Bookkeeper Expectations

You started your own business because you are an expert in your field, not to keep the books. As a business owner, you should spend your time managing your business and serving your customers, not keeping financial records and running financial reports. Plus, you might not have the expertise to keep up the books accurately, completely, or efficiently. 

Between a lack of time and expertise, business owners can wind up with inaccurate accounting records that lead to expensive mistakes. Outsourcing the bookkeeping to a qualified professional saves business owners time and adds value. Bookkeepers provide accurate and up-to-date financial information and frees up business owners’ time to grow sales and serve customers.

Engaging a bookkeeper also means setting expectations to make sure that she or he provides the financial information you need to make informed business decisions. Setting these four expectations will give you a leg up on getting the bookkeeper services you need:

  1. Standard Tasks

Clarify the tasks and deliverables that will meet your needs, such as keeping accounting records up-to-date, ensuring information is categorized correctly, and reconciling financial activity. Establish a schedule for monthly financial statements and other reporting needed to manage your business.

  1. Two-Way Communication

If your requests or processes are not understood, a bookkeeper must be willing to ask for clarification or help. Communication is critical; it is better for your bookkeeper to ask questions rather than guessing or keeping quiet. Good bookkeepers manage day-to-day issues and know when to escalate an issue to you.

  1. Technical Proficiency

A 21st-century bookkeeper can conduct most, if not all, of your financial business electronically. That includes accessing bank statements, paying bills, and sending financial reports. Your bookkeeper should be proactive about securely using technology. It will save both of you time and reduce human error.

  1. Critical Thinking

You need someone who can focus on the details and on the big picture, understand how they work together, and apply the “sniff test” to make sure financial information is reasonable given your type of business. She or he must be a problem solver, assessing information and developing solutions using her perspective and expertise. 


You didn’t start your own business to keep the books. And you might not have the expertise to keep up accurate books that can be used to make informed business decisions. Doing you own books not only takes away from your customers, but you could also wind up with inaccurate accounting records that lead to expensive mistakes. Outsourcing the bookkeeping to a qualified professional saves business owners time and adds value. Setting these four bookkeeper expectations are a great start to getting the bookkeeper services that you need.

Prepare for Next Tax Season Now

You are probably still stinging from the pain of filing your 2021 income tax return. That pain might have been sharper if you had to pay when you filed. The memory of that pain could be just the incentive you need to start preparing for next tax season now. Starting to prepare for next tax season now reduces stress and gives you time to implement tax planning strategies early in the year.

Whether you file your own tax returns or engage a tax professional, these three tips will help you prepare for next tax season now:


  1. Check Withholdings and Estimated Payments

Did you owe a lot when filing your 2021 returns, or did you get a big refund? Either way it turned out for you, the IRS has online tools to help make sure that your tax withholdings or estimated payments will cover your anticipated tax liability. Employees who earn wages should use information at this link to verify that their tax withholdings are sufficient Taxpayers with investment, self-employment or other non-wage income should use this link to figure out their quarterly estimated tax payments due in April, June, September, and January

  1. Organize Tax Documents

Use your 2021 tax return to identify documents that you’ll need to accumulate in preparation for next tax season. Start printing the charitable donation letters and real estate tax bills to cut the delay when the 1099s and W-2s are released or mailed to you. As life events happen in 2022, such as buying a home, starting a business, or changing your marital status, check into how the event impacts your taxes. You might need a tax professional to help you plan for and understand the tax impacts of life changes.

  1. Pending Tax Changes 

The last two tax filing seasons involved reporting some unusual information that was related to pandemic tax changes, like the expanded Advance Child Tax Credit and Economic Impact Payments. As of today, no tax law changes are pending; however, you never know. Keep an eye on the news for any announcements indicating that a law is about to pass and see if it could impact next year’s tax reporting. Keep in mind that a reporting change could happen even if the change does not impact your tax liability, 

If the pain of filing your 2021 income tax return is still stinging, these tips to prepare for next tax season now are just what you need. Preparing now not only reduces stress; the earlier in the year you start, the more time you have to implement tax planning strategies. Whether you file your own tax returns or engage a tax professional, checking your withholdings and estimates, organizing you tax documents, and being aware of tax law changes will go a long way to help you prepare for next tax season now.

