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The Importance of Keeping Good Business Records

Often business owners are so busy running their businesses that they let record-keeping slide. After a long day at the job, very few people want to sit down and crunch numbers and file receipts, However, keeping up with your business records is a vital part of keeping your business healthy and on the right track. Good records will help you do the following:

  • Monitor the progress of your business
  • Prepare your financial statements
  • Identify source of receipts
  • Keep track of deductible expenses
  • Prepare your tax returns
  • Support items reported on tax returns

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What You Need to Know About Employment Tax Withholding

Nothing can trigger an IRS audit quicker than a company not properly reporting and paying Employment Tax on its employees, so it is very important for an employer to stay compliant by always keeping the proper documentation. There can be devastating consequences to both employers and employees when these taxes are unpaid because the IRS takes a very hard stance on any business that mismanages this process. Here are a few tips directly from the IRS to ensure your company stays in compliance.

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Employees or Independent Contractors – Making the Right Choice

In these tough economic times many companies regardless of their size are doing whatever they can to save money and keep their business afloat. After my years of experience working as a Compliance Audit Investigator with the State of Nevada Employment Security Division, employers often find the best way to save on their employment expenses is to classify its employees as independent contractors rather than as employees. That way instead of being responsible for the many taxes and expenses that are associated with having employees, like matching Federal Income Tax, Social Security and Medicare Tax, or paying FUTA (Federal Unemployment) and SUTA (State Unemployment), employers simply pay individuals for their services as independent contractors and let the individual pay their own taxes. Then at the end of the year the employer issues a 1099 to the individual avoiding all these taxes and expenses.

However there are very strict Federal and State guidelines that govern whether an individual is an employee or an independent contractor, and improperly categorizing your companies employees as independent contractors can cost your business tens of thousands of dollars.

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