If you own or control a company in the United States, you may have heard of a new requirement to report your Beneficial Ownership Information (BOI) to the government. But what is BOI, why do you have to report it, and how can you do it right? This article will answer these questions and more and provide you with the ultimate guide to BOI reporting.

What is BOI and why do you have to report it?

BOI is the information that identifies the natural persons who ultimately own or control a company. This may include their name, date of birth, address, and identification number. BOI reporting is a new obligation for certain companies created by the Corporate Transparency Act (CTA) of 2021, which is part of the Anti-Money Laundering Act of 2020.

The CTA aims to prevent and combat money laundering, terrorist financing, tax evasion, and other illicit activities by enhancing the transparency of the ownership and control of companies in the U.S.

The CTA requires many corporations, limited liability companies, and other entities created by the filing of a document with a secretary of state or a similar office under the law of a state or Indian tribe, or registered to do business in the U.S., to report their BOI to the Financial Crimes Enforcement Network (FinCEN), a bureau of the U.S. Department of the Treasury.

FinCEN is responsible for collecting, analyzing, and sharing financial intelligence to combat financial crimes. FinCEN will maintain a secure and confidential database of BOI reports, which will only be accessible to authorized users, such as law enforcement agencies, financial institutions, and federal functional regulators.

Which companies must report BOI, and which are exempt?

Not all companies have to report BOI to FinCEN. The CTA provides a list of 23 exempted entities, which include, but are not limited to, the following:

1. Companies that are already subject to supervision or regulation by federal or state authorities, such as banks, credit unions, insurance companies, broker-dealers, investment advisers, public accounting firms, public utilities, and registered charities.
2. Companies that have a physical presence in the U.S., employ more than 20 full-time employees in the U.S., file income tax returns in the U.S. demonstrating more than $5 million in gross receipts or sales, and are not owned or controlled by a foreign person or entity.
3. Companies that are owned or controlled by an exempt entity, such as a subsidiary of a bank or a charity.
4. Companies that are dormant, meaning they have not generated any income or revenue, engaged in any business activity, or operated any bank account for at least one year.

If your company does not fall into any of the exempt categories, you will have to report your BOI to FinCEN, unless you qualify for an exemption based on your specific circumstances. You can find more information about the exemptions and how to apply for them on FinCEN’s website.

Who is a beneficial owner and what information do you have to report?

A beneficial owner is a natural person who, directly or indirectly, through any contract, arrangement, understanding, relationship, or otherwise, meets one or more of the following criteria:

• Exercises substantial control over a reporting company, meaning they have the power to make important decisions or direct the activities of the company, such as appointing or removing directors, approving mergers or acquisitions, or changing the company’s bylaws or articles of incorporation.
• Owns 25% or more of the equity interests of a reporting company, meaning they have a direct or indirect ownership stake in the company, such as shares, units, or membership interests.
• Receives substantial economic benefits from the assets of a reporting company, meaning they have a direct or indirect entitlement to the income or profits of the company, such as dividends, distributions, or interest payments.

There are some exceptions to the definition of a beneficial owner, which include, but are not limited to, the following:

• A minor child if their parent or guardian is reported as a beneficial owner.
• A nominee, intermediary, custodian, or agent acting on behalf of another person or entity.
• An employee or contractor of a reporting company, if they do not meet any of the other criteria.
• A creditor or lender of a reporting company unless they meet any of the other criteria.

If your company has one or more beneficial owners, you will have to report the following information about each of them to FinCEN:

• Their full legal name
• Their date of birth
• Their current residential or business street address
• Their unique identifying number from an acceptable identification document, such as a passport, driver’s license, or state identification card, along with an image of that document
• Their FinCEN identifier, if they have one, or a request for one if they do not have one

A FinCEN identifier is a unique number assigned by FinCEN to a beneficial owner or an applicant, which can be used to report or update BOI without providing other identifying information. You can request a FinCEN identifier for yourself or your beneficial owners when you file your initial or updated BOI report, or separately through FinCEN’s website.

When and how do you have to report BOI to FinCEN?

The deadline for filing your initial BOI report to FinCEN depends on when your company was formed, incorporated, or registered in the U.S.

• Companies formed or registered before January 1, 2024, are granted until January 1, 2025, to report BOI.
• Companies created or registered on or after January 1, 2024, are required to report BOI within 30 days of receiving notice of creation or registration.

If you need help submitting your BOI, you can contact my office at 202-618-1295 or, if you are my bookkeeping client, you can directly pay HERE for me to start working on your file, getting ready to submit on Jan. 1, 2024.

Frequently Asked Questions

1. What is beneficial ownership information reporting?

Beneficial ownership information reporting is a new requirement for certain companies in the U.S. to report the information that identifies the natural persons who ultimately own or control them to the Financial Crimes Enforcement Network (FinCEN).

2. How do I get a beneficial owner report?

You can get a beneficial owner report by filing an electronic form with FinCEN through its website, providing the required information about your company and its beneficial owners, and receiving a confirmation of receipt from FinCEN.

3. What is included in beneficial ownership?

Beneficial ownership includes the name, date of birth, address, and identification number of any natural person who, directly or indirectly, either exercises substantial control over a company, owns 25% or more of the equity interests of a company, or receives substantial economic benefits from the assets of a company.

4. What is disclosure of beneficial ownership?

Disclosure of beneficial ownership is the process of making the beneficial ownership information of a company available to authorized users, such as law enforcement agencies, financial institutions, and federal functional regulators, for the purposes of preventing and combating financial crimes and enhancing transparency and accountability in the corporate sector.

5. Why is beneficial ownership information important?

Beneficial ownership information is important because it can help identify and verify the true owners and controllers of a company, and reveal any potential links or risks associated with money laundering, terrorist financing, tax evasion, and other illicit activities.

