Proper Tax Filing in a Gig Economy

The modern economic landscape is shifting
so abruptly, a small business owner in a gig
economy may falter or misfile, prompting an audit.

Trying to keep abreast of the various ins and outs of tax filing is daunting enough, but can be especially problematic in a gig  economy.

What the heck is a gig economy you ask?  

As the name somewhat implies, it is an economic period where permanent work becomes scarce and most companies rely on hiring independent contractors and temp workers to get corporate work done. 

As can be expected, this makes for uncertain influx of income forth bother employers and employees.

Our current economic climate not only alludes to this growing trend, but it also indicates that it may become a permanent fixture in the corporate sector. A recent study by Inuit indicates that 40 percent of  US based workers will identify as independent contractors by 2020.  There are a number of reasons for this, from  the prevalence of online  jobs, remote  work and tiny entrepreneurial companies that are fueled by internet traffic or revenue sharing ventures.

With so many online businesses, usually sole proprietorships, being established, entrepreneurs will find themselves challenged  on how to adequately file their taxes and avoid the kind of red flags that prompt an IRS audit.  Adding to the potential of an Internal Revenue visit is how relatively new the phenomenon is.  Government agencies are usually slow to adapt to economic and social changes, so they may not have systems in place dedicated to the growing number of gig economy based set ups.

The biggest concern for an e-commerce company, particularly if it is a sole proprietorship or LLC, is the proper reporting of income. 

The best way to ensure proper filing is to do so via the 1040 form, the standard tax return for independent contractors. If the business is technically diversified . e.g., you create arts and crafts as well as sing on the weekends in a money making party band, the business owner will have to keep separate records from each enterprise and designate their income separately on both state and federal forms.

Because the modern economic landscape is shifting so abruptly, a small business owner in a gig economy may falter and even misfile, prompting an audit. To avoid this pitfall, such companies may need to rely on a reputable accounting firm to handle their taxes. A reputable company will offer packages that suit the needs of a wide variety of business. When investigating an accounting firm, ask relevant, in depth questions to see if they understand the specific needs of an independent contractor who is subsisting within a gig economy structure. By hiring knowledgeable accounting pros, an independent contractor can remain reasonable free from the threat of an IRS audit, which will grant peace of mind to any business owner, in any type of economic climate.

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• GBC Payroll Services' Website   
• About GBC Services
• Payroll Taxes and Your Business
• Helpful Payroll Related Articles
• GBC Tax Income Atlanta Office
• Chartered Global Management Accountant (CGMA)
  American Institute of Certified Public Accountants (AICPA)
  GBC Services LLC, Tax Accounting Services for Atlanta GA
  GBC Press Release : MORE

The Importance Tax Planning for Small Businesses

Your blood sweat and tears go into maintaining
your small business. Protect your time and money
by hiring an external accounting firm.

Unlike most mega corporations, small businesses don't have a team of accountants and lawyers to consult when hit with a IRS audit. 

This is among many reason why a small to moderate sized business should retain the services of a reputable accounting firm.

A reliable and historically proven  accounting firm, such as GBC Taxes Atlanta, would act  on your company's behalf if you ever find yourself  in need of assistance during or after an IRS audit.

Of course it is also prudent to avoid  getting audited altogether. The best way to do this is to outsource your financial  preparations for quality record keeping.  Even with dependable in house  accounting staff on hand, you will need a second pair of eyes to keep the tax man at bay.

Human Factors and Financial Accounting

The problem with relying solely on  company  finance officers is the principle of familiarity breeds contempt. It's not that the staff CPA's will consciously try to sabotage records, it's just that, being human, they will become comfortable with  the daily routine  of the office.  Such comfort has it's draw backs and minuses.  On the one hand, its good to have happy and satisfied workers--this makes them more likely do their jobs well in an effort to  remain employed.

The down side--in such an atmosphere it can become rather easy to become complacent, skipping over imperative details that  can provoke an  Internal Revenue investigation when tax time comes around. Besides, it never hurts to give your internal  ledger keepers a helping hand.

Maintenance and Record Upkeep

Another potential issue with in office record keeping is the propensity to lose all important paper work and documents.  This of course becomes an issue in during an audit where relevant  information  can make the difference between a loss of hundreds or even thousands of dollars into government coffers.

