Are You Self-Employed? What You Need To Do To Comply With Tax Law

How do you determine if you are Self-Employed? Well there are a few things you have to consider. You are considered Self-Employed if:

• You carry on a trade or business as a sole proprietor or an independent contractor.
• You are a member of a partnership that carries on a trade or business.
• You are otherwise in business for yourself (including a part-time business)

Basically a Self-employed individual generally must pay self-employment tax (SE tax) as well as income tax. SE tax is a Social Security and Medicare tax primarily for individuals who work for themselves. It is similar to the Social Security and Medicare taxes withheld from the pay of most wage earners. In general, anytime the wording "self-employment tax" is used, it only refers to Social Security and Medicare taxes and not any other tax (like income tax).

Generally, an individual must pay Self-Employment at the end of the year or by the due date April 15th. However, if you expect  to owe more than $1000.00 at the end of the year you need to do quarterly estimated tax payments. 

Tax Tips "Know The Qualifications for Earned Income Tax Credit"

Before you decide to claim the  Earned Income Tax Credit you should know the qualifications in order to claim it on your tax return. Here are the requirements:

1. You do not qualify for EITC if your tax filing status is Married Filing Separately.
2. You must have a valid Social Security number for yourself, your spouse – if filing a joint tax return – and any qualifying child listed on Schedule EIC.
3. You must have earned income. You have earned income if you are paid wages, you are self-employed, you have income from farming or you receive disability income.
4. Married couples and single people without children may qualify. If you do not have qualifying children, you must also meet age and residency requirements as well as dependency rules.
5. Special rules apply to members of the U.S. Armed Forces in combat zones. Members of the military can elect to include their nontaxable combat pay as earned income for the purpose of computing the EITC. Even if you make this choice, your combat pay will remain nontaxable.

Gabby Ramirez Accounting & Payroll Services

The Goal of Accounting

As a small business owner you will come to realize that accounting organization is crucial in order to make wise and informative business decisions. Also, we know that cash flow is the life blood of your business. Without cash flow there is no business! So it comes to a point where if you are not keeping accurate records of income and expenses then how do you figure your profit margin? And are you really making any profit? Well that is why accounting is essential and necessary. Bottom line-the ultimate goal of accounting is to help you analyze the information and use it as economic indicators if whether it's time to reduce expenses or even time to grow your business! 

Income Tax Only $49

Income Tax Special!  We are friendly and will give you the best customer service! Tax season begins January 2013! Stop by our office to make an appointment! 

Tax Tips

If you filed an extension to pay taxes due, October 15th is the last day to report. If there are any hardships there are ways to come to an agreement with the IRS. Here is the source if you need additional information. http://www.irs.gov/Individuals/Payment-Plans,-Installment-Agreements

I am a Certified Quickbooks ProAdvisor!

I am so happy that I finally became a Certified QuickBooks ProAdvisor! Now I can service my clients more efficiently and they will have the peace of mind that their work is being done by a professional. Check out my  Intuit profile by clicking this link  http://proadvisor.intuit.com/quickbooks-help/gabby-ramirez.

What About Your Cash Flow? Simple Steps To Take Action

Cash flow is one of the most important forces for small businesses to be successful and yet it is the most neglected.  Business owners are so focused on the working side of their business but fail to pay attention to their cash flow. Essentially, cash flow is the lifeblood of your business! How else will you know how much your business is bringing in and how much money is going out? You need to create a simple bookkeeping system and keep it constantly updated with all your business transactions in order to carry this important task.  In short, the purpose of a bookkeeping system is so that it can help you make wise decisions.  Basically, a cash flow analysis will be able to  help you analyze the health of your business. So now that you know how important it is go out there and do your bookkeeping duty! But for the meanwhile, here are five tips that will help you improve your cash flow. Happy Bookkeeping!


5 Tips to Improve Your Cash Flow

1.  Keep Revenues High and Expenses Low:

All your efforts should be on improving the sales of your products or services.  Try to analyze which  products or services sell the most. How can you improve your services or products so that you produce repeat business from a new customer? How can you improve the quality of your products or services so that you keep loyal customers? These are just some aspects that need to keep into consideration. Of course expenses also should be low. It wouldn't be good idea to spend more money than you're making.