6. Why is beneficial ownership disclosure important?

Beneficial ownership disclosure is important because it can facilitate the access and sharing of beneficial ownership information among authorized users, and improve the efficiency and effectiveness of their investigations, compliance, and supervision activities.

The post The Ultimate Guide to BOI Reporting: What You Need to Know and How to Do It Right? first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post The Ultimate Guide to BOI Reporting: What You Need to Know and How to Do It Right? appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The IRS always gets its attention drawn to certain tax returns by a number of red flags. Some of them are minor and can be ignored, some are moderate and require a simple verification while other red flags require an audit. In this article, we look at the reasons why some income tax returns get selected for an audit. We will do so using the 3 common IRS audit red flags we selected. See below.

Hiding income, or not reporting your income

The majority of businesses are run by owners, are small, and thus, are vulnerable to several mistakes. One such mistake is underreporting business income. To do this, the business ought to hide some sales receipts and doctor their accounts in order to submit a deflated figure.

Such an act, deliberate or not, is viewed as illegal tax evasion by the IRS. Individuals too can fall into this trap. Imagine someone running a side hustle or has a side, legally registered business they don’t fully work in. Income from all these should be reported so you can pay a fair share of taxes. But some individuals may be tempted to hide it, including proceeds from virtual currency trading activities.

But how will the IRS know if you hide some income?

Well, the IRS uses information returns to match what you submit with your income tax return. Remember, they get copies of all the 1099s and W-2s you receive. So, while processing your federal return, the IRS system should be able to conclude that what you submitted matches everything that they have already received.

If there is a mismatch, the system refuses to process your tax return, resulting in further investigations.

Mixing business expenses with personal expenses.

Mixing business expenses with personal expenses can be divided into two. First, it’s the personal expenses such as household groceries and office coffee, and other small supplies. Secondly, it’s other work-related expenses such as travel and business meals that can be easily mixed with personal expenses. For example, an entrepreneur could be tempted to use a business card for personal travel and hope to deduct the expenses. This won’t stand.

Regarding supplies such as household goods, a business owner can easily make an error if they use the same business credit card to purchase household supplies. Those expenses are coming out of your company account, hence, by the book, they should be deducted. But are they really ordinary and necessary business expenses? Not at all. If the IRS catches this, you will be audited. That is why I always encourage business owners to keep separate bank accounts and credit cards for personal and business use.

Nevertheless, mixing expenses is rampant in meals and travel. Recently, I shared a video warning sole proprietors not to deduct business meals for their everyday lunch and breakfast at work. That just won’t work. Every meal and travel expense you deduct should be related to your business. It must be ordinary and necessary.

For example, you can deduct a business meal that you had while having a meeting with a client. You can also deduct travel expenses you incurred to go and attend a business conference outside your usual city or home of business.

If you want to learn more about deducting business meals, sign up for my upcoming Tax Pop-Up Class to be held on October 27, 2022, for $47. In case you read this article after the class has been held, you can order a replay video by contacting our office.

Earning more money, or too little

Your income level can also trigger an IRS audit. The IRS is not jealous of your earnings, but they know that the more you earn, the more your tax return is likely to be complex. More so, declaring extremely low income could raise the IRS’ eyebrows. They may conduct a lifestyle audit on you to ascertain how you live your life with such a low income.

Complex tax returns usually trigger an audit because it’s easy to make a mistake with them. But to avoid such mistakes, you can hire a tax professional to prepare your federal tax returns every year. You can hire me HERE.

Nevertheless, the IRS audited about 1 percent of those earning less than $200,000 in 2021. And almost 4 percent of those earning more were audited. The percentage of audited tax returns increases to 12.5 percent if you raise the threshold to $1 million.

Even if you consider business tax returns, the same pattern exists. Only 1 percent of corporations with less than $10 million in assets were audited, compared with 17.6 percent above that threshold. Once again, this is because more earnings usually are from companies and individuals with multiple streams of income and transactions, which complicates their returns. More so, IRS agents know that committing resources to a single potentially big taxpayer results in a potentially bigger revenue per audit, which works well for them.

However, this is the time to not be complacent if you are a middle-income earner, thinking you may be safe. The IRS received a revenue boost from the Treasury to the tune of $80 billion in the next ten years. This money will be used to hire more agents, tens of thousands, to ensure that all taxpayers are put under scrutiny.

Frequently Asked Questions

1. What are the red flags for the IRS?

IRS red flags include submitting a tax return with too many rounded figures, hiding your income, submitting a return with very high income or too little income, as well as claiming too many deductions, among others. These all raise suspicions.

2. What triggers an IRS audit?

An IRS audit is triggered when the Information Returns Processing (IRP) rejects a return for inconsistency. The rejected return is further investigated, and if the discrepancy is too big, it results in an audit, sometimes by mail or a field audit.

3. How much money gets flagged by the IRS?

The IRS does not have a specific amount that it flags. But it uses a different number of combinations to have an idea of a taxpayer’s profile and in which income range they may fall. Your income profile can be estimated using the W2s you submit as well as information returns received from other third parties. If your prior year’s W2s indicated you made 100K, for example, suddenly saying you now made $500K could trigger an investigation to ascertain if you did not lie in your previous returns.

4. Who is most likely to get audited by IRS?

Everybody (individuals and businesses) can get audited, that is why you should always play by the rules when submitting your tax returns.

5. What are the chances of getting audited in 2022?

Well, these are high, given the ongoing PPP loan fraud investigations. The government is suddenly realizing that many taxpayers could have lied to gain COVID relief funds illegally.

