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Easy Ways to Grow Your Retirement Savings: Smart Retirement Planning

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Retirement often feels like the finish line of a marathon. No matter how far away your last day of work may seem, it’s a goal worthy of pursuit. Creating a retirement savings plan is akin to staying hydrated during a long distance race, otherwise known as your career. It’s a necessary task to ensure you’ll have enough left in the tank (or bank account) when it’s time to settle down.

For retirement, you get what you put in; learn about some of the preparations you can make today to maximize your reward down the road.

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3 Reasons Bookkeeping Services for Small Businesses Yield Great Results

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Business owners are typically jacks-of-all-trades, and in a competitive market, a versatile skillset is a key ingredient of success. Unfortunately, this means that some entrepreneurs end up stretching themselves too thin with responsibilities.

When one person is in charge of bookkeeping, marketing, and business growth, something’s got to give to ensure quality production and error-free work. Bookkeeping is an important responsibility no matter what industry you’re in, and it should always be a priority to complete it accurately and efficiently. Motl Accounting in East Dundee has a team of bookkeeping specialists to help Chicagoland’s small business community improve their company’s daily operations.

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What You Need to Know About Employee 401(k) Plan Contributions

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You might not know everything about employee 401(k) plan contributions, but if you’re an employer, it is your responsibility to understand the basics when you offer this benefit to your workforce. A 401(k) is one of the most common retirement investment options because it is a flexible way to build capital over the course of a career and the funds mostly get withdrawn from your paycheck. We have a Payroll Vault team that oversees the accurate disbursement of these funds from paychecks to 401(k) or retirement accounts.  Here’s what makes this type of plan unique and what sets it apart from other retirement options.

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3 Questions to Ask Your Payroll Provider

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If you’re a small business owner in Chicago or the northwest suburbs that have been considering using outsourced payroll services for your company, you’re sure to have plenty of questions that the Payroll Vault team at Motl Accounting in Dundee can answer. After all, payroll is an essential responsibility for every company, so it’s important to know that yours is in good hands. Still, the benefits of enlisting an external payroll provider often outweigh this uncertainty for small and medium-sized businesses. When it’s time to dedicate more time to grow your business and less on number crunching, here are three questions you should always ask when evaluating payroll providers.

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The Advantages of Using a Personal CPA to File Your Taxes

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What’s your favorite season? At Motl Accounting in Dundee, our favorite is tax season. It’s the time of year when you should be thinking about the best way to complete your business filing. There are a number of ways to do your taxes, but a personal CPA for your small business like Charles Motl will provide the quality of service you should expect from a customized tax filing. Business taxes are an entirely different animal than your personal filing; they can be much more complex. The more complicated your taxes are, the more you need help from a professional to avoid those unexpected and tedious mistakes that will ruin the start of your year.
When you work with Motl’s certified public accountants, you know that the American Institute of Certified Public Accountants has qualified our professionals to practice in your state. This distinction means the accountants have passed a rigorous exam and have the experience to complete a professional tax return with accurate deductions on your behalf. Many businesses that we service have tried doing their taxes on their own before realizing how much they may be missing out by not understanding the complexities of deductions and taxations. We recently assisted a Photocopy business in Chicago by reviewing a statement they received and helped them save around $1800 dollars by taking a second look at the statement. It’s natural to panic when you receive notices from the IRS or State government, but we provide the peace of mind in such situations. That’s what we pride ourselves on. This among many reasons is why it’s advisable to go with a CPA rather than doing it alone. Read on for some of the strongest benefits.

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The Dos and Don’ts of Charitable Tax Deductions for Small Businesses

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Tax season is underway for businesses across the country, which means it’s time to start thinking about any charitable tax deductions for small businesses you’ve made that can reduce your tax burden. One of the most commonly claimed deductions is for charitable donations — about 75% of small business owners allocate a portion of their profits to charitable donations. There are many reasons to support charities beyond tax savings. Giving back reminds business owners that they can make a positive change in the world, and it’s also great for a company’s overall reputation. Learn how to go about smart small business charitable giving before you take action.

Do: Find a cause that aligns with your business

While it’s great to donate to any cause you’re passionate about, there are extra benefits to donating to charities that align with or relate to your business. For example, if your company sells the majority of its products for mothers, it makes more sense to donate to a breast cancer charity than one for disaster relief. Your customers choose your business for a reason, and donating to causes they’re likely to care about is bound to get them excited.

