If you are an entrepreneur, you are obviously very good at operating and managing a business. Perfect, you should handle all these tasks by yourself. But what about the things you are not so good at? Who will deal with them? One such area is accounting on which you may not be that perfect, so should you do this by yourself as well? No, hire an tax accountant Orlando to help you out with this, so that you can manage the finances of your business in a better way. Moreover, doing so will help you comply with the tax laws and avoid trouble with the IRS, while aiding you in assessing the health of all your cash flows.
If you want your company to grow, here is some accounting advice that you should definitely act on.
Set measure goals
You can never track your progress and determine how much you have succeeded until you have proper goals and metrics in place. Set accounting goals that you can achieve in the time to come. The aims should be such that they help you in monitoring your progress and also tie back to your company’s bottom line.
As for the metrics you can choose any one of these, but most of the industry relies on accounts payable and accounts receivables.
Prepare proper reports with regards to the accounting tasks
You should keep yourself updated with how well your business is performing in the accounting sector. This you can do if you prepare monthly reports that clearly mention all accounting stats and figures. Close you books within the deadlines and double check them to ascertain there are no discrepancies of any sort. Your P&L should clearly mention your earnings and expenses, so that you can easily evaluate the amount of cash you have in hand, the amounts that are in the bank, inventory levels and so on.
Take your accounting data on the cloud
The cloud technology has rapidly become an integral part of data a management, and you should implement is as well if you so do not want to be left being in the race. There are so many accounting systems that feature this technology and will help you access data whenever you need it and wherever you need it. Other than easier management, a cloud technology does have its benefits such as increased productivity, 24/7 access, more convenience and so on.
Since there are many accounting systems available, it might be difficult for you to choose one. Make sure whichever one you go for is tailored to your business’s nature, and can take care of all your issues such as invoicing, billing payroll and the like. Your chosen tax accountant Orlando will be able to guide you about this.
Accounting is not only limited to tax compliance
There are so many people who think that accounting only has to do with taxes, but that is not true. There is a lot more involved and if you delve in it, you can manage your business in a better way.
Planning Out Your Taxes
The main aim of tax planning is to arrange your finances such that you have to pay the lowest possible amounts in taxes. Generally, there are three main approaches to doing this increasing your deductions, reducing your income and taking advantage of tax incentives. Your tax accountant Orlando can guide you more about these, but here is a quick review.
Reducing Your Income
The amount that you pay intakes is estimated from your Adjusted Gross Income or the AGI. The AGI affects not only the tax amount but other things as well such as the tax rate, tax credits and so on. In fact, AGI is a factor that is not only limited to taxes, but plays it part beyond accounting as well. In general terms, it can be regarded as something with which you can measure your finances pretty well.
Coming on to the issue of reducing AGI, you can do this once you realize what this factor is made up of. AGI can be defined as your total income minus the adjustments. Obviously, the higher your income is, the greater will be your AGI and the more taxes you will have to pay. Reduce your income and you will be to reduce AGI. Possibly the best way to reduce this is to contribute amounts to a retirement account such as 401 (k).
Another way to decrease AGI is to make use of more adjustments. Adjustments are just deductions. However, for them to work as adjustments, you will have to mention them page 1 of the 1040 tax form instead of itemizing them in Schedule A. Examples of adjustments include contributions to IRA, student loan, alimony and other similar expenses. Browse the form and you will be able to view a complete list. Your chosen tax accountant Orlando can also help you in determining your adjustments.
Increasing Your Deduction
Now that you have reduced your income, how do you increase your deductions? A standard deduction can be availed by anyone, but it will be good if you can itemize it somehow. You can do this by making use of expenses related to health care, local taxes, property taxes, charity gifts, tax preparation fees, costs related to investments and so on. Once you have your itemized deductions, compare it with the standard deduction, and go for whoever is the higher value.
As for the standard deduction, that actually depends on the filing status and number of dependents you have. Getting married or increasing your dependants can help you in increasing your standard deduction.
Taking Advantage of Tax Incentives
Okay, so by now, you must have done the two major parts. The third strategy is to utilize tax incentives, which can bring down your taxes. Though there are many tax incentives, the best of these are college expenses and adoption. The latter may not be suitable, but you can easily use the former option. Ask your tax accountant Orlando and he will be able to provide you with more information regarding tax incentives and the manner in which you can use them.
If you need more information about our Orlando accounting and tax services, please contact us at 407-502-2400. Freedomtax Accounting’s staff has been providing honest accounting services and tax services for 15 years. Our Orlando accounting and tax firm has its main offices in Kissimmee, FL. Our services are provided nationwide, but mainly in the Central Florida market to areas like Orlando, South Orlando, Kissimmee, St. Cloud, Poinciana, Clermont, Davenport, and Hunters Creek, FL. Our tax accountants and IRS enrolled agents (irs ea) specialize in corporate accounting and bookkeeping, tax services, tax preparation, back taxes help, tax debt relief, tax resolution, tax planning, itin numbers, incorporations, and non profit 501c3 tax exempt status applications.