e39aff66

Q3 Estimated Taxes Due September 15!

Thu, 04 Sep 2025 14:35:04 GMT

Quarter 3 Estimated Taxes Are Due September 15th

If you’re self-employed or run a small business, you already know that estimated tax payments are part of the rhythm of managing your finances. These quarterly payments help you stay on track with the IRS and avoid penalties at the end of the year.

The next deadline is coming up soon: Quarter 3 estimated taxes are due on Sunday, September 15, 2025 .

Why Estimated Taxes Matter

Unlike traditional employees who have taxes withheld from every paycheck, self-employed individuals, freelancers, and business owners are responsible for setting aside and paying their own taxes throughout the year.

By making quarterly estimated payments, you:

Avoid big surprises (and stress) at tax time.
Reduce the risk of IRS penalties and interest.
Stay in control of your cash flow and business finances.

Who Needs to Pay?

You likely need to make quarterly estimated payments if you expect to owe $1,000 or more in taxes when filing your return, and you don’t have taxes automatically withheld from another income source.

Common examples include:

Sole proprietors and single-member LLCs
Partnerships and multi-member LLC owners
Independent contractors and freelancers
Small business owners who receive profits or distributions

How to Calculate Your Q3 Estimated Taxes

The IRS gives you two main ways to calculate your estimated payments:

1. Safe Harbor Method (Most Common)

If you pay the same amount each quarter—based on last year’s taxes—you’ll avoid penalties as long as you pay in 100% of last year’s tax liability (or 110% if your adjusted gross income was over $150,000).

Example:

Your 2024 total tax liability was $12,000 .
Divide by 4 = $3,000 per quarter .
You’ll pay $3,000 by September 15th for Q3.

2. Actual Income Method (Better for fluctuating income)

If your income varies throughout the year, you can calculate based on what you’ve actually earned so far.

Example:

January through August, you’ve made $60,000 net income .
You expect to owe roughly 20% in federal taxes = $12,000 total for the year .
Divide by 4 = $3,000 per quarter .
If you already paid $6,000 for Q1 and Q2, your Q3 payment would be $3,000 .

Quick Tip:

Don’t forget self-employment tax! On top of income tax, most self-employed individuals also pay 15.3% self-employment tax (Social Security + Medicare). This is why working with a tax professional can make sure you don’t underpay.

How to Pay Your Q3 Estimated Taxes

The IRS offers several convenient ways to pay:

Online through IRS Direct Pay – fast and secure.
IRS2Go Mobile App – pay directly from your phone.
Mailing in Form 1040-ES with your check or money order.

Pro Tip: Keep It Simple

At Keep-On-Booking , we always recommend setting aside a percentage of every payment you receive into a separate savings account just for taxes. That way, when quarterly deadlines roll around, you’re already prepared.

If you’re not sure how much to set aside, check out our earlier guide: How to Estimate Taxes When You’re Self-Employed.

Need Help?

Quarterly payments can feel overwhelming—but you don’t have to do it alone. If you’re unsure how much to pay or whether you’re on track, we’d love to help you calculate your estimated taxes and give you peace of mind.

�� Reach out to Keep-On-Booking today so you can head into tax season with confidence!

How to Estimate Taxes When You’re Self-Employed: A Simple Guide

patti@keep-on-booking.com (Patricia Moore) — Wed, 23 Apr 2025 15:25:11 GMT

Working for yourself is exciting—you're your own boss, setting your own schedule, and building something you're proud of. But when it comes to taxes, things can get a little tricky. Unlike traditional employees who have taxes withheld from their paychecks, self-employed individuals are responsible for managing and paying their own taxes throughout the year.

That’s where estimated taxes come in. They help you avoid a surprise tax bill (or penalties) when tax season rolls around, and they’re a big part of staying compliant and financially healthy as a business owner.

Let’s break down how estimated taxes work and what you need to do to stay on top of them.

What Are Estimated Taxes?
Estimated taxes are payments you make to the IRS throughout the year on income that isn’t subject to withholding. This includes money you earn from freelancing, gig work, contract jobs, or running your own business.
If you expect to owe at least $1,000 in taxes for the year after subtracting withholding and tax credits, you’ll likely need to make estimated payments. These payments cover both your income tax and self-employment tax (which includes Social Security and Medicare).

When Are Estimated Taxes Due?
Estimated tax payments are made four times a year:
- April 15 – for income earned January 1 to March 31
- June 15 – for income earned April 1 to May 31
- September 15 – for income earned June 1 to August 31
- January 15 (of the following year) – for income earned September 1 to December 31
If the due date falls on a weekend or holiday, your payment is due the next business day.

How Much Should You Pay?
There are a couple of ways to figure this out:
- Safe Harbor Method: If your income is similar to last year’s, you can avoid penalties by paying at least 100% of last year’s tax liability (or 110% if your adjusted gross income was over $150,000).
- Current-Year Estimate: If you expect to earn more or less than last year, aim to pay at least 90% of what you’ll owe this year. You can use IRS Form 1040-ES and your prior year’s return to help calculate your estimated payments.

How to Make Payments
You have a few options when it comes to sending in estimated tax payments:
- IRS DirectPay – an easy way to pay online
- IRS2Go mobile app – convenient for on-the-go payments
- Mail a check – using Form 1040-ES
- IRS online account – track payments, balances, and access past tax records
No matter how you pay, be sure to mark your calendar and avoid missing a deadline.

