Frequently Asked Questions
Can bookkeeping be done remotely?
Absolutely! Today’s cloud accounting capabilities were designed to make life easy. Your bookkeeper can manage your books remotely, but you can also access your own real-time data, financial information and reports. You will always have access to the information you need to make business decisions on the go from anywhere, anytime, on any device. This is so valuable for all you busy entrepreneurs!
How much do bookkeeping services cost?
Due to the varying complexities of businesses and their requirements, it is impossible to put a definitive number on the overall cost of bookkeeping services. For example, a sole trader’s bookkeeping needs will differ greatly from a retailer that pays staff!
We offer a FREE consultation to discuss your business needs and identify ways we can help you to grow your business. Once we have a strong understanding of your business and expectations, we can discuss a package that suits you.
What is bookkeeping?
Put simply, bookkeeping is “the process of recording, analyzing and interpreting the financial transactions of a business or individual.” Melanin Tax Solutions aims to go further than this to partner with and educate our clients on their business, systems, operations and results.
A good bookkeeper can be a huge asset to your business as they have the knowledge, experience and passion to manage your records accurately. Most importantly, they provide you with an important insight into your business’ operations and profitability.
Do I need a bookkeeper?
When should I need a bookkeeper?
What is double entry bookkeeping?
The double-entry bookkeeping principle means that every financial transaction will involve at least two accounts. This method gets its name because you enter all transactions twice.
In double-entry bookkeeping, a transaction always affects at least two accounts, always includes at least one debit and one credit, and always requires that total debits and total credits be equal. This is to keep the accounting equation (assets = liabilities + equity) in balance.
Because transactions are entered twice, double-entry bookkeeping is a practice that helps to minimize errors and increases the chances that your books balance.
What is the difference between accounting and bookkeeping?
Bookkeeping and accounting are often assumed to be the same profession. This is not the case!
Both are extremely important for every business, especially when used together. While bookkeeping is responsible for the recording of financial transactions, accounting is responsible for interpreting and analyzing financial data.
A bookkeeper will be the person who assists you with the ongoing financial recording, transactions, compliance and lodgements that keep your business running smoothly. Your accountant will be the person who analyses the data produced by your bookkeeper to minimize your taxation and make recommendations. Accountants have a strong understanding of tax law & requirements and will be best to assist in this area.
Instead of perceiving a “bookkeeper vs accountant” situation, it is important to understand that your accountant and bookkeeper work best together to serve the financial requirements of your business.
How long should I hold onto my tax documents?
The IRS recommends the following guideline for keeping tax records:
- Keep records for 3 years from the date you filed your original return or 2 years from the date you paid the tax, whichever is later, if you file a claim for credit or refund after you file your return.
- Keep records for 7 years if you file a claim for a loss from worthless securities or bad debt deduction.
- Keep records for 6 years if you do not report income that you should report, and it is more than 25% of the gross income shown on your return.
- Keep records indefinitely if you do not file a return.
- Keep records indefinitely if you file a fraudulent return.
- Keep employment tax records for at least 4 years after the date that the tax becomes due or is paid, whichever is later.
Can you help my business find tax deductions?
Yes, we can. By taking a deep dive into your business and expenses we can help determine which items are deductible.
What is the qualified business income deduction?
The IRS defines the QBI as follows:
Many owners of sole proprietorships, partnerships, S corporations and some trusts and estates may be eligible for a qualified business income (QBI) deduction – also called Section 199A – for tax years beginning after December 31, 2017. The deduction allows eligible taxpayers to deduct up to 20 percent of their qualified business income (QBI), plus 20 percent of qualified real estate investment trust (REIT) dividends and qualified publicly traded partnership (PTP) income. Income earned through a C corporation or by providing services as an employee is not eligible for the deduction. For more information on what qualifies as a trade or business, see Determining your qualified trades or businesses in Publication 535
We suggest meeting with the advisors at Melanin Tax Solutions if you have any questions about your business tax deductions.
What purchases are subject to sales tax?
