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Funding your Business Venture

Posted on August 15th, 2016

Starting your own company is the dream of a lifetime. However, without the right sources of capital or financing options, new business owners and entrepreneurs can find themselves struggling to turn their ideas into tangible and lucrative enterprises. If you are looking for ways to increase your capital, consider the following options for increasing funds:

Bank Loans

While the number of bank loans has decreased in recent years, this option for funding remains a popular choice among new start-ups and existing businesses, thanks to the diverse loan options. These options can vary from traditional business loans with set interest rates to business lines of credit. In order to qualify, banks often require that clients have a solid business plan in place prior to lending.

SBA Loans

In contrast to bank-financed loans, these loans are backed by the U.S. Small Business Administration, a government agency which focuses exclusively on small business growth and regulation. Prized for their low down payments, reasonable interest rates, and long repayment options, SBA loans are popular and can be applied to almost any aspect of your enterprise. However, given their popularity, the process for applying and obtaining an SBA loan can be much longer than that of a traditional bank loan.

Crowdfunding

Recent years have seen this option surge in popularity, thanks in part to the rise of social media. Rather than having to submit lengthy formal applications to a bank or agency, business owners using crowdfunding techniques simply trade small stakes of their business, or exclusive access to products and services, for individual contributions.  While there are a number of regulations that must be adhered to in order to compliantly raise funds, crowdfunding is an excellent alternative source of capital.

Angel Investors and Venture Capitalists

Venture capital investments are made by high net worth individuals (angel investors) toward new, high growth potential businesses in exchange for shares and decision making rights. An increasingly popular, nonconventional source of funding, venture capital is often considered high risk/high reward, as there is no guarantee the business will succeed with the investment.

While there are a multitude of funding opportunities available, finding the right type for your enterprise can be a struggle. At Quality Tax and Accounting Services, our mission is to help clients obtain secure sources of capital and thrive. Through our business valuation and review services, Milford CPA Nigel Jones helps new business owners and entrepreneurs identify their financial needs and prepare all documentation that may be needed to obtain funding. To learn more about our small business services, contact our team today.


Choosing the Right Entity for Your Business

Posted on August 8th, 2016

Choosing the right entity for your business will help you understand and know the legal and tax implications for your business. There are many different types of structures, and understanding each of their benefits are imperative to the success and the future of your business.

What Are Some Types of Entities?

There are many types of entities, each of which have their own regulations determined by state of incorporation, industry, and a number of other factors. As a result, how businesses are taxed varies from entity to entity. Choosing the right entity for your business allows you to understand any of these rules you must follow and prepare properly. Some entities are:

Sole Proprietorships: If you are the single owner of your business, you are automatically considered sole proprietorship. You alone are responsible for assets and liabilities made by your business. Depending on the type of industry and the state you are in, there are certain licenses, permits, and regulations you must follow to run your business.

Partnerships: There are many types of partnerships, but the simple definition is that it is a single business owned by two or more individuals. Within partnerships there is equal contribution of money, property, and labor, as well as division of profits and losses.

While this entity is easily formed and inexpensive, partnerships still face joint and individual liability and responsibility to any debts and decisions made by a partner or an individual. Some of the most common types of partnerships include general partnerships, limited partnerships, and joint ventures.

LLCs: Limited Liability Companies combine of the limited liability of a corporation with the tax and the flexible operational abilities of a partnership. Under this entity, a company member’s personal assets are protect and exempt from any liabilities that the incurred by the enterprise and profits are equally distributed amongst all members as delineated in the operations agreement. However, members are considered self-employed and must pay self-employment taxes towards Medicare and Social Security.

Corporations: This is a legal independent entity that, while owned by shareholders, is independently liable for any action or debts that the business produces. As a result, shareholders assets are protected against any business debt.

Corporations are a great way to generate capital, as they lend legitimacy to an enterprise and can raise funds through selling their stock. However, corporations are strictly regulated by the government, state, and local agencies. The amount of paperwork and recordkeeping is burdensome but is imperative when selecting this specific entity.

Whether you choose to be a sole proprietor or become an LLC, Quality Tax and Accounting Services is here to help you to succeed in your industry. For any questions regarding taxes for any of the entities, or you would like to schedule a consultation, contact our Milford, PA CPA firm today!


Why Choose A CPA?

