While uncommon, certain red flags increase the risks of receiving an IRS audit It’s unlikely the IRS will audit you anytime soon. For the 2019 fiscal year, the organization only audited 0.45% of American taxpayers, a number equal to about one in every 220 people. One reason for this dip was a reduced budget for…

Gig workers have unique responsibilities for organizing their tax records and paying quarterly balances on time. Life as a gig worker can be pretty good. After all, you’re usually your own boss, and you can set a schedule that fits in with your lifestyle. However, there are some challenges, including filling out invoices, collecting payments…

A SEP IRA can be a smart retirement plan option if you want higher contribution limits, flexibility, and tax advantages. Here’s how they work. Key takeaways: SEP IRAs are flexible retirement savings options, especially helpful to business owners with few or no employees SEP IRAs have high contribution limits: $58,000 for 2021 Only employers can…

Profit and profitability are two separate concepts. Here’s how they differ and how to start measuring. Key takeaways: Profitability is a metric that tells you if your business is viable, and it’s a measurement used by investors Profit is the dollar amount of net earnings in a given period Measure profitability by assessing gross and…

The Roth IRA is a tax-advantageous option for retirement savings. Learn how it works and who should use it. Key takeaways: Pros: Tax-free withdrawals. Withdraw contributions for any reason at any time without paying tax. Money grows tax-free. Make contributions at any age. No income limits on conversions. Lots of investment options. No required minimum…

Capital expenses are large purchases required to keep a business growing. Here’s what you need to know about these costs, including the tax implications.  Key takeaways: Capital expenditures are long-term investments like technology upgrades or significant equipment purchases These purchases are recorded on the balance sheet since they’re investments, not everyday operational costs Capital expenditures…

How can you find the right balance for optimized cash flow? Start with these eight tips. Key takeaways: 8 tips for better cash flow: Maintain visibility Be prompt with payments and invoices Be on the lookout for changes Try renegotiating Reevaluate your invoicing practices Cut unnecessary costs Use accounting software Consider a line of credit…

Key takeaways: 2020 taxes are done, and it’s time to start preparing for filing 2021 taxes Top 8 tax tips: Get to know the new tax brackets Pay estimated taxes on time Keep records organized Master the home office deduction Prepare to file electronically Classify your business properly Deduct charitable contributions Get help from a…