Knowing what these trends are can also e assist in cultivating  business planning that helps your company, and it's assets, grow.

When  small business outsource their financial record keeping for tax related purposes, they  have the added security of knowing pertinent information is being stored for easy accessibility when need be.  It's like having a back up, fire proof safe  at the ready in case of an emergency.

Business Planning and Updating

Because tax preparation and filing is the focus of any good accounting firm, they will be more likely  know what the current IRS regulations are, especially in terms of small businesses. This is essential, as governmental procedures can change annually depending on global and domestic economic climates. 
Your blood sweat and tears go into maintaining your small business. Protect your time and money investment and ensure long term viability by hiring an external accounting firm to fulfill all your  important  tax related needs.

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

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When seeking the assistance of a Certified Public Accountant, experience is key. GBC Services CEO Ghassan R. Ghraizi has the education  and proven commitment  to  providing superior customer service and cutting edge accounting technologies. To learn more about  this highly qualified Atlanta based CPA, contact Ghassan R.Ghraizi  today.

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READ MORE

• About GBC Services
• GBC Audit Services Website
• Visit the Internal Revenue Service's Website
• GBC Tax Income Atlanta Office

Online Payroll Processing and Human Resource Management System Specialists

IRS and Small Business Owners IRS Alert

If you run a small to moderate sized company,
outsourcing options as a means to protect your
investments on the in case of IRS prompted audit.

Many small businesses suffer from the misconception that only big corporations have to worry about exhaustive IRS audits. 

Nothing can be further from the truth.


Why?
The Internal Revenue Service utilizes a different set of criteria for evaluating moderate and small businesses, so there are numerous things that can red flag your company for potential governmental scrutiny that are unique to typical mom and pop ventures.

The most common issue  that creates unwarranted suspicion is the filing of numerous tax deductions and exemptions.  Even if such deductions are legitimate, far  too many of them may  give the IRS the impression, mistaken or other wise, that you are playing fast and loose with tax loopholes, shelters and write offs.  To reduce potential risk of an IRS audit in this regard,  you may wish to mitigate the numbers of deductions you indulge, taking due care to keep all receipts  and documents on hand.  This measure may not only keep you from getting audited, but may very well assist in keeping the business in the black should you wind up  being the unwitting participant of  an IRS evaluation.

Another potential problem that may be more specific to smaller and mid sized business is the correspondence audit. 

Moderate sized companies are in greater danger.

Especially this type of review due to the fact that this type of IRS evaluations focus primarily on  red flags that are specific to more diminutive enterprises. In many cases,  this style of audit may not require a face to face meeting and can be disputed in an informal setting.

Another way to keep the tax man at bay is to outsource your major accounting work. Even if you have an in house bookkeeper or a reliable on staff finance team, it is always a good idea to have another pair of eyes evaluating your books. Not only does it guarantee your financial records will be maintained, it allows for pristine record keeping that reduces IRS related inquiry.

Outsourcing may be especially needful if you undergo a correspondence audit and decide to dispute the outcome. 

Even though these kinds of IRS audits are largely handled via snail mail, they can still be costly and problematic to a small company's bottom line when contested.   Companies that routinely outsource with reputable accounting firms will be able to utilize reliable CPA's to represent them in Tax Court. Additionally, the company will be familiar with your company's in house finance paradigm and can utilize this knowledge to assist you in the pursuit of your goals.

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• GBC Tax Offer Atlanta Experienced IRS Representation
• Visit the Internal Revenue Service's Website
• Atlanta Income Tax Preparation Services
• GBC Tax Income Atlanta Office
• Commonly Used Tax Forms
• Contact GBC Income Tax Services Today! 
• Payroll Taxes for Your Small Business

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

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Things to Consider When Outsourcing Payroll and HRMS

A small business owner won't have the in depth
knowledge of tax codes as it relates to payroll,
governmental regulations or IRS standards.

Being your own purchasing agent  has very little if any drawbacks--but improper filing of tax documentations, or bad record keeping, could land you in hot water with the IRS.

While this is understandable, and can be done in many areas, one place where this can prove disastrous is in the realm of accounting. 

The issue is compounded when smaller ventures lack the manpower to effectively  structure a human resources department.  Without  an established  HRMS in place, office routines can become unorganized and dysfunctional.