What If You Don’t Pay Enough?
If you underpay or make late payments, the IRS may charge you a penalty. For 2025, the interest rate for underpayment is 7% plus 3 percentage points, and the interest is compounded daily, which can add up quickly.
You can usually avoid this penalty if:
- You owe less than $1,000 when you file, or
- You paid at least 90% of your current year’s tax bill, or
- You paid 100% of your prior year’s tax (or 110% if your income was higher)

Reassess When Life Changes
Life happens—maybe you got married, took on a second job, or had a child. Any of these events can change how much tax you owe. Check in on your income and expenses every few months and adjust your estimated payments if needed.
If you also earn W-2 income, consider increasing your withholding through your employer by submitting an updated Form W-4. This can help offset your self-employment tax and reduce what you need to pay quarterly.

Why Hiring a Bookkeeper Can Make a Big Difference
Being self-employed means wearing a lot of hats—and tax planning doesn't have to be one of them. A professional bookkeeper can help you stay organized, track your income and expenses, and make sure your estimated payments are accurate and timely.

At Keep-On-Booking, I work with self-employed individuals and small business owners to take the guesswork out of tax season. From ongoing bookkeeping to estimated tax support and financial reporting, I'm here to help you stay on top of your finances—so you can focus on doing what you love. Schedule a consultation today and let’s make your next tax season the easiest one yet!

Top 10 Commonly Missed Tax Deductions for Self-Employed People

patti@keep-on-booking.com (Patricia Moore) — Tue, 28 Jan 2025 17:22:58 GMT

Tax season can be a challenge for self-employed individuals, but it’s also an opportunity to save money by leveraging deductions. Unfortunately, many people overlook key expenses that could significantly reduce their tax bill. Here’s a quick guide to the top 10 commonly missed tax deductions:

Retirement Plan Contributions:
Contributions to SEP-IRAs, SIMPLE IRAs, and solo 401(k)s are tax-deductible.
Tax-deferred growth helps you build a stronger financial future while reducing your current taxable income.
Self-Employment Tax:
You pay the full 15.3% Social Security and Medicare tax as a self-employed person.
Deducting half of this tax aligns your tax burden closer to that of traditional employees.
Home Office Expenses:
Deduct a portion of your rent, mortgage, utilities, and insurance if you use a part of your home exclusively for business.
Use the simplified method to calculate your deduction or opt for actual expenses if they’re higher.
Health Insurance Premiums:
Deduct premiums for health, dental, and long-term care insurance for yourself, your spouse, and dependents under 27.
This deduction applies even if you don’t itemize your deductions on your tax return.
Internet and Phone Bills:
Deduct the business portion of your phone and internet expenses.
Ensure you separate personal and business use to avoid IRS scrutiny.
Meals:
Deduct 50% of meals for business purposes, such as client meetings, conferences, or travel.
Meals must be reasonable and not considered extravagant to qualify as deductible.
Office Supplies:
Items like pens, paper, printer ink, and other business essentials are fully deductible.
Don’t forget to deduct larger office equipment like desks, chairs, or computers if used solely for business.
Marketing and Advertising:
Deduct the full cost of promoting your business, such as website hosting, social media ads, and printed materials.
Costs related to branding, like logo design or promotional items, are also deductible.
Professional Services:
Costs for accountants, lawyers, consultants, or other professional services are fully deductible.
Fees for tax preparation software or financial advisors can also qualify as deductions.
Travel Expenses:
Deduct costs like airfare, lodging, car rentals, and meals for business-related travel.
Parking fees, tolls, and transportation to and from meetings or the airport can also be deducted.

Why You Should Hire a Bookkeeper:
Keeping track of expenses and deductions can be overwhelming. Hiring a bookkeeper provides:

Maximized Deductions: Ensures you claim every eligible expense
Time Savings: Lets you focus on running your business while they handle the details.
Accuracy: Reduces errors and the risk of audits.
Financial Insights: Helps you better understand and plan your finances.

Bonus Tip: The cost of hiring a bookkeeper is a deductible business expense!

.

Final Thoughts
Navigating taxes as a self-employed individual doesn’t have to be stressful or overwhelming. By staying informed about commonly missed deductions and maintaining accurate records, you can significantly reduce your tax burden and keep more of your hard-earned money.
At Keep-On-Booking, I help take the guesswork out of your finances. From payroll management to tax filing and financial reporting, my services are designed to save you time and money while you focus on growing your business. Contact me today for a consultation: https://www.keep-on-booking.com/consultation

Understanding Worker Classification: A Guide for Colorado Business Owners

patti@keep-on-booking.com (Patricia Moore) — Wed, 02 Oct 2024 14:52:28 GMT

As a Colorado business owner, one of the most important decisions you’ll make is how to classify the people who work for you. Are they employees or independent contractors? Properly classifying your workers in line with Colorado's laws is crucial, as it affects everything from wages and benefits to tax responsibilities. This blog will walk you through the key differences between employees and independent contractors in Colorado, the protections each group is entitled to, and the consequences of misclassification. Whether you’re starting a new venture or managing an established business, getting worker classification right is essential for staying compliant and protecting your business.

