Hardware Reference
In-Depth Information
Typical CpAs have a list of clients they service on a regular basis and as years pass, you and
your CpA will be best friends. I don't necessarily mean in a literal, social context; however,
I am sure that many true friendships have been born between business owner and account-
ant.
I mean “best friends” in more of a business sense. When you get to the point where your
CpA saves you money, shows you how he saves you money, and then proves how he'll
continue to save you money, you'll think differently about him. It's all comes down to the
mighty dollar in a small business, and your CpA is on your side. A good CpA can often
easily pay for himself in tax savings found and recovered.
Once you do, this will determine which income tax return you will need to file each year.
Additionally, the federal government has four basic types of business taxes that must be
paid:
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Income tax
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Self-employment tax
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Employer payroll taxes
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Excise tax
There are volumes written on this subject and you should do as much research as you can
but know this: There's a price to pay for legally owning and operating a business in the Un-
ited States. Understanding and believing that paying your taxes is the right thing can be the
beginning of a successful enterprise. That doesn't mean you shouldn't take legal advant-
ages when you can; let your CPA find those for you.
Nearly every state imposes some sort of business or corporate income tax. Like federal
taxes, your state will impose taxes based on the structure of your business. While a lesser
of two evils, state taxes will be collected and you will sleep well knowing that you're doing
your part in keeping the country great . . . by paying your taxes.
Expense Reports & Receipts
You will have receipts. If you do a good job at keeping your personal finances in line, then
you're off to a good start with your business. If you're sloppy with your personal accounts,
it's time to straighten up and get a good system in place.
Receipts will come with every purchase you make at your business, from ordering invent-
ory (sometimes called invoices), to ordering a telephone system, to putting gas in the com-
pany vehicle. You will have a pile of receipts.
You will need to sort out how these receipts are to be categorized in your accounting sys-
tem. This is the beginning of getting an accurate P&L statement, because if you just clas-
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