What are Non-Cash Assets?

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Cash Assets & Non-Cash Assets

The financial success of any business relies heavily on cash flow statements. Cash flow statements are designed to show if and when you will have enough cash available to pay the bills of your business. Cash flow statements, income statements and balance sheets are collectively referred to as the “big three” in terms of financial reporting. In many cases, the end of a cash flow statement is normally the balance of the cash account; however, non-cash assets are also figured into the statement.

Non-Cash Assets

If you take a look at your balance sheet, you will notice that there are sections which show you the assets, liability and equity accounts. The assets portion of the sheet is subdivided into sections, including current and non-current assets. Current assets are assets which will soon convert to cash or expenses in the next twelve months, while non-current assets are fixed assets such as cars, buildings, warehouses, etc. and also investments.

Bank Holds

It is worth noting that banks will often put a hold on several large non-cash items depending on your account history. This time of holding is often referred to as the float. According to investopedia.com, this is the time during which banks have funds available to them.

Don’t Have Doubt

Many people choose not to touch non-cash assets until they fully understand the liability they present for them and their finances. If you are in doubt, or if you be unsure about taking on a cash asset, don’t have doubt. We have accountants available on our team to help you better understand cash assets and non-cash assets so you don’t make mistakes. Our accountants can help you understand cash assets and non-cash assets and also help you ensure that you’re actually organizing them effectively.

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Four Characteristics Your Next Accountant Should Have

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Characteristics of Good Accountants

Hiring a good accountant can be a challenge because you’re never really sure what you may be getting when you hire a new employee. To eliminate these challenges, we have decided to compile a list of four characteristics your next accountant should have.

 Dependable

When hiring a new accountant, you always want to make sure that you’re hiring someone who is dependable and who can help you at the drop of a dime as it relates to your expenses or even during rare cases of IRS audits.

Trustworthy

When hiring an accountant, you want to make sure that they always have your best interest in mind. In order to do this, it is imperative that your accountant be trustworthy. Being trustworthy means that they keep your confidential information private, and it also means that you’re willing to take their suggestions because you know at the end of the day they’ll have your company’s best interest in mind.

Confidence

Confidence is super important when making a new addition to your team. You need your new accountant to be confident in their job but also confident in what they bring to the table. Many businesses fail year after year because they’re way too many yes men on company teams. Having an accountant who is confident will show you that you don’t have to worry about a yes man.

Productive

When hiring an accountant, it may be obvious that you have to hire one who is productive. But the importance of hiring a productive, diligent accountant is such that mentioning it specifically is worthwhile. Hiring a productive accountant will ensure that no matter what your company has going on, your accountant will always be working toward the success of your company.

What other characteristics do you think are important to your company’s brand? Leave your comments below.

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Why You Should Hire an Accountant after Getting Married

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Marriage & Finances

You’ve said your vows, partied all night, honeymooned for (at least) weeks, and now that the wedding festivities are over, it is time to begin your life together. While discussing finances may be tough, it’s a discussion that is necessary to the success of your marriage. According to current statistics, about 57% of divorces are caused by disagreements or stress over finances; hiring an accountant could eliminate this problem before it ruins your marriage.

Want to avoid the curse of financial divorce? Here are a few reasons why you should hire an accountant after getting married:

To Avoid Divorce

Avoiding divorce is the most obvious reason why most married couples should hire an accountant. The statistics are not in favor of those couples who refuse to discuss financial records and so, as a couple, you and your spouse should both be committed to hiring an accountant even if it’s just as a way to fireproof your marriage.

To Pay Bills

Who should pay the car payment? Who should pay the light bill? These are all questions that everyone asks, especially newlyweds; and instead of allowing these questions to cause disagreements, an accountant can mediate the conversation. Your accountant will be able to determine what makes sense financially, and he or she may even recommend that all bills be split evenly down the middle.

To Discuss Past Credit and Current Debt
At some point, you and your spouse will probably have to make a large purchase together, such as a house. Because of this, it’s important that you discuss your past credit and current debt with an accountant. Doing so will show the both of you what you need to work toward in order to position your family to receive loans in the future.

