Arrington Accounting & Tax Services

It would be realllly nice if the IRS had a cute little decisions tree for what receipts a business needs to keep...

But, they actually don’t give a *ton* of guidance on receipts.

A few things they’re sticklers on:

The IRS wants you to keep receipts for all lodging (hotels, Airbnbs, etc) while on business travel.

For any purchases of $75 or more of other business travel, non-entertainment meals, gifts, or transportation? Keep those receipts, too.

Otherwise, the IRS wants records of the date, amount, payee, proof of payment and business purpose of your purchases.

Account statements and good bookkeeping can help substantiate your business expenses.

If you clocked that quarterly taxes don’t always follow a “quarterly” schedule, here’s why ↓

Way back in the day, Tax Day used to be March 15th, so Congress counted three months out and set June 15th as the next estimated tax deadline. 📆

But when Tax Day got pushed back to April 15th (not complaining, btw), the June 15th deadline stayed the same.

Soooo, unfortunately, that’s why your Q2 estimated taxes are due just two short months after you paid your April ones.

We don’t make the rules; we just make sure you don’t miss the deadlines! 🤷

Here’s what made the difference in this business owner’s tax bill:

1️⃣ We adjusted their entity structure and compensation (distributions + salary).

2️⃣ They maxed out their contributions to their SEP IRA to reduce their taxable income and save for retirement.

3️⃣ They accelerated purchasing COGs to increase their deductions for the year.

Tax planning throughout the year is the key to making sure you don’t pay too much in April!

If we had a dollar for every time a business owner asked us, “Can I deduct this meal?”, I’d be eating at Mastro’s every night! 🥘

Meals are tricky... the last thing we want is to give the IRS any reason to look at your business more closely.

Proud of you for filing your taxes. We mean it! 🫶

But if this tax season didn’t go as smoothly as you hoped, here is the tax homework we’re assigning to you.

Do these things this now if you want a waaay less stressful time next April!

We’re campaigning for a business owner mindset shift ↓

Just because an expense is “nice to have” doesn’t mean it’s a luxury.

Sound familiar?

It’s why you feel like you’re spoiling yourself when you make your life easier as a business owner, like finally outsourcing your social media.

Could you do it yourself? Sure!!

Does it give you HOURS of your time back to spend on the main function of your business?

Definitely.

Too many business owners wait waaay too long to get support on things like their bookkeeping, invoicing, marketing, customer experience, and scheduling.

The most successful business owners we work with are the ones who aren’t doing it all themselves; they’re the ones who reframe spending to buy back their time as a necessity.

“Hey, quick admin thing! Could you send me your completed W-9 for my records? Thank you!”

That’s it. That’s the text! 📲

If you’re paying contractors (like a virtual assistant or social media manager), you may need to issue them a 1099-NEC.

To do this, you need their legal name and taxpayer ID... which comes from their W-9.

Ideally, you should get a new contractor’s W-9 as part of your onboarding process before you ever pay them (but trust me, as a business owner, we know this isn’t always how it works in practice).

If they hesitate or ask why, just let them know it’s an IRS requirement for businesses with contractors!

We’re all about adding whimsy to your life, but maaaybe your chart of accounts isn’t the best place for it? 🤷

Things we’ve seen that we’re still trying to unsee:

→ A “Personal expenses” account (this really shouldn’t need to be a thing; it’s best practice to reclassify these!)

→ 3 different versions of “Office Expenses”, “Office Expense”, “Office” 😬

→ Subaccounts on subaccounts on subaccounts

→ Vague account names that make sense to you (but not to anyone else)

We’re not here to judge your chart of accounts, but we *are* here to fix it. Ask about our diagnostic reviews if you want our feedback on yours! 🧠

Today we remember and honor those who served and sacrificed. Our office is closed in observance of Memorial Day. Wishing everyone a safe holiday weekend. 🇺🇸