Don’t: Fall for a scam

Unfortunately, there are plenty of charities that masquerade as good causes, when they’re actually scamming good-hearted people, so it’s important to do your research before you give any organization your money. Even with legitimate charities, the majority of your contribution may be going directly to administrative, overhead and marketing costs rather than what is advertised. You can find out if a charity is valid and how your money is allocated by specific charities on Charity Navigator.

Do: Decide how you can help

There are a variety of ways to support causes beyond one-time monetary donations. Volunteer work, event sponsorships, fundraising and donating goods are all ways to make an impact. Each type of contribution must be recorded and filed differently, so it’s worth working with an accountant to ensure you get the proper tax deduction. The type of charitable work you should do largely depends on time commitments, the enthusiasm of your employees to participate and budgetary considerations. Don’t overcommit yourself — it’s not worth the headache.

Don’t: Forget to involve employees

If you’re unsure what type of charity makes sense for your business, it’s a good idea to ask your employees what they think is a worthwhile endeavor. If they care about a certain cause, they are more likely to feel enthusiastic about your company’s direction and want to participate. It is a great way to retain talent for your business and improve workplace culture. In addition to these benefits, getting your employees to volunteer or participate in fundraising makes your company eligible for additional tax deduction benefits.

Do: Publicize to customers

There’s nothing wrong with bragging about doing a good thing! Your current customers are bound to have a positive reaction if your company is giving back. If you publicize your charitable efforts, you may even attract new customers who believe in supporting businesses with philanthropic behavior. While this might not bring direct tax benefits, more customers is good for your bottom line, which no business owner will complain about. Consider the positive PR that comes with giving.

Don’t: Ignore paperwork

When it’s time to file your tax deduction, there are some important things to remember. Be sure that your charity is eligible for a tax deduction by using the IRS search tool and learn about the limitations of each type of charitable deduction on the IRS charitable contribution topic page. You must report your charitable contribution on Form 1040 Schedule A of your taxes before the end of the business tax year. Remember that your deduction cannot amount to more than half of your adjusted gross income. Always have your records of charity contributions close at hand, in case of a tax audit.

Business owners benefit in many ways from charitable donations, so including them in your next filing is a worthwhile goal. We understand that choosing the right charities, keeping records of your contributions and filing tax deductions is a complicated process. If you are looking for a helping hand when you’re giving back, our team can assist you with our business tax services to help reduce your tax burden as much as possible. Contact us today to get started with tax savings.

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How Offshore Tax Havens Affect Small Businesses

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dollar-signThe U.S. Public Interest Research Group Education Fund recently published a study indicating that small businesses pay $5,128 on average in taxes per year to make up for revenue lost to offshore tax havens. Small businesses generally aren’t the ones taking advantage of offshore locations with low (or zero) taxes. Huge corporations are more likely to have the means and motivation to create corporate headquarters in offshore tax havens like Switzerland, the Cayman Islands and Singapore. The amount of federal money lost is staggering — $128.5 billion in corporate tax revenue is kept in foreign countries harboring offshore accounts for large companies. Unfortunately, this affects small businesses because they end up shouldering more than their fair share of the tax burden.

The problem only seems to be growing, as more large companies are considering the advantages of moving corporate offices to tax havens. While the ethics of such decisions are up for debate, there’s no denying that many businesses will save money on taxes any way they can. Without legislation to bar a company from abusing the availability of tax havens, the behavior is sure to continue. The current tax code tends to favor large conglomerates, while putting small and medium-sized businesses on the hook for more tax expenses. Globalization has created a race to the bottom for federal taxes as nations vie to attract international businesses.

It is still unclear what the future holds for corporate tax avoidance, but tax laws tend to change with new presidential administrations. Of course, it’s not just the president who debates tax policies, and the 115th US congress will need to reach a consensus on how to move forward with the growing problem. It’s not just accountants or small business owners who benefit from a stricter corporate tax system — the money that is sent to foreign countries could be used to directly benefit the general public. Infrastructure improvements, a strong national defense, education and paying down the national debt all rely on tax dollars.

