Below are frequently asked questions. To view the answer, just click on the question.
What is the accrual method of accounting?
Expenses are matched with the related revenues and/or are reported when the expense occurs, not when the cash is paid. It can be described s forward-looking, as it anticipates revenue that has not yet been collected. If the revenue ends up as uncollected, it can be deducted in a future year.
What is cash basis accounting?
Revenues are reported on the income statement when the cash is received.
What is a capital lease?
Capital lease is a lease in which the lessor only finances the leased asset, and all other rights of ownership transfer to the lessee. The asset is recorded as the lessee’s property in its general ledger.
What bookkeeping and accounting services do you offer?
GPL provides full external bookkeeping service including payroll, bank reconciliations, financial statements, and monthly and quarterly reports. We also offer Quickbooks consulting services for existing clients. We work out of our offices in Bellevue, but our staff will visit your place of business as required.
How much does your service cost?
Our fees are based on the volume of work and complexity of each client’s account. Nothing we do here at GPL is a “one-size fits all” service, as everything is tailored to the needs of individual clients. After an initial free consultation and review of your business records, and after you have decided the scope of services you want, we establish a fixed monthly fee so you can manage your budget. We believe in providing services based on the needs and desires of your clients. In general, our costs have proven to be less than our clients were paying for their accounting staff. We determine the scope of services and establish a fixed monthly amount so you can manage you budget.
The cost of properly setting your books up and maintaining them is far more cost effective than having your CPA fix and correct them at year-end. In addition, the benefits of having accurate and useful reporting during the year can assist in all aspects of running your business.
We encourage you to take advantage of our free bookkeeping consultation and learn what the precise costs for your business would be.
Who services my account?
One of GPL’s bookkeepers is assigned to your account. This person is your main point of contact at our firm, and he or she will work on your account, master your unique processes, and be responsible for the details of your account. The bookkeeper assigned to your account is supported by the rest of accounting team who serve as back-ups and who preform reviews on your books.
Will I lose control of my business by using an external bookkeeper and accountant?
No. You still maintain 100% control of all decisions and all checks are still signed by you. You decide what vendors get paid and when. We provide with the information and perform the specific task, but you approve all invoices for payment and sign all checks. Further, GPL will have as little or as much access to your accounts as you allow us to have.
What software do you support?
We are experts in Quickbooks and Quickbooks Online. It is the general accounting software that we recommend. We offer Quickbooks consulting services for current clients.
Does GPL provide tax services and audit services?
Yes. We have a team of tax specialists who are experts in federal, state, and international taxation. Our tax resolution department is led by an enrolled agent with 25 years experience in representing individuals and businesses in audits before federal, state, and local taxing authorities.
I didn’t deposit my payroll taxes with the IRS last quarter. Is that going to be a problem?
Yes, and a major one. Not filing or paying your payroll taxes can be considered a federal crime. The IRS can refer your case to the Criminal Investigation Division and ultimately to the Department of Justice if they can prove that you intentionally (very low thresholds) didn’t file and/or pay. We can help you become compliant again.
When do I need to send my federal withholding and payroll tax deposits to the IRS?
It depends if your business is on the monthly or semi-weekly deposit schedule. Before the beginning of each calendar year, you must determine which deposit schedules you are required to use. The deposit schedule you must use is based on the total tax liability you reported on Form 941 during a look-back period. You need to be aware that schedules for depositing and reporting taxes are not the same.
When do I make my federal withholding and payroll tax deposits on the monthly schedule?
You must deposit employment taxes on payments made during a month by the 15th day of the following month.
I make my federal withholding and payroll tax deposits on the semi-weekly schedule. When do I have to make them?
Under the semiweekly deposit schedule, deposit employment taxes for payments made on Wednesday, Thursday, and/or Friday by the following Wednesday. Deposit taxes for payments made on Saturday, Sunday, Monday, and/or Tuesday by the following Friday.
When do I report my federal withholding and payroll tax despots to the IRS? What form do I use?
Employers should only report their deposits quarterly or annually by filing Form 941 or Form 944.
How do I send my federal withholding and payroll tax deposits to the IRS?
You must use electronic funds transfer (EFTPS) to make all federal tax deposits.
What is EFTPS?
