Bookkeeping Enterprises

“Thanksgiving is a joyous invitation to shower the world with love and gratitude.” --Amy Leigh Mercree

Happy Thanksgiving from Bookkeeping Enterprises!

📱 949.243.0032
✉ [email protected]
🌐 http://www.bkkgent.com

Are you a business in California and have 5 or more employees? This year, retirement plans will be required for California employers with five or more employees. The legislation passed in 2016 required all employers with five or more employees to offer a retirement savings account. This law also applies to nonprofit organizations. 2022 brings the final implementation phase requiring organizations with 5-49 employees to comply by June 30, 2022. If you already sponsor an employee-retirement plan, you are meeting this requirement.

The deadline for implementation for organizations with more than 49 employees has passed, and the Franchise Tax Board is in the process of enforcement. More information on how to respond if you have received a notice is on this web page: https://buff.ly/3hSHQ4L.

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 http://www.bkkgent.com

401k

There is still time to file for your Employee Retention Credit (ERC)!

How does employee retention credit work?
The Employee Retention Credit is a refundable tax credit available to certain businesses that qualify. Based on certain factors such as employee cap and qualified wages, specific business owners are entitled to a percentage of qualified wages an employer pays to employees after March 12, 2020, and prior to January 1, 2021.

Who qualifies for the employee retention credit?
To qualify and be an eligible employer you must be able to prove that your business was negatively impacted in one or more of the following ways: Your business experienced a partial or total shutdown during 2020 or 2021 (includes being limited by commerce, inability to travel, or restricted group meetings), or gross receipt reduction (a business may be eligible for one quarter and not another).

How to apply for employee retention credit?
To apply for the Employee Retention Tax Credit, employers must complete and file Form 941-X, Adjusted Employer’s Quarterly Federal Tax Return or Claim for Refund, with their quarterly federal tax return.

What is the deadline for employee retention credit?
The Employee Retention Credit sunset date was moved from 12/31/21 to 9/30/2021; however, you can still file retroactively as long as you meet the eligibility requirements.

Can you still apply for the ERC program in 2023?
Yes, there is still time to apply for the ERC program in 2023. To claim the ERTC tax credit, you will need to fill out Form 941-X. Luckily, the statute of limitations for filing amended quarterly returns is up to three years from the date of filing the Form 941. For example, if you are a business owner that qualifies for the ERTC program during the third quarter of 2020, the amended documentation needs to be submitted by October 2023. Businesses have until 2024 to look back on their payroll during the qualifying period and apply for the ERC tax credit.

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 http://www.bkkgent.com

We don't know them all, but we owe them all.

With respect, honor, and gratitude, thank you to all the veterans and service members, and their families for serving our country.

Bookkeeping Enterprises
📱 949.243.0032
✉ [email protected]
🌐 http://www.bkkgent.com

401(k) plans are an excellent way to save for retirement, but because 401(k)s are tax-advantaged, the IRS sets a contribution limit on how much you — and your employer — can put into your 401(k) per year.

➡️ The maximum you can put into a 401(k) in 2022 ⬅️
If you’re under age 50, your maximum 401(k) contribution is $20,500 in 2022.

If you’re 50 or older, your maximum 401(k) contribution is $27,000 in 2022, because you're allowed $6,500 in catch-up contributions.

For 2022, your total 401(k) contributions — from yourself and your employer — cannot exceed $61,000 or 100% of your compensation, whichever is less.

Employers who match employees' 401(k) contributions often do so between 3% and 6% of the employee's salary. So if you make $50,000, and contribute 5% of your salary ($2,500), and your employer matches that full 5%, you'll add $5,000 to your balance each year.

Can I contribute 100% of my salary to my 401(k)?
It depends on what your salary is. The maximum individuals under 50 can contribute is $20,500 in 2022. The limit for those 50 or older is $27,000.

➡️ Are there separate limits for Roth 401(k)s? ⬅️
No. Roth 401(k)s have the same contribution limit as regular 401(k)s.

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 http://www.bkkgent.com

2022 is almost over -- Are you paying yourself correctly?

