Frequently Asked Questions

Improving cash flow is all about getting money in faster and letting it go out slower. 

The first strategy I recommend to clients is invoicing immediately upon delivery. And aggressively follow up on overdue accounts. Most small businesses lose thousands because they’re too polite about collecting what they’re owed. 

You can also flip the script on payables by negotiating longer payment terms with suppliers while maintaining good relationships. This essentially uses their financing to keep cash in your business longer.

If you carry inventory, focus on lean inventory management. And create a simple 90-day cash flow forecast to anticipate tight spots before they hit.

Generally, if you control when, where, and how the work gets done, that person is an employee. If the worker decides how the job is completed, uses their own tools, and is hired for a specific project, they are more likely an independent contractor.

Getting this right is crucial. Because misclassifying someone can lead to penalties for unpaid payroll taxes. Proper payroll accounting keeps you compliant and gives you a defensible position if the IRS ever asks questions.

If you expect to owe $1,000 or more in taxes and don’t have enough withholding from other sources, you do need to focus on paying your taxes in quarterly estimated payments.

And be sure to follow the Safe Harbor Rule: Pay 100% of last year’s tax liability (110% if AGI exceeded $150K) to avoid penalties.

Tax planning is what keeps you ahead here. By reviewing your financials during the year, we can project what you’ll owe and make sure your estimated payments are accurate.

Any “ordinary and necessary” business expense. But you’ll be asked to provide proof, so keep detailed records and receipts for the IRS.

Home office expenses, business meals, professional development, equipment, software subscriptions, and travel costs are all legitimate deductions you can take when they directly support your revenue-generating activities. 

The critical test is whether you would have incurred this expense without your business. If the answer is no, you’re likely on solid ground for a deduction. However, the IRS will ask for detailed records and receipts at the time of purchase. Not reconstructed paperwork during tax season. 

The most accessible credits include the Small Business Health Care Tax Credit for businesses with fewer than 25 employees, the Work Opportunity Tax Credit for hiring from targeted groups like veterans or ex-felons, and various energy efficiency credits for qualifying equipment upgrades. 

Also, a lot of business owners overlook the Research and Development Credit, which applies more broadly than you’d think. Even developing new processes, software, or improving existing products can qualify. Not just traditional lab research. And the Disabled Access Credit provides up to $5,000 annually for accessibility improvements. 

This is by no means an exhaustive list. And I see a lot of business owners miss credits they qualify for because they don’t know to ask about them. We can look at your business’s situation and find credits you might not realize are available to you. 

Paying less in taxes comes down to 1) smart planning and 2) taking advantage of every opportunity the IRS provides. 

The core strategy is to be meticulous about deducting all of your normal and necessary business expenses. Everything from your rent and supplies to your advertising costs. 

You should also explore different tax credits, which directly reduce your tax bill. Another powerful tool is contributing to a retirement plan like a SEP IRA or Solo 401(k). Which not only saves for your future, but also lowers your taxable income right away. 

Ultimately, the best way to ensure you’re not overpaying is to keep excellent records and work with a tax pro who can spot all the deductions and credits that apply to you.