The post 3 Common IRS Audit Red Flags Explained first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post 3 Common IRS Audit Red Flags Explained appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

Each tax year, the IRS charges various penalties for various offenses committed by taxpayers. These penalties fall into different categories, which should tell us rampant or common tax offenses that are committed by both business and individual taxpayers. In this article, we look at the 3 most common IRS penalties.

Why should you know common IRS penalties?

You do so to prevent yourself from being penalized. One of the tools to prevent yourself from being audited and penalized by the IRS is to learn how they usually select tax returns for audits. And, through knowing common types of penalties paid by the guilty party, you will have an idea of what usually gets people in trouble with the IRS.

Nevertheless, what are the 3 most common IRS penalties imposed on taxpayers? See below. These penalties are based on information obtained from the IRS FY 2021 Data Book.

1. Failure to Pay Penalty

This penalty applies when you don’t pay owed taxes by the due date. The federal payment and the filing deadline for individual taxpayers and some businesses is usually April 15 of each year. This applies to the tax year immediately before the current filing season. For example, April 15, 2023, will be the deadline to file 2022 taxes.

Besides the above deadline, we also have quarterly tax payments that are due for each quarter of the year. This applies to estimated taxpayers such as sole proprietors and small business owners. Individuals who make a side income or do not have their employer withhold taxes while expecting to owe $1,000 or more in taxes should file estimated taxes.

A failure to pay by these due dates usually traps the taxpayer into owing more taxes by the April 15 deadline, resulting in failure to pay.

In 2021, the IRS assessed more than 17 million in civil penalties for failure to pay against Individual and estate and trust income taxes. Only 2.2 million were abated. More than 328,000 corporations also failed to pay adequate taxes and were hit with penalties before 76,000 were abated. More so, more than 2.7 million businesses were assessed for failure to pay employment taxes.

2. Underpayment or non-payment of estimated taxes

This is the second biggest type of civil penalty assessed by the IRS for the Financial year 2021. Here, two categories apply as mentioned below.

Underpayment of estimated tax by corporations applies when you, as a business, do not pay all estimated taxes on time. This can easily affect small businesses that do not hire monthly bookkeepers and accountants. This practice leaves the owner or manager having to juggle between running the business, organizing the numbers, and submitting tax requirements.

There is also the underpayment of estimated tax by individuals, which applies when you don’t pay estimated tax accurately or on time as an individual. As mentioned before, an individual taxpayer can be liable to pay estimated taxes when one has side income that is not part of their withholding taxes. You should pay estimated taxes when you expect to owe more than $1,000 in taxes. You can estimate this by looking at your previous returns. Or hiring a tax professional to help you.

If you need help from a tax professional, you can count on me. I helped thousands of individuals and small businesses understand their estimated taxes and how not to be on the wrong side of the IRS. Contact me now for a quick tax chat.

3. Delinquency

This is the third biggest type of civil penalty assessed by the IRS for the Financial year 2021. An account becomes delinquent if the owed amount is not paid when the due date has passed.

Millions of individual taxpayers, small businesses, estates, and corporations were assessed for delinquency in FY 2021. This also resulted in millions of dollars in penalties being slapped on them.

The ugly thing about delinquency is that as time passes, your owed taxes accumulate interest. This means that when you eventually pay, the owed taxes could be far more than you originally owed.

Conclusion

This article has shown that most taxpayers (individuals and businesses) get penalized for failure to pay taxes, including estimated taxes. On the other hand, delinquent accounts usually arise when you fail to respond to IRS notices about your owed taxes. This failure to respond can work against you because the IRS may submit your account to collection agents.

Debt collection agents are a little more aggressive. They may attach your property, leaving your family vulnerable. More so, going through such a route may result in you losing your credit score, hampering any chances of getting fresh credit for your future endeavors.

If you need help organizing your business accounts or to solve any tax issues, contact me for help. I say this because, for businesses, non-existent financial statements are usually the source of non-payment of taxes. How can you pay for something you don’t know? You should know your numbers first and then rightly pay estimated taxes or file accurate returns.

You can contact me through this LINK. Click the appropriate links for accounting and tax services.

Frequently Asked Questions

1. What happens if you get a tax penalty?

If you get a tax penalty, you should pay the underlying amount owed plus the penalty as soon as possible.

However, if the penalty is a result of additional owed taxes (by IRS calculations) and you don’t agree, you can lodge a formal complaint as soon as possible. But in such cases, it is advisable to contact a tax professional like me to handle the matter and guide you according to your taxpayer’s rights.

2. What does a penalty mean in taxes?

A penalty means that you are being charged by the IRS for paying taxes after the annual deadline or for filing a tax return late. Besides the penalty, the IRS may also charge interest on the amount of money due. The interest is changed quarterly.

3. What triggers the IRS underpayment penalty?

This happens when you pay less estimated taxes or don’t pay at all even after the deadline. Please note that this penalty may still be charged by the IRS even if it owes you a tax refund. Therefore, I advise you to pay all owed taxes even if you expect a refund. Better to pay and receive your refund back.

4. How do I get IRS penalties removed?

First, you can avoid incurring the penalty by filing your tax return early and paying taxes due before the annual deadline.

But, if the above happens and you are penalized, you may request an abatement of taxes, penalties, and interest. This is done through filing Form 843, Claim for Refund, and Request for Abatement. I advise you to do this through a tax professional to avoid making more mistakes.

5. How much are IRS penalties and interest?

Penalties are calculated according to the offense. Late filing penalties are 5% of the tax owed each month, up to 25% of the total owed tax. If your return is over 60 days late, the minimum penalty for late filing is the smaller of $100 or 100 percent of the tax owed.