Employees:

Wages and Hours: Colorado employees are entitled to at least the state minimum wage, which adjusts annually. They are also covered by the Fair Labor Standards Act (FLSA), which requires overtime pay at 1.5 times the regular rate for any hours worked over 40 in a week.
Benefits and Protections: Employees have access to a range of benefits such as unemployment insurance, workers’ compensation, and health benefits. Additionally, they are protected from workplace discrimination, unsafe working conditions, and wage theft under both federal and state law.
Legal Recourse: If their rights are violated, employees can file complaints with the Colorado Division of Labor Standards and Statistics. These violations could include unpaid wages, workplace safety issues, or employment discrimination.

Independent Contractors:

Flexibility: Independent contractors in Colorado typically enjoy more freedom in choosing their working hours and methods for completing tasks, allowing for greater flexibility in their work-life balance.
Limited Protections: Unlike employees, independent contractors aren’t entitled to minimum wage, overtime pay, or benefits such as unemployment insurance and workers' compensation. They also aren’t covered under most employment discrimination laws.
Tax Responsibilities: Independent contractors must manage their own taxes, including self-employment tax, and are responsible for covering their own benefits, insurance, and retirement savings.

The Importance of Proper Classification

In Colorado, workers are generally presumed to be employees unless proven otherwise. If an employer wants to classify someone as an independent contractor, they must demonstrate that the worker is:

Free from the employer’s direction and control in performing their work; and
Engaged in an independent business or profession related to the work they perform for the employer.
Employers cannot rely solely on issuing a 1099 form to classify someone as a contractor. A written contract is required, outlining key elements like the contractor's obligation to handle their own taxes and the fact that they won’t receive unemployment insurance unless they or another entity provide coverage.

Key Factors to Determine Worker Classification

Colorado uses a variety of factors to assess whether a worker is an employee or an independent contractor. These factors include:

Control Over Work: If the employer dictates how, when, and where the work is done, the worker is more likely an employee.
Nature of the Work: If the worker performs tasks integral to the employer’s core business, they are probably an employee.
Payment Method: Employees are generally paid by the hour or on a salary, while independent contractors are paid per project or job.
Tools and Equipment: Employees often use tools and equipment provided by the employer, whereas independent contractors provide their own.

Consequences of Misclassification

Misclassifying an employee as an independent contractor to avoid paying overtime, unemployment taxes, and other benefits can lead to serious penalties. Businesses found in violation could face:

Back pay for unpaid wages and overtime
Fines and penalties
Back taxes for unemployment insurance and other withheld benefits

Proper classification of workers is essential to avoid legal and financial repercussions. Colorado’s Division of Labor Standards and Statistics can investigate claims of misclassification, and violations can be made public under the state’s Wage Theft Transparency Act.

Get Professional Help
For small business owners, navigating these complex classifications and ensuring compliance can be overwhelming. By hiring professional bookkeeping services, you can ensure accurate worker classification, maintain compliance with employment laws, and avoid costly penalties. Keep-On-Booking's expertise in payroll management, tax filing, and financial reporting allows you to focus on growing your business with confidence and peace of mind. Contact us today to learn more: https://www.keep-on-booking.com/consultation

1099 Contractors vs. Employees: What Nebraska Business Owners Should Consider

patti@keep-on-booking.com (Patricia Moore) — Wed, 24 Jul 2024 14:56:45 GMT

Expanding your business into Nebraska is an exciting step! Whether you're setting up in Omaha, Lincoln, or another part of the Cornhusker state, it's important to familiarize yourself with Nebraska's employment and labor laws. These regulations are designed to protect workers from discrimination, unfair working conditions, and unsafe environments. As an employer, understanding these laws is essential to avoid legal complications. While federal laws apply nationwide, each state, including Nebraska, has its own unique set of rules that business owners (including you!) must comply with.

Protections for Employees vs. Independent Contractors in Nebraska
Employees:
Wages and Hours: Starting January 1, 2024, employees in Nebraska are entitled to a minimum wage of $12.00 per hour, which will continue to increase annually. Additionally, under the Fair Labor Standards Act (FLSA), employees are entitled to overtime pay at 1.5 times their regular rate for hours worked over 40 in a week.

Benefits and Protections: Employees can access various benefits, including unemployment insurance, workers' compensation, and health benefits. They are also safeguarded against workplace discrimination and unsafe conditions under both federal and state laws.
Legal Recourse: If their rights are violated, employees can file complaints and seek legal recourse for issues related to wages, overtime, and workplace safety.

Independent Contractors:
Flexibility: Independent contractors have the advantage of more flexible work arrangements, often having control over their hours and how they complete tasks.

Limited Protections: Unlike employees, independent contractors do not qualify for minimum wage or overtime pay and are not covered by unemployment insurance, workers' compensation, or most employment discrimination laws.
Tax Responsibilities: Independent contractors must manage their own taxes, including self-employment tax, and handle their own benefits and insurance.

The Importance of Proper Classification:

Misclassifying employees as independent contractors to avoid paying overtime, unemployment taxes, and other benefits can lead to severe penalties from the Department of Labor. Proper classification depends on several factors, including the level of control the employer has over the worker, the nature of the work, and the payment method. This is part of the ten-factor test highlighted in cases like Wright v. H & S Contracting.

