Keeping up to date with your various tax and compliance responsibilities can be a headache, especially when regulations are so complicated and you have to take care of running your business.
Lucky for you, The Profit Line offers support for a wide range of tax and compliance needs for corporate, small and non-profit organizations. Don’t spend any more time trying to make sense of complex regulations and filing processes – let our trusted team of accountants help you make sure your business is always fully compliant.
Whether you recently started your own company or are a veteran in the world of business, you are well aware that you are subject to a variety of taxation and other regulatory requirements every year. What the specifics of those filing processes may be, however, is a different story. At The Profit Line we are well aware of the frustration and confusion business owners face when it comes to compliance. Regulations are dense and complex, taxation rules and requirements differ from jurisdiction to jurisdiction, and year end is a hectic and busy time even before adding on the burden of making sure your business has met all of its tax and compliance obligations.
Our team sympathizes with your struggle and is here to make your periodic and year end filing processes a whole lot easier for you. Our team utilizes the best-in-class accounting software to ensure your books and financial records are always accurate and up to date, which is a major help when it comes to pulling financial data for tax and other compliance purposes.
We also have developed a streamlined and efficient accounting workflow that coordinates all of your reporting needs and ensures no task ever goes forgotten. Your taxes will be filed accurately and on time, you will be ready for year end audits, and all reporting requirements will be met. While your Profit Line team works to decipher tax codes and compliance requirements and prepares all of your paperwork, you have the freedom to get back to running your business.
We offer a full scope of tax and compliance services to meet your unique business needs. Some of the core services we offer in this area include:
Please explore the pages dedicated to each of these services to learn more about our offerings and to gain a sense of how The Profit Line can streamline your tax and compliance requirements so you have more time to get back to business.
INCOME TAX FILING SUPPORT
Tax season is often a stressful time of year for business owners. With ever-evolving tax codes, it can be difficult to keep track of your various obligations as well as regulations, including those that can work in your favor. You want to manage your tax liabilities, and ensure that you’re filing accurately and on time.
At Profit Line, our goal is to ensure that your books are kept in tip top shape, so your financials and related financial data are accurate and ready, when needed, for tax filing. We work closely with our clients’ tax accountants to provide any additional information needed for filing.
The primary way we facilitate your income tax reporting is through careful and diligent management of your books. Generally speaking, tax accountants do not review financial statements and records of each of their clients to determine if everything is categorized properly, unless they’ve been engaged to perform an audit or review. Their work is to use the financial statements and reports generated from your accounting system to accurately complete your tax returns. Put simply, they take the numbers on your financial records and plug them into the appropriate tax forms, working to apply the tax code to your advantage wherever possible based on the information provided to them. Therefore, it’s crucial that your books accurately and completely reflect your financial activity and your financial position in order for you to get the best results and most precise tax returns possible each year. Your Profit Line team works year round to ensure your books are up to snuff and that everything is clearly and adequately categorized so that, come income tax filing time, the heavy lifting is already done and income tax filing is a breeze.
Besides making sure your books are complete and accurate so your tax accountant has all of the relevant information when preparing your forms and providing tax advice, our team also serves as a liaison between your company and your tax accountant. It is often the case that tax accountants will request additional schedules and support to supplement your financial statements. We communicate directly with them to provide all of the information they need so you can focus on other things.
As an example, for some of our clients, income needs to be reported by location or zip code of service delivery, as tax nexus is based on where the business transactions occur. This is not information that sits neatly on the P&L, so we work to extract this information from your sales and invoicing activity, building out a relevant schedule to provide to the tax accountant at year-end so you don’t have to worry about getting bogged down with these details.
Finally, based on the schedule of estimated quarterly tax payments provided by your tax accountant, we take care of making your quarterly income tax estimated payments to local, state and federal tax agencies. We know it can be easy to lose track of the numerous payment deadlines you are required to meet each year. Our team takes care of this responsibility for you so you are always compliant and don’t have to worry about incurring any penalties for delinquent or deficient payments.