As large businesses move towards increasingly international models, it’s important to keep a watchful eye on their behaviors. Chances are, most companies aren’t moving their corporate offices to micro nations because they think there are loads of potential customers there. Although technically legal, tax avoidance by multinational corporations disproportionately hurts small businesses, and that’s a problem. Small businesses face enough challenges as it is to get established in the marketplace. Making up for other companies’ tax avoidance is an extra obstacle for an already challenging endeavor. Thankfully, there are tax write-offs that the federal government encourages small businesses to use, and we can help you save as much as possible for your 2017 filing. Explore our tax preparation services to see what your business can do to level the playing field for taxes.

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Getting the Most out of Vehicle Expense Deductions

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If your business requires any driving, you owe it to yourself to make a vehicle tax deduction. It’s one of the most common business tax deductions because so many industries require vehicles to get work done. Every year, the Internal Revenue Service sets a standard mileage rate so business owners can calculate their deduction accurately. For 2017, the rate is dropping slightly to 53.5 cents per mile as opposed to 54 cents per mile in 2016. The new rate goes into effect on January 1st 2017, so be aware of this small adjustment within the next month. Keep in mind that you must keep accurate records of your travel dates, destinations, and reasons for driving if you’re hoping to capitalize on the deduction.

How It’s Calculated

You might be wondering what determines the transportation tax deduction rate, as it seems to fluctuate randomly on a yearly basis. The truth is, there is a method to the madness, and the IRS calculates the rate based on changing market conditions. The government agency reviews a study of the fixed and variable costs of operating a motor vehicle for a given year before changing the deduction standards. The largest factors for the 2017 rate were declining fuel prices that slightly outweighed rising vehicle insurance and maintenance costs. While you may not receive quite as much of a deduction next year, it also costs slightly less to get from Point A to Point B.

An Alternative Option

If you prefer not to use the standard rate for business transportation, you have the option to calculate the actual cost of operating your vehicles. This method requires much more detailed record keeping, but can potentially result in a larger deduction. You can rack up extra deductions for gas, oil changes, repairs, licenses, parking fees, insurance costs, car washes, and more when you calculate every vehicle related expense.

What’s Right for Your Business

Choosing between standard mileage rates and actual vehicle expenses can be tricky — if you have a small, old, or inexpensive car, you’re more likely to benefit from standard mileage. If you’re willing to track every expense, and you drive a more expensive vehicle, actual vehicle rates may be worth the effort. At Charles Motl & Associates, we are always available to consult your business on its vehicle tax deductions. Learn more about our tax services to get the most out of your 2017 filing.

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Business Tax Deductions You Didn’t Know Existed

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There’s nothing worse than realizing you could have saved money on your taxes after you’ve already filed them. It’s easy to overlook some of the lesser-known deductions that exist, but doing so could cost you a pretty penny. Sometimes business owners wait until the last minute to do their taxes, and that rush prevents them from researching money saving options at their disposal. If you don’t have a tax planner by your side, you’re left guessing about your best options. Start keeping records of your tax write offs now, and your 2017 tax day will go much smoother.

Home Office

Your home office probably doesn’t have to be as complicated as you think. So long as you have a dedicated computer for work and a space to get business tasks done, you can probably make a home office deduction on your taxes. That square footage isn’t the only thing that counts as business expenses – your mortgage, electricity and insurance costs count as well. Some people worry that a home office deduction is a red flag that invites an IRS audit, but if you are actually using it for business you have nothing to worry about.

Furniture

Buying office furniture may seem like a big investment initially, but it can save you money come tax day. Your office chairs, tables, filing cabinets and desks are all deductible if you’ve purchased them since your last tax filing. There are several types of furniture deductions you can take utilize. You can either deduct the total cost of the furniture at once, or you can reduce your tax burden incrementally over seven years. Base your choice on when you anticipate benefiting from that money most.

Driving Expenses

Hitting the open road doesn’t have to hit your pocket book hard. If you keep careful records of your driving miles, the government is more than willing to give you a break on your taxes. Some things you’ll want to keep on record are dates, miles driven, parking expenses and explanations for your trips. Make sure to keep your receipts on hand if you don’t have a receipt-scanning app on your phone. When you have that information at hand, you can easily save some money that would otherwise be gone forever. Gas mileage deductions vary by year, and for 2016 they are at 54 cents per mile driven.

Travel Costs

If you’re a frequent business traveller, you stand to save a significant amount of money with your expenses. You can deduct the total cost of your hotel stays from your taxes, so it’s worth springing for a few extra stars if you have the opportunity. Planes, trains and car expenses don’t have to set you back either. Exactly 100% of those costs can go directly towards deductions. That includes related expenses, such as tipping your flight attendant or visiting a laundromat while on the road. You can even write off your meal costs while travelling, albeit at a reduced deduction rate of 50%.

