tax preparation update

Businesses: Get Accounting Advice Before 12/31

Each year, we help our business clients review their business and tax changes.  This year, though, it is more important than ever to meet with your accountant!

According to a recent article from ABC News, "it's particularly important [this year] because of the law enacted nearly a year ago.  Owners who don't have regular conversations with tax advisers may not understand the changes, many of which are significant and complex."

If you haven't met with your Accountant, or they haven't asked for a meeting with you, WHY?

Here are a couple questions you need to ask about:

  • The Small Business Deduction
  • Should You Incorporate?
  • Can You Deduct Entertainment?
  • Are There Cost Reductions for Your Industry or Small Business?

You can't correct some of these issues after 12/31/18, so it's really important to review and discuss the tax implications while there is still time to make needed changes.

If you need help, contact us today!

Women-Owned Small Business and Government Contracting

The US Small Business Administration has programs specifically designed to help women-owned businesses prepare their organizations to do business with the federal government.  As a matter of fact, the federal government’s goal is to award at least 5% of all federal contracting dollars to women-owned small businesses each year.  In this article, we’ll uncover some of the resources you can use to get your business qualified as a women-owned small businesses (WOSB).

Starting a Business

If you need help starting your business, Emerald Financial Partners has a Business Start-Up program that may be able to assist you with:

  • Discovery – The discovery session will help validate the business idea and review the pre-requisites for launch.
  • Business Plan – Help you create a documented success plan for your business.
  • Structure - Determine which business entity (LLC, S-Corp, C-Corp, Sole Proprietor, etc.) gives you the most benefit from both a liability and tax perspective.
  • Set Up - We'll help you file for entity formation, register with the State, obtain a Federal Tax ID number and more!
  • Accounting System - We'll help you choose the accounting system you need to understand how your business is running and prepare documents you need for fundraising or bank loans.

Eligibility Requirements

Once your business is up and running, you’ll need to determine if you meet the eligibility reuqirements for women-owned small businesses (WOSB).  According to the SBA.gov, “your business must:

  • Be a small business, as defined by the Federal Government
  • Be at least 51% owned and controlled by women who are U.S. citizens
  • Have women manage day-to-day operations and also make long-term decision”

Here are some of the steps you’ll need to take to get started with the Women-Owned Small Businesses (WOSB) program.

  1. Set up a profile at the gov website.
  2. Get self-certified or third-party certified. You should use the SBA.gov website.
    1. You can self-certify by answering questions and uploading documents.
    2. Third party certification can be provided by one of the following organizations:

     

    1. Once you’ve been certified, be sure to update your profile on Sam.gov. This shows contracting offers that your business is in the WOSB program.
    2. You’ll need to annually update your certification information to maintain your status in the program.

    There are additional opportunities for economically disadvantaged women-owned small businesses (EDWOSB).   We’ll review this more in a future article.

    If you need help starting a women-owned business, or preparing your business for federal contracting, contact Emerald Financial Partners.  We are a woman-owned business and have 38 years of practical business experience to share with you!
     

For more information, visit our Women-Owned Small Business page!

What You Need to Know About Government Contract Accounting

In Maryland, we are fortunate to have the geographic location that provides many government contractors with direct access to our Federal government and associated contracts. But, to be a successful government contractor, you will likely need to engage a knowledgeable accounting partner to assist you with Defense Contract Audit Agency (DCAA) compliance services, and help you follow specific guidelines, particularly as it relates to government contract accounting. Here are just a few items that your business needs to consider, when it comes to government contract accounting:

  • Quickbooks
    • Ensure that QuickBooks is set up and compliant with the Federal Acquisition Regulations (FAR)
    • Ongoing compliance checks and troubleshooting
  • A pre-award accounting system survey and post-award system audits
  • Staff training to maintain and resolve ongoing compliance issues
  • Compilation of financial statements for GAAP and DCAA compliance
  • Proper classification of direct and indirect costs
  • Audits and reviews of financial statements to meet government contract or outside party requirements
  • Government contract cost analysis
  • Preparation of DCAA audits
  • Ongoing consulting support to ensure competitively priced proposals and government contract accounting compliance

These are just a few of the items you need to consider.  The guidelines change and there is a lot of information and compliance issues your company will be responsible for.  Most of our clients find that these tasks are much easier to outsource and generally provide better compliance for audits.

Emerald Financial Partners has nearly 40 years of accounting experience and a large portion of our client base is government contractors, with a large portion of those clients focused on IT (Information Technology) contracts.

Contact Emerald Financial Partners today for a free business consultation!

What You Need to Know About Net Operating Loss Tax Changes

The 2018 tax reform made many good changes in the tax law for the small-business owner. But the changes to the net operating loss (NOL) deduction rules are not necessarily in the good-changes category. They are designed to put money in the IRS’s pocket.

OLD Net Operating Loss Rules

You have an NOL when your business deductions exceed your business income in a taxable year. Before tax reform, you could carry back the NOL to prior tax years and get refunds of taxes paid in those prior years.

Alternatively, you could have elected to waive the NOL carryback and instead carry forward the NOL to offset some or all of your taxable income in future tax years.

NEW Net Operating Loss Rules

Tax reform made two key changes to the Net Operating Loss rules:

  1. You can no longer carry back the NOL (except for certain qualified farming losses).
  2. Your NOL carryforward can offset only up to 80 percent of your taxable income in a tax year.

The changes put more money in the IRS’s pocket by

  • Eliminating your ability to get an immediate tax benefit from your NOL carryback, and
  • Delaying your ability to get tax benefits from future NOL carryforwards.

We are bringing the NOL rules to your attention in case you need to do some planning.

At Emerald Financial Partners, we have some strategies that may help you realize some immediate benefits from your business loss.

Powered by Top Rated Local®