Write Off These Home Improvements to Save Money This Tax Season

painting walls at home

painting walls at home

With economic uncertainty looming over many American households, you may be wondering if there are home improvement deductions you can take advantage of to save money this tax season. The answer is a resounding yes!

Several home improvement and repair projects are eligible for deductions and can save you money on your taxes. From energy-efficient upgrades and medical-related additions and modifications to home office-related expenses, there are several options for households looking to leverage tax-saving deductions.

This post outlines home improvement expenses you can write off this tax season to save money. Keep reading to determine if you are eligible for any of these tax-saving opportunities.

Energy-Efficient Renovations

Investing in energy-efficient products is one way to save money this tax season. As part of the recently enacted Inflation Reduction Act of 2022, energy efficiency tax credits for residential upgrades were extended through 2032. This is great news for homeowners looking to save money this tax season.

If you’re looking to lower your tax bill this year, you may consider taking advantage of several energy-efficient tax credits and rebates, including:

The Energy Efficient Home Improvement Credit

The Inflation Reduction Act reintroduced the Energy Efficient Home Improvement Credit with special credits for installing energy-efficient insulation, windows, doors, roofing, and other energy-saving renovations. For 2022, you may be eligible to receive a credit of 10% of the costs of installing energy-efficient products. This credit limit will be bumped to 30% for the 2023 tax year. Read this fact sheet for more information on new credit limits for qualifying improvements such as energy audits, exterior doors and windows, and water heaters or heat pumps.

The Residential Clean Energy Credit

The Inflation Reduction Act increased the credit amount to 30% for the costs of installing qualified systems using solar, geothermal, wind, or fuel cell power to produce necessary utilities like electricity and water heaters in your home. The 30% annual credit drops to 26% in 2033 and 22% in 2034, after which the credit will expire. Take advantage while you can!

High-Efficiency Electric Home Rebates

This program provides rebates to low- and middle-income households who upgrade their appliances and utilities to high-efficiency models. For example, your family may be eligible to receive a rebate of up to $840 if you purchase an energy-efficient stove, or up to $1,6000 if upgrading your home’s insulation.

If your total annual income is less than 150% of the median income where you live, you are eligible for this rebate and should leverage it to save money this tax season.

Medical-Related Improvements

a wheel chair in a plain background

If you, your spouse, or your dependent(s) require permanent home improvements as part of medical-related care, you can deduct certain related expenses from your tax bill. Taking care of yourself and your loved ones is a taxing process that often involves modifications to your daily routine.

Improvements to your home that are necessary for the medical care of you or your family are fully deductible, so long as they fit set criteria. The following are examples of medical care-related improvements that you want to deduct from your taxes to save money:

  • Adding entrance and exit ramps for wheelchair accessibility or ease of mobility
  • Expenses to widen hallways and interior and exterior doorways
  • Modifying kitchen cabinets and counters
  • Installing support bars and railings in bathrooms and around entrances and exits to your home
  • Adding lifting mechanisms to the exterior of your home or inside as a means to get from one floor to another
  • Modifying alarms, smoke detectors, or other electrical fixtures
  • Modifying certain landscaping features such as grading areas around your home

This is just a snapshot of the expenses that can be deducted to save you money on your tax bill. Check out IRS Publication 502 for a full list of medical-related home improvements that may be deductible.

You should note: any expenses that could be considered as increasing the value of your home – such as a swimming pool or other architectural designs – may not be deductible until, and if, you sell your home. It’s best to reach out to an expert CPA to discuss your unique situation.

Home-Office Improvements

The past few years have drastically changed the way many Americans work. While a large percentage of citizens conduct business operations from a home office, more and more business owners are adopting a home office base.

Several deductions exist for people who use their home as the principal business location and exclusively utilize space within their home to conduct their business operations. Unlike other deductions included in this post, home office-related repairs and improvements can be deducted from your taxes. The caveat here is that any repairs or improvements must only be in the part of your home you use exclusively to run your business.

While improvements are deductible through depreciation over a length of time, any repairs you’ve made this year can be deducted from your taxes on this year’s tax return. If you have an office or space in your home that qualifies for the home office deduction, you’ll be able to deduct the following expenses:

  • Repairs to windows and doors in the space
  • A percentage (relative to the ratio between your home and office footprint) of exterior maintenance and repair work, such as roofing, HVAC, and furnace repairs
  • A percentage of maintenance fees for pest control or extermination.

As you can see, the list of home office-related expenses is less robust than other categories in this post. However, if you use a room or space in your home exclusively for your business, there are still money-saving tax deductions you should take advantage of!

If you’re interested in writing off any home improvement deductions to save money this tax season, reach out to us. We bring together our friendly team and affordable services to make sure our clients never pay more than they have to.

How Having An LLC Can Help You Avoid Paying Too Much Tax

wooden blocks with llc written on it

wooden blocks with llc written on it

Choosing the right business entity for your company can have a huge impact on how you pay business income tax. Many businesses elect to set up their business with an LLC entity structure, opening up many tax-saving opportunities.

This post helps you understand the basics of paying taxes as an LLC entity, and the advantages of deductions and credits you can leverage to avoid paying too much in business income tax.

Taxes for LLC Explained

Before we get into the tax advantages of an LLC, it’s important that we lay the groundwork for how LLC taxes work. At the federal tax level, LLCs are considered pass-through entities. This means that LLCs (as well as sole proprietorships and S-corps) are not taxed on the entity level. Rather, any income generated by the LLC is passed to the business owners who then pay taxes on that business income on their personal income return. Although not all states levy a state-based LLC tax, you should check to see the unique tax regulations in your state before proceeding.