Worker Classification Rules

Worker classification sounds boring until it becomes big news. Like back in 2020 when businesses like Uber and Lyft were fighting in court over whether drivers are classified as employees or independent contractors. Uber and Lyft won their legal battles to classify drivers as independent contractors. Good news for them – classifying workers as independent contractors saves businesses money in employer payroll taxes and other employee-related expenses. On the flip side, the independent contractors assume more costs, like self-employment taxes and health benefits.

Employers have always tried to push the rules to their limit; but, as you can imagine, worker classification issues have gotten bigger as the gig economy has exploded. That means an explosion in the confusion about worker classification among employers and workers. So, about a year ago, the U.S. Department of Labor (DOL) stepped in to help everyone comply with applicable tax law by issuing a final rule  to clarify the standards for when a worker should be considered an employee or an independent contractor.

Three things that employers and workers should know about the final DOL rule:

  1. An “economic reality” test is used to determine whether a worker is an independent contractor or is “economically dependent on an employer for work” (i.e., an employee). The rule defines two “core factors” to help businesses determine whether a worker is economically dependent on someone else’s business or is in business for her- or himself.
  1. The first core factor isn’t just one thing; it relates to a series of conditions, including the degree of control of the employer over the work, the amount of skill required to perform the work, and the degree of permanence of the working relationship. An independent contractor is free from the control and direction of the hirer, is sufficiently skilled to work autonomously, and is providing services that are temporary or intermittent.
  1. The second core factor relates to whether the work being performed is integrated with or separate from the overall business. An independent contractor performs work that is outside the usual course of the hiring entity’s business, either a specialized skill or temporary need for additional resources.

Worker classification issues have gotten bigger with the explosion in the gig economy. Determining whether a worker is considered an independent contractor or an employee can be complicated, which is why DOL issued clarifying rules. The decision about worker classification assigns the responsibility and cost to the employer or the worker, so it’s important to get it right.

Need more information? The IRS has more details about worker classification at

Business Email Scams on the Rise

Cybercrime is all over the news. It seems like there’s a new one reported every day. Well, that’s because it is a daily occurrence. One particular type of cybercrime on the rise is the Business Email Compromise, or BEC. A BEC is a hack where the criminal gets into valid email accounts and poses as a trusted party, like your banker or a vendor, and getting you to send them money. 

Business email compromise scams are on the rise, up 33% from last year, according to the FBI. Losses totaled nearly $2.4 billion in 2021, more than ten times more than just seven years ago. Victims include federal government agencies, insurance companies, energy infrastructure, and computer system vendors. Those are some highly sophisticated players that have invested tons of money in cybersecurity. 

So, what chance does a small business have defending itself against all those sophisticated cybercriminals? Systems are only as safe as the security practices of the least knowledgeable user. All it takes to open the door to a cybercriminal is one person clicking on the wrong link from an unknown source, or from a hacker masquerading as a trusted sender.

Believe it or not, implementing these six low-cost tips can help organizations of all sizes follow safe cybersecurity practices. Even more important, train all team members on safe cyber and send them periodic reminders.

  1. Keep software systems up to date and use a good anti-virus program.
  1. Examine the email address and URLs in all correspondence to detect a scammer mimicking a legitimate site or email address.
  1. Scrutinize all electronic requests for a payment or fund transfers, even from a trusted party.
  1. Ignore text messages, emails, or phone calls asking you to update or verify your account information and go to the company’s website to see if something needs your attention.
  1. Never open unexpected attachments until verifying the sender’s email address and use virus scan before opening any document.
  1. Be extra suspicious of messages that urge immediate action.

With cybercrime in the daily news and business email compromise on the rise, small businesses need to defend themselves. Protecting your systems and your money doesn’t have to be expensive. Promoting a few low-cost cybersecurity tips can help business or all sizes and types avoid becoming a victim of business email compromise. 

Should You Make Estimated Tax Payments?

