What’s your availability? Having an open line of communication with your accountant can be extremely important, especially during tax time. Someone who’s available during the course of the entire year is always a plus.

When it comes to your small business’s finances, make sure you’ve crossed all your t’s and dotted all your i’s. Contact the experts at Corneliuson & Associates for all your small business accounting needs

How to Calculate & Pay Estimated Quarterly Taxes: A Small Business Guide

Tax time and alarm clock with coins, calculator and calendar

If you’re a small business owner, chances are you’re structured as a sole proprietorship, or perhaps even a partnership. Under IRS guidelines, as an individual, it’s required that you pay estimated taxes based on a quarterly schedule as you earn income annually. This is true as long as you expect to owe at least $1,000 when it’s time to file your return.

Throughout the year, you’ll want to keep the following dates in mind. This will ensure that you pay in a timely manner, as a means of avoiding any penalties at the end of the year.

  • Quarter 1 (January 1 – March 31) – Estimated taxes due on: April 15, 2017
  • Quarter 2 (April 1 – May 31) – Estimated taxes due on: June 15, 2017
  • Quarter 3 (June 1 – Aug 31) – Estimated taxes due on: September 15, 2017
  • Quarter 4 (Sept 1 – December 31) – Estimated taxes due on: January 15, 2018

How to Calculate Estimated Quarterly Taxes

Estimated taxes can be calculated through Form 1040-ES, as found on the IRS’s official government website. In order to calculate your estimated tax amount, you’ll need to determine the estimated financial amounts for the following:

  • Your adjusted gross income
  • Deductions
  • Credits
  • Taxable income

Additionally, the IRS recommends that you take into account the prior year – your deductions, credits, and income as a means to help you make more accurate estimates. However, small business owners who are perhaps new to the process will surely have more questions. Therefore, the IRS typically exempts startup owners from having to pay quarterly estimates during their first year of operation.

What Happens if I Underpay…?

If you underpay, it is possible you will owe a penalty. However, you might be able to avoid a penalty in the event that you ultimately owe under $1,000 once you’ve deducted your credits and withholdings. Meanwhile, in the event that you overpay, you’ll receive a refund.

How to Pay Estimated Quarterly Taxes

The IRS makes it easy to pay your quarterly taxes through its online payment portal – either directly through your bank account, or with your ATM/debit or credit card. Meanwhile, other payment options include by mail (information here) or by phone.

For additional information on quarterly taxes or how we can help, contact the experts at Corneliuson & Associates today.

5 Resolutions for Running Your Business More Efficiently in 2017

A new year brings new resolutions, and for your small business, a chance to run things more effectively. If you’re looking to revamp things a bit, consider the following tips on how to increase your small business efficiency:

Outsource Financials

Chances are that one of the reasons you started your small business was so you could work on something you’re truly passionate about. All too often, however, small business owners get bogged down in the nitty gritty of financials — whether it’s bookkeeping, accounting, payroll, or tax preparation. When this happens, you have less time to focus on bettering the product or service you’re offering. Consider outsourcing your financials with a trusted accounting firm like Corneliuson so that you can focus on what matters most.

Simplify Your Hiring Process

Sure, the hiring process can be one of the most arduous tasks of running any business, but it doesn’t have to be. To make hiring easier, the Professional Association of Small Business Accountants recommends using an online platform such as Proven, which allows you to post to over 100 jobs boards through a single submission. This way instead of just posting to Craigslist, you expand your reach more qualified candidates. Not only that, but you can track applications through an app on your smartphone.

Step Your Online Operation Up a Notch

Are you making the most of your online operation? Some questions you’ll want to ask yourself:

  • Do I have a mobile-friendly website?
  • Do I have an easy to use e-commerce platform?
  • Am I on all the social media platforms that my customers use?
  • Am I on all the important local listing sites (i.e. Yelp, Google, Bing)?
  • Do I blog regularly about my business?

If the answer is no to any of the aforementioned, it’s time to step your online operation up a notch.

Embrace & Analyze Customer Feedback

Encourage your customers to provide you with feedback, whether it’s through a physical form you provide them upon checkout, or via Yelp or some other form of online review. Take the feedback, especially if it’s negative, into account and analyze how you can improve your business operation to better meet the concerns of any customers who provide constructive criticism.

Plan to Meet Objectives Incrementally

Plan to accomplish things incrementally. If you’re planning to launch a new website, for example, perhaps set a goal to have it up and running by May, then plan to launch a new service or product by July. Trying to take too much on at once can bog you down.

To learn how you can run your business more efficiently by working with the professionals at Corneliuson & Associates, contact us today.