Financial Statements and Credit

Why have a financial statement?

Your financial statement creates a snapshot of your​ financial situation​. If you create your financial statement and revise it each year, you can evaluate how you are progressing toward your goals​.

Why do I have problems with cash flow…?

It depends on your situation. Cash flow issues can range from many different sources. One example is as simple as not being paid from customers. Another source can he more complicated, as not generating enough income to pay your invoices and debts. A cash flow statement can help you measure how much money came in your business versus how much money went out. You can analyze your cash flow many ways. Some examples: monthly or annual.

What is a cash flow statement?

A cash flow statement is a simple financial tool that provides data regarding all your cash inflows and outflows. Creating a cash flow statement is helpful in determining: ​

  • How your money is spent​
  • Whether you have extra money to invest ​
  • How you can manage your finances to improve your ​net worth​

Why do I need to know about my credit…?

Credit has become a normal part of doing business in​
our society​. Every major purchase you need to have some type of credit available to get a loan. If you need a credit card, they will also need to check your credit score. Your credit score dictates how you utilize your credit. The lower the score the worse you look to potential lenders.

Why is it important to manage debt?

Managing debt and understanding the types of debt is important to your overall financial health. If you are spending more money than you are bringing in, you will not be able to pay your bills on time and the debt keeps piling up. You may never be able to catch up.  There are different types of debt, useful debt, unavoidable debt, and bad debt. Understanding what types of debt there are and how to use them is critical to keeping yourself and your business financially healthy.

I do not understand the financial statements, I run on my gut feeling.

Running on gut feeling does not take into consideration the actual numbers. You may remember the movie Jerry Maguire, famous phrase was “Show me the money” If you do not have financial statements to show you how you are doing you will never be able to maximize profit while reducing your expenditures.

What are financial statement statements?

Financial statements are the information that is informing you how well your business is performing. There are different types of financial statements. One key financial report is called the Profit and Loss Report. This report can give insight on how much profit you are making after all your expenses.  The income and expenses can be broken down into smaller types of information that you can utilize to make better business decisions and maximize profit while minimizing your expenses.

Retirement Planning

Why should I invest?

You all heard the expression, time is money. This holds true when it comes to investing. You can leverage what is called compound interest Compound interest uses the power of time and reinvestment of interest or dividends to make your investment grow more quickly.

Are there the types of investments with tax advantages?

Yes. There are investments that are tax deferred or as I refer to them as “Tax Delayed ” These are: 401K, 403B, 457 plans, IRS’s variable annuities and fixed annuities. These investments allow you to invest before or after-tax dollars and delay paying taxes on contributions and earnings until withdrawn.

What are the most common types of investments with tax advantages?

Two types typically used are:

  1. Traditional IRA – allows individuals to direct pre-tax income toward investments that can grow tax-deferred until withdrawn. Income thresholds may also apply.
  2. 401(k) – employer-sponsored defined contribution plans. These programs allow workers a tax-advantaged way to save for retirement. These plans are employer specific. They offer workers lots of benefits including tax breaks, employer matching, high contribution limits, contributions after age 72, and shelter from creditors.

Will my retirement withdrawals be taxable?

Money withdrawn is usually taxed as ordinary income (may be subject to penalties)

I have a hard time setting money aside, I am too busy… Help?

People in the united states enjoy one of the highest per capita incomes and standards of living in the world. Many people do not set money aside and live their retirement in poverty. If you really look at how you spend your money each day you can find ways to save. You can allocate a percentage of your take home pay into a savings account and use that money to invest.

What are the roadblocks to retirement planning?

I call these roadblocks the DO NOT” S


  • define how they wish to live their retirement
  • set financial goals
  • commit to setting aside money
  • manage credit wisely.

What are some strategies to avoid these retirement roadblocks?

Two strategies that are easy to start are these:

First: Take time and go over your financial snapshot. Take a financial inventory of all your debts. Manage the debt and pay down any high interest credit cards first.

Second: Make sure you set aside money for your retirement. You can start with something like $ 20.00 a week and put it into a retirement plan. Most people do not realize how much out of pocket they spend each week in coffee. Invest in yourself first!

