Atlanta CPA: Be Sure Your Business Does Not Become a Statistic…Practice Wise Financial Management
Wise financial management is one of the best ways for your business to remain profitable and solvent. How well you manage the finances of your business is the cornerstone of every successful business venture.
Every year tens thousands of potentially successful businesses fail because of poor financial management. As a business owner, you will need to identify and implement policies that will lead to and ensure that you will meet your financial obligations so you will not be counted among those business owners who do not economically survive.
So you can manage your business, setting up a sound, realistic budget by determining the actual amount of money needed to open your business the monies needed to keep it open (operating costs). To help our clients we have found that quick, informative communication is essential to both:
Keeping Your Tax Bill as Low as Legally Possible
Profit Maximization & Opportunity Management
The below is a sample letter we might send to a client to ensure that they are well informed about financial and business decisions facing their business and to ensure that their annual corporate income tax returns or IRS Form 1120S are properly compiled and prepared:
Please verify if you were the sole employee of the corporation.
The Retained Earnings at the end of last year per your internal accrual books was $10,000. Please adjust your internal books to this number and resend the balance sheet and profit and loss.
Did pay any monies (just the tax but not the penalties and interest) against your old state returns.
For the retained earnings please post a journal entry as of 12-31-10 to Debit/Credit Retained Earnings and to Debit/Credit Sales for difference between what is there…for example if the Retained Earnings is $1000 and it should be $400 you will debit Retained Earnings for $600 and Credit Sales for $600. This will adjust your retained earnings to be back in line with the tax return balance sheet as reported to the IRS.
What was the amount of your wife’s Independent Contractor Income and did she have any business expenses against it?
Did you make an IRA contribution for the 2010 tax year?
Please record $2000 of Depreciation Expense for the year to reflect the Section 179 Depreciation we can take on your new fixed assets purchased.
Please send along with it a copy of the W-2′s the company issued for the year.
This is to confirm that in helping you get your 2010 corporate return data ready to prepare the income tax return that you noted personal expenses that were listed on your company’s profit and loss and should not be.
In reviewing your prior filed returns there appears to be a great tax liability exposure that your prior corporate returns listed as business expenses that were personal and not a valid business expense. I suggest that ASAP that:
-You review and amend the prior filed corporate and personal income tax returns ASAP.
-That you set up rules and procedures to ensure that there are no personal expenses will be paid out of the business in the future.
This will confirm that we went over the rules of being an S Corporation and that IRS tax law requires all active employee owners to pay a fair and reasonable salary given position and profit.
Need Help With Your Atlanta Financial Statements or Bookkeeping? http://www.youtube.com/watch?v=PhpMHlJ2Fbw
His CPA PC…A Christian CPA Firm: Never Underestimate the Long Term Benefits Serving as a Metro Atlanta CPA for Decades www.HisCPA.com
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