Late payment penalties are 0.5% of the actual tax owed for each month, or part of a month, that the tax remains unpaid from the due date until the tax is paid in full. There is no maximum limit to the failure-to-pay penalty.

IRS interest rates change each calendar quarter. Beginning October 1, 2022, taxpayers pay an interest of 6% for underpayments.

The post 3 Most Common IRS Penalties you Should Watch Out for first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post 3 Most Common IRS Penalties you Should Watch Out for appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The Inflation Reduction Act introduces or repackages various tax reforms for many groups. Some reforms will affect/benefit businesses, but some will also affect/benefit individual taxpayers. Nevertheless, this article focuses on what’s in it for individual taxpayers and small business owners.

The Inflation reduction act is mostly inclined to reduce the impact of human activity on the planet. The bill avails an amount of about $30 billion in tax credits for wind and solar power. This amount includes both corporate and individual incentives. There are also credits for using heat pumps to warm your home.

As such, taxpayers will be incentivized for green energy private home improvements. This comes courtesy of the improved Energy Credits for Home Improvements. The previous $500 lifetime credit for home improvements such as installing high-efficiency furnaces, insulation, exterior windows, and doors had been terminated on December 31, 2021.

But the Inflation Reduction Act brings it back, starting this year for the same amount as it was. However, taxpayers are set to benefit even more starting in 2023 when the $500 lifetime limit is replaced with a $1,200 annual limit for 2023 through 2032.

There will, however, be a few exceptions that have lower annual limits. You can hire me to prepare your taxes so we can apply these credits accordingly.

This credit is limited to 30% of eligible expenses, or the dollar amount limitation noted, if less, and includes the cost of installation, which was not the case before.

Buyers of electric vehicles will also get tax incentives. It does not matter whether the car is new or secondhand. According to the bill, taxpayers will save up to $7,500 in tax credits for new electric vehicles and $4,000 for used electric vehicles. In total, this will help families save $950 per year.

However, all of the above are tax incentives. This means that taxpayers ought to go through the necessary processes in order to claim them. More so, the usual paperwork or documentation will be required to ensure that you don’t claim the credit only for it to be refused by the IRS.

To this effect, I urge everyone buying solar panels for their homes or installing new energy-efficient heating systems to keep all paperwork. Tax paperwork begins right when you enter into a transaction. You will require the receipts, both in physical and electronic forms.

If you are buying these improvements as a business, remember to do so using a business credit card. The failure to prove that you purchased anything you claim as a deduction or credit could disappoint you.

To note is also the reduction in prescription drug costs. The Inflation reduction act continues the Affordable Care Act premium subsidies. These lower the cost of health insurance from now until 2024. These were due to expire at the end of 2022 – not anymore.

However, we should also consider some useful information about these incentives. For example, implementation details and timeframes involved. A good example of other provisions in the bill that won’t kick in until this year or next is the efforts to lower drug prices, including caps on their costs for seniors. These will only kick in in 2025.

Nevertheless, about 1.4 million Americans are set to benefit from a $2,000 annual cap that will be placed on out-of-pocket medical expenses. But this provision will be effective starting in 2025.

There will be more benefits aimed at relieving citizens of the pain of paying more for medical treatment. I will be sharing more about this with my clients and my followers on my social media pages. It is my aim that everybody understands their taxes and how they can implement strategies to save money on taxes and build generational wealth. You can also follow my social media pages to know more.

Regarding taxes, the government has promised that no family making less than $400,000 will see their taxes increased. This could be good news, but you still need to hire a tax professional to guide you on taxes. From experience, I know how new bills, laws, etc., can mess things up for taxpayers when they least expect it. As such, find your tax professional now. I am available if you need me from any State.

Finally, much has been said about the IRS’ past misgivings because of the lack of manpower. The Inflation reduction act provides $80 billion in funding for the agency for the next 10 years.

As mentioned last week, this increased funding will result in more agents being hired. With more agents, the agency will be equipped to scrutinize taxpayers more deeply than before. This could mean more audits for middle-income earners and small business owners who have been dodging bullets.

If you fit the above profile and you know your taxes have been questionable, reach out to me now before the IRS comes knocking. You can contact my office HERE to book an appointment with me. We will discuss your taxes and how we can move forward.

This should be one of your tasks on the ‘emergency’ board because the year is fast coming to an end, which means we will start filing 2022 taxes soon. Don’t let this period come and find you ill-prepared when the IRS is hiring more agents to watch your taxes.

Frequently Asked Questions.

1. What does the inflation Reduction Act do?

The Inflation Reduction Act is aimed at taming raging inflation, but in essence, it is more aggressive toward combating climate change. It also lowers prescription drug costs, health care, and energy costs.

2. Will the inflation Reduction Act reduce inflation?

So far, the indications are that it will have more impact on climate change than on inflation itself. But there could still be a somewhat positive impact on inflation.

3. What causes inflation?

Inflation primarily emanates from factors that affect demand and supply. On the supply side, when the cost of production increases or when producers, somehow, produce lower goods than what’s demanded, prices would rise.

On the demand side, when demand is more than what is being produced, prices also rise. That is why stimulus checks are blamed, in some circles, for the current round of inflation because Americans had more money to chase fewer goods (due to closed or limited capacity businesses during the pandemic).

4. How does reducing the deficit reduce inflation?

A deficit is at the government level. When the government borrows or spends more than it makes or collects, there is a deficit. This type of deficit discourages private borrowing because already, the government is pouring money. When there is less private activity, the economy may face shortages, leading to inflation.

For this reason, reducing the deficit may reduce inflation. This is because a reduced deficit points to reduced government spending, which opens up private borrowing and encourages private production. More goods in circulation equal less inflation.