How an LLC actually pays those taxes is another matter. The ownership structure of the LLC plays an essential role in determining how LLC taxes are paid. There are three ways to establish an LLC structure:

  • Single-member LLC
  • Multi-member LLC
  • C-corporation or S-corporation classification

Each of these classifications pays income taxes differently. Let’s dive deeper into each one.

Paying Income Tax as a Single-Member LLC

As the sole owner of an LLC, you have a few tax advantages. First, the IRS deems single-member LLCs as disregarded entities. This means that as the sole owner of an LLC, you are not required to file a separate income tax return for your LLC income. Instead, you report your LLC income and expenses on your personal income tax return. This process is the same for business owners operating a sole proprietorship.

Depending on the state in which you live, there may be additional LLC-related fees if you make over a certain amount of income. For example, LLCs in California incur an annual LLC tax of $800 and an annual fee proportionate to your LLC’s annual income. Other states impose franchise taxes along with the annual LLC tax. You must know how your state taxes LLC entities before deciding to incorporate your own business.

Paying Income as a Multi-Member LLC

calculating business tax with coins in the front

Similar to the single-member LLC tax structure, multi-member LLCs are considered pass-through entities. Each member of the LLC pays taxes on the LLC’s business income on their personal tax return, relative to their ownership share of the LLC.

Additional state taxes also apply to this type of LLC entity structure, and you should ensure you’re prepared to file at both the federal and state levels, according to your state’s regulatory guidance.

Paying Income Taxes as a C-Corporation or S-Corporation LLC

Single-member LLC and multi-member LLC entities have a reasonably straightforward income tax return process. However, things can be more complicated if you choose to classify your business as a C-corporation or S-corporation.

Paying income tax as an S-corporation begins similarly to the other LLC entity types. In this tax status, you are still considered a pass-through entity. However, you must prepare and file a separate K-1 form for each of the corporation’s shareholders to demonstrate each person’s earnings and deductions. Then, you file an annual tax return on Form 1120S, which you can read more about here.

If you decide to file as a C-corporation, you will be subject to the federal flat corporate tax rate of 21%. On top of the federal tax, state and local corporate taxes may also apply. To file C-corporation taxes, read more about filing Form 1120 here.

As you can see, setting up an LLC doesn’t have to be a daunting endeavor. Carefully consider how each entity’s business tax requirements work with your projected business income, and ensure you’re accounting for any state and local taxes that may apply.

Tax Advantages of an LLC

Now that we’ve how an LLC entity structure impacts your business and tax filing process, this next section highlights several tax advantages you should leverage as an LLC.

Qualified Business Income Deduction

The qualified business income deduction (or QBI as it is more commonly known) is a major tax advantage for pass-through entities like the ones we outlined above. This tax deduction allows eligible LLCs, partnerships, sole proprietorships, and S-corporations, to deduct up to 20% of qualified net business income on their taxes.

This tax deduction became available to pass-through entities for the 2019 tax filing season. In 2022, there are new income thresholds you should be aware of before filing for the deduction:

  • Married Filing Jointly has an income threshold of $340,100
  • All other filing statuses have an income threshold of $170,050

While this deduction expires after 2025, you should contact us to ensure taking advantage of this deduction is the right tax-saving move for your LLC.

Increased Contribution Limits

steps made of wooden blocks

Another tax advantage of setting up your business as an LLC is the increased contribution limits for your retirement accounts and life insurance policies. In the case of a retirement account, a single-member LLC can contribute up to 20% of net compensation. Multi-member LLCs may contribute up to 25% of net compensation.

Rules regarding SEP IRA depend on your particular entity structure, so it’s essential to speak with an experienced accountant to ensure you are following the appropriate tax laws. Set up a free consultation with us here.

While life insurance is not considered a business expense by the IRS, the federal agency does allow you to take advantage of tax-saving deductions in some cases. If you are an LLC, S-corp, partnership, or sole proprietorship, you may be able to deduct the life insurance premiums for you and any employees your business employs.

Other Tax Advantages of an LLC

There is a long list of business-related expenses you can deduct as an LLC business entity. Many of them may already be familiar to you, including business costs, office supplies, business taxes, utilities, and rent.

However, there are other deductions you should consider to help you avoid paying too much in business taxes as an LLC. These deductions include:

If you’re interested in other, lesser-known tax write-offs for your LLC, check out our recent article here. And if you need more information about filing for an LLC entity status, reach out to our expert CPA team to schedule a free consultation. We can help you navigate the filing process with the state and ensure you’re ready to file the appropriate tax forms for your entity.

Meta Description: Several home improvement and repair expenses are eligible for deductions and can save you money on your tax bill. From energy-efficient upgrades and medical-related additions and modifications to home office-related expenses, there are several options for households looking to leverage tax-saving home improvement deductions. This post outlines the home improvements you can write off this tax season to save money.

4 Reasons Why Outsourcing a CFO Saves You Money In Business

handshaking with an outsource cfo

handshaking with an outsource cfo

Outsourcing the CFO role can be a huge money saver for your business. The CFO is one of the most critical roles you can hire to ensure the financial success of your business, yet hiring the right person can be daunting.

There are several benefits to outsourcing your CFO, many of which can help your business save money. In this post, we’re outlining the four major ways outsourcing CFO services is a better financial move for your business than hiring an in-house employee.

From making cost-cutting decisions to streamlining your tax filing process, outsourcing CFO responsibilities gives your business the flexibility it needs to keep thriving.

Let’s dive into the four ways outsourcing CFO services can help your business save money this year.