The Key Factors Include:

Control Over Work: If the employer dictates how, when, and where the work is done, the worker is likely an employee.
Nature of the Occupation: Work integral to the employer’s business suggests an employee relationship.
Payment Method: Employees are typically paid by the hour or salary, whereas independent contractors are usually paid per job or project.
Provision of Tools: Employees generally use tools and equipment provided by the employer, while independent contractors use their own.

Consequences of Misclassification:

Misclassifying workers can result in back pay for unpaid wages and overtime, fines, and back taxes for unemployment insurance and other withheld benefits. Correctly classifying workers is crucial to avoid these legal and financial repercussions.

Get Professional Help:
For small business owners, navigating these complex classifications and ensuring compliance can be overwhelming. By hiring professional bookkeeping services, you can ensure accurate worker classification, maintain compliance with employment laws, and avoid costly penalties. Keep-On-Booking's expertise in payroll management, tax filing, and financial reporting allows you to focus on growing your business with confidence and peace of mind. Contact us today to learn more: https://www.keep-on-booking.com/consultation

Tax Filing for Small Businesses and Tips for Keeping Good Records

Thu, 01 Jun 2023 14:22:48 GMT

How to Keep Good Records for the Next Filing Season for Small Businesses

Small businesses have a ton of challenges. They need to make the right decision around every corner and save on as many overheads as possible to remain profitable and grow. One of the luxuries small businesses don't have is a dedicated finance team to address tax filing and record keeping. Instead of outsourcing, the business might decide to do their taxes themselves.

It's commendable! But as a small business, you can't afford to make mistakes, and you need to keep pristine records to make the subsequent tax filing easier. You also need to keep your ear to the ground on any taxation developments you must comply with.

For instance, the IRS has made changes to the Form 1099-K from 2023 onwards on all amounts of payments which puts extra weight on maintaining proper records to make filing easier.

Here are some tips small businesses should consider to make the next tax filing easier and ensure they don't run into any problems in case of an audit.

Have a Document Management System

All business transactions should be documented either on paper or electronically. As your business grows, your pile of paper and files will also increase.

You need to have a management system, preferably categorized, to make it easy to know which documents go where.

If you can go paperless, that would be amazing. It would make management and access to the records easier. You can then use a digital document management system that will organize your business's documents.

For added safety, you can add a document control system that will outline how often you need to review and update the documents.

Keep Up with Record Retention Mandates

There's more to keeping good records within small businesses than for tax filing purposes. You are also obligated to comply with document retention mandates in case of an audit.

These mandates can vary between two and six years. But to be safe, you should maintain records for the past seven years.

Remember that some records, like a nonprofit's tax-exempt certificate or the business tax ID, never become irrelevant, so keep them close.

If you're suspected of tax fraud, the IRS could audit your business's financials up to seven years ago. That's why most CPAs will tell you to keep records for up to seven years . The records mandate extends to the following documents:

Employee information (names, addresses, and contact information)
Employee timesheets and pay stubs
All tax forms associated with and submitted to the IRS
Insurance documents
Bank statements
Contracts
Financial statements
Tax returns
Email correspondence
Legal files
Meeting minutes from the board of directors
Business registration documents
Customer invoices
Contracts, including loan and mortgage documents
Purchase receipts

Invest in an Accounting and Payroll Software that Generates Records

The most effective way to cut costs and remain compliant is to invest in technology where possible. An accounting and payroll software that can generate records, payroll tax forms, and customer invoices should be high on your list of must-haves.

Go for software with bookkeeping basics like keeping accounts receivable records when you bill a customer. The software should also generate different IRS tax record forms so you can easily search for these forms when you need them.

Match Your Records to Transactions During Bank Reconciliations

Bank reconciliations can help small businesses catch errors and understand their financial positions. But you can only do this if you keep proper records. Make it a habit to match every transaction in your accounting software to a record. Make sure you have a matching invoice, receipt, or contract.

Back-Up and Secure the Records

Keep a backup of all your records, preferably off-site. If you suffer a data break or a natural disaster, you can avoid a catastrophe. It doesn't hurt to be extra careful and have a backup of a backup. Also, ensure your backups are regularly updated.

Get External Help

You might not have the budget to run an entire team of accountants to comb through your books and ensure compliance. But you can contact a specialized small business tax professional like myself for a free consultation , especially on new tax advancements like the new reporting threshold for Form 1099K Payment Card and Third-party Network Transaction for the tax year beginning 2023.

Outsourcing certain aspects of tax filing can save owners of small businesses money while ensuring they remain updated and compliant with the latest tax trends and requirements. Contact us today and find out how we can help.

Keep on Booking is based out of Lincoln, Nebraska, and provides exceptional booking and accounting services in Nebraska, Colorado, New Mexico, and Arizona.

Don’t Forget to Claim Your Nebraska Property Tax Credits

Fri, 07 Apr 2023 16:11:40 GMT

Don’t Forget to Claim Your Nebraska Property Tax Credits

Every asset owner has a patriotic duty to pay their property taxes. Failure to do so could see you lose the asset or part of it to tax sale. If you own property in Nebraska, you pay a property tax determined by its taxable value and the total consolidated tax rate for the tax district of your property's location. That's quite a lot of money, especially if you pay school district or community college taxes. Fortunately, Nebraska offers refundable credits for school and community college property taxes paid. This is where Nebraska property tax credits come in.

