Passageway Financial - Accounting, Tax, & Consulting

Many business owners aren't accounting for the assets they have. Assets can be powerful when talking tax strategy!

Gone are the days of tracking mileage on a notepad on the dashboard.

Understanding what counts as a legitimate deduction can save you from potential issues with the IRS and ensure you’re maximizing your allowable deductions. Here’s a breakdown: Business vs. Personal: Only expenses that are directly related to your business operations can be deducted. Personal expenses or those that don’t directly benefit the business are not deductible. Reasonable & Necessary: Expenses must be both “ordinary and necessary” for your business to qualify as a deduction. For instance, buying a high-end luxury vehicle solely for business purposes might not be fully deductible. Documentation is Key: Even if an expense is deductible, you need proper documentation. Keep detailed records and receipts to substantiate your claims in case of an audit. Mixed-Use Expenses: If you use an expense for both personal and business purposes (e.g., a car), only the portion attributable to business use is deductible. Entertainment Expenses: Recent tax law changes have made it more difficult to deduct entertainment expenses. Meals might be partially deductible under specific conditions, but general entertainment costs often aren’t. 🔍 Pro Tip: Consult with your accountant to ensure you’re only claiming legitimate deductions and maintaining the right documentation. 💬 Have questions about what expenses are deductible for your business? Drop them in the comments or get in touch with us for a personalized consultation!

Like belts, cowboy boots are exempt from sales tax. Hiking boots are not.

Profitability isn't just about revenue - it's about knowing where your money is going and making smarter decisions.

Reconciliation is a necessary double check to make sure the bookkeeping records and reports are accurate to what actually happened in the bank. It's like the bow on top of a pretty accounting present!

Review your office setup and expenses to ensure you're claiming all eligible deductions and maximizing your tax savings.

Here’s why: Avoiding Surprises: Regularly reviewing your financials helps you avoid any unpleasant surprises when tax season arrives. You can keep track of deductible expenses and income fluctuations, ensuring you're not caught off guard. Maximizing Deductions: By keeping accurate records and planning ahead, you can take full advantage of tax deductions and credits available to you, potentially reducing your overall tax liability. Quarterly Payments: Depending on your income, you might be required to make estimated tax payments quarterly. Staying proactive ensures you don’t miss these deadlines and face penalties. Strategic Planning: Regularly consulting with your accountant can help you make strategic decisions throughout the year, such as timing equipment purchases or adjusting your business structure, to optimize your tax situation. 🔍 Pro Tip: Set aside time regularly to review your finances and consult with your tax professional to keep everything on track. 💬 Have any questions about tax planning? Drop them in the comments or reach out to us directly!

"Stitching together a business with nothing but a great idea, your unique talents, and whatever few resources you have at hand is most certainly a miracle. And it feels like one, too, until the day you realize your business has become a giant, scary, soul-sucking, cash-eating monster." "The monster wreaks destruction at every turn: empty bank accounts, credit card debt, loans, and an ever-increasing list of "must-pay" expenses. He eats up your time, too. You wake up before sunrise to work, and you are still at it long after the sun goes down. You work and work, yet the monster continues to grow. Your relentless work doesn't free you; it further drains you." "If you think operating your business is closer to a horror story than a fairy tale, you're not alone." Excerpt from Profit First by Mike Michalowicz Our team at Passageway Financial gets it! We aren't afraid of the monster and we have worked with many businesses to get them back on track. We help you as a business owner find a path to overcome your financial challenges and lead a profitable business. Let's connect! https://lnkd.in/gZ7PnuJ7

"Whenever you see a successful business, someone once made a courageous decision." - Peter Drucker #courageous #smallbusiness