Did you just pay an extra chunk of money when you filed your 2021 income taxes? Were penalties included? It’s not fun to learn that you owe more in tax when you file your return. But if you earn income from self-employment or get investment income, no taxes are withheld from that income, and you can owe a lot when you file. How can you avoid that expensive bad news? You can project your income tax liability and pay what you expect to owe during the year. 

The IRS requires taxpayers to pay their income tax liability as their income is earned. States that charge income tax and the District of Columbia have similar rules. Employers withhold and remit income taxes to cover their employees’ tax liability on wages and other compensation. But taxpayers with income from interest, dividends, capital gains, and self-employment may need to make estimated tax payments to cover the related income tax liability.

Taxpayers should regularly assess their need to make estimated income tax payments, as well as other taxes such as the self-employment tax. All the necessary details about making payments, when and how much are at

The IRS website has a lot of information to read, so let’s boil it down to three important things to know:

  1. When are Estimated Taxes Due?

For estimated tax purposes, the year is divided into four quarters. Although some payments due dates changed temporarily due to COVID, estimated tax payments are general due on April 15, June 15, September 15, and January 15 of the following year. If the payment due date falls on a Saturday, a Sunday, or legal holiday, the payment is due the next business day.

  1. How Much Do You Need to Pay?

Estimated tax payments are based on estimated income and resulting tax liability. An estimated tax payment is due if the liability is at least $1,000, after subtracting withholding and refundable credits. Withholdings or estimated payments must equal or exceed the smaller of 90% of your 2022 tax liability, or 100% of your 2021 tax liability. Calculate your 2022 tax liability at this link

  1. What if You Don’t Pay Enough?

Interest is due on any unpaid balance, accrued daily from the time the tax liability was created (i.e., by receiving income) until the tax is paid. Interest accrues daily, which can really add to your tax bill. Clearly, the IRS is serious about getting paid on time. Figure your 2022 federal income tax bill by using the IRS Withholding Estimator at

If you paid a chunk of money when you filed you 2021 income tax return, or if you will receive income with no tax withholdings in 2022, you might need to make estimated income tax payments. The IRS has all the tools to figure it out at

Not Ready to File by April 18?

Not Ready to File by April 18?

This year, the federal tax filing deadline for taxpayers in most states is delayed from April 15th to April 18th because of Emancipation Day. In Massachusetts and Maine, it’s not until April 19th because of Patriot’s Day. Some other states that have been impacted by federally-declared disasters, like Kentucky, and Colorado, have even longer to file.

Despite the delay, the tax deadline can sneak up on you. If you’re in a panic because you haven’t started gathering your tax documents, you can relax. You can request a tax filing extension to postpone until October 15th. You don’t need to provide a reason for needing the extension, but it does take a little time to get it done right and avoid possible underpayment penalties.

Here are three tips for getting an income tax filing extension:

  1. You Must Apply

Individuals can request a tax filing extension by filing IRS Form 4868, Application for Automatic Extension of Time to File U.S. Individual Income Tax Return, online at the IRS website, via approved tax software, or in paper form. It must be sent or postmarked no later than midnight on the original due date. The extension is automatically approved if a refund is expected or if the estimated amount due is paid with the extension request.

  1. Pay Amounts Due

Use the IRS Form 4868 instructions at to estimate your 2021 income tax liability. Compare your estimated taxes to your tax withholding or quarterly estimated payments and enter the numbers on the extension request. If you owe more in taxes than you’ve paid in, the balance due must be paid with the extension request. Failure to pay the amount due results in an underpayment penalty and interest accrued daily on the unpaid balance.

  1. Check Your State

Each state has its own set of rules and processes for its residents to request an income tax filing extension. Check your state’s tax department website for deadline updates and links to information about requesting an extension of time to file your 2021 income tax return.

Rushing at the last minute is stressful and causes mistakes, especially with an already-stressful activity like filing your income tax returns. Get more time to file your 2021 federal taxes by requesting a tax filing extension. Go to the IRS website at for details and help estimating any taxes you owe with the extension request.

