Small Businesses: It May Not Be Too Late to Cut Your 2019 Taxes

Don’t let the holiday rush keep you from taking some important steps to reduce your 2019 tax liability.

You still have time to execute a few strategies, including:

1. Buying assets

Thinking about purchasing new or used heavy vehicles, heavy equipment, machinery or office equipment in the new year? Buy it and place it in service by December 31, and you can deduct 100% of the cost as bonus depreciation.

Although “qualified improvement property” (QIP) — generally, interior improvements to nonresidential real property — doesn’t qualify for bonus depreciation, it’s eligible for Sec. 179 immediate expensing. And QIP now includes roofs, HVAC, fire protection systems, alarm systems and security systems placed in service after the building was placed in service.

You can deduct as much as $1.02 million for QIP and other qualified assets placed in service before January 1, not to exceed your amount of taxable income from business activity.

Once you place in service more than $2.55 million in qualifying property, the Sec. 179 deduction begins phasing out on a dollar-for-dollar basis. Additional limitations may apply.

2. Making the most of retirement plans

If you don’t already have a retirement plan, you still have time to establish a new plan, such as a SEP IRA, 401(k) or profit-sharing plans (the deadline for setting up a SIMPLE IRA to make contributions for 2019 tax purposes was October 1, unless your business started after that date).

If your circumstances, such as your number of employees, have changed significantly, you also should consider starting a new plan before January 1.

Although retirement plans generally must be started before year-end, you usually can deduct any contributions you make for yourself and your employees until the due date of your tax return. You also might qualify for a tax credit to offset the costs of starting a plan.

3. Timing deductions and income

If your business operates on a cash basis, you can significantly affect your amount of taxable income by accelerating your deductions into 2019 and deferring income into 2020 (assuming you expect to be taxed at the same or a lower rate next year).

For example, you could put recurring expenses normally paid early in the year on your credit card before January 1 — that way, you can claim the deduction for 2019 even though you don’t pay the credit card bill until 2020.

In certain circumstances, you also can prepay some expenses, such as rent or insurance and claim them in 2019.

As for income, wait until close to year-end to send out invoices to customers with reliable payment histories. Accrual-basis businesses can take a similar approach, holding off on the delivery of goods and services until next year.

Proceed with caution
Bear in mind that some of these tactics could adversely impact other factors affecting your tax liability, such as the qualified business income deduction.  For more information about small business tax liability or other business advisement services, contact the experts at David Mills CPA, LLC. 

© 2019

 

Calendar date circled in purple with the words pay day written

Why Should You Outsource Payroll?

On payday, your employees expect their paychecks to be correct. Errors or oversights on a paycheck can anger and unnecessarily stress an employee. Save the hassle and outsource your payroll.

Ensuring your employee payroll is accurate is vitally important, yet for many small business owners in the Peoria and Central Illinois area, the process is laborious, stressful and never-ending.

Calendar date circled in purple with the words pay day written

When you outsource payroll responsibilities to the experts at David Mills CPA LLC, you get more time to concentrate on your core business. You will have peace of mind knowing your payroll operations are being handled correctly and professionally.

Pay period follows pay period. Accurately completing your company’s payroll requires time and attention. 

Outsourcing Ensures Payroll Accuracy

By outsourcing payroll responsibilities, you can be assured that all special deductions, such as wage garnishments, savings, and health deductions are properly calculated.

Do you know the updated payroll regulations for 2020? With outsourced payroll services, the experts at David Mills CPA LLC ensure your firm is compliant with all current payroll laws.

At David Mills CPA LLC, payroll tax deposits are electronically filed and quarterly payroll tax forms are prepared and filed. They also complete year-end W-2 and 1099 forms as well as worker’s comp audits and any requests for payroll information.

Hiring experts to complete your company’s payroll helps avoid IRS mistakes and penalties. 

When you work with David Mills CPA LLC, you are able to establish a direct deposit option for your employees. Direct deposit saves employees a trip to the bank to cash their paycheck and has become a convenience employees expect.

Outsourcing Payroll Eliminates the Burden on Employees

Outsourcing your payroll eliminates the need to train or cross-train employees to handle payroll. When payroll is handled in-house, a burden is placed on the company every time the person responsible for payroll goes on vacation, takes a leave of absence or quits the company. 

When the payroll employee leaves or retires, they walk out with valuable knowledge that can be hard to regain.

Outsourcing your payroll responsibilities means a knowledgeable team is in place to seamlessly handle your company’s needs.