Recently, the Nebraska Department of Revenue (DOR) estimated the amount of unclaimed Refundable Income Tax Credit for Property Tax Paid remaining for two years, i.e., 2020 and 2021, to be about $193 million . If you haven't claimed your credit, you could get some extra cash you did not expect.

Learn more about Nebraska property tax credits and how to claim them!

Nebraska Property Tax Credits

Each property tax credit in Nebraska equals the product of a distinct percentage, and either the school district or community college paid. The Department of Revenue calculates each credit percentage during the final quarter of each calendar year.

Use this Look-up Tool for clarification on your school district property taxes and community college property taxes you paid. To get the credits, you must complete Form PTC for the same year as the Nebraska tax return on which you claim the credit.

Property Taxes Paid in 2020

Individuals and entities exempt from income tax can claim credit for school district property taxes paid in 2020. The entities include financial institutions, C Corporations, or organizations.

Claiming the credit requires completing the appropriate Nebraska tax return alongside a 2020 Form PTC. Even if one doesn't owe Nebraska income tax and paid school district taxes, they should still file a Nebraska income tax return and the 2021 Form PTC to get the credit. Individuals who did not claim the credit on their Nebraska tax return may also file a 2020 Form PTCX .

Pass-through entities such as partnerships, S-corporations, trusts, and estates may allocate the paid school district taxes to their beneficiaries or owners in the same way the income is distributed . They get their allocation by giving a Form PTC together with the 2020 Nebraska tax return.

Property Taxes Paid in 2021

Individuals or entities that paid school district property taxes can claim credit for their taxes paid in 2021. Claiming the credit requires completing the right Nebraska tax return alongside a 2021 Form PTC.

Even those who paid Nebraska school district taxes but don't owe Nebraska income tax should file a Nebraska income tax return together with the 2021 Form PTC to get the credit.

Individuals who filed their Nebraska tax return without claiming the credit for school district taxes paid may file the 2021 Amended Nebraska Property Tax Incentive Act Credit Computation ( Form PTCX ).

Also, estates, trusts, partnerships, and S-corporations that did not claim the property tax credit or allocate the taxes they paid in 2020 may use the 2021 Nebraska return to claim the credit.

Property Taxes Paid in 2022 and After

You can claim Property Taxes Credits paid in 2022 and after for both school district and community college property taxes. You only need to complete the right Nebraska return alongside a Nebraska Property Tax Credit, From PTC.

Claim Your Nebraska Property Tax Credits with the Help of Professionals

Nebraska has millions of dollars of unclaimed tax credits. Some of the money could be waiting for you! But you have to claim the credits by filling out the appropriate Form.

Keep on Booking is based out of Lincoln, Nebraska, and provides exceptional booking and accounting services in Nebraska, Colorado, New Mexico, and Arizona.

How Do You Pay Yourself as a Business Owner?

Wed, 15 Mar 2023 19:52:24 GMT

How Do You Pay Yourself as a Business Owner?

As a business owner, you deserve your fair share of your own profits. However, the specific logistics of taking your "cut" can be a little challenging to understand. Paying yourself as a business owner depends on the type of business entity. Below, we will review two common ways business owners can pay themselves:

Owner's Draw

An owner's draw is also called a draw on profits. It is not a salary. Sole proprietorships, partnerships, and LLCs often use owner's draws. There are no rules about when and how much you can take as a draw. In fact, you can take a draw as often as you'd like, or as rarely.

It is called a draw because it is a withdrawal from your equity in the company. This means your draws cannot exceed your equity in the company. If you have a partner, you have to keep track of each person's share so that you can keep your draws under the limit.

Owner's draws are subject to a self-employment tax of 15.3%. This can add up quickly at the end of the year, so it's important to set aside some of your income for your year-end tax liability. If this is your primary income, you may want to look into making estimated payments to help reduce the burden at tax filing time.

Salary

If your business is an S Corp or C Corp you should pay yourself a salary. This is legally required if you work in the business. Also, the "reasonable compensation" rule governs S Corps . This means your salary has to be comparable to somebody else doing the same job in your industry.

In this case, your company pays taxes on profit and you pay taxes on, and only on, your salary. Your company will now cover the employer portion of payroll taxes, leaving you covering the employee portion . This can save you quite a bit in taxes depending on your profit.

Deciding How Much to Pay Yourself

It can be a challenge to decide how much you should consider paying yourself as a business owner. How much can your company afford? How much can you afford? And as an S-Corp, can you consider it as reasonable compensation?

If you are unsure of where to start, reach out to us for a free consultation .

Keep on Booking is based out of Lincoln, Nebraska, but provides exceptional booking and accounting services in Nebraska, Colorado, New Mexico, and Arizona.

Why You Should Always Consider Accounting Ethics in Your Organization

Tue, 31 Jan 2023 12:00:04 GMT

Accounting Ethics: Working with Integrity and Trustworthiness

As a business owner, accounting ethics are an important consideration when hiring a bookkeeper. No matter how big or small your company, having a code of trustworthiness and integrity is a key part of any responsible financial management team.

Accounting ethics help ensure that everybody involved – from clients to employees – is operating honestly and transparently. But with so many different principles and expectations around decisions related to accounting, it can be difficult for small business owners to know what exactly is ethical or not-ethical behavior. Here are a few things you need to know about accounting ethics:

What is Accounting Ethics?

