Learning Center for Tax and Financial Insights

Every entrepreneur starts their company with their own vision of what the future holds. Maybe you thought you’d just work from a home office, managing every function and loving every minute of it. Maybe you always knew you were going to make it big and would need a suite of executives, a team of sales and marketing professionals, and a whole bunch of support staff to help the whole thing run like a clock. Whatever you anticipated, if you’ve gotten to the point where your books and your financial planning have gotten beyond your ability, it’s time to think about bringing on someone with more time and experience. While you may be tempted to hire a full-time CFO, there are many benefits to using the fractional CFO services offered by a bookkeeping or accounting firm.Every growing business needs accurate and timely record-keeping and reporting. But if your needs have grown beyond basic bookkeeping and you need financial insights, accounting management, KPI tracking, and analysis, it’s time to hire a professional. In the past, businesses in your position have had little choice but to bring on a Chief Financial Officer. Today, an increasing number of successful entrepreneurs are recognizing that hiring a virtual CFO — also known as a fractional CFO — makes a great deal of sense. And you can easily access this service by contacting your professional.A virtual CFO provides outsourced financial services at a fraction of the cost of a full-time employee’s salary. While every business is different and compensation can shift based on years of experience, geographic location, and the scope of the actual work, there’s no getting around the fact that the median salary paid to a Chief Financial Officer in the United States is $417,857. That’s a pretty big hit to take as a new expense, and that doesn’t count the outlay for benefits, bonuses, and associated costs starting with office space and equipment and going on from there.While the services afforded by a full-time Chief Financial Officer would undoubtedly be valuable, most businesses have legitimate questions about whether the outlay of cash is worth the price. Now consider instead the option of using your CPA firm’s virtual CFO service. They have invested in bringing on professionals who possess all of the same knowledge and experience, but a fractional CFO service participates on a customized schedule to suit the needs of your company — and charges according to a much more reasonable contracted monthly fee, without the need to pay benefits, bonuses, or other expenses.

November 10 - Report Tips to EmployerIf you are an employee who works for tips and received more than $20 in tips during October, you are required to report them to your employer on IRS Form 4070 no later than November 10. Your employer is required to withhold FICA taxes and income tax withholding for these tips from your regular wages. If your regular wages are insufficient to cover the FICA and tax withholding, the employer will report the amount of the uncollected withholding in box 12 of your W-2 for the year. You will be required to pay the uncollected withholding when your return for the year is filed.

The Internal Revenue Service on Sept. 28, 2022, warned taxpayers of a recent increase in IRS-themed texting scams aimed at stealing personal and financial information. This video will give a brief description of what to watch out for and how you can possibly identify a scam.

Here are seven ways you can be safe, compliant, and productive when you’re using QuickBooks Online.“Best practices” is a phrase that human resources professionals have been using for decades. But every type of profession has its own best practices, whether they call it that or not. These guidelines are not enforceable rules, though some managers may build them into their official policies. They just describe the way work should be done to achieve optimal outcomes and keep data organized and secure.You may have heard of Generally Accepted Accounting Principals (GAAP). Public companies are required to adhere to them, and many other businesses large and small follow these rules and procedures. We’re not going to discuss GAAP in this month’s column. Rather, we’re going to talk about more general best practices for accounting, actions you can build into your QuickBooks Online work to make that time more productive and in line with what other successful businesses do.How Do They Help?Accounting best practices have numerous benefits. For example, they:Help maintain the integrity of your QuickBooks Online data files.Improve the accuracy of your accounting work.Save time.Provide insight on the financial health of your business.When you incorporate best practices into your work, you may even find that your relationships with customers and vendors get better because you’re handling their businesses? conscientiously.7 Suggestions For YouHere are seven guidelines that we try to follow. We hope you will, too.Track your 1099 vendors If your business employs contractors, make sure that you indicate their 1099 status in their vendor records.Changes in the economy over the last few years have led some people to take on part-time (or even full-time) contract work. You should be creating vendor records for these individuals. Click Expenses in the tool bar and then select the Vendors tab. As you’re completing a record, you’ll see a section labeled Additional info. Check the box in front of Track payments for 1099. You can create and deliver your 1099s using QuickBooks Online when the time comes.Reconcile, reconcile, reconcileOnce you’ve downloaded cleared transactions from your financial accounts, it’s important that you reconcile them. This is probably one of your least favorite tasks to undertake, but QuickBooks Online simplifies it for you some, walking you through the process. Reconciling accounts regularly can help you:Discover errors and missing transactions.Get a more accurate picture of your cash flow.Make your reports more preciseKeep your lists up to dateYour QuickBooks Online company file can grow substantially over the years. Though the site has great search capabilities, you may still be scrolling to find the entries you want. This isn’t as big a problem for lists like Payment Methods or Terms, but overly lengthy lists of Products and Services, Customers, and Vendors can become unwieldy over time. Try to keep them current. If you don’t want to delete them completely, you can make individual records inactive by clicking an Action link in the listing table for each.

