Bookkeeping & Accounting

Bookkeeping

Bookkeeping is a vital part of owning and operating any business. Company finances need to be accurately tracked, recorded, and managed daily – and it is no small task. Our team at Freyman CPA are knowledgeable experts about the bookkeeping and accounting topics and practices that matter for your business, and we are here to answer any of your questions, just contact us!

 

  1. Is accounting an Excel the right accounting tool for my business?

 

Excel is the most common accounting tool used by professional accountants. It is a manual technique for recording day-to-day transactions and summarizing financial information. Any business can create its own accounting system in Excel.

 

Excel does have its limits though. Because it is manually operated, it cannot automatically connect to your bank accounts or import and sort any financial transactions. It also is not able to detect and report any data entry errors. And, it does prove itself to be a very time-consuming process – that’s why many business owners consider investing in a business accountant or a bookkeeping or accounting software solutions.

 

If you find that your business has outgrown Excel or if you are looking for a simpler and more efficient way to record, track, and manage your business finances, there are other solutions for you. An alternative is a paid accounting software like QuickBooks Online. At Freyman CPA, P.C., we are well versed in the inner workings of Excel and can handle any accounting and bookkeeping need. If you have any questions, please contact us.

 

  1. What is bookkeeping and accounting software?

 

Accounting software is a tool used by businesses of all shapes and sizes to record, track, and manage all the business finances. It is typically a computer program that works to assist bookkeepers and accountants in recording and reporting all the transactions of a business. Some programs can handle more complex transactions of a large firm, while others are built to assist a small self-employed enterprise. Because not all accounting and bookkeeping software is created alike – do some research to determine which program is best for your business needs.

 

Freyman CPA, P.C. is familiar with the various types of bookkeeping and accounting software and we are happy to assist you and find the best software solution for your business.  If you have any questions, please contact us.

 

  1. What is the best bookkeeping and accounting software solution?

 

Staff accountants and bookkeepers use specialty software to carry out payroll tasks and to record all of their entries to wages and taxes payable. Software solutions are efficient and are significant time savers. When it comes to all the different types of software, Freyman CPA, P.C. recommends using QuickBooks Online or Intuit QuickBooks because it takes on all the heavy lifting from booking to filling.

 

With bookkeeping software, your business can easily perform various functions like preparing detailed financial statements, audits of the books of public companies, and prepare reports for tax purposes.

 

QuickBooks Online

 

QuickBooks Online is an easy solution for keeping your financial books organized, updated, and communicating with your other software solutions. It is accounting software that accurately records transactions including receivables, accounts payable, inventory, payroll, and processes monthly, quarterly, and annual reports.

 

Though doing a simple audit of your specific account program and the needs of your business, you can determine which process is best to apply to your purposes. If you have any questions, please contact us.

 

  1. How do I issue 1099-forms?

 

What is an IRS 1099 Form?

 

Simply put, 1099 forms are issued for payment of services provided by a self-employed worker. The purpose of the 1099 form is for independent contractors, freelancers, vendors, gig workers, and LLCs to record income and show that they were given money through a contractual relationship with another business or company.

 

Sometimes goods and supplies are considered part of the services provided by self-employed workers and LLCs. However, when they are not considered part of the service provided, corporations do not need to report payments for the equipment, supplies, or other tangible goods and inventory. 26 U.S.C. § 6041(a).

 

There are multiple types of 1099 tax forms, so be sure your entity is filling the correct form for the contractual relationship you carried out.

 

When to file an IRS 1099 Forms?

 

A1099 form must be filed whenever a business or company pays an unincorporated independent contractor who is a sole proprietor or member of a partnership or LLC for work done in the course of business or trade and for gain and profit.

 

1099 forms are filed once a client has paid at least $600 for the contractual income payment in the course of trade or business with a contractor. Clients need only report payments made by direct deposit or cash, not payments made electronically (which are reported on a 1099-K form). Every tax year the client will be required to provide to the contractor the form for filing.

 

The client typically provides self-employed workers with two copies of the 1099 form (one for their federal tax return and one for their state tax return) reflecting the money the client has paid to the contractor or freelancer (these are forms “Copy B” and “Copy 2”). The client will also be responsible for sending a copy of the form to the IRS (“Copy A”) and/or the state tax agency (“Copy 1”), depending on the state, and the client will want to keep a copy (“Copy C”) for their own records. Once the IRS and other government agencies receive a copy of the 1099 form from the client, it will know if a self-employed worker has not reported income fully or completely because the company client will have already sent them a copy of the 1099 form as well. In other words, it is a key piece of evidence for whether a self-employed individual or entity is under-reporting.

 

When does an IRS 1099 form not need to be filed?

 

Businesses and companies who are clients to self-employed independent contractors do not need to file a 1099 form if they did not pay more than $600 for goods and supplies. They also may not need to file a 1099 form if they paid by credit card, debit card, or through a third-party settlement organization (like PayPal or Venmo), even if the goods and supplies cost more than $600. The payment processor is responsible for reporting the transaction to the IRS through a 1099-K form.

 

How is an IRS 1099 form different from a W-2 form?

 

1099 form is generally used to report payments made to non-employee contractors. Whereas a W-2 form is used to report payment and income of an employee who is on payroll and withholds taxes from their earnings.

 

At Freyman CPA, P.C., we are skilled professionals who are knowledgeable about which tax forms your company needs to comply with both federal and state tax regulations. If you have any questions, please contact us.

 

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