Education

If you want to be a master of your trade, you need to have the smarts to compete. Luckily, if you have education costs, you can write them off of your taxes if they relate to your current job. The IRS is strict about this write off though; you can’t own a bakery and go to school for your Masters of Architecture free of charge. If you want to improve your skills for your current position, this tax break gives you the chance to expand your career in a way that’s financially sensible. If you believe the best business owners are always learning, this incentive might be for you.

When it comes to taxes, every business owner wants to minimize their expenses. Tax deductions give you the chance to save money on the things you’d probably buy anyways, so it’s a no-brainer to take advantage of them. Of course, the examples above are just a few of the tax write offs you should be aware of. Our experts can help you reduce your tax burden, and ensure you won’t miss any deductions for the upcoming tax season. When we provide tax services, we work with businesses through the entire year, so no tax saving opportunity slips through the cracks. Learn more about our tax preparation services, and call today!

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Getting Financially Organized at the Office

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It’s one thing to plan on improving organization around the office, but another to actually go through with it. Getting organized does more than make the office look tidy – a more structured workplace can actually help you grow and earn money. It’s easier to be productive when you don’t have stacks of papers, lost receipts and file cabinets filled to the brim. It’s not just physical clutter that gets in the way – digital files, profiles and accounts can quickly become disorganized and that creates an avalanche of problems. Cut through the mess and distractions with a few simple changes:

Remove Trash

No, it’s not spring quite yet, but that doesn’t mean you can’t do a little cleaning around the office to free up some space. A cluttered office environment can make people feel stressed, and removing unnecessary items will create a more welcoming space. It’s common to want to hold onto knick-knacks, old office papers and other items because we often overestimate their importance. Problem is, once these items are no longer necessary, they just get in the way when you’re looking for something you really need. The next time you come across a form or document that’s over a year old, ask yourself whether it’s causing more problems than it’s worth. If you haven’t missed it, you probably won’t in the future.

Put Away Paper Receipts

If there’s one thing nobody ever feels like doing, it’s organizing a fistful of receipts after a long day. Chances are, you’ll toss those papers into the trash just to get them out of the way. That, or you’ll add to the ever-growing Mount Crumpled Paper – before long it’s sure to reach the ceiling. It’s impossible to completely avoid paper receipts, so it’s worth doing the next best thing: get a scanning app that turns that ink into digital receipts. It only takes a few seconds, and it will make your business tax write offs a whole lot easier to manage. Shoeboxed, Expensify and Wave are three great mobile apps that automatically scan and extract receipt information.

Clean Up Your Inbox

Computer screens aren’t always immune to clutter. If your number of unread emails is in the hundreds or thousands, it’s probably time to do a little organization. You don’t necessarily need to delete old emails, because you might need to look back at a conversation thread with a coworker or client, but you should create folders to stow them away. Most email services allow you to archive old emails that you don’t use on a daily basis, while keeping a separate folder for more current messages. You can go a step further and create categories in your inbox for the types of emails you commonly receive. Most email services already have a spam folder, but you should unsubscribe to any pesky promotional emails that escape the filter.

Stop Battling Your Books

Chances are, you already have a bookkeeping service, or you leave it all to an accountant. Whatever your situation, it’s worth reevaluating the processes you have in place to see if you can manage your records more efficiently. Processing payments, recording expenses and tracking projects is essential if you want your business to grow. At the very least, look over your income statement and balance sheet every month to ensure that your records are accurate and every expense is accounted for. Look into smartphone apps like Mint or Freshbooks that allow you to record your transactions on the go, and ensure that any computer software you’re using is up-to-date. You can make your life easier by taking advantage of our bookkeeping services – we’ll ensure your records are always ready.

It only takes a few weeks for a mess to get out of hand. When the office is orderly, your whole team can perform at its best, and productivity increases. It’s impossible to know how much time you waste digging through emails, searching for documents or wondering how much you spent on equipment, but it adds up. Make your life a little less hectic with accounting services that help you stay organized. We can integrate with your existing bank accounts and Quickbooks software, so the transition is simple. Get on top of the day-to-day and start focusing on year over year growth. You’ll wonder why you didn’t sooner.

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