A business owner sitting at a table

How to Know Which Accounting and Auditing Services Make Sense for Your Business

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Not many small business owners or entrepreneurs particularly enjoy the accounting aspect of their business. For most people, it’s a tedious but necessary task that must be endured in order to keep doing business.

If you have simple finances and few employees, you may still be handling the books yourself. But at some point, the task may grow beyond what you alone can handle. This points many business owners in an awkward spot—large enough to need some accounting help, but not large enough to require a full-time accountant or financial department.

If you’ve found that accounts receivable or accounts payable are not up to date, or payroll details have been missing, it’s time to seek help with your accounting needs. This means asking a basic question about which accounting services are best for your small business. If you are concerned about IRS tax audits, or find yourself in need of an internal financial statement audit to reconcile some mismatching numbers, you might seek out an accounting firm with tax law experience.

Check out 10 Bookkeeping Tips for Small Businesses to make sure you haven’t missed any best practices for your accounting functions. It will help you ask better questions when choosing an accounting and auditing service.

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A business owner on the phone while reviewing his accounts

What Triggers an IRS Audit? And Am I (or My Business) at Risk?

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There are few things in life that inspire fear and anxiety like finding out you are being audited by the IRS. Just thinking about the potential implications for your personal life and your business can be headache-inducing, at the very least. But is there anything you can do to avoid an audit? After all, audits are random, aren’t they?

While only IRS insiders know the actual algorithm responsible for audit triggers, we know that there are a few red flags that can put you on the short list for an audit.

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A man making a phone call to remove a hold on a license

How to Remove a Hold on Your Driver’s License From Unpaid Taxes

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If you have unpaid taxes, you probably already know that the state of Maryland may add fees and interest to your debt. But if you couldn’t afford to pay the tax liability in the first place, you might be tempted to shrug your shoulders and say, “Oh well.”

This is why the Comptroller of Maryland may use another technique to persuade you to pay back your debt. The state can withhold your driver’s license or vehicle registration until you address your unpaid debt. Many people rely on vehicles for transportation for work or school, so losing their driver’s license can have a devastating impact.

Businesses can also feel this impact, since unpaid debt may interfere with vehicle registration renewal for any vehicles owned by the business. This can be caused by unpaid unemployment insurance contributions, unpaid business taxes, and more.

If you’ve received notice that the state has placed a hold on your driver’s license or registration, you should call a tax attorney like S.H. Block Tax Services to find out what your options are. Our firm has experience with resolving tax debt and can help you get back on the road.

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A woman working on a computer to remove a lien

How to Remove a Tax Lien (so You Can Refinance Your House)

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If you’ve got a tax lien on your house, you’ve probably got questions about it—and for most people, the number one question is “how do I get rid of it so I can refinance or sell my home?”

The short answer is that you should be able to pay off your state or IRS tax debt in full to get rid of your lien. But as with just about everything involving taxes and tax debts, the process can get a lot more complicated than that.

In this article, we’ll provide some general information about liens and talk in detail about the steps to get rid of a home tax lien. We’ll also explain how an experienced tax professional can help make the lien removal process a whole lot easier in many cases.

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a bookkeeper or accountant recording information in a notebook and discussing graphs and charts with another professional

What Is the Difference Between Bookkeeping and Accounting?

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While bookkeeping and accounting both support healthy finances and accurate financial records for businesses, they are not the same thing. Although they work together, they perform separate functions and require different skillsets. And if you want to make wise financial decisions (and avoid costly tax penalties), you need both.

Bookkeeping is actually a building block for good accounting. With greater accuracy and organization in your ledger, you set yourself up for greater success with accounting.

If you find that your business is struggling with financial forecasting and analysis, you might benefit from stronger foundational bookkeeping. Hiring a bookkeeping service can be a great way to strengthen your business’s finances. While many small business owners start out handling the finances themselves, hiring financial professionals can bring huge benefits for their business. The knowledge of financial best practices can help keep your business healthy and growing.