We are in a new year and time to do things right. So let's talk about how you should properly pay yourself from your business.

Owners of C-corporations and S-corporations must pay themselves a reasonable salary and run it through the payroll system like any other employee. It is also recommended that self-employed owners, freelancers, and partners also pay themselves a “salary” although, technically, it will be an owner’s draw and not included in payroll.

Paying yourself a salary reinforces the notion that your business is a separate entity and reduces the need for you to violate the Golden Rule by having your business pay your personal expenses directly. Instead of numerous transactions during the month where the business pays an expense on your behalf, have the business write you one check per month that you deposit into a separate account used to pay your personal expenses.

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 http://www.bkkgent.com

Do you want to take deductions and write-offs on your taxes?

You will need these 5 things for that deduction to stick. The first 3 are commonly found on receipts.
1. Place - where you actually purchased the item.
2. Point in time (date) - date of when the actual purchase took place.
3. Purchase amount - must show what you purchased and the total purchased for

These last two are missed by 82% of entrepreneurs and it is something that you manually have to add yourself. This is if you want to take advantage of the meal deduction.
4. Person - who you went to eat with (write the name on the receipt)
5. Purpose - the purpose of the meeting (write it on the receipt)

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 http://www.bkkgent.com

Verify all employee information before issuing Form W-2. A missing or incorrect name or Social Security number can lead to penalties. Make sure all paychecks from the year have been recorded. Be sure to include all payments for commissions and bonus pay.

Planning is essential when it comes to bonus payments. Lead time will ensure timely delivery and the opportunity to review the accuracy of the checks before the check date. Remember, a bonus will often push an employee’s pay into a higher tax bracket for that pay period. Consider the tax implications for the employee on a local, state, and federal level before running the bonus payroll.

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 https://bkkgent.com

Accruals are adjustments for revenue that have been earned but not posted to the general ledger accounts, and expenses that have been incurred but are not posted to the general ledger accounts. Year-end accruals are adjusting entries to make sure revenue and costs are recorded in the correct fiscal year.

Record year-end accruals, if you are not already recording monthly, e.g. depreciation, payroll, services received not yet billed for, payments made for services not yet received, and deferred revenue.

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 https://bkkgent.com

You must get an accurate count of the materials and supplies you have on hand if your business has inventory. Otherwise, you could wind up with empty shelves or inventory shrinkage (e.g., expired goods).

If your business has inventory, complete an inventory check before year-end. Match your inventory totals to your balance sheet. If you find discrepancies between your count and balance sheet, make adjustments.

Accounting for inventory at year-end can also help you know how much you spent on inventory during the year and its value. And, it can help you better plan next year’s inventory, especially for busier seasons.

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 https://bkkgent.com

Once your bookkeeping is complete, it's a good idea to look through your income statement and balance sheet - make sure everything appears correct. Take your time and go through it line by line. Look for dollar amounts that don't seem to match. Catching these mistakes now can save you time and trouble later.

Remember to look for things like:
• Negative account balances
• Balances that differ (seem too high or too low)
• Substantial differences in last year's account balances

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐 https://bkkgent.com

Are you still storing your business receipts in a shoebox? If so, you might want to rethink the way you organize business receipts to tidy up for the new year.

Disorganized receipts can put your small business at risk of sloppy and inaccurate books. Not to mention, messy records can increase your chances of making errors on your business tax return and cause more issues in the future.

To get your business receipts organized prior to year-end, you can:
✔️ Sort receipts by type of expense
✔️ Use folders and labels
✔️ Organize receipts chronologically
✔️ Store receipts digitally on your computer or device

To keep your receipts in shipshape year-round, make sure you organize them from the get-go. As soon as you get a receipt, organize it using your filing or storage system. That way, you don’t have to worry about misplacing the receipt or forgetting to account for it.

If you use accounting software, you may even be able to attach receipts and documents to transactions to better track them.

For more information and bookkeeping help, contact the experts at Bookkeeping Enterprises today.

📱 949.243.0032
✉ [email protected]
🌐https://bkkgent.com