Blessing Associates, LLC

12/09/2024

Hi everyone!

Our firm (Blessing Associates, LLC) is reminding our clients so I thought I'd post it here to for all the small, local businesses. 😊

If you have a company registered with the State of Iowa (e.g., an LLC), you are probably required to file the new Beneficial Ownership Interest (BOI) report with FinCEN.

The report itself can be filed online but it has to be done by December 31 if you were already an existing company at the beginning of this year. The deadline is shorter if you started a new firm this year.

The penalty for not filing can be significant so make sure to do it by the deadline! It's easy to forget in the holiday rush.

MORE INFORMATION:

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04/25/2024

Did you know that the IRS doesn't use a single tax rate to calculate all of your taxes? It is true that the basic tax formula is (Taxable Income x Tax Rate), but the US has SEVEN (7) possible tax rates that can be applied to your income!

These tax rates are 10%, 12%, 22%, 24%, 32%, 35%, and 37% and are applied in a stair-stepped pattern.

Essentially, every taxpayer will pay 10% on the first portion of their taxable income, 12% on the next portion of their taxable income, 22% on the next portion of their taxable income, and so on.

Example: Mary (a single taxpayer) earned $20,000 in taxable income in 2023. Based on the table below from the 2023 tax year, she would pay 10% on the first $11,000 for $1,100. She would then pay 12% on the next $9,000 that she earned for $1,080 in taxes. Her total taxes owed is $2,180.

Note that these "Tax Brackets" or segments of income change each year. For example, in 2023, you paid 10% on the first $11,000 you earned in taxable income. In 2024, that changed to 10% on the first $11,600 you earned in taxable income.

You should also note that the brackets are different for each filing status (e.g., the bracket for a single person is different from a head of household).

For information about what the tax brackets will be for the 2024 tax year, you can find more details here: https://blessingblc.org/2024/04/25/2024-2025-income-tax-brackets/

04/05/2024

The increase in tax return filings has led to a rise in tax preparer fraud, affecting vulnerable individuals. To prevent fraud, seek professional, licensed tax preparers who are transparent and encourage client involvement. To that end, here are five signs that you may want to check on your return (or find a new preparer).

https://blessingblc.org/2024/04/05/5-key-signs-your-tax-preparer-may-be-scamming-you/

With the steady increase in fraudulent tax preparers, here are five signs that you may want to check on your return (or find a new preparer)

03/27/2024

When a small business is subject to an IRS audit, one important focus may be the company's reported income. This scrutiny typically involves a review of the business and personal bank accounts and accounting records, requiring the taxpayer to document and explain all income and non-income deposits made into these accounts.

While the IRS traditionally emphasizes larger deposits, I have encountered situations where clients were required to account for every single deposit in their bank accounts. Clearly distinct business and personal accounts can simplify matters, although explanations for personal deposits in a personal account may still be necessary.

We advise our clients to meticulously document each deposit entering their bank accounts. Some choose to not explanations in writing on their bank statements directly, retaining these statements in their permanent records. Others opt to record explanations in the 'notes' or 'memo' sections of their accounting software or spreadsheets. The key is to ensure that, when confronted by the IRS, adequate explanations can be provided for any non-income-based deposits, even if it is as straightforward as withdrawing and redepositing funds.

It is crucial not to delay in making these notes, as the details can easily be forgotten. Additionally, it is important to bear in mind that the IRS may conduct audits several years later; maintain records for a minimum of 3 years.

12/26/2023

Happy Holidays everyone!
This is just a quick reminder for all area small businesses that with the end of the year coming, taxes are shortly around the corner as well. Don't forget to start your end-of-year processes and set up your accounting and record systems to be ready for the new accounting period.
Record your December 31 mileage for any business use vehicles.
Record your Ending Inventory for 2023 and Beginning Inventory for 2024.
Set up a folder to collect the incoming year end Tax Statements (1099s, Interest Statements, K-1s)
Check that you maximized any available deductions like Charitable Giving
Pay your final quarter Estimated Taxes
Get ready to file your Payroll Taxes and any Business Tax Forms due early in the year.
Check your employees' addresses to mail them W-2s and 1099s.
Clear your files to check for missed Receipts or Expenses and set up the new folders to start collecting 2024 Expenses.
If you bought something significant (equipment or tools), you may want to call the seller and get a replacement receipt if necessary before they start clearing their own systems for the new year.
Download the Annual Financial Statements for your business records.
If you need any help, feel free to reach out to our office. Blessing Associates, LLC is a small business consulting firm based in Birmingham but servicing all of Southeast Iowa. We handle small business management, accounting, taxation, and law.
www.blessingassociates.org

HAPPY HOLIDAYS!

Small Business Services Blessing Associates, LLC provides practical business consulting, accounting services, and tax preparation. We guide small firms, sole practitioners, freelancers, and gig-workers through the difficult steps towards achieving professional and financial success. How Can We Help....

12/08/2023

Which Tax Form Meets your Needs? Are you a small business owner? Do you know if you should file a special tax form for your business? Here is an introduction to the different types of tax forms that the IRS requires from individuals or businesses.

https://blessingblc.org/2023/12/08/which-tax-form-meets-your-needs

A General Introduction to the various personal and corporate income tax returns as required by the IRS, organized by Taxpayer type.

11/07/2023

Explanation and Examples of the five types of events that alter the ownership, quantity, or value of assets on the Balance Sheet.

https://blessingblc.org/2023/11/07/changes-to-the-balance-sheet-asset-based-transactions/

One of the more difficult concepts for those launching into the world of accounting is the fascinating practice of Double Entry Bookkeeping. This is the system by which accountants trace […]

11/07/2023

PSA: The IRS has begun reviewing and auditing claims for the ERC (Employment Retention Credit) to identify false claims.

You may recall the flood of marketing and calls that extended from 2021 to 2022 offering companies the chance to apply for the ERC credit if they were 'impacted by the COVID lockdowns.' Often promising as much as $26,000 per employee. Unfortunately, many of the clients who were convinced to apply for this Tax Credit did not actually qualify to receive the money.

The number of fraudulent claims was so extensive and the misinformation so prevalent that the IRS is now allowing taxpayers the chance to WITHDRAW their claims without facing criminal penalties. Even if your claim is already under an audit, as long as none of the money was paid to you, there is a chance to withdraw your claim.

If you filed for the ERC and now want to confirm your eligibility or file to withdraw your claim, contact us today for more information.

11/02/2023

Blessing Associates, LLC is a Southeast Iowa-based business consulting firm. We offer small business solutions for those facing issues with law, accounting, taxes, management, communications, and more.

Just some of our services include: Taxes, Contracts (Writing / Review), Accounting, Purchasing, Inventory Control, Invoicing, Bill Pay, Payroll, Business Start-Up Filings & Organization, Rental Management, Business Management, Notary Public, Recovering and Restructuring to Clean Up Messy Accounts, and More! We're even certified Quickbooks Proadvisors.

Whether your business is just starting out, growing, tweaking things, completely reworking form the ground up, or in shut-down mode, we are here to help.

Call us by phone or email us for more information today!

02/09/2023

Iowa Residents! If you bought a new home recently, don't forget to apply for the Iowa Homestead Tax Credit. You need to fill out Form 54-028a and file it with the state. This decreases your real estate taxes, it does not effect your annual state taxes.

12/26/2022

An introduction to income tax brackets that all taxpayers should know, as well as the established rates for 2022 and 2023.

An introduction to income tax brackets that all taxpayers should know, as well as the established rates for 2022 and 2023.