What is the retirement planning process?

The retirement planning process helps you determine the outcome of what you want to achieve in retirement. You will need to determine your retirement income needs when you retire versus what you have saved. Once you determine your income in retirement you need to find a way to save and build your retirement funds to be able to support you in retirement. Using the correct investment options can help you achieve your retirement goals.


Why Tax Plan? Most People avoid taxes but using tax laws is critical to your overall financial strategy to keep more of what you earn. Without looking at ways to lower your tax burden you are using up your hard-earned money when you do not have to.

Why do I need a tax professional when I can do my own return? Tax laws are changing more than ever in recorded history. The most recent changes on December 27, 2020 included 5,500 pages of changes! A professional can help with planning and getting the most out of your refund. What you spend on having a professional prepare your return can save you thousands in the long run. IRS and state penalties which can be in the thousands for noncompliance issues.

What Can I do to save money on Taxes? Before you implement any strategy to reduce your tax liability make sure it complements you overall financial plan. You need to examine your tax situation two years at a time. The goal is to reduce you tax liability over both years.

What are some of the examples that you would recommend saving money on taxes?

Some examples would be to participate in an employer sponsored retirement plan, contribute to a traditional IRA and contribute to flexible spending accounts. If you want to get into real estate (Capital Asset) and flip properties, knowing the tax laws can save you thousands on the sale.

Are there taxable investments taxed at a lower rate?

A capital gain can be defined as a gain or profit from an investment … like property. The gain is the difference between the current market value (sale price) over the cost basis (what you paid) Assets help 12 months are less are taxed as ordinary income. Assets held more than 12 months are usually taxed at a federal income tax rate usually lower than ordinary income.

Will I get taxed if I sell my personal home?

It depends. You may be able to exclude any gain from income up to $ 250,000 individual or $ 500,000 on a joint return (in most cases) To claim the deduction take tax planning as you must meet the criteria established by the IRS. There are also the state laws to consider.

What are Itemized Deductions?

Itemized deductions are a range of expenses that are deductible on your taxes. These include mortgage interest, property taxes, medical and dental expenses that exceed a percentage % of your adjusted gross income, charitable donations and more. Itemized deductions reduce your taxable income significantly, resulting in less taxes paid and, in some cases, even a lower tax bracket.

What Allowable Deductions Can Be Itemized?

Homeowners with mortgage interest on a loan that is less than the IRS allowable can be itemized on their taxes. Charitable contributions, investment interest, student loan interest up to $2,500 and gambling losses can all be itemized, ultimately lowering your tax bill. If you have medical or dental expenses for the year that total 7.5% or more over your adjusted gross income, these eligible expenses can be itemized as a deduction.

What is the difference between Itemized and the Standard Deduction?

If a taxpayer opts to take the standard deduction, in lieu of itemizing, this is a flat amount reduced from your adjusted gross income. In some cases, the standard deduction will amount to more money than the itemized deduction, making this more advantageous for the taxpayer. Taking a standard deduction is simpler when filing taxes, leaving many to just take the standard deduction. When filing your taxes using itemized deductions, it is important that you adhere to the IRS’ guidelines for these items.

I married this year is there anything I should do for my taxes?

Yes! When you get married life events can have a major effect on your taxes. It’s possible to bring the tax you pay closer to the amount you owe, especially if you let me know before tax season rolls around.

I just got a new Job, should I worry about my taxes?

When you start a new job, you must complete a Form W-4, Employee’s Withholding Allowance Certificate. Your employer uses it to calculate the amount of federal income tax to withhold from your pay. If you start a new job, let me know and I can help you complete this form.

I own a business should I pay estimated tax?

If you earn income that is not subject to withholding, you may need to make estimated tax payments. This type of income may include self-employment income, interest, dividends, gambling, or rental income. If you expect to owe a thousand dollars or more in tax, and meet other conditions, you may need to pay it before the end of the year.

I just had another child, should I check my withholdings?