SALES TAX MANAGEMENT
For so many businesses, charging, collecting, and paying sales taxes is a normal part of daily operations. When you sell certain products or provide certain services, these products and/or services may be deemed taxable in the jurisdiction you are providing them. If so, you may be required to collect sales taxes from your customers, and then remit these taxes to various state government agencies. The rules and regulations governing what sales are taxed and how much tax is to be charged varies by jurisdiction. In addition, especially where interstate commerce is concerned, sales tax rules and rates depend both on the location of your business and on the location of the customers you do business with. You are not alone if trying to wrap your head around all of the different sales tax rules leaves you confused and frustrated.
At Profit Line, we understand just how hard it can be to figure out your sales tax liabilities while also focusing on running your business, and we are here to help make this easier for you. Sales tax liabilities are common for many of our clients, so our team has great practice with making sure all sales taxes are paid at the right time and in the right amount. You can trust us to take this burden off your shoulders.
There are several steps in determining your sales tax liabilities. First, it is critical to know which of your products and services are subject to sales tax and in which jurisdictions this sales tax applies. Once you know which items to tax, the appropriate sales tax rate is applied to these sales and can be automated in your accounting system. When customers are billed and sales taxes are added to their invoice, if the goods and services have been delivered, these sales taxes must be recorded in a sales tax payable account, which will be used to make appropriate payments to all applicable tax authorities. Sales taxes become payable when the taxable goods or services have been delivered and not when payment has been received. Frequency of sales tax payment to state agencies can be annual, quarterly or month, depending on volume of sales, with thresholds varying from state to state.
While this can be a complicated process with many opportunities for error, our team utilizes specialized applications to ensure that your sales taxes are correct. When recording sales and drafting invoices, QuickBooks automatically calculates sales tax based on the types of products and services invoiced and the respective locations of you and your customers, ensuring you always bill for, and collect, the correct amount of sales tax. At the same time, the software records the sales tax in your books so your periodic sales tax liability for each jurisdiction in which you conduct business is already calculated when it comes time to pay.
When you work with Profit Line, you have a dedicated team that will review and manage your sales tax records. Should there be an error in QuickBooks resulting from manual entry mistakes, we will quickly correct it so your accounts are always accurate. When due, we will also take care of paying your various sales tax liabilities on your behalf so that is one less thing you have to worry about!
1099 PREPARATION & DISTRIBUTION
For many businesses, just trying to understand the regulations surrounding income taxes and sales taxes is quite stressful. Adding in the extra requirement to report non-employee compensation and trying to get a handle on all of the payments that are eligible and excluded for reporting purposes likely seems downright impossible - especially when there are so many other important tasks to attend to.
Having worked with a large range of clients over the years, we understand all too well the struggle and frustration that comes with 1099 reporting. That’s why we have developed a process to capture vendor and independent contractor information throughout the year so there is not a mad dash to collect forms in December and January ahead of the 1099 filing deadline.
As an overview, all businesses that pay certain vendors and independent contractors for services in an amount of $600 or greater in a given calendar year are required to prepare and distribute 1099 Forms to these folks at year-end, and file Form 1096 with the IRS to report these payments. There are some exceptions to this general rule, some of which are discussed in our FAQ section. In recent years, the appropriate form for this reporting has been the 1099-MISC, but beginning in fiscal year 2020, the IRS is requiring businesses fill out form 1099-NEC to file this information. The journey begins when you engage US-based vendors or contractors to deliver services! Best practices would have you collect a completed W-9 Form from them before you make any payment for their services. The tax identification number (TIN) and business or individual contact information provided on the W-9 lets you know if this vendor or independent contractors is 1099 eligible and, if so, it provides the information needed down the road to populate the 1099 you will have to prepare for them, and the IRS, at year-end.
When Profit Line manages your bookkeeping, we ensure that we know which of your vendors and independent contractors are 1099 eligible, and we make sure that we have all of the information needed to complete these forms. No sense scrambling at year-end to make this eligibility determination, or to gather the information. It’s often difficult to reach vendors long after their services have been provided and paid for!