5. What is inflation?

Inflation is a general increase in the prices of goods and services, resulting in a fall in the value of money or the fall of its purchasing power.

6. How can inflationary pressure be reduced?

To reduce inflation, the government may reduce the level of money in circulation through various tools. These include increasing interest rates, reducing government spending, open market operation such as buying securities in the open market, and raising taxes.

The post This is How the Inflation Reduction Act Will Affect Some of You. first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post This is How the Inflation Reduction Act Will Affect Some of You. appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

Business traps come in many forms, but the one about trapping yourself into a jack-of-all-trades can be destructive to a business. In this article, you will learn why doing everything by yourself is not good for your business. You will also learn about a few ways to avoid becoming this type of entrepreneur. 

Why is Doing Too Much Yourself a Bad Thing?

I would be lying to say that it is only a few small business owners tempted to put themselves at the heart of everything. Many entrepreneurs and small business owners are guilty of this. Even myself, I was once doing everything until I realized it was not working for the business anymore.

But to be honest, many small business owners fail to get to this point when they realize they are destroying their business by trying to do everything by themselves. For this reason, you must read this article and find out how it can help you, as an entrepreneur, to trust more brains, eyes, hearts, and hands in your company.

Nevertheless, doing everything by yourself makes your business very vulnerable to many things. Something as simple as you falling ill and requiring two days of rest can throw everything off the rails. Anyone can unexpectedly fall ill, or have some other kind of emergency. When that happens, and you are a one-man band, suddenly, the wheels will start to come off. That is how many solopreneurs get out of business.

More so, just like every small business owner, you also need trusted partners and staff. These are the people who fully understand the business and how it runs. For example, they know where to find vital contacts, such as suppliers, clients, etc., whenever needed. Imagine when you need to contact a vital individual, and boom, you can’t remember where you saved their details? It could result in income loss and more. So, the staff knows where to find these contacts; you need to have them. 

In a nutshell, doing everything in your business is doing business badly. Doing everything by yourself can result in fatigue, which will sabotage other business functions such as marketing, bookkeeping, accounting, and any other operations. Just a single business mistake results in the stalling of all these other business functions.

Besides skills shortage and non-diversity (of ideas), doing everything on your own is a startup trap that snatches your work-life balance. Remember, besides being a businessperson, you are also an individual who should spend his or her time and money on leisure and go back home to loved ones. You need that stability; don’t take it away from yourself.

What should you do to avoid being a “jack of all trades” in your business?

The first thing to do is to “Stop basing your decisions on how much it’s costing you and start thinking about how much it will be WORTH!” I saw this quote from one of the Arete Syndicate’s communications. Oh, what truth to tell! I know that I am a numbers person, and am always on my clients’ case, asking them to protect how they spend and ensure to earn more. But I would never advise against ‘oiling’ your business with more hands and brains in your team or teams. That is what your business needs to grow.

But guess what? Some of you will worry about the extra money they pay an extra employee (you need so much) instead of thinking about the benefits you will receive once you hire them.

The second problem to guard yourself against is the “After all, it’s my baby syndrome.” This has driven many entrepreneurs into the ground because they think that since it is their business, they can do whatever they feel like. But this is dangerous and wrong. Businesses that do well have solid teams that the owner values, together with their input or business ideas. Even if it is your vision and your effort that got the business to where it is, still, you would never be in seven different places doing eight things at the same. You need a team for that. Hire, train; trust them.

More so, you can avoid doing everything by yourself by giving your employees authority over tasks. This one is for small business owners who already have employees but still insist on doing everything. This is bad because, besides disturbing you from focussing on the real tasks made for a CEO, it can confuse your teams. And when there is confusion, productivity is undermined. I also have my teams; my job is to only provide them a direction and remind them of the company’s vision from time to time. But honestly, I have no idea how they do every small thing to support the company’s vision. Sometimes they tell me what I should do, and I just do it because now they know where the company is headed, and its history.

Therefore, be hands-on, but do not overwhelm your employees with your constant presence. Give them the authority to make small decisions and complete tasks in the best way possible. This promotes business innovation and keeps the workplace exciting!

And finally, I do take business consulting clients, with whom I share not only my personal experience of growing from being a single, young accountant working on her own to now having a team of more than twenty employees but also valuable business tips tailor-made to suit your company’s needs. If you need to benefit from this, contact me and book your first session.

Frequently Asked Questions

1. How do you destroy a business?

There are many ways to destroy your business; doing everything by yourself is one of them.

2. Which of the traps mentioned do you think entrepreneurs should avoid the most?

You should avoid doing everything by yourself. It is impossible to be the CEO, marketing manager, intern, finance director, and social media manager at the same time. That can only result in fatigue, poor quality output, and loss of revenue.

3. How do you sabotage a small business?

It is possible to self-sabotage your small business, especially when you do not hire staff to help you run your business.

4. How do you hurt a company’s reputation?

Any company can be hurt by poor products and services. Such poor quality is a result of fatigue and lack of expertise. It can also be because of rushed tasks due to a lack of time and manpower to adequately and efficiently complete them.

The post Here is the Number One Trap that Can Destroy your Business: Doing Everything by Yourself. first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post Here is the Number One Trap that Can Destroy your Business: Doing Everything by Yourself. appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

Building generational wealth is an important mission for any individual. This is because it has something to do with acquiring assets and cash for the sake of leaving your loved ones living comfortably without having to worry about money. 

However, this crucial journey is not easy for many people to embark on. The major reason is that many of us already have pressing issues on which we spend most of our time. Such issues include paying off your credit cards, mortgage, or car loan. We are so consumed by these things that we think we do not have time to start building generational wealth. But, in this article, you will learn five ways to help you build generational wealth even in the middle of all the noise and ‘pressing issues’ we mentioned above.