Congratulations!! When certain life events occur, check with me to see if you need to change your Form W-4 or change the amount of estimated tax you pay. A change in your marital status, your family size or your home ownership status can change the amount of taxes you owe.

I am in the Insurance Marketplace. Is there any planning I should be doing?

If you are receiving advance payments of the premium tax credit, it is important that you report changes in your income or family size to your Health Insurance Marketplace. You should also notify the Marketplace when you move out of the area covered by your current Marketplace plan. Advance payments of the premium tax credit help you pay for the insurance you buy through the Health Insurance Marketplace. Reporting changes will help you get the proper type and amount of financial assistance so you can avoid getting too much or too little in advanced premium tax credits.

I am selling my home Is there anything I should be worried about?

In most cases, gains from sales are taxable. However, if you sell your home, your gain may be tax free.

You may be able to exclude part or all the gain from the sale of your home if you owned and used the home as your main residence for at least two out of the five years before the date of sale. Exceptions and other tax considerations need to be met so it is important to know the tax laws.

I moved. Do I need to report my change of address?

YES. It is your responsibility to notify the federal government, states, and vendors. Report Your Address Change. After you sell your home and move, update your address with the IRS. To do this, file Form 8822, Change of Address. If applicable, you should also notify the Health Insurance Marketplace when you move out of the area covered by your current Marketplace plan.


Why Hire a consultant?

You hire a consultant when you need specific expertise and skills but do not necessarily wat to hire a full-time staff position.

How can a consultant help with our business?

A consultant can help make the changes necessary in the business and be an objective onlooker that sees the issues and provides a fresh, objective viewpoint.

What are some of the consultant’s skill sets to look for? Some but not all the skill sets should include:

  • Independence
  • Expertise
  • Industry Best practices
  • Make difficult decisions
  • Cost effective Analysis and ideas.

Will my Business PPP Loan Be Tax Deductible?

Businesses who took advantage of the Payroll Protection Program (PPP) can breathe a sigh of relief. Legislators have decided money from the PPP will allow for the deduction of expenses. This means that businesses will not lose any tax deductions that were expected because money was paid using the PPP loans. This is big news for businesses and a huge relief of a potentially hefty tax burden.

I try to get money to help my business with growth, but no one will loan me money.

Poor use of credit, accumulation of debt along with no financial statements are the key cause of a bank not loaning money to your business. Many businesses resort to a secondary market like PAY-DAY loans that charge higher interest rates and unrealistic pay back requirements that end up having the business close the doors. Getting the right professional to assist you can get your business’s back on track with the money you need to keep the doors open.

Hiring a consultant will increase my costs to run my business. Why would I hire one?

A consultant supplements your work-staff. A business discovers it can save thousands of dollars a week by hiring consultants when they are needed rather than hiring a full-time employee. You do not have to pay benefits. You can also use a consultant on as needed basis to help with keeping your overall cost down while helping to increase the bottom line.

What type of consultants should I consider for my business?  

Here are some types to consider:

Strategy and Management Consultants –These firms or individuals will have a deep understanding of your specific market and know best practices of your industry. They can offer help in enlarging your market footprint, expand your product offerings, help you reorganize for efficiency and cost savings, increase your company’s capabilities.

Operations Consultants –These companies focus on increasing your process quality and efficiencies. You might use them when you are looking to map out existing processes, analyze them and get suggestions/advice to improve quality, reduce steps or mistakes and increase margins and decrease costs.

IT Consultants – With the rapid pace of technology and tech support needed, most companies have hired a consultant at some point to help integrate and improve their computer or phone systems or storage space, upgrade servers, etc.

Human Resources Consultants – These businesses are used to work specifically on employee needs. You might use them to recruit top talent, improve employee retention and determine compensation to align with your company goals. You might use them for leadership and communication development.

Sales and Marketing Consultants – Firms in this area are used to create marketing plans, work on positioning statements, develop a brand, launch advertising campaigns, establish social media strategies, initiate sales process and improvement, or design sales training and coaching.

Accounting Services

Why do I need bookkeeping and Accounting Services?

We help with your business to maintain accurate accounting practices and understand the meaning behind their financial data and how those numbers affect their business. An outside accounting service can keep costs down instead of hiring a full-time person or team or people.