Accounting ethics is the moral compass for the accounting industry and its professionals. It is based on a set of core values and principles that guide the decisions and activities of accounting professionals. Accounting ethics are essential to ensuring trust in financial reconciliation and reporting , audits, as well as other services provided by accountants. With this trust, investors, lenders, regulators, and other stakeholders would have confidence in the accuracy and quality of financial data.

Accounting ethics also encompass the rules, regulations, and codes of conduct that govern the activities of accountants. These standards have been developed by professional accounting organizations such as the American Institute of Certified Public Accountants (AICPA) and national and international regulatory bodies. They guide ethical decision-making in conflicts of interest, professional competence, and integrity.

What Diligence in Following Accounting Ethics Looks Like

Accounting professionals have to serve their clients with integrity and diligence. Their responsibility is great; they must provide ethical services with the utmost care. These include:

Honesty in all decisions related to client's financial matters, such as sales tax/tax prep
Explain and be open about charges
Avoid conflicts of interest
Protect confidential information
Maintain up-to-date knowledge of industry regulations and procedures
Adhere to accepted professional standards and laws related to accounting
Ensure accuracy and traceability of financial records
Act with integrity and objectivity at all times
Develop processes to prevent fraud and other illegal activities

Examples of What it Looks Like to Have it Challenged by a Client

Accounting ethics come up in many situations where clients may attempt to pressure an accountant into unethical behavior. Examples of this include:

Pressuring the accountant to alter financial records or reports
Asking the accountant not to disclose certain information
Pressuring the accountant to ignore applicable laws or regulations
Making inappropriate requests related to confidential information
Attempting to influence an audit result by offering favors

These ethical challenges can create a difficult situation for an accountant since a client is usually their employer, and they are expected to be compliant with their requests. However, accountants must stand firm in upholding their values and ethics even when faced with pressure from clients. Examples of the best practices include:

Setting clear expectations upfront, such as requesting that all requests be put in writing
Making it clear that any unethical behavior will not be tolerated
Documenting their conversations with clients, so they can reference them if needed in the future
Always consult a professional ethics expert when faced with particularly difficult ethical dilemmas

If a client is exhibiting any of these behaviors, it is the responsibility of the accounting professional to refuse any such requests and stand firm on their ethical obligations.

Balance Ethics and Accounting

Accountants need to adhere to a strict code of ethics. This means that they should always work with integrity and be trustworthy. There are many examples of accounting ethics being challenged by clients. However, it is up to the accountant to maintain their ethical standards.

If you need help following accounting ethics or keeping your business afloat, reach out to us for a free consultation . Keep on Booking is based out of Lincoln, Nebraska, but provides exceptional booking and accounting services in Nebraska, Colorado, New Mexico, and Arizona.

Cash Basis vs. Accrual-Based Accounting: Choosing the Right Method for Your Small Business

Sun, 15 Jan 2023 11:30:00 GMT

As a small business owner, choosing the suitable accounting method to track and manage your financial data is essential. But with so many options available, it can take time to know which method is best for your business. In this article, we'll explore two of the most commonly used accounting methods : cash basis accounting and accrual-based accounting. By understanding the differences between these two methods, you can decide which is right for your business.

What is the Difference Between Cash Basis Accounting and Accrual-Based Accounting?

At a high level, the main difference between cash basis accounting and accrual-based accounting is the timing of when transactions are recorded. With cash basis accounting, it records transactions during the exchange of cash. For example, if you sell a product or service and receive payment from a customer, it records the sale at that time. On the other hand, accrual-based accounting records transactions when they occur , regardless of the time of payment. So, if you sell a product or service on credit, the sale is recorded at the time of the sale, even if payment is not received until later.

Advantages of Cash Basis Accounting

One of the main advantages of cash basis accounting is that it simplifies record-keeping . Since transactions are only recorded when cash is exchanged, there are fewer transactions to track and record. This can make it easier for small business owners with limited accounting knowledge or capacity, to understand and manage their financial data.

In addition to being easier to understand, cash basis accounting can also be less expensive to implement. Since it requires fewer transactions to track and record, it may require fewer resources and less time to maintain.

Disadvantages of Cash Basis Accounting

While cash basis accounting has advantages, it also has some significant drawbacks. One of the main disadvantages is that it can be less accurate in reflecting the actual financial status of the business. Since it only records transactions during the exchange of cash, it may provide a partial picture of the business's financial activities.

Another disadvantage of cash basis accounting is that it does not provide a clear picture of future cash flow. Cash basis accounting only records transactions during the exchange of cash. Hence, it may not accurately reflect the business's future financial obligations or opportunities.

Finally, cash basis accounting may not be suitable for businesses with high levels of credit sales. Since transactions are only recorded when cash is exchanged, credit sales may only be reflected in the business's financial records once payment is received.

Advantages of Accrual-Based Accounting

Accrual-based accounting provides a more accurate picture of the business's financial status . Since it only records transactions when they occur, regardless of the receipt of the payment, accrual-based accounting offers a complete picture of the business's financial activities. This can be especially important for businesses with high levels of credit sales. It allows them to track and manage their accounts receivable accurately.

In addition to being more accurate, accrual-based accounting can also provide a clearer picture of future cash flow. It can help businesses better predict their future financial obligations and opportunities by recording transactions when they occur.