Therefore, what are the five ways or strategies to build generational wealth?

Bulk up on savings

Many of us fear building generational wealth because we look into our bank accounts and see nothing. However, if you create a savings plan, you can start building a cash reserve. To do this, you will need financial discipline and a budget where you allocate a specific amount of your earnings towards saving.

You could be asking how you will save if you are not employed. The truth is that almost all of us get our hands on cash from time to time. This could be pocket money from our parents or spouses or a general cash flow frequently coming from well-wishers that you know. You can use this money to save because no rule says you can only save money from wages or salaries. Once savings build up, you will be ready to take things to another level.

Insure your assets and your family

The next step you should take before investing is to protect the money you already have. How do you do this? You must get insurance for your family and assets. If you already own a home, ensure that it is insured; the same goes for everything you own. The reason for doing this is to protect the money you have already saved as you get ready to start investing.

Imagine, after saving $100K, you ignore getting house insurance, and boom, a tornado strikes, leaving your house in the ground? This means you would have lost a home, and no insurance money is going to pay for it. The next step is you will dig into your savings to try and replace that house, which leaves you back to where you started – with zero money, zero savings, and zero investments. The same applies to health insurance; it ensures that your saved money is protected in case one of your family members gets sick.

Invest in index funds and government bonds

Index funds are low-risk investments that protect investors through investing in various companies. This reduces risk because those many companies in an index can dilute each other’s risk until it is almost zero. These, together with government bonds, are the safest assets to invest in. They should be the first you must invest in as soon as your savings are enough to embark on this journey and you have finished insuring your family and assets.

These investments are first in line because, as a rookie investor, you may have less knowledge about the markets, hence exposed to so much risk. However, you can protect your money by simply targeting these low-risk assets. As such, invest in them at this stage and wait.

Invest in equities

After some time, your investments in index funds and government bonds would have resulted in two things. First, you could have earned more money or returns. Secondly, you would have gained valuable information about investing and protecting your investments. Armed with more money and this knowledge, you may be able to start investing in more targeted listed companies that present high risk and high rewards.

You may also target dividend-paying companies known as dividend stocks. By doing this, you increase your total investments in the market. This can result in more of your money building up, increasing your net worth to some exciting levels. But remember, this all has to work as planned, and you must not withdraw your investments prematurely. Instead, invest with a long-term view because you want to build generational wealth, not withdraw your investments to buy an expensive Gucci bag.

Invest in real estate and REIT

The final play in this game is buying real estate properties or putting money in a Real Estate Investment Trust (REIT). Many generational wealth builders love real estate because buildings provide the safest protection for your money. When inflation rises, so does the value of properties. Therefore, if you own them, you would have protected your money in the long run. More so, owning buildings provides constant cash flow because you can rent them to individuals or businesses, depending on the types of properties you own.

In conclusion, building generational wealth is an intentional process. You should decide and commit yourself before starting. Many people fail to get off the ground because they think too little about their incomes. But no one can excuse themselves from saving merely because you earn less; you can always make a plan; you can always draw up a budget and start saving. However, if you need help or an assessment of your situation and how you can start building generational wealth, contact my team to book an appointment with me. I will help you figure it out.

Frequently Asked Questions

1. How do we generate generational wealth?

Generational wealth is created in various ways. But one major way to do so is to create various income streams and consistently maintain them until your income is enough to buy expensive assets such as rental buildings or shares in major companies.

2. What is generational wealth?

Generational wealth is wealth that can be passed down from one generation to another. It is also known as legacy wealth.

3. Why is generational wealth significant?

Generational wealth gives your family members a good start in life. They will have advantages such as not having student loans or waiting until they are 40 to buy their first house. More so, generational wealth creates a family culture of making money that can be passed down from generation to generation.

4. How can I build wealth fast?

There is no way of building wealth fast. People who believe in building wealth fast take shortcuts that sometimes end them in jail. So, to build wealth, learn the ropes, be patient, and steadily apply financial discipline as you build upon what you already earn or have.

The post 5 Investment Strategies to Build Generational Wealth first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post 5 Investment Strategies to Build Generational Wealth appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

Inflation is giving citizens sleepless nights, because of its effect on basic goods prices. And because of this inflation, economists are already warning of an impending recession due to the slowly subduing business and economic activity. Consumers are increasingly becoming wary of their spending patterns. This leaves one wondering about tools to help vulnerable small businesses survive inflation and a recession. Small businesses are more vulnerable because they usually keep a small balance sheet. This means they can easily run out of resources in their times of need.

Therefore, what are the five business tools a small business needs to survive inflation and a recession?

1. Boost your balance sheet

Boosting your business balance sheet simply means accumulating resources to sustain it when the recession finally kicks in. Remember, this works well for your business if you do it some months before the recession begins. How could I predict this? You could ask, which is understandable because not everybody is an economist. However, basic knowledge around this accepts that rapid inflation and high-interest rates are almost always followed by a recession. Therefore, you can use this combination as a pointer that another recession is coming.

How can you boost your balance sheet? There are a few ways you can do this. For example, in early 2000, Amazon, then a bookseller, sold $672 million in convertible bonds to boost its balance sheet. Just over a month after doing this, the dot com bubble burst, throwing many tech companies into delirium. Many of them folded forever, especially given the recession this burst induced (between March 2001 and November 2001). So, even if other tech companies folded, Amazon experienced phenomenal success because it had so much cash to use. And you can imagine how some inputs got cheaper during the 2001 recession?

2. Build business systems

Above, we mentioned how Amazon survived the 2001 recession. This could be a good result of having business systems and respecting what they predict. Business systems are plenty. You can have ones that help you manage your Social Media presence, Email Marketing or Campaigns, your Budget, Accounting, and Credit Monitoring. When inflation is rampant and interest rates are rising, you can see how it is doing to your cash flow by monitoring your budget, including how it’s shifting.

