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Wednesday, March 25, 2015

Small Business Owners View Tax Laws as More Important than Actual Tax Paid

Hiring a Tax Professional will save
your business both time and money.
While most small business owners accept the amount of tax they pay, the paperwork accompanying those taxes and other regulatory requirements can cloud their view of the local business environment. Aside from economic conditions, small business owners' perception of the ease of compliance with licensing, regulatory, and tax regulations is the most important predictor of whether or not they considered a state or city friendly to their firms.

A recent survey asked over 12,000 small business owners to rate the degree to which their state or city was small-business friendly. Then it asked a series of questions about the specific business environment in their state or city. By comparing the answers, it found:

  • The respondents' view of the performance of their state economy relative to the national economy was the most important factor in their rating of small-business friendliness.
  • Those who were aware of training or networking programs offered by their state or local government were significantly more likely to say that their state or city was small-business friendly than those who were not aware such programs existed.
  • While the ability to easily file taxes was an important consideration, the amount of taxes paid was not for the majority of small business owners.

The results are consistent with other research, which finds that policies that assist businesses with licensing, permitting, and tax filing; provide technical assistance to help firms grow; and provide well-targeted job training and education, are much more effective than tax incentives in promoting business development and economic growth.


Call GBC Income Tax Services today at 678-366-9232 for all your tax and IRS needs!

Wednesday, March 18, 2015

Determine Whether Your Small Business is A Business or a Hobby for Further Legitimate Deductions

Maximize your deductions during
the next tax season and just watch
as your small business flourishes.
The Internal Revenue Service reminds taxpayers to follow appropriate guidelines when determining whether an activity is a business or a hobby, an activity not engaged in for profit.

In general, taxpayers may deduct ordinary and necessary expenses for conducting a trade or business. An ordinary expense is an expense that is common and accepted in the taxpayer’s trade or business. A necessary expense is one that is appropriate for the business.

Generally, an activity qualifies as a business if it is carried on with the reasonable expectation of earning a profit.

In order to make this determination, taxpayers should consider the following factors:
  • Does the time and effort put into the activity indicate an intention to make a profit?
  • Does the taxpayer depend on income from the activity?
  • If there are losses, are they due to circumstances beyond the taxpayer’s control or did they occur in the start-up phase of the business?
  • Has the taxpayer changed methods of operation to improve profitability?
  • Does the taxpayer or his/her advisers have the knowledge needed to carry on the activity as a successful business?
  • Has the taxpayer made a profit in similar activities in the past?
  • Does the activity make a profit in some years?
  • Can the taxpayer expect to make a profit in the future from the appreciation of assets used in the activity?
The IRS presumes that an activity is carried on for profit if it makes a profit during at least three of the last five tax years, including the current year — at least two of the last seven years for activities that consist primarily of breeding, showing, training or racing horses.

If an activity is not for profit, losses from that activity may not be used to offset other income.

READ MORE >> (U.S. Small Business Admin): Is It a Business or a Hobby?
Call GBC Income Tax Services today at 678-366-9232 for all your tax and IRS needs!

Wednesday, March 11, 2015

Managing External Audit Relationships

An external auditor is key in going
over all the details of your records.
External auditors are certified professionals who check the accuracy and completeness of a business's financial statements. Managing the external audit relationship can be difficult for small business owners who must balance the auditor's requests for sensitive financial information, the need for company confidentiality as well as the choice of which auditor to engage.

Up-front communication is the hallmark of the selection process. Business owners should seek an auditor who is keen to discuss issues as they arise and who doesn't hide the risk of financial decisions from the company or its managers.

Once you have selected a compatible professional, keep these three points in mind to guide you through the rest of the process wisely:

  1. Traits of a Good Relationship: The key traits that define a good relationship between the external auditor and the business executives can be summed up in three words: collaborative, congenial and communicative. This last trait is merely an extension of the open communication policy the auditor and business should adopt starting in the selection process. Collaborative and congenial mean both parties recognize their obligations to the auditing process. The business owner is willing to provide documents when requested by the auditor, in a reasonable format, and timing issues are discussed forthrightly. In return, the auditor is fair and keeps an open mind, assuming that errors point to mistakes rather than fraud unless there is strong evidence to think otherwise.
  2. Consequences of a Bad Relationship: A breakdown in any of the three key traits can have serious repercussions for the business. In most jurisdictions, the law requires companies to hire an external or independent auditor, so any snag in that process may put the company at breach of law. Further, the audit opinion may be delayed, withheld or qualified if something goes wrong. A qualified opinion means the auditor can complete her job but finds that the company hasn't provided full and clear information or possibly has been subject to fraud or tax evasion. The business should try to avoid these consequences at all times, keeping the lines of communication open and setting clear goals and expectations during the engagement process.
  3. Extending the Auditor's Engagement: Sometimes, the auditor or the company may not be able to complete the audit in the time frame that was arranged initially. In this instance, it is important for the scope of work to be clarified so as to extend the auditor's engagement, lengthening the amount of time it hires the auditor. A scope of work document should be drawn up at this point, specifying the balance of work to be completed, the amount of time for the contract extension and any procedural issues that need to be addressed. External audits normally take place every 12 months, so any external audit engagement lasting for more than a few weeks is likely to throw this schedule off track in the future.

Call GBC Income Tax Services today at 678-366-9232 for all your tax and IRS needs!

Wednesday, March 4, 2015

GBC Services, LLC Now Offers Expert IRS Representation in Atlanta Area

Hire an expert to defend you
in a timely fashion when facing
possible trouble with the IRS.

GBC Tax and Audit Services have expanded to now include IRS Representation.

Don’t risk your company’s future by going into an IRS audit unprepared. Be proactive and contact GBC Tax Services of Atlanta for a free consultation today. There is no obligation and getting proper advice maybe just the thing you need to regain control of the situation and straighten out the problems.

Tax resolution is not a simple affair and one wrong move can cost a business greatly. We all have heard the horror stories of companies that were levied with hefty fines and forced to close their doors, seizure of property, freezing of accounts, and even jail time for noncompliance. The risks are too great to go with an unproven team or unproven strategies, so better to take heed in a timely manner.

GBC Tax Services provides a skilled team of professionals who work hard to keep your company afloat in your time of need, meeting with the IRS on your behalf, with eyes wide open. We will also thoroughly review and revise your accounting to maintain your books and straighten out your finances.

Once the IRS storm has quelled, GBC Tax and Audits will continue to offer consultations and advice, so contact us today and rest assured that your business is in good hands.

GBC Tax and Audit Services, Certified Public Accountants is located at:
1950 North Park Place SE, Suite 150, Atlanta, GA 30339.
Telephone: 678-366-9232
For Media Inquiries: Ghassan R. Gharaizi, Quickbooks ProAdvisor and Certified Public Accountant.


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