Take the Bias Out of Cost-Cutting Practices

CFOs play a crucial part in the success of your business. One of the main functions of their role is to ensure your business can sustain its current business structure. Tasks like administrative management, risk assessment, and business goal planning are high on the list of a CFO’s responsibilities.

Traditionally seen as the right-hand of the CEO, a CFO must have their eyes on every big move your business makes. Making cost-cutting decisions is among the most challenging tasks a CFO will face. CFOs are often tasked with examining bloated overhead and making difficult firing decisions. While deciding to cut jobs and fire large swaths of employees is not easy for any executive, the fact is having an unbiased party making the difficult call is much easier for all involved.

An outsourced CFO helps your business identify areas, like payroll, where you can make cost-cutting moves to save money. By removing the emotional aspect of such decisions, you can feel confident to make those tough business moves with sound financial justification.

Remain Focused on Financial Goals

a black binocular sitting on top of a bag

Both in-house CFOs and outsourced CFOs wear many hats. However, a critical difference between hiring an outsourced CFO is that they are not bogged down by your business’s daily operations like an in-house CFO may be. In-house CFOs can quickly become time-strapped with team meetings, team management, and unnecessary paperwork. Instead of focusing on money-saving functions like closing financial gaps and managing cash flow, in-house CFOs can be distracted by other business-related functions. In fact, a recent report by Datarails indicates that CFOs spend around 10 hours per week on manual work rather than on strategic financial analysis.

Hiring an outsourced CFO means your budget, cash flow management, risk assessment, and financial reporting are all done off-site by a professional whose only job is to ensure your finances are running smoothly. Your business’s cash flow is the most critical part of staying financially solvent. It’s essential that the person you hire as your CFO has the time and mental energy to complete a routine in-depth analysis of your finances. These reports are critical in setting and achieving your business’s financial goals and saving you money.

Aid in Fundraising Campaigns

A chief function of any CFO is raising capital for the business. Fundraising can be necessary to ensure your business can keep up with cash flow needs. But ensuring your CFO has the right connections and knows how to navigate the choppy waters of fundraising campaigns can be daunting.

Luckily, this is where an outsourced CFO can help your business generate more money. Because outsourced CFOs are generally well-connected with other financial service professionals, they can cast a wider fundraising net than an in-house professional.

Leveraging their own entrepreneurial chops means getting connected with the right financing institutions and leaders much more quickly than asking an in-house CFO to start making the networking rounds. Most outsourced CFOs have a large network of financial professionals they can tap to help your business raise the capital needed to achieve your next big goal. Most importantly, while an outsourced CFO can save you money, it’s equally critical they know how to make you money.

Streamline Your Bookkeeping & Tax Filing Process

clock calculator and a pen side by side

While some CFOs identify as accountants, it is certainly not required to step into this executive role. This means that many businesses must hire both an in-house CFO and a separate CPA to help with tax filings.

Therefore, hiring a CPA who offers outsourced CFO services can help your business save money in the long run. Instead of onboarding a new in-house CFO – paying all the upfront costs associated with headhunting and salary negotiations – and paying a separate accountant to help with bookkeeping and tax filings, you can streamline the process by outsourcing your CFO functions.

Hiring an outsourced CFO who doubles as a trusted CPA is one of the best ways to save your business money.

Cook CPA Group’s outsourced CFO service gives you the best of both worlds. We provide expert CPA services alongside strategic CFO services with the intent to save your business money year after year. When you’re ready to explore what Cook CPA Group can offer, we encourage you to check out our outsourced CFO services package and book a free consultation call with Evelyn to get started today!

Meta Description: Choosing the right business entity for your company can have a huge impact on how you pay business income tax. Many businesses elect to set up their business with an LLC entity structure, opening up many tax-saving opportunities. Read this post to familiarize yourself with the basics of paying taxes as an LLC entity, and the advantages of deductions and credits you can leverage to avoid paying too much in business income tax.

What Size Company Needs a CFO?

three balls from largest to smalles on red background

three balls from largest to smalles on red background

Hiring a Chief Financial Officer (CFO) is an important decision for any business. But you may be wondering what size company needs a CFO. Considering the size of your business is a pivotal aspect of deciding to hire a CFO or an outsourced CFO to help you keep up with the financial side of the business.

If you run a small business, you may not need a full-time CFO, but you may benefit from the expertise of an outsourced CFO. For medium-to-large businesses, the decision to hire a CFO becomes imperative to the successful operation of the company.

The financial and tax experts at Cook CPA Group are well-versed in the financial operations of businesses big and small. We created this blog post to help you explore when it’s time to hire an outsourced CFO and what you should know before making the decision.

Hiring a CFO for a Small Business

For a small business, hiring an outsourced CFO can provide the financial guidance and advice needed to make informed decisions about your company. While hiring an in-house CFO seems like the conventional next step, consider the cost-saving advantages of hiring an outsourced CFO.

Your small business can benefit from the expertise of an outsourced CFO to create a budget, manage cash flow, and provide financial analysis to help you make the best decisions for your business.

For small businesses, it may be time to hire an outsourced CFO when the business is growing and you can no longer keep up with the finances on your own. An outsourced CFO can help you manage the finances, provide you with financial forecasting for better margins, and help you meet your financial goals.

Quick Tip: Are you a Sacramento-based small business? Check out 18 financial tips we compiled to help small business owners in the Sacramento area plan for a financially successful year.

Hiring a CFO for a Medium-Sized Business

owner of a medium business working on their inventory

For a medium-sized business, hiring a CFO is an immeasurable asset. While they can help with the more routine tasks like budgeting, cash flow management, and reporting, CFOs can also help with strategic goal setting.

Traditional business models suggest hiring an in-house CFO to help with this role. However, your medium-sized business can benefit from hiring an outsourced CFO to take on these responsibilities without impacting your bottom line.