The Electronic Federal Tax Payment System® tax payment service is provided free by the U.S. Department of the Treasury. You will need to establish an account, which you do at https://www.eftps.gov/eftps/. (There is also more information on this service and its requirements there.
What is FUTA?
FUTA stands for the Federal Unemployment Tax Act. It is a federal employer tax used to help fund state workforce agencies. As of 2014, it was a 6% tax.
What is does “base FUTA wage” mean?
You pay FUTA for each employee on the first $7,000 they earn each year. That is the base FUTA wage.
When do I make my FUTA deposits to the IRS?
FUTA tax deposits are due by the last day of the first month that follows the end of the quarter. If the due date for making your deposit falls on a Saturday, Sunday, or legal holiday, you may make your deposit on the next business day.
If your liability for the fourth quarter (plus any undeposited amount from any earlier quarter) is over $500, deposit the entire amount by the due date of Form 940 (January 31). If it is $500 or less, you can make a deposit, pay the tax with a credit or debit card, or pay the tax with your 2011 Form 940 by January 31.
How do I report my FUTA payments to the IRS? When do I have file by?
You report them either quarterly or annually on Form 941. The forms are due the same dates as the deposits (April 30, July 31, October 31, and January 31), except that if you made all deposits in a timely manner during the year, you have an extra 10 days to make the January 31 filing.
What’s the difference between an employee and an independent contractor?
You determine when and how the work is done with an employee, such as insisting on where they work and between what hours. An independent contractor has more freedom to make those decisions. There are some gray areas and overlaps, however, so you should consult a payroll expert.
Do I withhold and pay payroll taxes for an independent contractor?
My business is failing, and I’m closing it down. It’s a C-corporation, so I won’t have to worry about the withholding and payroll taxes I didn’t deposit, right?
Wrong. If you withheld funds from your employees’ pay, that money belongs to the IRS, not you. Even if you shut the company down, the IRS can come after you personally he IRS can come after business owners individually for payroll taxes owed. They can access what is called the Trust Fund Recovery Penalty (TFRP) against owners and shareholders. The IRS is the only creditor that can go behind the corporate curtain and go after individuals.
What is a financial statement?
A financial statement is an outline of the financial activities of a business, an individual or any other entity.
How often do I need to have financial statements prepared for my company?
Financial statements should be prepared whenever business tax filings need to be prepared are needed, as they are the only reliable way to know what your income, expenses, and profits are. However, they are useful tools whenever you need an easily accessible overview of your current financial positions.
What are the common elements of financial statements?
Typically, financial statements for businesses include: income statements, balance sheet, statements of retained earnings, and cash flows.
What are CFO services?
CFO services are financial management activities that enhance performance, facilitate growth, and improve profitability of a company. Specific CFO services include strategic planning, financing, forecasting, risk management, and so on.
What is the difference between a Controller and a CFO (Chief Financial Officer)?
The controller manages the accounting staff. The controller is responsible for making sure that the company’s transactions are properly recorded and that financial statements are generated every month. The controller books the past.
A CFO takes accounting results to the next level. While a Controller fully understands accounting and accounting systems, a CFO will take a more forward look at business by projecting, forecasting, managing cash flow, and planning for future growth.
The CFO is responsible for the overall financial health of the company. In addition to supervising the Controller, the CFO is responsible for Treasury functions (cash), financing (debt), Information Technology, Legal, External Accountants, and provides the answers to the CEO and the shareholders. The CFO also provides the CEO and shareholders a picture of the future. He acts as the visionary for growth and provides critical financial guidance.
Is my company too small to need a CFO?
The need for sound financial management is not a function of size. Small companies as well as large ones benefit from the services of a CFO, but small companies usually don’t need these services on a day-to-day basis. That’s where GPL comes in. We provide a way for companies of all sizes to get the financial management they need, as they need it, without the cost of a full-time executive officer.
Can't my CPA firm take care of these CFO tasks?
No. CPAs are ethically and legally required to remain independent from certain functions in your business in order to insure accuracy and truthfulness in accounting. Further, few CPAs who have had the responsibility, accountability and experience of a Corporate CFO.