For businesses that engage international vendors and independent contractors, Form W8-BEN is to be collected before any payment is rendered for services. This form provides information on the vendor or contractor’s tax residency and the relevant withholding rate, if any, applicable to their compensation, depending on the terms of their country’s tax treaty with the US. Instead of Form 1099, Form 1042-S is used to file information on payments made to international vendors and contractors at year-end, and information provided on the W8-BEN is used to prepare this form.
If it sounds tedious to remember to collect W-9s and W8-BENs from all of your contractors before you pay them, and from which parties you even need to collect these forms in the first place, you’re not alone. For so many companies, this is a task that is neglected and put off until the end of the year, a practice that increases the stress and chaos present at an already stressful time of year.
At Profit Line, our aim is to significantly reduce the burden that comes with reporting non-employee compensation. First, our staff accountants are well attuned to the need to collect forms W-9 and W8-BEN, so they ensure that these forms are requested as you begin working with new vendors and independent contractors. On a quarterly basis, they will review your financial records to ensure there are no forms missing for these vendors and contractors. If you prefer to collect forms W-9 and W8-BEN in-house, that’s A-OK. We’ll work with you to collect this information in whatever way you are most comfortable, while still making sure that your records are complete. Then, when the end of the year rolls around, as it inevitably does, we will prepare and distribute the 1099s on your behalf, using the information we have been collecting from your vendors and contractors throughout the year. By building this reporting requirement into the regular accounting workflow we establish for our clients, we set them up for success and a stress-free filing process.
GRANT TRACKING & REPORTING
Non-profits are typically dependent on the generosity of individual and organizational donors to secure the funds necessary for operational viability and to pursue their missions. In some cases, grants and donations are made with specific restrictions - this could be restrictions on purpose of fund use, restrictions on timeframe in which funds can be used, or restrictions that only the interest earned on the principal amount of the gift can be used for operations.
No matter what the tracking or reporting details happen to be, you will need to provide periodic reports, typically quarterly or annually, that provide evidence of use of funds. At Profit Line, we work with a wide range of non-profits and are well versed in grant reporting requirements.
The key to successful grant reporting is to have strong transaction tracking throughout the year. As with other forms of expense tracking, it is critically important to regularly and consistently track expenditures related to your grant and ensure that they are coded to the proper accounts. What this really comes down to is having a well-structured Chart of Accounts that has all of the accounts needed to accommodate your grant tracking specifications. As funds are used throughout the year, it is helpful to code these expenditures to their appropriate accounts, which are connected to the grant, in real time. Then, when it comes time to generate reports, it’s easy to pull data related to use of the grant that can be incorporated into formal reports and provided to your donors.
While this may sound simple, in practice many organizations struggle to stay ahead of reporting requirements by letting their transaction management and coding slip. To make matters worse, in many cases, the fiscal year associated with grants and donations does not match the fiscal year of your organization, making it even harder to meet grant reporting requirements. This is where we come in. When you work with Profit Line, your dedicated team will make sure that your transactions are accurately coded as they occur so there is never a scramble to find information when reports are due. We prioritize organization and efficiency and take care of all of the data tracking you need to keep you ahead of the reporting curve, no matter when or how frequently your grant reporting is needed. You need never worry about grant reporting deadlines again.
AUDIT & REVIEW
It is well known that audits are regulatory requirements for large, publicly traded companies. However, plenty of smaller private companies may also need audits or reviews to satisfy investor or other stakeholder demands. For many of the small and medium sized for-profit businesses we serve, audits are neither required nor necessary. Sometimes, however, an annual review might be appropriate given the scale and scope of the business. For our non-profit clients, annual audits are often required by law, with reviews sufficing in some cases.
At Profit Line our accountants are well equipped to support you should an audit or review be something you require. The main way we engage in the audit process is by working directly with your auditors to provide them with information and data they need to perform their testing and draft their audit or review report. It is usually the case that for operational or internal control questions auditors will go directly to you for evidence, but where financial information is concerned, our staff is capable of gathering and preparing supporting data and schedules and fielding financial-related questions so you can focus on other tasks.
As with most of the services we provide to our clients, our aim is to develop as organized and efficient a process as possible to save you both time and money, and this is true of our audit and review support services. Having an audit performed can be very costly, so we strive to keep your financial records clear and organized to minimize the time your audit will take.