Hiring an outsourced CFO is an effective way to reduce payroll costs, boost productivity, and efficiently achieve business goals and metrics.

In addition to routine financial management, an outsourced CFO can create financial forecasts and robust reporting to help you set and achieve your financial goals faster. They can also help with mergers and acquisitions, capital raising, financial modeling, and investor relations.

As your business reaches new financial heights, it’s important you carefully monitor for any risks. Hiring an outsourced CFO can help your medium-sized company with risk management and regulatory and tax compliance.

Read more about the importance of financial risk management here.

Hiring a CFO for a Large Business

top view of a large industrial distribution warehouse with their working employee

Hiring an outsourced CFO for a large business is crucial. While most large businesses have a full-time CFO, it may be wise to consider switching to outsourced CFO services.

There are numerous benefits to outsourcing your company’s CFO role, including increased financial focus, the ability to reach financial goals faster, and a critical eye to financial bottlenecks and operational risks that may be overlooked.

While an in-house CFO may be a financial expert, they may not know their way around a tax audit. That’s why we recommend hiring an outsourced CFO who can work cross-functionally to provide you with financial expertise while managing your tax obligations.

Need more reasons to hire an outsourced CFO for your business? Check out five ways an outsourced CFO can save your business money.

At Cook CPA Group, we have decades of experience helping businesses of every size manage their finances and prepare business taxes to maximize savings. Hiring a CFO becomes an essential step in growing your business, no matter the size of your company.

Schedule a free consultation with us today to find out how to hire Cook CPA Group as your company’s outsourced CFO.

5 Signs It’s Time to Hire an Outsourced CFO

business team talking to an outsource cfo

business team talking to an outsource cfo

As a business owner, finding time to get your finances in order while keeping up with the demands of daily operations quickly becomes impossible. Between maintaining your books to managing cash flow and expenses, there is just too much to keep up with. Because of this, you may be considering whether it’s time to hire a full-time CFO to manage your bookkeeping, accounting, and financial reporting.

While an in-house CFO makes sense for some large-scale enterprises, an outsourced CFO is often a much better fit for mid-sized businesses. This post outlines the five signs it’s time to hire an outsourced CFO rather than an in-house CFO for your business. Keep reading to see if any of the five signs resonate with you.

1. You Need a Clear Financial Picture

In business, cash flow is king. Understanding the differences in cash flow and revenue on a monthly basis can help you determine your next business move. You can’t expect to take risks or scale your business without knowing the total amount of money coming in each month.

If you find struggle to keep up with invoicing and expenses, it may be time to hire an outsourced CFO. An outsourced CFO can help you determine gaps between your cash flow and expenses, and ensure you stay financially solvent. Additionally, an outsourced CFO isn’t bogged down by daily operations, meaning they can provide clarity around your financial objectives.

2. You Need Help Maintaining Your Books

Along those same lines, it may be time to hire an outsourced CFO if you struggle to keep your financial books in order. Maintaining proper accounting practices and bookkeeping techniques is a significant pain for many business owners. Starting out, you may have felt confident doing your own bookkeeping and accounting, but over time, keeping up with the invoices and monthly expenses became overwhelming.

Finding an outsourced CFO who is also a certified public accountant (like our team at Cook CPA Group) can help you set up or better utilize accounting software. From there, an outsourced CFO can help maintain the accuracy of those books and prepare your quarterly tax filings.

3. You Need Regular and Custom Reporting

cfo having a regular and custom reporting

A benefit of having a CFO, whether in-house or outsourced, is the ability to get custom and regular financial reports. While many automated accounting software plans offer a reporting function, they’re often lacking in the customization department.

Having a financial pro provide you with detailed financial reporting can go a long way in scaling your business. Hiring an outsourced CFO means getting expert financial advice and detailed reporting to navigate difficult business decisions. Custom reports can include:

  • Balance sheet
  • Income statement
  • Cash flow statement

While your accounting software may provide these reports, the likelihood is that you’re not getting actionable advice on the appropriate steps your business should take. Hiring an outsourced CFO can help you analyze these reports and develop an implementation plan to keep you on the right track to pivot your business for growth.

4. You Don’t Have Time To Do It All Yourself

As a budding business owner, you may have had time to pore over your financial statements and cash flow spreadsheets. But as an established business, you may feel like you need to tack on an extra day or two each week to tackle all your tasks. If this sounds familiar, it’s time to hire an outsourced CFO.

Outsourced CFOs take your tedious financial tasks to give you the time you need to focus on daily operations. Imagine never thinking about bookkeeping or keeping up with cash flow issues again! Now that’s a benefit all business owners can agree on.

5. You Don’t Have the Budget to Hire a Full-Time CFO

One of the biggest signs it’s time to hire an outsourced CFO is if you don’t think you have the budget to hire someone in-house. The benefit of hiring an outsourced CFO is that many offer services at an hourly or set monthly price. Because they aren’t stuck dealing with employees or daily operations, outsourced CFOs focus on just the numbers. Say goodbye to paying for benefits, sick leave, and vacation time!

Hiring an outsourced CFO saves you money without skimping on the results. With curated and tailored reporting and expert advice, hiring an outsourced CFO is the best of both worlds: cost-effective and custom to your business.

Outsource Your CFO Function To Cook CPA Group

outsourced cfo presenting reports with her clients

If any of the above signs resonate with you, it’s time to hire an outsourced CFO. At Cook CPA Group, we have decades of experience helping businesses like yours increase cash flow, grow revenue streams, and set strategic financial goals.