Contact the professionals at David Mills CPA LLC today to see how their payroll service can meet the needs of your business. David Mills CPA LLC has offices in both Morton and East Peoria.

Your Small Business Needs a Budget

five stacks of silver coins increasing in height from left to rightSmall businesses need budgets, but too often, they don’t have one. The staff at David Mills CPA, LLC can assist with your budgeting needs.

Creating a business budget can seem overwhelming. One survey found as many as two-thirds of all small businesses don’t have a budget.

Without a budget, though, your company’s financial health is at risk. Small businesses face challenges every day. A budget helps mitigate those difficulties.

The experts at David Mills CPA will show you how budgeting can grow your profits. Interpreting the numbers is key, but we understand making sense of those figures can feel overwhelming.

We can help you answer the critical questions:

  • Do you really know where your money is going?
  • What does it cost you to open the doors each day?
  • What are your most profitable services or products?
  • When you have vendor price increases how much more do you need to sell to remain at the same profit levels?

A smartly planned budget will include flexibility to help you navigate any troubled waters your business may face.

close up of black calculator keysA budget should be more than just a yearly chore. It’s a tool to help you tackle short-term obstacles while planning for the long-term future.

Experts can help answer budgeting questions

We will teach you the questions to ask when looking at your budget versus actual numbers. In this way, your budget becomes a valuable tool to manage cash flow and build your business.

Budgets help make your business more efficient. They can help keep your company out of debt while developing a roadmap for future growth or expansion.

Planning your business budget will make it more efficient to operate your company.

Let the staff at David Mills CPA assist you with all your business budgeting needs. Contact us today for more information.

Accounting Firms in Peoria, Illinois

One of the Best Accounting Firms in Peoria, Illinois

accounting firms in peoria illinois

If you have been looking for a professional and reputable accounting firm in the central Illinois area, you have come to the right place. David Mills, CPA, LLC is an accounting firm with years of experience in tax preparation, budgeting, payroll services, bookkeeping, business structure, and more! If you need help with finances, we have your back. From personal to small and medium-size businesses, we have the knowledge to provide you with the services you need to get ahead with your finances.

Benefits of Working with an Accounting Firm

When you work with an accounting firm you have the experience and knowledge behind you to make large (and small) financial decisions. This is vital for both personal finances and for business finances! As a person, a large financial decision like a home or a car can majorly impact you and your income. Budget planning can help you decide what options are best for you. As a business, growth and profit are two of the most important outcomes. If you don’t have proper bookkeeping, transactions may be inaccurate and cause financial issues down the line. This could limit profits and growth!

We can also help businesses with setup, training, and troubleshooting of QuickBooks! On top of that, our payroll, controller & CFO services, business structure, and tax preparation services can help you make informed decisions about your business. Leave the technical financial work to us so you can focus on what really matters; your business.

Out of the accounting firms in Peoria, Illinois, choose us to help you get your finances going in the right direction. Give us a call today and tell us how we can help you! We are eager to help you with your personal and business finance needs!

Bookkeeping and its Importance to Businesses

Every business should be keeping track of their finances. And while nearly all large businesses or corporations have someone–or maybe even a team of people–bookkeeping for their business, small to medium size businesses tend to lack in this department. It is often due to the fact that the staff is too busy with the revenue generation activities like marketing or public relations. Bookkeeping keeps a record of purchases, sales, and receipts. Without it, financial transactions could be incorrectly recorded and future business planning could be compromised. This is why you should consider using our bookkeeping services. We offer both monthly and quarterly so you can focus on what’s important: your business.

Benefits of Outsourcing Bookkeeping:

bookkeeping

  1. No Need to Train your Staff: Our staff is always up-to-date and proficient in Bookkeeping and Payroll Laws, so you won’t have to waste time and money training your own staff.
  2. Timely Information: We make sure any important updates are given to you as quickly as possible so you can make sound financial decisions.
  3. No Costly Penalties: We electronically file your payroll forms and taxes so can avoid costly fees.
  4. Open Communication: There’s always a professional accountant here ready for your questions.
  5. Problem Identification: We will be able to identify problems before they become major issues.

Each month or quarter–depending on your chosen service–you will have access to all the files and information you might need for your business’ finances. It’s easily retrievable as well from a Quickbooks file so you can quickly and easily access any information you might need. Outsourcing your bookkeeping is a great way to approach finances for small to medium sized businesses, so make sure to give us a call. Our team of professionals is ready to help you and your business