Being a CFO, whether on a full-time or part-time basis is much more than being able to crunch numbers or to fill out a tax form. A CFO is multi-faceted. A good one has lots of first-hand experience wearing many hats including administration, management accounting, production, purchasing, human resources, facilities, contracting, and negotiations in addition to having strong finance skills. Above all, a good small business CFO must be business savvy.
My company is doing fine, and I have good accountants. What benefit would a CFO be to me?
Every year thousands of small businesses fail. According to the most recent statistics from the Small Business Association, 70 percent of private start-up companies fail within their first two years of operations. Almost all of these companies had an accountant. Often these businesses fail, not due to a fundamental weakness in the business itself or even the changing economics of their industry, but due to a lack of even the most basic financial management. Without sound financial management, companies are simply not able to realize their potential or manage risk. Having an experienced financial executive as part of management can only be a positive. A CFO provides the big financial picture and a clear vision for optimal growth. Even if your company is running fine, nothing is perfect. Efficiencies and margins can always be improved providing the shareholders with a greater bottom line. A CFO can work with your accounting staff to improve financial reporting, so that you can make better decisions about your future. Maybe you have a good accounting staff, but do they really have the tools and experience to provide support for the operating side of your business?
How much are your CFO services?
Give us a call or send us an email. We will provide a free consultation to how we can be of service. Then, we will be able to recommend a strategy for going forward, as well as what our fees would be.
Can you help me find an attorney, banker, or CPA firm if I need those services?
Absolutely. GPL is at the center of a wide network of qualified professionals who provide legal, banking, insurance, and many other services.
What is compliance assurance?
The measures needed to meet certain governmental criteria.
What is an internal compliance assurance audit?
Businesses may conduct a periodic audit to ensure the company stays well within the governmental regulations, avoiding any type of penalties or fines.
What is a compliance audit?
Government agencies conduct compliance audits to make sure companies are remaining in compliance with regulations. When and if infractions are found, there is often some sort of fine as well as a window of time granted to make corrections.
Can GPL Tax & Accounting conduct an internal compliance audit for my company?
Yes. We have a complete team ready to perform such services, as well as the capacity to chart a course to compliancy should we find any issues.
Do I have to collect sales tax?
Generally speaking, yes, unless you’re doing business solely in one of the handful of states where there is no sales tax or where sellers can elect to pay the sales tax themselves instead of collecting it from their purchasers.
I’m a service-based business, do I need to charge my customers sales tax?
While all product-based businesses are required to submit sales tax for sales made in any state with a physical presence, only a few states require service-based businesses to do the same. You’ll need to check with your particular state for specific guidelines.
Do all states have sales tax?
No. Alaska, Oregon, Montana, New Hampshire and Delaware do not have a state sales tax.
Should I consider absorbing the sales tax?
Only a few states permit sellers to absorb the sales tax. In most states, you have to charge your customers the sales tax or face penalties.
When do I have to submit my sales tax to my state?
Once you’ve collected sales tax from your purchasers, the obvious next step is reporting and paying the tax to the appropriate authorities. Most states generally require you to file a tax return and remit the sales and use taxes you have collected on a monthly basis. (More and more states requiring, electronic reporting and payment.) However, each state has special rules that may require you to file and pay on a more or less frequently, depending on the amount of your tax liability.
What if I sell to customers in different states?
This is a common scenario for e-commerce and online business owners.
- If your business has a physical presence or nexus in a state then you may have to collect sales tax from customers in that state
- If you don’t have a physical presence or nexus in a state, then you are NOT required to collect sales taxes for that state
- If you collect sales tax for a state, you must return the sales tax to that state
What creates “nexus” in a state?
Here are some possibilities that create “nexus” in a state:
- You maintain an office, store, or other business facility in the state
- You or your employees enter the state to take orders, perform services, or otherwise do business on your behalf
- You own or lease real property that is located in the state
- You own or lease personal property that is stored or used in the state on a more than occasional basis.
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We’re here to help when you need us. Explain your problem to us, and we will respond privately within 72 hours.
No sales. No pressure. Just the information you need.
GPL Tax & Accounting is here to handle your personal and business tax preparation and planning needs. We can also handle your bookkeeping and accounting requirements. GPL provides all the tools and know-how you need to be in the best tax position while staying compliant with all tax regulations.