When it comes to our outsourced CFO services, we leave no rock left unturned. We dig through the financial weeds of your business to identify gaps and opportunities to scale. Our founder, Evelyn Cook, is an expert accountant and finance professional with the strategic smarts to help your business be successful.

If you’re ready to hire an expert outsourced CFO, schedule a free consultation call with Evelyn. You’ll discover how Cook CPA Group will help you save on operational costs while making decisions that positively impact your business finances.

4 Question You Must Ask Yourself Before Doing Own Business Accounting

woman thinking about doing her own business accounting

woman thinking about doing her own business accounting

Ensuring your business operations run smoothly is an overwhelming responsibility as a business owner. While some processes can come more easily to you than others, accounting practices are often weak points in many businesses.

You may think doing your own business accounting will save you much-needed cash flow, but if you don’t have a clear understanding of accounting practices, you could waste precious time and energy doing your own accounting.

Business accounting is one of the most important aspects of running a successful business. Before deciding to do your own business accounting, you should ask yourself the following four questions. These questions may help shape your perspective on some more technical aspects of business accounting.

In the end, you may find hiring an expert CPA saves you time, money, and energy.

How many monthly transactions do you expect?

An essential question to ask yourself before doing your own business accounting is how many transactions you expect to make each month. Keeping track of monthly transactions may be easy if you’re in the early stages of establishing your business. However, as your business grows, it becomes more important to ensure you track every transaction accurately.

There are many options to consider in the world of accounting software, with QuickBooks being a common choice among small business owners. Before you begin researching all your accounting software options, keep the following considerations in mind:

  • Accounting software typically comes with a monthly or annual cost. Run the numbers to determine whether it may be more cost-effective to work with a CPA instead.
  • Setting up your accounting software profile takes time. Consider the amount of free time you have to set up your account and learn the ins and outs of an accounting software program.
  • Accounting software can have many features that go unused by your business. While offering shiny bells and whistles is a great way to attract new buyers, the truth is you may be paying for features you don’t need.

Can someone else validate your calculations?

businessman asking help to an outsource cfo about his business accounting

Ensuring your financials are accurate is vital to the health of your business. Before deciding to do your own business accounting, ask yourself whether you feel confident making all the calculations yourself.

While accounting software can help you, it’s critical to manually review your calculations before filing your taxes. Many Cook CPA Group clients use their own accounting software but send us their account reports to ensure everything is up to snuff before filing their taxes.

Everyone makes mistakes, and it’s essential to recognize that business accounting is complex. Having a second pair of eyes to validate your calculations and confirm your accounts are in order is a huge step in ensuring you file your taxes accurately and timely. Doing your own business accounting may not be a wise decision for you if you don’t have someone you trust to double-check your financials.

Do you have separate business and personal accounts?

Maintaining separate business and personal accounts can go a long way in ensuring your accounting process is seamless. And, if your goal is to make paying taxes as easy as possible, separating your business accounting function from your personal accounts is critical.

Before deciding to do your own business accounting, review your current process. If you currently mix your business accounting with your personal accounting, it may be wise to separate them. While an experienced CPA has the know-how to wade through mountains of transactions, the process may prove too time-consuming for you.

Opening a separate business account is the best piece of advice I can give any business owner interested in doing their own business accounting. Doing so can save you unnecessary headaches during tax season.

Are you familiar with business-related tax deductions?

businessman computing business related tax deduction

One of the main arguments against doing your own business accounting is missing out on business-related tax deductions. With the potential to save hundreds if not thousands of dollars on your tax bill with business-related deductions, you must know the opportunities you can take to pay less in taxes.

Business deductions are an important component of any tax filing, and accurate accounting plays a major role in claiming the appropriate tax savings. No matter the size or years in business, every business can and should leverage deductions. But researching eligibility requirements and ensuring you can legally claim the deduction can become a complex process.

Many people who opt to do their own business accounting also prefer to file their own taxes. While this can streamline the tax filing process, you could potentially be leaving money on the table. We strongly recommend you consult with a trusted CPA for guidance.

Cook CPA Group has decades of business accounting experience. We encourage you to schedule a free consultation with us if you’re debating whether to do your own business accounting. We can guide you through the important steps you should consider and serve as a resource for any business accounting questions you may have.

Tricks Your CFO Should Be Using To Be More Effective

senior cfo having a meeting with other employee

senior cfo having a meeting with other employee

Hiring a CFO is an essential step in ensuring your company’s financial health. However, many CFOs get so bogged down with competing priorities that they struggle with the time management skills necessary to complete the job effectively.

While we are champions of the outsourced CFO model (check out our outsourced CFO service here), we also recognize the CFO on your team is always looking for effective tricks that can make their job easier. Plus, having a successful CFO means your business can run on autopilot.

Share the following six effective tricks with your CFO to improve their effectiveness and streamline your business processes.

Optimize Cross-Team Documents

CFOs have a lot on their plate. Working from a cross-functional perspective, CFOs often have a hand in many of your business operations. While this is an excellent perspective when defining your business strategy, dealing with multiple sources of information can slow down even the savviest financial pros.

Implementing a business-wide policy of data version control is a time-saving trick your business CFO should understand and leverage. Instead of wasting time sorting through different versions of data, encourage your teams to work from one source of truth – a single financial spreadsheet. Creating a model document you can use to collect data across your organization saves your CFO time and costly mistakes.

Leverage Business-Grade Financial Software

cfo leveraging business grade financial software of their company

Investing in your team is one of the most important things you can do to maintain a healthy business. According to Continuum Cloud’s 2019 State of Workforce Management Report, 73% of CFOs report a significant return on investment in implementing digital tools.