Posted on July 20th, 2016

These days there are plenty of options for anyone looking for help managing their finances.  Financial planners provide overall guidance for money management, investing and retirement planning, but for day-to-day financial management and procedures people often look to accountants or CPAs.  While Accountants and CPAs are often thought of as the same, there are definite differences and here are three reasons why a CPA can be the best option.

  1. All CPAs are accountants, but not all accountants are CPAs.

While accountants are highly trained financial professionals, they’re not licensed. CPAs on the other hand, are licensed and certified through the completion of rigorous education and training which includes:

  • An accounting degree from an accredited college or university
  • Passing the four-part CPA Examination
  • Successful completion of the American Institute of CPAs Professional Ethics Exam
  •  1,800 working hours completed under the supervision of an actively licensed CPA
  • Ongoing compliance with continuing education requirements to maintain their license
  1. CPAs offer comprehensive services

If you’re a small business owner, hiring a CPA rather than an accountant can be especially advantageous.  While each function plays an important part in managing business finances, again, there are differences.   Accountants oversee and manage bookkeeping functions, then analyze the financials and prepare financial reports.

While a CPA has the experience to provide all those services, they will also provide big-picture assessments of all facets of your business finances as well as management of:

  • Business analysis, growth planning and risk assessment.
  • Creation and set up of the right accounting system for your business
  • Regular analysis of income, expenses and cash flow that provide ongoing insight on your business’s overall financial health
  • Budget creation and audits
  • Review and preparation of necessary financial statements
  • Investment management

 

  1. CPAs are Tax Experts.

No one wants to pay more in taxes than they need to.  CPAs stay current with all local, state and federal tax regulations, and can prepare accurate tax returns for any situation.  A CPA will can provide tax planning strategies to help clients keep tax liabilities as low as possible from year to year, and also have the knowledge to resolve tax problems such as unfiled or late returns, settlement of IRS debt through a payment plan or an Offer in Compromise and Innocent Spouse Relief for victims of spousal fraud   A CPA is also licensed to fully represent clients and make claims on their behalf during any IRS audit proceeding.


5 Steps for Avoiding Tax Problems

Posted on July 12th, 2016

Tax problems can spell financial trouble for individuals and business owners alike. While common, problems with the IRS or state can be easily avoided through careful tax preparation. Some key steps towards avoiding tax problems include:

Be Proactive

Filing the appropriate tax forms correctly can take a significant amount of time. If you are filing multiple forms or facing a more complicated tax return than usual, waiting until the last minute to file taxes limits the amount of time available for checking and verifying the information presented on the appropriate forms. While extensions are available, if you owe money to the IRS, any back taxes immediately begin accruing interest once the calendar passes April 15. Worse, failing to file an extension before the deadline leaves individuals who owe back taxes responsible for fines and penalties. File early so you have the chance to ensure accuracy.

Stay Organized

Tax returns are designed to capture a significant amount of data on a singular form. Between insurance coverage verification, declaration of foreign-held investments, and a number of other factors, the documentation needed to accurately file tax returns varies from person to person. Failure to include the right information in the right place leaves individuals and business owners liable for stiff tax penalties. With this in mind, take care to save and securely store all important documentation to make filing your earnings a more organized, less complicated experience.

Evaluate Often

Your tax situation can change throughout the year. For individuals, major life changes such as marriage, birth of a child, or a new job can alter your tax situation, opening the door for additional credits or liabilities. Similarly, small business owners may find that home offices, travel expenses, and other details of daily operation can qualify their enterprise for tax credits. Frequently evaluating your tax situation to accommodate these changes can help lower your liability and ensure compliance throughout the year, minimizing potential surprises during tax season.

Protect Sensitive Information

No business or individual is completely safe from identity theft. Savvy hackers can easily bypass unsecured accounts and steal important financial information. If they assume your identity during tax season and you file your own, accurate returns, the IRS may flag your secondary entry as fraudulent and begin the process of auditing your accounts. Protecting sensitive financial information with hard-to-guess passwords that are regularly changed, as well as shredding valuable information, can help reduce the risk of becoming a target of identity thieves.

Consult a Professional

There is no substitute for the knowledge of an experienced professional. Qualified CPAs can provide year round tax guidance, ensuring that all opportunities for lowering your tax liability are being taken with compromising your compliance with federal and state laws.

Quality Tax and Accounting Services is proud to provide comprehensive tax planning and preparation strategies in Milford for both individuals and business owners. To schedule your consultation, contact Nigel Jones, firm founder, today.