November 10 - Social Security, Medicare and Withheld Income TaxFile Form 941 for the third quarter of 2022. This due date applies only if you deposited the tax for the quarter in full and on time.November 15 - Social Security, Medicare and Withheld Income Tax

Article Highlights: 2023 Social Security COLA Increase Historical COLA Increases Keeping Inflation At Bay Medicare Premium Decrease Medicare Income Adjusted Tables for 2023 Modified Adjusted Gross Income How Gambling Can Affect Medicare Premiums Social Security Trust Fund The Social Security Administration recently announced that Social Security beneficiaries will get an 8.7% increase to their benefits in 2023. Thanks to the current high inflation this is the highest increase in 40 years, and the second year in a row that there’s been a substantial increase, 5.9% in 2022 and now 8.7% for 2023. The table below reflects the COLA benefits going back to 1976. As you will note, the COLA increases have been relatively stable in recent years except for 2008. HISTORICAL SS COLA RATES (Percent) YEAR COLA YEAR COLA YEAR COLA YEAR COLA YEAR COLA 1976 6.4 1986 1.3 1996 2.9 2006 3.3 2016 0.3 1977 5.9 1987 4.2 1997 2.1 2007 2.3 2017 2.0 1978 6.5 1988 4.0 1998 1.3 2008 5.8 2018 2.8 1979 9.9 1989 4.7 1999 2.5 2009 0.0 2019 1.6 1980 14.3 1990 5.4 2000 3.5 2010 0.0 2020 1.3 1981 11.2 1991 3.7 2001 2.6 2011 3.6 2021 5.9 1982 7.4 1992 3.0 2002 1.4 2012 1.7 2022 8.7 1983 3.5 1993 2.6 2003 2.1 2013 1.5 1984 3.5 1994 2.8 2004 2.7 2014 1.7 1985 3.1 1995 2.6 2005 4.1 2015 0.0 Rate for a particular year is effective for the following year’s benefit payments The Social Security Administration will mail notices to Social Security beneficiaries during the month of December letting them know what their 2023 benefit will be. The COLA adjustment will boost retirees’ monthly payments by an average of $146 to an estimated average of$1,827 per month for 2023. The COLA increases are about keeping the roughly 70 million Social Security recipients up with inflation and not really providing any increase in buying power. The 8.7% increase will be included in the January 2023 benefits. Medicare Premiums – The Centers for Medicare and Medicaid Services also recently announced the 2023 Medicare premiums. Seniors will also see a rare but small drop in the Medicare premium rates. Both Medicare B (Medicare premiums) and Medicare D (Medicare prescription drug coverage) are treated as medical insurance premiums that may be tax deductible by a taxpayer who itemizes their deductions and for some self-employed individuals. Medicare premiums are not a fixed amount for all retirees. The amounts paid or withheld from the individual’s Social Security income is based on the taxpayer’s modified adjusted gross income (MAGI) from the two years previous. The following tables reflect the 2023 Medicare Part B monthly premiums and the Medicare Part D monthly supplement based upon a taxpayer’s 2021 MAGI. To determine the amount that will be withheld from your monthly Social Security benefit add together the Part B and D amounts.