Leveraging business-grade software enhances the efficiency and efficacy of your business while making it easy for your team to do their job. Financial software helps CFOs save time on routine tasks that are traditionally unconsolidated. Aggregating data from multiple sources and automating several financial functions helps your financial team work more effectively with other business operation teams.

If you want your CFO to give you more effective strategic advice, take advantage of the wide-ranging software options available.

Automate Financial Processes

In a similar vein to leveraging business-grade financial software, implementing automation in your business process can help your CFO save time. Keeping up with growing business demands is a primary struggle for most CFOs.

Automating data collection and reporting functions can go a long way in helping alleviate the overwhelm. You can help your CFO automate by offering to implement strict internal controls and cross-functional dashboards. Many financial software programs integrate seamlessly with your existing financial processes and offer these automation features.

Support your CFO and financial team by investing in automation software that fits their unique needs.

Focus On Strategic Reporting

a cfo discussing his report about financial growth

An important function of any CFO role is reporting. But financial reporting can quickly become a time-wasting activity. Taking time to collect, analyze, and create a report on financial information provides valuable insight, but the key is to spend that time on strategic reporting.

If your company invests in business-grade financial automation software, much of the weekly or monthly reporting functions your CFO typically reports on can be automatically created. Distributing these reports through mid-level staff allows your time-strapped CFO the opportunity to think strategically.

Encouraging your CFO to move away from day-to-day reporting and take a higher-level approach to the business strategy can be the catalyst for the growth your business needs. While your CFO is well-versed in daily operations, it may be necessary to outline operational expectations beyond monthly models.

Give your CFO the tools and guidelines to spend more of their time on strategic reporting for the foreseeable future so they can hand the reigns of daily operation to their executive team.

Create Internal Risk Management Protocols

The responsibility for risk management often falls to the CFO in small to mid-sized companies. Collaborating with an in-house or outsourced legal team on risk management issues can be a time and energy drain.

A time-saving trick for your CFO is to implement a strategic company-wide risk assessment. With the help of a legal team, your CFO’s team can quickly develop a risk management process that protects your business in the event company standards are compromised.

While this takes upfront work, having risk protocols in place ensures a huge return on time in the future.

Build Proactive Strategies

cfo giving task to their staff

It’s no secret that CFOs wear many hats. From financial analysis to risk management and goal setting, CFOs have plenty of work to keep them busy the whole day. However, getting trapped in endless work cycles without taking the time to anticipate problems can be a risk for your business.

An effective CFO can save time and energy by delegating daily operations to their staff. In turn, they can spend the freed-up time anticipating potential problems in the business and developing proactive strategies to mitigate them.

Your CFO is an integral part of the decision-making process of your business. You must encourage them to make space in their day to look out for solutions for any potential problems that may arise.

It may be wise to outsource your CFO functions if you believe your CFO is struggling to be as effective as they could be. At Cook CPA Group, we’ve worked with hundreds of business clients and seen how the best businesses have scaled their operations. Schedule a free consultation today to find out how we can help your CFO and your business achieve financial goals.

Your Checklist for Paying Taxes Your First Year In Business

business partners working on documents for their business tax

business partners working on documents for their business tax

Reaching the end of your first year in business is a significant milestone. Bringing your idea to life and achieving your business goals is no small feat. As tax season approaches, it’s just as essential to research and understand the tax-paying process for your small business as it is to hit your next big goal.

From organizing your business financial statements to understanding required tax forms, paying taxes during your first year in business takes careful planning. Luckily, Cook CPA Group is always in your corner, anticipating your accounting needs.

Use the information outlined below to create a checklist that will make paying taxes during your first year in business a complete breeze.

Business Taxes You Are Required To Pay Your First Year In Business

The first essential step in planning your tax filing for your first year in business is familiarizing yourself with the different business taxes you’re expected to pay. As a small business owner, there are several business taxes you are required to pay to the IRS that you may not be familiar with. Here are the five types of business taxes you should prepare to file in your first year in business:

Income Tax

Paying income taxes during your first year in business will be no different than paying individual income taxes. In most cases, you will pay both federal and state income taxes, depending on your business entity type.

Sole proprietorships and S corporations report business income on individual tax returns. Your tax bracket will determine the flat tax rate you will pay.

Conversely, C corporations pay taxes based on the business’s net income. At the federal level, the tax rate for C corporations is 21%. Currently, forty-four states impose a corporate income tax ranging from 2.5% to 11.5%. Visit the Tax Foundation’s website to find your state’s corporate income tax rate.

Self-Employment Tax

business owner doing paper works for self employment tax

It’s common for business owners to consider themselves an employee of their company for accounting purposes. You are required to pay self-employment taxes if you earned $400 or more from business activities. That money will be taxed at a flat rate of 15.3% and is used to fund Social Security and Medicare benefits.

Employment Tax

You will be responsible for paying employment taxes if your business employs other individuals. Employment taxes include Social Security and Medicare, federal and state income tax withholding, and federal unemployment tax.

Estimated Tax

Businesses must pay estimated taxes four times per year if they expect to owe more than $500 in taxes as a C corporation or more than $1,000 as another business entity. Estimated taxes are due January 15, April 15, June 15, and September 15.

Excise Tax

Not every business is subject to excise taxes, but it’s critical to understand the goods and services that may apply. You should expect to pay the excise tax if your business sells certain products such as gasoline, cigarettes, or alcohol. Reach out to us for a comprehensive list of what goods and services fall under the excise tax rules.

Know Your Business Tax Forms & Tax Deadlines

calculator calendar and alarm clock on green background

As you gear up to pay taxes for your first year in business, it’s critical to understand the business tax forms you’re required to file and when they’re due.