The solution? Outsourcing.

Human Resource Management Services

Human Resource Management  is an extremely important aspect of running any business,  and is critically linked to quality accounting and  the upkeep of financial records.  Most small business can ill afford to ignore HRM  responsibility yet they  often think they can take on this aspect alone. The danger here of course is mismanagement, which could potentially lead to trouble further down the road.

Outsourcing to a firm that can expertly handle the day to day functions of Human Resource Management is the surest way to go. Reputable companies offer a variety of ways in which a small to midsized company can integrate their services and will happily consult with clients to address their goals and concerns.

Many small to moderate sized business owners attempt to wear  far too many hats in order to maximize their profits.  

When investigating options in this area, small business should take into consideration the longevity of the firm as well as its accreditation. Honestly,  would you trust your kids to someone  you just met or to an individual with a bad reputation? Your business is your baby--make sure you place it in the right hands.

Payroll Services

All too often, small to moderate sized businesses  attempt  to take care of their own payroll needs or hire one individual to take on the task of  payroll distribution and record keeping. The error here is somewhat obvious.  A small business owner won't have the  in depth knowledge  of tax codes as it relates to payroll, governmental regulations or IRS standards. Likewise,  relying on only one person or a small  department to address critical aspects of bookkeeping can put you on the pathway towards an exhaustive IRS audit.

Outsourcing is a great option here as it would be enable a company of any size to utilize the expertise of individuals whose primary concentration is tax, payroll and human resource management. Just be sure the company you choose employs certified  public accountants and has a  great reputation in this arena.  GBC Taxes of Atlanta can confidently make such claims and offers decades of collective accounting experience.  Contact or call us today to learn what we can do to help your small to moderate sized company run more efficiently, and avoid  common pitfalls that lead to an IRS audit.

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READ MORE

• About GBC Services
• GBC Audit Services Website
• Visit the Internal Revenue Service's Website
• GBC Tax Income Atlanta Office
• Chartered Global Management Accountant (CGMA)
  American Institute of Certified Public Accountants (AICPA)
  GBC Services LLC, Tax Accounting Services for Atlanta GA
  GBC Press Release : MORE

What You Should Know About IRS Correspondence Audits

Many of these  types of audits occur when
mistakes in accounting happen.

Much ado has been made about the fact that IRS audits are on the  decline, however, this  does not mean the IRS can't, or won't, come knocking on your door.  This is especially true if you own a small to mid sized company, as these types of  audits are actually on the rise. 

Correspondence Audits and What They Mean for Your Business

When it comes to IRS related tax audits, large and small business can face two kinds. One is the face-to-face audit.  This particular process is largely handled in person, with the agent and business owner pouring over relevant documentation to assess how much money, if any, a business may owe in  taxes.

The type of audit small to moderate sized companies most often face however, is the called a correspondence audit. As the name implies, this type of  IRS review is generally handled via  snail mail, and can be disputed in lower tax courts. Even so, if handled incorrectly,  a correspondence audit can lead to a  closer examination  of your company's financial  records, which could lead to significant payouts.

This is something a struggling small enterprise can ill afford.

Dealing with a Correspondence  Audit

Correspondence audits usually occur after an IRS agent is alerted to potential issues on the company's tax return.  It could be something as simple as a clerical  error or  missing finance  documentation.  In such instances, an agent will send out an official letter to the business owner requesting further information for clarification.

Now, a correspondence  audit may appear innocuous enough but don't be fooled.   These types of government examinations can be a drain on time and financial resources as you try to get he matter sorted.  Making matters worse, there is usually very little recourse for businesses who receive these types of  notices in the mail, as contact information is seldom supplied.  In other words, you  receive  the notice with on o way to call  or ask questions regarding the  issue.  The only other option  a company will have at this juncture is to request an in office meeting with your local  IRS representative, but this request may or may not be honored--and that's perfectly legal.

How to Avoid a Correspondence Audit

When you receive one of these little bomb shells in the mail, you will have to respond to it by law or face heavy fines or penalties.  Many individuals try to gather the requested info and send it off hoping that will end the matter.  This may not always be the case.