You can also use accounting to constantly monitor your balance sheet. That is why it is crucial for small businesses to have accounting. It is a useful tool that tells you about the money your business has and what it is making. If you do not have accounting systems in place, make sure you start building them now because a recession is coming. The last thing you want is to get into it not knowing how much money your business has. You can contact me so I can help you organize your accounting.

3. Review your business spending

Uncontrolled business spending results in cash flow shortages. But you can control this if you have accounting systems that tell you how much you have been making versus your spending, that’s why you need accounting systems. You should use these systems to predict when it is time to reduce spending in preparation for a recession. Remember, you should start preparing for a recession at a time like this – when inflation and interest rates are rampant.

4. Invest some of your cash during inflation to profit from increasing prices

One of the things that happen when inflation is rampant is that cash reserves also lose value. You find that the money that could buy you a month’s office supplies can, at some point, only buy you three weeks’ supplies. In that case, you also need to be creative to protect your cash reserves. Invest some of the money in stocks that are appreciating, especially defensive stocks such as pharmaceuticals and food producers. However, you should also know that this is cash you can need at any time, so, you better invest in stocks or investments that are easy to cash out whenever you need the money.

5. Position your business for business credit

Finally, your business should be able to use credit during a recession. Remember, a recession is a period of low growth and low interest rates. So, you can take advantage of low-interest credit to sustain your business or even expand your products or services. However, to access business credit, your credit profile should be without blame. Therefore, during such inflation and interest rate runs like this, start fixing your credit profile. If you want to know how to position your business to leverage business credit, read my Business Structure and Funding Guide, which you can purchase for $67.

In conclusion, you should always anticipate a recession whenever inflation gets as high as it is these days and interest rates are rising this fast. Costs of borrowing for businesses are becoming exorbitant, hence, they reduce borrowing and stop investing in their businesses. That is why one of our points to manage this was that you should press the pause button on some projects that are not urgent – it’s a survival tactic when prices are rising fast and there could be a cash crunch ahead. It happens with all the big businesses, which is why economic activity suddenly gets subdued, leading to a recession. If your business is going through a rough patch and you feel things are falling apart, contact me to book a business consultation session. I may help to save your business.

Frequently Asked Questions

1. How can a small business survive a recession?

The major protection against a recession for a small business is to build its balance sheet. It should accumulate cash resources as much as it can.

2. What businesses do well in a recession?

Businesses that produce essential goods such as food and medicines usually do well during a recession.

3. How should a small business prepare for a recession?

A small business can re-look into all its existing projects and pause on some that are not urgent in order to save money. It can also develop customer loyalty programs in order to retain as many customers as possible when the cash crunch finally starts. The more customers it keeps, the more money it can generate during a recession.

4. What’s the best thing to do in a recession?

A small business should avoid starting any new projects during a recession. This is mainly because consumers are generally not spending much, so, any new investment may meet low returns, resulting in the loss of cash, which the business needs to keep operating.

The post 5 Business Tips Your Small Business Needs to Survive Inflation and a Recession first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post 5 Business Tips Your Small Business Needs to Survive Inflation and a Recession appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

Do you want to grow your business? Set goals. Do you want to build generational wealth? Set goals. I could go on and own about the importance of goal setting. It is one of the most important aspects of running a business. If you did not set any goals for your business, pay attention to this article, and then contact us if you need help to develop your first business goal. Suppose you are already doing this; use this article as a stepping stone to another level of running a business.

Besides businesses, individuals, too, must set goals. This is the only way to grow faster than an average person who does not set goals. With that said, why is it important to set goals?

Goals are a measure of progress

Unless you are running a hobby in your backyard, you would want to measure progress in your business. The best way to do this is to set goals. An achieved goal is an easy way to measure how you have progressed. For example, if your goal was to hire a new employee in the next four months, doing so is a tangible measure of progress for your business. You can actually tell someone that your business has grown in size as it has hired one more employee. In the same way, if your goal is to increase profits by 5% in the next two months, if you achieve that by the end of that period, you can also use that number to measure growth in profits.

There are many areas you can use to measure business progress. Therefore, there are many goals you can set to help grow different departments in your business.

They give you focus

Have you tried waking up in the morning without a plan? That day I bet goes so slow that you would think something is wrong with your watch. But there is nothing much in there except that when you have nothing to do, your body just switches off from the world. The same happens when you are running a business. Without setting goals, it is difficult for your body to be focused on achieving something. Your body simply knows that there is nothing to fight for, and it responds by switching off. But if you do set goals, you wake up every day knowing that there is something you ought to be fighting to achieve. That breathes fresh air into your body!

They help you develop and maintain momentum

Forward momentum is good for your development. When your life is full of activity, and you wake up feeling important – being wanted somewhere where you got to fulfill certain duties, you suddenly become alive. Setting goals gives you precisely that. It creates a forward surge that you just cannot stop. You know that, through your short-term goals, you are working hard to achieve the long-term goals. After that, you can set new goals towards your vision, which becomes your lifestyle. You will just never stop.

They help you defeat procrastination

Above, I spoke about how setting goals helps you get focused and create momentum. Well, these two things are crucial to stopping procrastination. When you are on the move and have the drive or focus, you do not postpone tasks that must be completed today. As soon as something needs completion, you will be on top of it immediately. And remember that wealthy people have this kind of a drive. If you also have it, you are on your way to being great at what you do.