However, you may not know what kind of financial help you need. If that is the case, let’s dive deeper into the differences between bookkeeping and accounting.

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Are Student Loans Tax Deductible?

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Going to college can be a time of growth and excitement, not to mention set you up for a productive career. But for many graduates, student loans are the college hangover that just won’t go away.

Student loan debt can follow you around for most of your adult life, causing financial stress and impacting your daily decisions. Yes, the Biden Administration has recently made some key changes to help borrowers of federal student loans, including up to $10,000 in debt cancellation (or $20,000 for Pell Grant recipients) for low- and middle-income households. But that may be just a drop in the bucket for borrowers who still owe significantly more than these caps.

While student loan repayments are not tax deductible, the IRS does offer some relief by letting you deduct student loan interest from your federal taxes. No matter how long it takes you to pay off your student loans, if you pay loan interest, you may be eligible for a deduction on your tax return. There is no limit to how many years you can take that deduction.

If you are just learning about this now, and are kicking yourself for not taking this deduction in previous years, there’s good news there as well: you can file an amended tax return to fix any mistakes made on prior returns, and potentially get back an extra refund.

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an adult child discussing financial matters with a parent

Can I Claim My Parents or an Adult Child as Dependents?

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With many families seeing the economic benefit of multi-generational households, there’s another benefit you may be wondering about: tax breaks.

If you support someone in your family financially, such as a parent or adult child, you may be able to claim them as a dependent even if you don’t live in the same household.

The IRS has a few tests to help you determine if your financial support allows you to claim a qualifying child or a qualifying relative. The tax credit depends on how your dependent is qualified; the credit for a qualifying child is $2,000 and the credit for a qualifying relative is $500.

Figuring out whether your support qualifies you to claim a dependent can be a little tricky in some cases.

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reviewing Venmo and Zelle payments while filling out a package address

Do You Have to Pay Taxes on Venmo and Zelle Payments?

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Payment apps have made it easier than ever to split the bill when you go out with friends, but new rules in the tax code might add some extra complication to apps like Venmo and Zelle.

You can still split the bill with friends without any tax implications, but if you receive $600 or more tagged as “goods and services,” or if you have a business account with a payment processing app, you will receive a Form 1099-K for reporting this income to the Internal Revenue Service on your 2022 income tax return.

If you use multiple payment platforms to receive payments, you may not receive a 1099-K tax form, but that doesn’t mean you don’t have to report this income on your taxes. Keep reading to see what rules apply to you, and how this change will affect your payments and taxes. If there is any confusion, you should talk to a tax professional about your specific situation.

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crypto and irs questions

Crypto and IRS: How Will My Cryptocurrency Sales Affect My Taxes?

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Cryptocurrencies (also called altcoins or virtual currency) have seen some wild fluctuations in the recent past. For example, the value of a single full Bitcoin went from $10,000 to nearly $70,000 and then back down to $20,000, all within the span of two years.

Some people have realized huge profits and others have lost thousands (or more), but not everyone has considered the tax ramifications of those sales. The Internal Revenue Service considers cryptocurrencies to be property. That means a variety of taxes likely apply to your altcoin transactions, whether you sell your virtual currencies or use them to pay for goods or services.

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Protect Your Family With Effective Estate Administration and Planning

Protect Your Family With Effective Estate Administration and Planning

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If you intend on leaving assets that need to be distributed to your heirs after you pass—whenever that may be—estate planning is an incredibly valuable endeavor.

This is not something to be ignored until your golden years, particularly if you have minor children. If the unthinkable happens, you want to make absolutely sure your family members will be well cared for.

Making an estate plan gives you a chance to convey your final wishes. Then, the act of estate administration, which is the reconciliation of debts, filing of forms, and distribution of your assets, will happen in accordance with your desires—rather than state law.

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