As the old saying goes, an ounce of prevention is worth a pound of cure. Many of these  types of audits occur when mistakes in accounting happen.  Or worst yet, the company's finance department has lost or failed to keep up with pertinent records.

Avoiding this scenario may be as simple as hiring an outside accounting firm to handle your financial record keeping and tax filing. GBC of Atlanta is familiar with ins and out of Correspondence Auditing and related disputes and can act on your company’s behalf. Contact us today to learn more about how to protect your financial investments and remain in good standing with the IRS.

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

• GBC Tax Offers Atlanta Experienced IRS Representation
• Essential Financial Services
• Tax Requirements By State
• Visit the Internal Revenue Service's Website
• GBC Audit Services

Tax Season is Every Season : How To Avoid An IRS Audit

What Does The IRS Take Into Consideration
When Performing An Audit?

Did you know that you are more likely to face an audit when Tax Season is in full swing.  In either case, it pays to be ready, no matter what.

Although Tax Season for all officially ends and begins on a given calender day, one mustn’t make the mistake that so many businesses do, by thinking  you are safe from scrutiny  once the season comes to a close.

Remain on Guard

The Internal Revenue Service has a list of things it looks for when considering a business for potential audit. These red flags can pop up for any  reason, at any  time. As this is the case, it remains imperative to  be on the look out for potential  accounting issues, and, when and wherever possible, to outsource with a reputable accounting firm.

Indeed, the IRS can  perform an audit for any reason any day of the week, 365 days a year.


Why?

Having a second pair of professional eyes lowers your risk of IRS investigation, which  all too often approaches a corporate audit with a “guilty  until proven innocent” mindset.

What to Look Out For 

The IRS looks for a wide variety of things that  could potentially clue them in  the idea that you may not be on the up and up, at least in their eyes. When it comes  to intensive government investigations, an uncrossed “t” and undotted “i” simply means payments weren't given to Uncle Sam  in due time, and that can spell trouble for you and your business.  Even so, agents will and often do consider human errors during an audit, but they will often need detailed documentation  to make such determinations—this  is when accurate record keeping becomes crucial.

So, what are some of the things the IRS will take into consideration when performing an audit?  There are quite a few, with the most common being:

Ready and Petty Cash – Businesses that run primarily on cash transactions or  have a lot of petty cash on hand for odds and ends, may garner significant  attention. This is because cash is hard to trace and can easily be hidden or  passed under tables.  In such cases, the IRS may also evaluate your --

Lifestyle and Charity Contributions –   When cash flow is difficult to determine, the Internal Revenue Service will often assess  an individual's social status as it relates to what neighborhood they live in, car they drive, how expensive their clothing  is and even the size of charitable contributions. They weigh these things against the person's assets, inheritances and  the money reportedly take in.  Of course, someone with a sizable income will be able to amass a wealth of creature comforts. If you are pulling in less than 110k a year however, living in Beverly  Hills and buying a Bentley every year should be well out of your price range.

While the IRS uses this assessment as tool in business that deals largely in cash, they can and often employ this methodology in affirming potential tax evasive or mismanagement  for other types of payment based goods and services.

Business Expenses and Reports  – It is not unheard of for  an employee or businessman  to  expense corporate travels, and while even entertainment and meals can be  legally deducted, you have to be able to prove their relation to  company related activity. This is why it is prudent to keep all receipts and documents  on file on the in case they are needed to justify an company expenditure during an audit.

Work Form Home Write Offs  – working from home is becoming more and more common. For business owners who spend a good portion of their time at their residence, they may and can often write off things like their utilities and  internet service.  Individuals  who are tempted to do so however, may  pile on unnecessary deductions in order to receive a hefty  tax return.  Eagle eyed IRS agents  will spot such discrepancies however, and in due time, you may find yourself undergoing an intensive tax audit.

As the above list indicates it is prudent to retain receipts and  relevant forms on the in case  the IRS pays you a visit. The best course of action is to avoid an audit altogether.  One way to do this it  to   stay on top of your accounts, which  is why outsourcing to a reputable finance firm is in you and your companies best interest, all year round.

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

• GBC Tax Offers Atlanta Experienced IRS Representation
• Essential Financial Services
• Tax Requirements By State
• Visit the Internal Revenue Service's Website
• GBC Audit Services