2. Try to use a credit card for business expenses:

This keeps you from delaying expenses. Of course you will have to make sure you have money available to pay off the balance by the end of the month to avoid paying interest. 

3.  Always try to keep your books updated:

This is crucial because keeping a well organized system will easily produce a cash flow analysis that will indicate you right away how much cash you have or need in order to cover all expenses and make a profit. After all that is the reason why you are in business!

4. Try to Pay Bills On Time to Avoid Late Fees:

Not only will you have an excellent credit history but  vendors will have an incentive to increase your credit limit and most important you will avoid late payment fees. Some vendors even give you a discount if you pay your bills on time. Let me tell you, those fees can add up in the long run.  Instead, try to use your credit card to delay payments. 

5. Try to find ways to reduce your fixed costs: 

Fixed costs include rent, insurance, telephone, etc. These costs are what keep your business open but there are ways to reduce the cost. Talk to other business owners and compare prices for services or products. You might save a lot of money in the long run if you compare and contrast. Its just a matter of asking!

Is Tax Season Stressing You Out?

If you are a small business owner you know that we are already almost half way near the dreaded April 15th! As the deadline quickly approaches how prepared are you with your tax information? Do you have all the necessary information to complete your tax return? Are your deductible expenses or mileage carefully recorded? Do you have receipts of your income and expenses in file? If you did not answer "yes" to most of these questions these tips may be of benefit to you. Keep reading to find out...

1. Keep control of all your expenses and income by setting a specific time to record all daily or weekly transactions. And do it regularly!

                                                      

2. Keep a log in your car to record your mileage. If you do not record it you might forget.  Your bookkeeper can then transfer this information  to make it easier for you.

3. Do not throw away your receipts. Keep a place where you can easily remember and make it a habit of placing ALL your receipts there.

4. And lastly, DO invest in a good computer and create your own custom accounting system. It is much easier to keep a soft copy of all your information, receipts, invoices, etc. in one place. 

                                                      

                                                      

Why do small businesses opt for Freelance Bookkeepers now?

I wanted to share a great article that outlines the benefits and cost effective services of a freelance bookkeeper. So why hire a freelance bookkeeper? Well three simple reasons:

1. It is Cost Effective-Hiring an in-house employee to do bookkeeping tasks is just too expensive for a small business.  First, you have to train the employee, then you have to pay employee taxes and include job benefits. However, Freelance bookkeepers are experts in accounting and will do the work efficiently and productively in order to save the business owner money and time. And time is money!

2. It will Help you Focus on Your Business-Bookkeeping and Accounting can be a tedious and time consuming job. Often times business owners do not have the time and patience to keep up with their business transactions, financial journals or processing payroll. Therefore, the job that a bookkeeper performs is essential and convenient for the business to run smoothly.

3. It will save you headaches with the IRS-By law, small business owners need to keep and provide business records and tax returns for a certain period of time. Having accurate and well maintained records help business owners stay on top of things and gives them a way to  defend themselves in case the IRS or state government comes knocking.


For additional information please read this useful article below.

Why do Companies opt for Freelance Bookkeeper now?

Welcome to my Website

Hello and welcome to my website!  I am Gabby and I am a freelance bookkeeper that loves to help small business with their bookkeeping. I also am infatuated with the idea of creating and starting a new business.  Recently, I helped my parents start their own food business.  Its been operating for about six months  and although the starting process has been a bit difficult for them the numbers clearly prove that  that it has slightly grown. How great is it that anyone has the opportunity to start and run their own business?

I hope that through my blog I  may inspire people to start and run their own business.  I am intrigued by the planning process, the decision making, considering the risks, and all the research that it involves. Although I admit that starting a business maybe risky and also involves a lot of hard work, often times if a business becomes successful it brings a lot of rewards.  It's many factors that affect a business but if you have the guts and determination to do it, you can do it! So here we go!