Purchase of all tangible goods (unless a specific exemption exists) and some services are subject to sales tax. There is a presumption that “all gross proceeds of sales and the gross income derived from a business activity classified under a taxable business classification comprise the tax base from the business until the contrary is established.” In other words, all sales are considered taxable until the seller of goods or services provides proof that the sale should be nontaxable or tax exempt. Sellers overcome this presumption by requiring that customers believing their purchases to be exempt from tax provide an exemption certificate.
Common Sales Tax Exemptions on Purchases of:
- Professional or personal services (if not as part of the purchase of tangible personal property)
- Tangible personal property purchased for resale
- Warranty or service contracts (if not required as part of the purchase of tangible personal property, and listed separately in the invoice)
- Prescription drugs, certain medical equipment, prostheses, insulin, prescription eyeglasses, and hearing aids
- Printed and other media materials purchased by publicly-funded libraries and made available to the public (materials not available to the public are not exempt; equipment is not exempt either)
- Internet access and cable services
- Custom computer software (pre-written software and pre-written software update are taxable)
- Conference fees
- Professional membership dues
- Machinery and equipment used in research and development
- Chemicals used in research and development
- Food for (human) home consumption
- Freight or shipping if separately stated on the invoice
- Commercial lease
How does the use tax differ from sales tax?
Use tax is similar to sales tax, in that it is a tax collected in relation to sales made. However, it is differentiated from sales tax in that for sales tax, the primary consideration is whether the sale occurred in the state, while for use tax it is whether the property purchased out-of-state is brought into the state for use, storage or consumption.
What is accounting?
When should I need an accountant?
Can accounting be done remotely?
How much should I pay for an accountant?
What are the signs that I might need to hire a bookkeeper for my business?
How can a small business owner like me prepare for my taxes?
There are a few key things that small business owners can do to prepare for their taxes. According to some of the experts in tax preparation that NYC has, first, it is important to keep good records throughout the year. This will make it easier to file your taxes and ensure that you are getting all of the deductions and credits you are entitled to.
Second, it is a good idea to estimate your tax liability ahead of time so that you can budget accordingly. This way, you will not be surprised when tax time comes around.
Finally, it is helpful to consult with a tax professional if you have any questions or concerns. They can help you navigate the tax code and maximize your deductions. By taking these steps, you can minimize your stress come tax time and ensure that you are prepared.
As a small business owner, what should I look for when searching for tax services near me?
When searching for tax services near you, as a small business owner, it is important to keep a few key factors in mind. First and foremost, you want to make sure that the tax service you choose is reputable and has a good track record. You’ll also want to inquire about pricing and compare rates between different providers. Additionally, it can be helpful to read online reviews from other small business owners before making your final decision.
Do I need tax advisors near me for my business?
If you are running a small business, the answer to this question depends on a few factors, including the complexity of your business and your personal financial situation. If your business is relatively simple and you have a good understanding of tax law, you may not need a tax advisor. However, if your business is more complex or you are unsure about how to file your taxes, it may be worth considering hiring a tax advisor.
What are the qualities should I look for when finding an expert in bookkeeping near me?
When you’re looking for an expert in bookkeeping near you, first and foremost, they should be highly knowledgeable in the field of bookkeeping and have a strong understanding of all the various aspects involved. Secondly, they should be able to keep up with the ever-changing bookkeeping landscape and have a deep understanding of new software and technologies as they come out. Finally, they should be highly organized and have great attention to detail, so that they can keep your books in order and help you stay on top of your finances. By finding someone with these qualities, you can rest assured that your bookkeeping needs will be well taken care of.
Will online bookkeeping services in Bronx NY help me prepare my taxes for my small business?
While online bookkeeping services can help you stay organized and on top of your finances, they will not necessarily help you prepare your taxes. This is because tax preparation requires a more in-depth understanding of the tax code and how it applies to your specific situation.
However, online bookkeeping services can help you keep track of the financial information that you will need to provide to your tax preparer, which can make the process easier and less time-consuming.