In Pursuit of Profit - Blog - ASP

9/22/2020

Cash versus Accrual Accounting – Which is Better for Small Businesses?

cash vs accrual accounting

Small businesses with less than $25M in annual revenue can choose whether they prefer to use cash or accrual accounting. However, you must declare which you are using when filing business tax documents during formation and plan to stick with your choice for the foreseeable future. New businesses are often tripped up by which they should use because they do not truly understand the implications of each type of accounting.

They ask:
What are the differences?
Are there advantages to using one over the other?
Do bookkeepers and accountants work with both?

The decision about which type of accounting system to use depends on size, payment terms, business goals, available resources, and third-party financial requirements. Management should consider all these factors before deciding and consult with a professional accountant as needed during the process.

Both cash and accrual accounting methods result in the same bottom line when all your accounts receivables are collected. The differences are when that revenue is recognized and what kind of tax obligation is incurred as a result.

11/13/2018

5 Tips for Payroll Tax Reporting

5 Tips for Payroll Tax Reporting

Payroll taxes are one of the most labor-intensive employment taxes that business owners handle. Also known as “FICA taxes,” payroll tax is comprised of Social Security and Medicare taxes. These taxes are withheld from employees’ paychecks as well as paid by the employers, which means that business owners must manage both sides of the equation.

5/3/2018

Tax Reform: Changes to Depreciation Affect Businesses Now

As employers across the country celebrate National Small Business Week, the IRS reminds businesses that the passage of the Tax Cuts and Jobs Act may affect their depreciation deductions and taxes.

Business taxpayers can generally depreciate tangible property except land, including buildings, machinery, vehicles, furniture and equipment.

4/9/2018

Why am I being selected for an IRS audit?

Being selected for an audit doesn’t always mean there is a problem. Sometimes you may actually be due a refund after the audit or the IRS may accept your tax return as is.

The IRS uses several different methods to select organizations and individuals for audits:

1/8/2018

W-2, W-3, 1099-MISC, Information Returns Due Date: January 31

In case you missed it, congress passed provisions in the Protecting Americans from Tax Hikes (PATH) Act of 2015 that accelerate the due date to January 31 for filing information on wages reported on Form W-2, Wage and Tax Statement, and information on nonemployee compensation, effective for returns and statements relating to calendar year 2016.

11/30/2017

W-2 Scam - How THIEVES Are getting Employee Data

w2 scam

There are a growing number of businesses, payroll and human resource communities across the nation becoming a victim of a W-2 email scam.

Criminals use this scheme to gain access to W-2 and other sensitive tax information that employers have about their employees.

10/20/2017

What to Do After Your Payroll or Tax Professional Data is Compromised (Hacked)

Every tax practitioner in the United States – whether a member of a major accounting firm or an owner of a one-person storefront - is a potential target for highly sophisticated, well-funded and technologically adept cyber-criminals around the world.

8/15/2017

Stay Alert for Scammers Who Pose as the IRS

Now is the time when many software providers begin to send notices about software upgrades as many work to meet the September 15 and October 15 deadlines for taxpayers filing on extension.

Last week Forbes reported on the new scam involving a phishing email that impersonates a tax software provider attempting to steal usernames and passwords.

8/1/2017

IRS Standard Mileage Rate 2017 (There is an App for That!)

The mileage reimbursement rate is intended to cover the costs of operating a car for business purposes. Costs that the standard mileage rate are expected to cover include standard maintenance, repairs, taxes, gas, insurance, and registration fees.

If you didn't catch the change for 2017, the IRS standard mileage rate was reduced from the previous year.

On Jan. 1, 2017, the standard mileage rates for the use of a car (also vans, pickups or panel trucks) is: 53.5 cents per mile for business miles driven, down from 54 cents per mile in 2016.

Services

Accounting Services
Recruiting Services

Company

About
Oregon Team
Washington Team
Colorado Team
Clients

Support

Contact
CC
FAQ
Resources
Blog

ASP

Your resource for accounting & recruiting services. Serving Seattle, Bellevue, Redmond, Kirkland, Portland, Beaverton, Hillsboro, Lake Oswego, Denver, Lakewood, Aurora and more.

Contact us today for a free,
no-obligation consultation:
Toll Free (800) 931-6557
WA (425) 492-1901
OR (503) 473-0122
CO (720) 572-8211
info@asp-nw.com

© COPYRIGHT ASP - ALL RIGHTS RESERVED
A CFO Selections Company

Photos used under Creative Commons from Pricenfees, Debbieallendale