by Isabella Gonzalez | Jul 16, 2024
According to financial experts, managing your finances online is more than just a convenience now, it’s a money-saver. All United States taxpayers benefit from an online IRS account. For Pennsylvanians specifically, staying on top of your tax obligations can be even more efficient with myPATH as well. Let’s explore what myPATH is and why you should consider signing up for these essential accounts.
What is myPATH?
PA myPATH is Pennsylvania’s online portal designed to provide taxpayers with a convenient and secure way to manage their state tax obligations. Through myPATH, users can file returns, make payments, and access their tax account information anytime and anywhere.
Immediate Updates on Your Tax Status
One of the most significant benefits of signing up for both IRS Online and myPATH is receiving immediate updates on your tax status. At 13 Consulting LLC, we see it all too often where people receive IRS notices months or even years later, all the while accruing interest. With these online tools, you can access your account information in real time. You stay consistently aware of your tax obligations, payments, and potential refunds without the lag time of traditional mail.
Secure and Convenient Access
Both the IRS Online and myPATH are designed with security in mind. Your personal information is protected with robust security measures. Additionally, the convenience of accessing your tax information from anywhere at any time means you are no longer tied to the limited operating hours of tax offices or access to your home office.
Tracking your payments, viewing past returns, and gathering necessary documents for future filings all have become easier. Having digital copies of your records can also be handy if you need to reference them for other financial or legal purposes.
More Payment Options
Both platforms offer easy and flexible payment options. Whether you need to pay your taxes in full or set up a payment plan, these online accounts make it simple. You can schedule payments directly from your bank account or pay by credit or debit card. This flexibility is convenient for all taxpayers, but essential for business owners and self-employed individuals throughout the US.
Set Up Notifications
With the IRS Online and myPATH, you can set up notifications to alert you of any changes or updates to your account. This feature helps you stay on top of deadlines and avoid missing important notices.
Support & Resources
Both the IRS Online and myPATH provide access to a wealth of resources and support. Whether you have questions about your tax situation or need assistance navigating the platforms, help is just a click away. These resources can guide you through various tax scenarios, making the process less daunting and more manageable.
Work With a 5-Star CPA
At 13 Consulting, we specialize in offering tailored recommendations to all of our clients. Business owners and individuals alike receive high-quality CPA services with personalized financial expertise. Contact us today to get your custom strategy started!
See what our clients say:
“Steve is direct, no nonsense and helped me out of a tax mess. He spent lots of time with me to make sure I understood things in layman’s terms and exact numbers so I could take care of my business and my family, and continues to be there for me when questions arise. I’m so glad I found him and I couldn’t recommend him highly enough.”
Patrick W.
“Steve is a great guy to work with. Been working with him the past three years. He is super responsive to anything you need done and is very flexible. Highly recommend!”
Dan M.
“My taxes were not simple by any means, but Steve was great in working with me to ensure everything was filed on time and providing some advice on my long term tax planning strategies. Would recommend Steve to anyone.”
Matthew K.
by Isabella Gonzalez | May 8, 2024
When you’re a small business owner, every decision carries weight. And every decision falls on your shoulders. When it comes to financial choices, you might just be giving it your best guess, but making lasting changes on your business structure.
Most Common Financial Pitfalls for SMBs
One common pitfall he outlined was solely focusing on sales and earnings, rather than making sure your business is liquid, solvent, and well-capitalized. ”Working capital can be an issue depending on how long customers take to pay or how long the average inventory cycle takes,” Steve included. Adding a line of credit is a great way to protect from a temporary cash crunch as well.
We sat down with founder & CPA, Steve Frank, to get his insights on financials for small business owners. We found out what’s important, what not to waste your time on, and strategies for scalable success.
What Financial Metrics Should Small Businesses Prioritize?
Steve emphasized the importance of cash flow, dubbing it as the king of financial metrics.
“EBITDA (earnings before interest, taxes, depreciation & amortization) is a nice measure of simple cash flow that is available to both debt and equity holders. But owners need to pay close attention to the balance sheet and the current ratio (current assets / current liabilities) as well,” said Steve.
The CPA found that very often, small business owners get too caught up with driving sales and profits & losses, that they miss the important issues of liquidity and solvency.
What are Liquidity & Solvency?
Liquidity refers to the ease with which assets can be converted into cash without significant loss in value, indicating a company’s ability to meet short-term financial obligations. Solvency, on the other hand, assesses a company’s ability to meet long-term financial commitments by comparing its total assets to its total liabilities. It signifies the overall financial health and stability of a company. Prioritizing EBITDA allows you to keep a close watch on these factors.
Using Cash for Growth
If the goal is growth, then regularly investing your business’s money in fixed assets is the name of the game. “Whether it be machinery, equipment, furniture, or vehicles, this upkeep is important,” Steve included. The CPA also shed light on tax-saving opportunities such as Section 179 and bonus depreciation to reduce taxable income.
Section 179 allows businesses to deduct the full purchase price of qualifying equipment or software purchased or financed during that tax year. This deduction is particularly beneficial for small businesses as it can help reduce taxable income and lower their tax liability in the current year.
Maintaining Financial Records
For small businesses with limited resources, the CPA recommended Quickbooks Online for its user-friendly interface and comprehensive features. The basic plan, which costs around $30 per month, offers “a customer database, invoicing and collection module, vendor database, accounts payable and payment ability, and much more in addition to the traditional accounting software,” said Steve.
He highlighted the importance of timely reconciliation and accurate coding of transactions, and how Quickbooks allows for all of this. “Once you link up your business bank account to Quickbooks, you are able to reconcile and code transactions right in Quickbooks every time new bank activity is detected,” Steve brought out.
Reducing Unnecessary Expenses
The CPA advocated for the preparation of an annual budget as a way to manage expenses. Regularly comparing actual performance to the budget allows you to address issues proactively. “The budget should be a work in progress, not just a tool prepared in December
of the prior year and put away in a drawer until the next December,” Steve stated. Small business owners are often surprised at where their cash actually goes, once analyzed. Prepping an annual budget and regularly comparing the results steers your business clear of any surprises.
What Kind of Baseline Schedule Should SMBs Use for Managing Finances?
The CPA emphasized the importance of using a good accounting software in conjunction with spreadsheets for regular maintenance. “Once the transactions and journal entries have all been made for the month, export the financials to Excel or a similar software to perform budget to actual analysis. This should be done monthly, or quarterly at the very least,” Steve suggested.
Once the books are closed and the financials exported for each of March 31st, May 31st, August 31st, and December 31st, the owner and CPA should work together to determine the proper amount of quarterly estimated tax payments.
He also recommends discussing estimated taxable income after 10 or 11 months so you can plan some larger purchases in the current year, and minimize tax liability.
“For instance, if the owner is putting off the purchase of a key piece of equipment costing $100,000 and necessary for growth until 2Q of the following year, and current 11 month numbers show taxable income for the year of $150,000, it may make sense to purchase this December instead of next June, in order to reduce current taxable income to $50,000 by taking advantage of bonus and section 179 depreciation on taxes.”
Steve Frank, CPA
CPA in Reading, PA & Beyond
By prioritizing key metrics, avoiding common pitfalls, and leveraging technology effectively, entrepreneurs can navigate the financial landscape with confidence and steer their businesses towards sustainable growth.
Ready to get your business’s finances set up the right way? Schedule a call with 13 Consulting for expert advice.
