Oct 13, 2017
Going into
the last Quarter of the year. Time for some basic reflection about
taxes. Officers in S-Corps tend to take payroll later in the year.
Now is the time if you have not already been taking payroll. Don't
wait until it is time to prepare your Construction Company tax
return.
Next review your Estimated personal Taxes paid to the IRS. How much
did you pay in taxes for the current year? Internal Revenue expects
that you have paid a percentage Federal Taxes before the end of the
year.
Reviewing Federal Withholding for yourself and your employees to
avoid surprises when your annual taxes are filed. Contractors who
file as a Sole Prop or as an LLC fining as a Sole Prop tend to
forget that payroll taxes on their net income is due. I call this
“Chef’s Surprise” as it is based on Net Income. Everyone wants the
last few jobs to pay before the end of the year.
As the Sole Prop or 1099 Contractor, the amount due will be both the employer and employee portions (combined is 15.3% + federal income taxes) Refer to your Tax Accountant about the ability to claim the employer portion as a deduction on your taxes.
How are you keeping track of your income and expenses?
Do you use software or on a paper system?
The issue comes when your Banker, Liability Insurance Company, Worker’s Comp Insurance Company, Bonding Company or State Agency or Internal Revenue want reports. I have seen some manual systems that are quite good.
I remember the days pre-computer days where I used an oversized 13 Column Pad. It worked, not a great as the multiple ledgers and from there that first version of Quicken was wonderful. Now using QuickBooks which can be customized is fantastic. Being in Washington State where sales tax is destination based – customization is the key to easy reporting. Other states have different reporting requirements.
Many times, partners have different
visions for the company.
The most frustrating situation happens when one partner is actively working in the day-to-day activities, and the other partner is a “Manager” and is practicing “Seagull Management” but is never there for the day-to-day activities.
It is easy to say I’m working on the business. Reality is that it may not have the same meaning to all partners. Working on the business is Planning, Marketing, Doing Active Things in the business.
I have heard many stories where One Partner tells the other partner (while managing from afar) You need to be doing [fill in the blank]
It is easy for the person Not Doing The Work - to say, we (Meaning YOU) what should or should not have done [fill in the blank]. This happens a lot when partners are not in the same city. Or to say I can’t because you are better at [fill in the blank]. The last thing you need is for someone else to assign you a task to do. As a Construction Contractor, there is no shortage of “tasks to do” in running your Contracting Business.
These sort of challenges is one of the reasons we recommend being an S-Corp. It is easier to have a business relationship with someone that is something other than a 50-50%. It is by EXCEPTION that multiple partners will be equally invested in the company. (Time, Money and Effort).
Usually, the Construction Company is weighted with one partner doing more, spending additional hours in the Construction Side of the Work to bring in the money or save on employee hours.
Many times, that same partner is asking their spouse to pitch in and do the bookkeeping without pay because it will benefit them in the long run. Then it becomes two people actively working in the business for the financial benefit of one. If spouses are paid on payroll – they are valued.
(It can be the gesture more than the money)
If one of the owners is working fewer hours due to personal reasons; there is compensation that can be more easily given to the other working owners above and beyond the net profit of the company. Easier to facilitate a Loan To Shareholder as needed. When you discuss in the beginning, it Saves “White Noise” and “Hard Feelings.” later.
Years ago; I read a book that described how one partner was very upfront in saying.
Not all partnerships have problems. I know of several who have been friends and partners for decades. Partners discussed their roles and how to work together. It is awesome! I am always glad to talk to them and catch up.
How are you currently handling your bookkeeping?
If you are comfortable Doing It Yourself and just want a little TLC - we can help.
Additional resources are on FastEasyAccount.com (website) and FastEasyAccountingStore.com (store)
We accept all major credit cards and PayPal. Also available PayPal credit offers six months same as cash.
We Help A Little Or A Lot Depending On Your Needs. Do you want to explore a QuickBooks file cleanup, or discuss Outsourced Accounting? Offer One Hour Free Consulting. Sometimes Contractors use just to vent about business stuff, and for a variety of reasons, all I can do is be the ear on the end of the phone and offer suggestions.
Never am I going to be nasty about your bookkeeping no matter how “icky or artistic” you have been. We are here to help with your assistance we can create a file with good reports that are useful to you.
Remember your financials are based on the documents you provide in person, electrically, or by using our document management system. Unfortunately, many tools used on Star Trek are still not available.
Year-End Planning Tip: As the economy and your cash flow is improving, do you have all the tools and equipment you want or need? If purchases are made before December 31st, it is a deduction for the current year.
Looking forward to being of assistance.
About The
Author:
https://www.fasteasyaccounting.com/free-one-hour-consultation-bookkeeping
Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. http://www.fasteasyaccounting.com/sharie-dehart/ 206-361-3950 or sharie@fasteasyaccounting.com
I trust this podcast helps you understand that outsourcing your contractor's bookkeeping services to us is about more than just “doing the bookkeeping”; it is about taking a holistic approach to your entire construction company and helping support you as a contractor and as a person.
We understand the good, bad and the ugly about owning and operating construction companies because we have had several of them and we sincerely care about you and your construction company!
That is all I have for now, and if you have listened to this far please do me the honor of commenting and rating the Podcast www.FastEasyAccounting.com/podcast Tell me what you liked, did not like, tell it as you see it because your feedback is crucial and I thank you in advance.
I trust this will be of value to you and your feedback is always welcome at www.FastEasyAccounting.com/podcast
This Is One more example of how Fast Easy Accounting is helping construction company owners across the USA including Alaska and Hawaii put more money in the bank to operate and grow your construction company. Construction accounting is not rocket science; it is a lot harder than that, and a lot more valuable to construction contractors like you so stop missing out and call Sharie 206-361-3950 or email sharie@fasteasyaccounting.com
Thinking About Outsourcing Your Contractors Bookkeeping Services?
Click On The Link Below:
This guide will help you learn what to look for in outsourced construction accounting.
Need Help Now?
Call Sharie 206-361-3950
Thank you very much, and I hope you understand we do care about
you and all contractors regardless of whether or not you ever hire
our services.
Bye for now until our next episode here on the Contractors Success
MAP Podcast.
Enjoy your day.
Sharie
About The
Author:
https://www.fasteasyaccounting.com/free-one-hour-consultation-bookkeeping
Sharie DeHart, QPA is the co-founder of Business Consulting And Accounting in Lynnwood Washington. She is the leading expert in managing outsourced construction bookkeeping and accounting services companies and cash management accounting for small construction companies across the USA. She encourages Contractors and Construction Company Owners to stay current on their tax obligations and offers insights on how to manage the remaining cash flow to operate and grow their construction company sales and profits so they can put more money in the bank. http://www.fasteasyaccounting.com/sharie-dehart/ 206-361-3950 or sharie@fasteasyaccounting.com
#1 EZ Step Interview inside QuickBooks Setup
#2 Asked Their Tax Accountant To Setup QuickBooks
#3 They Attended A How To Setup QuickBooks Class Or Seminar
QuickBooks Set Up TemplatesSolopreneurQuickBooks Chart Of AccountsFree StuffQuickBooks Item Lists TemplatesConsulting
QuickBooks Set Up
Templates Solopreneur
QuickBooks Chart Of Accounts
Free
Stuff
QuickBooks Item Lists Templates
Consulting
Contractors_Success_MAP, Contractors_Success_Marketing_Accounting_Production, Contractor_Bookkeeping_Services, QuickBooks_For_Contractors, QuickBooks_For_Contractors,Contractors_Success_Map_Unique_Ways_Highly_Profitable_Contractors_Reduce_Taxes