Another advantage of accrual-based accounting is that it can be more suitable for businesses with high levels of credit sales. Since it records the credit sales at the time of the sale rather than when receiving payment, businesses can better manage their accounts receivable and predict future cash flow.

Disadvantages of Accrual-Based Accounting

While accrual-based accounting has its advantages, it also has some significant drawbacks. One of the main disadvantages is that it can be more complex to implement and understand. Since it records transactions when they occur, regardless of the time of the payment, it can require more detailed record-keeping and a deeper understanding of accounting principles.

Another disadvantage of accrual-based accounting is that it may require more resources and time to maintain. Since it involves tracking and recording more transactions, it may require more effort to manage accurately.

Finally, accrual-based accounting can be more expensive to implement, especially for small businesses that may not have the resources or expertise to manage it effectively.

Conclusion

In conclusion, choosing the right accounting method for your small business is essential. So, which one do you use for your business? Both cash-based and accrual-based accounting have advantages and disadvantages. The right method for your business will depend on your specific needs and goals.

If you're still unsure which method suits you, consider reaching out to us for a free consultation. We will help you understand each method's pros and cons and make an informed decision about which is best for your business.

Requirements to Fulfill When Filing Sales Tax in Lincoln, Nebraska

Tue, 27 Dec 2022 19:58:37 GMT

Requirements to Fulfill When Filing Sales Tax in Lincoln, Nebraska

As a business operating in Nebraska, you have a duty to remit your taxes to the state from the sales you make. Depending on your exact location, you may also have tax obligations to your county and your city. This means you need to collect sales and use tax, and also file tax returns regularly.

Many ways are available to determine what taxes you collect and remit. In certain cases, if you make sales outside city limits, you must track them separately from those made within city limits. Do you have specific obligations, as a business owner in Lincoln, Nebraska? Let's take a look.

The Sales Tax Rate in Lincoln, Nebraska

The City of Lincoln (as the state capital and the Lancaster County seat), does charge a sales tax on commercial transactions within the city limits . You have to add a 1.75% tax to all sales including tangible item sales (excluding certain kinds of prescription medications and even some types of medical devices). While most services are considered untaxable in the State of Nebraska, there are a few exceptions. You can see the exemptions and recently asked questions here .

In all, you require a 7.25% collection on the sales you make, of which 5.5% goes to the state. You do have a reprieve, however. Nebraska allows businesspeople to withhold a small percentage of the collected sales and use tax in what is known as a Collection Discount. The discount also serves as compensation for your efforts to collect, compile, and comply with the state tax regulation.

You can keep 2.5% of the first $3,000 you collect in a month, for every location you're currently operating in within the state.

Do note, the US Supreme Court Decision in South Dakota vs Wayfair does not affect the meaning of business nexus in the context of Nebraska's tax revenue laws . As of January 1, 2019, the state considers vendors making $100,000 and above in annual sales or upwards of 200 transactions to have economic nexus in the state.

Sales Tax Filing Calendar

Based on the sales you make, your sales tax account status with the revenue service, and other criteria. You could end up having to file tax returns monthly, quarterly, semi-annually, or on an annual basis.

To file quarterly, you need to file the returns by the following dates;

1st Quarter: April 20th
2nd Quarter: July 20th
3rd Quarter: October 20th
4th Quarter: January 20th

For monthly filing, ensure you do so by the 20th of the following month. As an example, for sales made in January, file your taxes by February 20th. For annual filing, say 2022, consider filing them by January 20th, 2023.

Filing and Payment Options for Your Taxes

After doing the tedious work of calculating what you owe the state and city of Lincoln, submit the returns and collection to the concerned tax collection service. Nebraska also allows electronic filing for sales tax returns. In case you're making payments of $9,000 or more, you need to do so via EFT, then file the Form 10 return electronically.

If you're unsure about filing your taxes electronically, you can still do so via snail mail. You have to fill out Nebraska Form 10 and mail it to the Nebraska Department of Revenue. Note, however, that filing via mail takes significantly longer to process the returns and payment.

Need Help with Your Nebraska Sales Tax?

Let's face it, taxes aren't everyone's favorite thing to do. What's more, sitting down to handle them takes you away from doing what you really should be doing; running your business. Instead, you should let us at Keep-On-Booking handle tax-related matters on your behalf. Whether it's reconciling or reporting , sorting out sales tax , and more , we can do it all.

Book a 30-minute call with our Bookkeeper now!

How to Stay Compliant with 1099 Contractor Payments on Venmo

Mon, 19 Dec 2022 16:02:07 GMT

Venmo Reporting and IRS Compliance - A Guide on 1099 Forms

Venmo is a safe and effective payment processor with an emphasis on social networking. Using Venmo to pay contractors is not as common as other methods of payment such as ACH/direct deposit. However, if it is your contractor's preferred payment method you can make it work as long as you comply with IRS regulations and Venmo's terms of service. Here's what you should know about Venmo reporting and IRS compliance.

The Benefits of Using Venmo

If you are a small business, Venmo is an appealing method to get your payments out the door quickly . You can send a payment for services rendered and they will be available for immediate withdrawal by your contractor. All they need to do is send you their Venmo ID. Then with just a few taps on your phone, you can be on your way. However, Venmo has strict rules for paying for goods and services on its platform.