They put you in control

Who does not want to be in control of their own lives? No one! If this is the case, you should be happy to know that setting goals puts you in charge of your life and your business. Everything that will occur therein is not by accident but by design. When you sit down to plan and set goals, you dictate the pace at which things should go in your business. Everybody else who will work with you later will only be doing so following your vision. Therefore, to steer your own ship, start by setting goals.

In conclusion, I understand that many people struggle to set goals. It is not easy for them to align their current lives with the future, hence the difficulty in setting goals. If you are one of those, do not hesitate to contact my team and set up a meeting with me for your business coaching.

People have also asked the following

1. What is the most important goal of a business?

There are no important goals in a business. You can set any goal to help your business in one or more areas. However, you can only prioritize goals depending on what you want to achieve first in your business. As such, goals that you prioritize at the moment cannot be said to be more important than the others.

2. What are business goals examples?

Examples of business goals are; to open a new retail outlet in the next 6 months or to grow sales by 40% in the next 12 months. When setting all these goals, ensure to make them SMART.

3. What are short-term business goals?

Short-term business goals are goals that you want to achieve soon. These have timelines ranging from a few days to a few weeks and months. Usually, a goal that must be completed in under 12 months is short-term. Businesses use short-term goals to achieve long-term goals.

4. What are smart business goals?

SMART business goals must be Specific, Measurable, Achievable, Relevant, and Time-bound.

5. What are some realistic goals?

Realistic goals are goals that you set knowing that your business can handle. For example, if you run a small business, you can target to increase sales by 5% in the next quarter because you know your own limits; for example, you have no employees. A huge business with a massive pool of resources can target to increase sales by 30% in the same period. This is realistic for them because they have the resources to drive sales.

The post Why are Business Goals Important? first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post Why are Business Goals Important? appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

Life is what you prepare for. Likewise, business success is a result of how you set and achieve business goals. For this to be a reality, you got to be a pro at setting goals. This subject is even more important now, given how much we have been putting out fires all-round – for the better part of the past two years. To say that it has been hectic in 2020 and 2021 will be an understatement. It has been excruciating! I understand that many businesses are still licking wounds after the experience with the pandemic. But life (or rather business) has to go on. There is success to be achieved ahead. You need to set goals, and this is how you do it perfectly. See below.

a. Start by defining goals versus objectives

I have seen many people confusing objectives and goals. These two words mean different things. An objective is very specific, while a goal is broader and covers many areas in your business. However, to achieve a goal, you set a number of objectives, especially within your teams. Therefore, objectives outline how you are going to achieve your goals.

b. Define your long-term and short-term goals

Goals can be set for periods of more than a year (long-term) and for a few months or weeks (short-term). You ought to define these in line with your business. For example, one of the short-term goals could be to open a new retail branch in your city in the next three months.

It is important to understand that short-term goals help you achieve long-term goals. Using the above example, the long-term goal could be to expand your retail business into another city. So, you will use profits from other branches you opened in your city to open a branch or retail store in another city.

c. Break down your goals into actionable targets

Goals that aren’t actionable mean nothing. And, for them to be actionable, they must be broken down into objectives assigned to specific teams. Using the above example, if your goal is to open a new retail shop in the next quarter, objectives must define steps you will take to get there. For example, when and who should ensure that all necessary compliance regulations are fulfilled. And, if there are needs for registrations with the State Department, who will do that, how, and when.

d. Set specific goals

Goals that are not specific are difficult to achieve. It will be hard for you and your team members to measure progress and know when to stop and focus on the next task. Bear this in mind when you set your business goals. Examples of specific goals include increasing sales by 35% in the next 6 months and opening two more retail outlets in the next 12 months.

e. Effectively assign tasks to your teams

As a business owner, one of your greatest strengths should be organizing and supervising your team. This also includes the effective assignment of tasks. These skills will help you achieve your goals. Know which team member to assign certain tasks and who needs more supervision than the other.

f. Have regular meetings to review progress

You cannot set goals and just forget about them until the final deadline. It is important to set team meetings, including some on business strategy in order to achieve these goals. You must review progress on an ongoing basis. Agree with your team on the intervals of the meetings, for example, weekly or bi-weekly.

g. Celebrate achievements

Many business owners often overlook this, but it plays a huge role in motivating your teams. Celebrating achievements is a way of telling your team members that they are doing well and you appreciate their efforts. It also gives you, as the business owner or manager, the hope that your goals will be achieved as planned. Remember, as a business leader, you don’t only need your expertise to make it, but you need to be hopeful in some moments.

h. Be accountable

Accountability helps you reach your goals faster. Set specific times to sit back and reflect on your actions as a business leader. Ask yourself if what you have been doing is in line with your goals. Be honest with yourself. If it is difficult to do this, I always encourage business owners to find an accountability partner who will help them scrutinize themselves.

People have also asked the following

1. What are business goals examples?

Examples of business goals are; to open a new retail outlet in the next 6 months, or to grow sales by 40% in the next 12 months. When setting all these goals, ensure to make them SMART.

2. What are the 5 types of business goals?

5 types of business goals are as follows: Financial goals, customer goals, growth goals, employee development goals, and social responsibility goals. Any business can develop several goals under each of the above categories. For example, under social responsibility, a company can set a goal to take 2 orphans to school every year.

3. What are smart business goals?

SMART business goals must be Specific, Measurable, Achievable, Relevant, and Time-bound.

4. What are short-term business goals?

Short-term business goals are goals that you want to achieve soon. These have timelines ranging from a few days to a few weeks and months. Usually, a goal that must be completed in under 12 months is short-term. Businesses use short-term goals to achieve long-term goals.

The post How to Set Goals in a Business first appeared on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.

The post How to Set Goals in a Business appeared first on Suncrest Financial Services | Tax Preparer in Upper Marlboro Md.