What accounting software is right for my business?

All business software is NOT equal. Your accounting software should be able to be adaptable to your business growth and accounting needs. There is many different software on the market and the cheapest may not be the best solution for your business information requirements.

My business is barely making ends meet, how can I afford accounting services?

Maybe the reason why your business is doing so poorly is your trying to do everything yourself. I find this very common in today’s world. An accountant provides services that help analysis financial information and help you make the important decisions you need to make your business profitable.

What type of services does an accounting service provide?

Depending on your business needs some of the services provided are: Maintain transaction records, analyze accounting process’s, reconciliation of accounts. Provide day to day communication on issues that need to be taking care of.

I am paying why too much money in taxes? Many business’s without strong bookkeeping and accounting records end of paying MORE in taxes than they should. Without an experienced accountant to review the day-to-day transactions. I find that there accounting systems are not set up correctly or transactions are not being recorded correctly causing them to pay more taxes.

Why do we need your expertise?

I have not had a new client that has come to us for help and not saved them thousands of dollars in taxes payroll etc. There is so much more to running the business than bookkeeping. There is day to day risk that needs to be managed and without someone on your team, one mistake can close your business.

IRS Representation

Why did I receive an IRS Letter…?

There are many reasons you may have received a letter from the IRS.  Most are just letters requiring additional information and it does not necessarily imply a suspicion of criminal activity. Tax returns that have any unusual deduction, conflicting calculations or are missing paperwork may be flagged for an audit. Do not ignore any letters from the IRS. If you do not respond you may have to pay even if you are correct in taking your deduction.

What do I do when I get a notice from the IRS?

After you receive a letter from the IRS indicating that you are being audited you will have thirty days to respond. In the letter, the IRS will indicate the paperwork that is needed, and these 30 days should be used gathering this information and supplying it to the IRS in a timely fashion.

A local resident received a letter in the mail form the IRS indicating that his most recent tax return would be audited. How can I prevent the IRS from auditing me?

Some deductions increase the likelihood that you will be audited by the IRS. These include home office deductions, rental losses, business use of a vehicle and hobby-related deductions. If there is an error in the math or a discrepancy in the paperwork, this may also trigger an IRS audit. Most audits are easily resolved but you have to respond in a timely manner.

Why do people get audited?

Most of the IRS audits are triggered by a computer or could be a random audit. Many are from math mistakes, hiding income, deductions unusually high can raise the red flag. Depending on the reason for the audit and the severity of the discrepancy, the course of action may be anything from sending in missing paperwork or to an IRS agent visiting your home. Seek professional help and advice. The experts at OneSource Accounting &Tax have assisted countless clients through an IRS audit.

Buy Sell Business

In recent years there has been an increase in buying and selling of businesses. Should I use a professional service?

While companies pay hefty fees for professional advisors, the amount paid out for fees is quite small if compared with the dollars and risk at stake when companies follow the advice of professional consultants. Management is good at managing their business, but do you really want to take a risk in using your expertise in goods, service or equipment and invest in capital. I have seen this done over and over and most business’s do not make it.

What does a professional provide in services to help with a purchase or sale?

Some of the benefits are: Minimizing uncertainty, understanding/confronting problems, running the numbers. There are others but these are a few.

What is the process in selling the business?

The type of sale and what your goals are will determine the overall process.  There should be a structured methodology that is designed to bring offers to the table and minimizing business interruption. Some of the process is as follows: Analyze, Value the deal, develop marketing, analyze the tax consequences and strategic planning.

Do you help with business plans on a purchase?

When you purchase a business, a plan is very often necessary to demonstrate the company’s business potential and how it will provide a reasonable return to the owner/stakeholders. Every business must provide its own unique financials, budgeting, and content to be able to get funds from lending professionals.

Should I get tax consultation in buying or selling a business?

Due to the complexity of the IRS code along with the states and local authorities, it is critical to get your business off to a good start with hiring a professional in your personal or business tax situation. Without this advice you could be paying out thousands of dollars unnecessarily.