Reporting Virtual Currency Transactions

Virtual currency is everywhere these days – on the news, in sports-betting commercials, on your
tax documents. Yes, on your tax documents. In case you haven’t heard, the IRS now requires
taxpayers to report transaction activity related to virtual currency. They want to know who is
trading virtual assets and the related income that’s being generated.
All individual taxpayers now must check one box on their tax return answering either “Yes” or
“No” to the question about engaging in transactions involving virtual currency. That’s it. Just
answer the question. But how do you know the correct answer? The IRS recently came out with
some guidance, just in time for tax filing season.
When Taxpayers Can Check “No”
Taxpayers who merely owned virtual currency at any time in 2021 can check the “No” box, as
long as they have not engaged in any virtual currency transactions during the year. Virtual
currency activities must be limited to holding virtual currency in their own wallet or account;
transferring virtual currency between their own wallets or accounts; purchasing virtual currency;
and engaging in a combination of holding, transferring, or purchasing virtual currency.
When Taxpayers Must Check “Yes”
Here is a list of the most common transactions in virtual currency that require checking the “Yes”
● Receipt of virtual currency as payment for goods or services
● Receipt or transfer of virtual currency for free (without providing any consideration) that
does not qualify as a bona fide gift
● Receipt of new virtual currency as a result of mining and staking activities
● Receipt of virtual currency as a result of a hard fork
● Exchange of virtual currency for property, goods, or services
● Exchange/trade of virtual currency for another virtual currency
● Sales of virtual currency; and
● Any other method of disposing of a financial interest in virtual currency.
Virtual currency is considered to be property under tax law. If you dispose of any virtual
currency through a sale, exchange, or transfer, you are not done reporting by simply checking the
“Yes” box. You must and use Form 8949 to figure the capital gain or loss related to the sale and
report it on Schedule D, Capital Gains and Losses.
Want more information on when and how to report virtual currency activity? Check out page 17
of the 2021 Form 1040 Instructions and visit for other

IRS Efforts to Clear Tax Return Backlog

Are you still waiting for your 2020 federal refund? Are you waiting for a response from the IRS to a letter you sent them last year? If you answered “yes” to either question, you are one of millions of taxpayers caught in the backlog of unprocessed returns and unanswered tax correspondence that is creating one of the most challenging tax filing seasons in our nation’s history.

The massive tax backlog was caused by a combination of COVID-19 shutdowns, staff shortages, and the additional workload to process COVID-related benefits passed by Congress. And that was on top of chronic IRS underfunding, anemic workforce growth, and outdated systems. Today, the IRS experiences historically low funding while they also administering one of the most complicated tax systems in the world.

It might seem kind of late, but on March 10th, the IRS announced an aggressive plan to end the pandemic tax return inventory by the end of 2022. The agency is taking a three-pronged, all hands-on-deck approach:

  • Hiring and Surging Thousands of Employees to Tackle the Backlog

The IRS plans to hold job fairs across the country to fill 5,000 open positions in the coming months, as well as an additional 5,000 new hires to be made by 2023. It is also creating new 700-person surge team to process new returns, amended returns, and answer taxpayer correspondence. They are also shifting 700 employees to three IRS processing centers. Interested in applying for an IRS job? Here’s the link:

  • Increased Taxpayer Assistance to Reduce Processing Delays

Much of the backlog stems from small errors on millions of tax returns, requiring manual review by IRS employees before they can be processed. The IRS is stepping up efforts to help taxpayers file accurate returns by sending more than 100 million informational taxpayer letters, and providing additional help online, on the phone, and in-person. The IRS created and expanded self-service online portals for taxpayers and hired contractors to increase the capacity to answer taxpayer calls and staff offices for in-person assistance.

  • Developing and Deploying Updated Technology to Automate Functions

The IRS launched a new automated tool that reduces the need for manual review and correction. They also reconfigured systems to temporarily halt sending approximately 40 different notices to taxpayers and developed new automated support technology to help taxpayers with online live assistance and quickly answer taxpayer queries. More information about new IRS automation is here

This tax filing season is projected to be one of the most challenging in our nation’s history due to COVID-19 shutdowns and increased workload. The IRS is doing what is can with its limited funding to take a three-pronged all-hands-on-deck approach to meet the challenge.