Setting Up a Business Profile on Venmo

Venmo was originally designed for individuals that know and trust each other to send each other funds. However, they have expanded their services as more small businesses have established relationships with their contractors. If you plan on compensating individuals on Venmo for labor, you must set up a business profile. This is to comply with the platform's rules as they explicitly forbid compensation with the free "friends and family" option. Additionally, per their terms of service, they may reverse the transaction if they discover it is being used for goods or services.

If you only have a personal Venmo account, you also need to get set up with a business profile. Doing so will put you in compliance and also make your business more discoverable, as payments sent and received through Venmo will appear in news feeds through their site. To set up a business profile, you'll need to submit documentation including your business name, address, and tax ID number for verification.

When Do I need to Send Out a 1099 Form to a Contractor?

If you've already set up your business profile, Venmo will automatically handle sending 1099 documents . Where it gets trickier is if you've been compensating labor through the platform using their personal payment options. This is against their terms of service. However, if these transactions occur nonetheless, it is your responsibility to prepare and send the 1099 forms yourselves to your contractor, as Venmo has no idea that these payments were being sent as payment for services rendered, and will not be able to help you.

If you find yourself in this situation, you still need to play by the rules of the IRS. A yearly transaction report can help you determine if any of your contractors are passing the $600 threshold. This would require you to send out a 1099 form. If you've been sending payments to contractors through the personal transaction methods on Venmo, consider having a professional sort through those expenses for you to ensure that you meet all requirements.

Remember to Stay in Compliance

For smaller businesses, Venmo can be a great way to handle payment operations with contractors. It is safe, well-known, and easily accessible. If you had a pre-existing personal Venmo account, it can be tempting to use it for business operations. However, make sure that you operate in compliance with both Venmo and the IRS. Here's where the importance of Venmo reporting comes in.

If you still have not done it until now, ensure that you address the situation and send out the 1099 forms yourself. You can then make things right with Venmo by setting up a business profile to make this task less harrowing next year.

e39aff66

Q3 Estimated Taxes Due September 15!

Quarter 3 Estimated Taxes Are Due September 15th

Quarter 3 Estimated Taxes Are Due September 15th

Why Estimated Taxes Matter

Who Needs to Pay?

How to Calculate Your Q3 Estimated Taxes

1. Safe Harbor Method (Most Common)

2. Actual Income Method (Better for fluctuating income)

Quick Tip:

How to Pay Your Q3 Estimated Taxes

Pro Tip: Keep It Simple

Need Help?

How to Estimate Taxes When You’re Self-Employed: A Simple Guide

Top 10 Commonly Missed Tax Deductions for Self-Employed People

Understanding Worker Classification: A Guide for Colorado Business Owners

1099 Contractors vs. Employees: What Nebraska Business Owners Should Consider

Tax Filing for Small Businesses and Tips for Keeping Good Records

How to Keep Good Records for the Next Filing Season for Small Businesses ﻿

Have a Document Management System

Keep Up with Record Retention Mandates

Invest in an Accounting and Payroll Software that Generates Records

Match Your Records to Transactions During Bank Reconciliations

Back-Up and Secure the Records

Get External Help

Don’t Forget to Claim Your Nebraska Property Tax Credits

Don’t Forget to Claim Your Nebraska Property Tax Credits

Nebraska Property Tax Credits

Property Taxes Paid in 2020

Property Taxes Paid in 2021

Property Taxes Paid in 2022 and After

Claim Your Nebraska Property Tax Credits with the Help of Professionals

How Do You Pay Yourself as a Business Owner?

How Do You Pay Yourself as a Business Owner?

Owner's Draw ﻿

Salary

Deciding How Much to Pay Yourself

Why You Should Always Consider Accounting Ethics in Your Organization

Accounting Ethics: Working with Integrity and Trustworthiness

What is Accounting Ethics?

What Diligence in Following Accounting Ethics Looks Like

Examples of What it Looks Like to Have it Challenged by a Client

Balance Ethics and Accounting

Cash Basis vs. Accrual-Based Accounting: Choosing the Right Method for Your Small Business

What is the Difference Between Cash Basis Accounting and Accrual-Based Accounting?

Advantages of Cash Basis Accounting

Disadvantages of Cash Basis Accounting

Advantages of Accrual-Based Accounting

Disadvantages of Accrual-Based Accounting

Conclusion

Requirements to Fulfill When Filing Sales Tax in Lincoln, Nebraska

Requirements to Fulfill When Filing Sales Tax in Lincoln, Nebraska

The Sales Tax Rate in Lincoln, Nebraska

Sales Tax Filing Calendar

Filing and Payment Options for Your Taxes

Need Help with Your Nebraska Sales Tax?

Book a 30-minute call with our Bookkeeper now!

How to Stay Compliant with 1099 Contractor Payments on Venmo

Venmo Reporting and IRS Compliance - A Guide on 1099 Forms

The Benefits of Using Venmo

Setting Up a Business Profile on Venmo

When Do I need to Send Out a 1099 Form to a Contractor?

Remember to Stay in Compliance

Do you have any further questions on Venmo reporting and IRS compliance? Please feel free to set up a free consultation .

How to Keep Good Records for the Next Filing Season for Small Businesses

Owner's Draw