Schedule C or Schedule K-1

If you run your business as a sole proprietor, you should file a Schedule C with your Form 1040 by April 15 to report your income. If you own an S corporation or a multi-owner LLC, you will file a Schedule K-1 by March 15 to report income to the IRS.

Form 1120 or 1120-S

If you own a C corporation, you will file a Form 1120 by April 15 to report income. An S corporation should use the similar Form 1120-S to file income separately from their personal income tax return by March 15.


Form 1099-MISC is filed to report the self-employment income you’ve earned as a business owner or if you’ve hired independent contractors to perform business-related activities. The deadline to submit copies of this form to the IRS is January 31.

Form 1065

If you own a partnership, you will use Form 1065 to report information, including income, gains, losses, and deductions.

Form 720

If you determine your business is subject to excise taxes, you will use Form 720 to report it.

Sort Your Business-Related Paperwork

female accountant sorting business related paperwork

Paying taxes for your first year in business requires careful planning. But organizing all your paperwork and determining the documentation needed to support your tax filing can be overwhelming. That’s why we suggest you focus on three main areas: financial documentation, business-related expenses, and payroll and employee documentation.

Financial Documentation

  • Balance sheet
  • Income statement
  • Bank account statements
  • Credit card statements
  • Invoices received from outside vendors
  • Invoices paid for services

Business-Related Expenses

  • Auto expenses (including mileage and maintenance)
  • Office Supplies
  • Operational costs (including rent, utilities, and maintenance costs)
  • Marketing and advertising costs
  • Expenses for professional services (including accountants, attorneys, bookkeepers, and consultants)
  • Insurance fees (including property insurance, vehicle insurance, business insurance, etc.)
  • Documentation for all equipment and assets purchased (including the depreciation schedule for each item)

Employment Expenses

  • Employee forms, including:
    • W-9 and I-9 verification forms for each employee
    • W-2 Forms
    • 1099 Forms for contractors
    • 1099-MISC for fees for nonemployee payments
  • Payroll forms
  • Witheld deductions from payroll and other employee wages

Now that you know the necessary forms, due dates, and documentation needed to pay taxes for your first year in business, you’re ready to meet this tax season head-on. If you feel overwhelmed with the process, schedule a free consultation with us. We’ll help you navigate the tax filing process for your first year in business and beyond.

4 Ways to Simplify Your Business Finance Process

4 Ways to Simplify Your Business

4 Ways to Simplify Your Business

Today’s businesses require financial management processes and systems that are agile, efficient, and digital. As both small business and accounting professionals, we have the privilege of working with clients from a broad range of industries.

Over the past few years, we’ve observed that many small businesses struggle with their day-to-day accounting and finance tasks – even when they have fantastic people working for them. Small business owners tend to be doers rather than number crunches. They love what they do and pour all their time, energy, and passion into their company. But as a result, many of them don’t pay enough attention to how they can streamline their business processes and save time on routine tasks.

In this post, we’re sharing the four ways to simplify your business finance process. By following these tips, you can reduce the time and effort you spend managing your business’s finances.

Keep Accounts Separate

The first step in simplifying your business finance process is keeping your business and personal accounts separate. By keeping track of your business finances in a different account, you will be able to more efficiently manage your cash flow and stay on top of your business-related expenses.

By keeping your business account separate from personal accounts, filing your taxes and dealing with any IRS inquiries is a much smoother process. Maintaining a separate business account means you never have to worry about keeping track of business deductions you want to leverage to reduce your tax bill.

Additionally, separating your business finances will help you build the business credit history needed to qualify for financing. Building your business’s credit history is important for future lending opportunities as banks and lenders ensure your business is in good standing with creditors. To learn more about establishing business credit and maintaining good credit history, check out the U.S. Small Business Administration’s website here.

Integrate Software From the Beginning

different colors of arrows merging

Accounting software can be a helpful tool when it comes to simplifying your small business finance process. By using software that integrates with your existing accounting system, you can automate many of the tasks that would otherwise be time-consuming and complicated. This can help you save time and money, and help you stay organized and in control of your finances.

Additionally, accounting software can help you keep track of your cash flow to avoid costly mistakes. By following these tips, you can improve your small business’s financial stability and reduce the time and effort needed to manage your finances.

Many small businesses turn to Quickbooks to help them manage their finances. Quickbooks is cloud-based accounting software that can be used by anyone. The software is very user-friendly and allows you to keep track of your business finances in an easy-to-use interface.

If you already use Quickbooks in your small business accounting process, make sure you leverage the Accountant’s Copy function. This feature allows you to send your business accounting records to your accountant in just a few clicks, making it easier to file your taxes.

Update Your Business Recordkeeping Process

Keeping updated records is essential to simplifying your business finance process. You can make more informed financial decisions by keeping accurate records of your transactions and balances. Understanding your business’s financial outlook is a critical component of your business plan and ongoing growth strategy.

LLCs and Corporations are legally required to keep business and personal accounts separate, which makes the recordkeeping process even easier to maintain. But choosing the recordkeeping system that is best suited to your business can sometimes be a struggle.

Keeping accurate records of any business-related purchases, sales, and payroll is essential in keeping your business financial processes streamlined and effective. By maintaining updated records in these areas, you will also be able to avoid costly mistakes and stay on top of your finances.

Maintaining updated records can be time-consuming, but you can make the process easier. To learn more about proper business recordkeeping, check out the IRS guide on the topic.

Hire an Outsourced CFO Accounting Firm

interview of an cfo accounting firm

Outsourcing your accounting and finance needs can save you time and money. An experienced and qualified accountant can help you manage your finances, prepare financial statements, and make sound financial decisions.

Additionally, an outsourced CFO can provide valuable insight into your business finances and help you identify areas where you can save money. By outsourcing your CFO responsibilities to a qualified accountant, you can simplify your business finance process and improve your financial stability.

Cook CPA Group offers expert outsourced CFO services for businesses wanting to streamline their financial processes while saving time and money. If you’re interested in what outsourcing your CFO services can mean for your business bottom line, schedule a call with Evelyn today.

In conclusion, there are a number of ways to simplify your business finance process. Following these tips can save you time and money and improve your overall financial stability. Keeping business and personal accounts separate, using accounting software, maintaining updated records, and working with an expert outsourced CFO accounting firm, can simplify your business finance process.

5 Ways Outsourced CFO Services Can Help Your Sacramento Business

5 Ways Outsourced CFO Services

5 Ways Outsourced CFO Services

A chief financial officer (CFO) is crucial to the success of your business, but hiring someone to take on the job can feel daunting. You know having a professional CFO by your side can help manage your business cash flow and financial records, and maintain accurate company budgets and records.

As a Sacramento small business, you know the costs of hiring someone full-time to manage your business finances. Often, small companies simply do not have the resources to hire and train a full-time employee to perform the job.

Luckily, outsourcing your CFO responsibilities is easier than ever with Cook CPA Group. We’re a great outsourced CFO option for Sacramento business owners who know they need financial help. Keep reading if you are interested in how outsourced CFO services can help your Sacramento business!

Save Money With a Sacramento Outsourced CFO

One of the main benefits of outsourcing the CFO responsibilities of your business is cost savings. Hiring an in-house chief financial officer can be costly when you consider how much your business will spend on the hiring and onboarding process, ongoing professional training, employment benefits, and other employee-based costs, including:

  1. Marketing the open position on job sites
  2. Training and onboarding a new employee
  3. Payroll
  4. Bonuses
  5. Health insurance
  6. Life insurance
  7. Disability leave
  8. Other payroll-related taxes

Outsourcing CFO services for your small business is a great option if you want to pay for excellent professional services without the hassle and costs of hiring a full-time chief financial officer. Additionally, hiring an outsourced CFO to handle your Sacramento business means you don’t have to worry about employees leaving your company for other employment opportunities.

An outsourced CFO handles your business financials on a contract basis and is obligated to serve you with your business’s best interest in mind.

Keep Your Business Flexible With an Outsourced CFO

meeting with an outsourced cfo

With an outsourced CFO on your side, your business benefits from flexible services. Hiring outsourced CFO services for your Sacramento business means you don’t have to worry about the changing business landscape. If you foresee tough financial times and prefer to handle your own finances until circumstances change, you are free to do so without the hassle of firing one or more full-time employees.

Additionally, hiring an outsourced CFO services team, like Cook CPA Group, means you don’t have to rely on just one person to keep the financial health of your business in check. Having a whole team of expert viewpoints and skill sets can be a valuable benefit when dealing with complex financial or accounting issues.

And the flexibility this arrangement gives you is one of the main benefits of hiring an expert outsourced CFO. In these uncertain times, it’s more important than ever to have expert financial forecasters on your team. Ensuring your business stays nimble is one of the best ways to ensure long-term success.

Save Time By Outsourcing Your CFO Responsibilities

Hiring an outsourced CFO services team allows you more time to run your business the way you envisioned. With an expert financial team taking care of your CFO responsibilities, your business can run smoothly in the background. You don’t have to waste time wondering what is going on in your company’s finances, where there may be trouble ahead, and where you may need to course-correct to get back to financial stability.

Bookkeeping is a tedious task that leaves you and your team too exhausted to focus on the things that matter to your company. An outsourced CFO saves you time by taking care of accounting practices, such as:

  1. Account receivables
  2. Cash flow reports
  3. Updated balance sheets
  4. Payroll

With your financial books in order and fewer administrative tasks to deal with, you and your team can focus on the long-term success of your Sacramento business.

Get Expert Insights with an Outsourced CFO By Your Side

team of financial experts discussing about a business

When you hire an outsourced CFO for your Sacramento-based business, you’re hiring a plug-and-play partner. As soon as you outsource your CFO services, a team of financial experts gets to work on your specific business needs. There’s no need to onboard new employees, show them the ropes, and start them off slowly as they adjust to their new role and responsibilities. An outsourced CFO team hits the ground running and gets to work on the financial aspects that make a real difference to your company.

Handing off the company’s financial responsibilities to a team of experts means you never have to worry about dealing with financial issues during busy seasons or when you’re taking some well-deserved time off. Outsourced CFOs have spent their professional careers working on accounting, bookkeeping, and other financial problems and know the right solutions to just about every problem that your company may face. Dealing with unique financial challenges is what they do best. Outsourcing CFO services for your small business means having a team of accounting experts on your side every step of the way.

Make Filing Business Taxes a Breeze

Most business owners will tell you tax season is the most stressful time in their business. Sorting through paperwork, scrambling to balance and update their books, and searching for expense receipts are just some of the struggles business owners face before filing their business taxes. However, with a professional outsourced CFO on your side, you can rest easy knowing your bookkeeping is updated, your accounts are balanced, and your expenses are properly accounted for.

Outsourcing CFO services for your Sacramento business means you can ditch the chaos and panic this tax season. Hiring Cook CPA Group as your outsourced CFO partner provides the flexibility you need to run your business without worrying about filing your taxes for the biggest return possible. We’re committed to helping our business clients tax advantage of every business expense to keep your tax bill as low as possible.

If you’re interested in learning more about what Cook CPA Group can help you accomplish with our outsourced CFO services, schedule a call today!