To Handle Finances

Will you and your spouse keep separate accounts? Will you have a joint account for certain spending practices? Whatever the case may be, your accountant can help you handle your finances in ways you and your spouse may never be able to.

Did you recently get married? What are you waiting for―hire an accountant today!

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Five Benefits of Hiring a CPA

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Benefits of CPAs

Finding a CPA can be a very stressful endeavor. However, CPAs can confer a number of very substantial benefits to your company. Here are just a few ways your business could greatly benefit from hiring a CPA:

CPAs Can Help You Increase Your Budget

Have you often dreamed of having a bigger budget to do some of the things you have always dreamed of doing within your business? Hiring a CPA can help you do just that. A CPA is all about numbers and helping you cut cost, and the more you cut cost in one area, the more opportunities you have to increase your budget in others.

CPAs Can Help You Decrease Your Budget

Just like CPAs can help you increase your budget, they can also help you decrease your budget if that be your desire. This can be done by seeing where you spend unnecessary money and cut that spending in half.

CPAs Can Help You With Financial Management

Do you struggle with personal and business financial management? Don’t worry, you’re not alone. Many businesses struggle with this same thing, and if you can find a CPA who is versed in financial management, that adds an extra bonus not only to your life but to the lives of those on your business team.

CPAs Can Help You Determine When You Need To Cut Staff

Whether businesses like to do this or not, sometimes cuts are necessary, and when you’re so invested in your own company sometimes you’re blind to the areas that you need to cut. Your CPA has an inside look at your business, but can also view things from a different perspective.

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Three Accounting Mistakes Your Accountant Can Help You Eliminate

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Accounting Mistakes

We have all made accounting mistakes in the course of running our business. In most cases, businesses don’t even hire an accountant until they’ve made so many mistakes that they need to take on an accountant out of sheer necessity. If you hire an accountant, your business can avoid the negative repercussions which follow when accounting mistakes are made.

Here are three common accounting mistakes an accountant can help you overcome:

Not Keeping Expense Receipts

When you are managing your own books, you don’t really have any accountability when it comes to making sure you hold on to your expense receipts. Once you hire an accountant, your accountant will ask you to keep track of your expense receipts and any good business owner knows that if you don’t listen to your accountant, your business is doomed.

Not Keeping Up with Receivables

Every business owner loves getting paid, but for whatever reason, no one likes to keep track of the money they receive. While this may seem like no big deal throughout the year, it could really become a nightmare during tax season because you will suddenly be left trying to figure out how much money you’ve made, and if in fact all the invoices you sent out were actually paid in full.

Not Recording Cash Transactions

As a business owner, it can be easy to forget about the cash transactions you make or the cash payments you receive because keeping track of every single cash transaction is not an easy task. If you don’t have time to record every cash transaction, your accountant will have time. Tracking cash transactions will not only help you see how much money you are making, it will also show how you recklessly spend cash (if you do).

What was your experience like hiring an accountant? In what ways have they helped eliminate your money issues? Comment below!

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Five Bad Money Habits Your CPA Can Help You Break

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Money Habits

Let’s face it, we all have bad money habits that we need to break. While we may not want to admit it, it’s a reality that many of us face every day. If you want to know whether someone has bad money habits, the best place to check is their bank account. If their account is always in the red, you’ve definitely found a bad money habit.

Having bad money habits does not mean you are a bad person, nor does it necessarily indicate that you’re a bad business person either. What it does say is that you lack self-control as it relates to your finances. Sadly, this is a flaw many business owners across America share.

Here are five bad money habits your CPA can help you break. Breaking these bad habits can help get business on the right path.

  • Spending Money Before You Get it
  • Spending Money You Don’t Have
  • Spending Money on Unnecessary Purchases
  • High Interest Rate Credit Card Usage
  • Failing to Calculate Taxes

Do any of these bad money habits sound like the habits of your business? Don’t worry, you’re not alone. 75% of businesses have one or more bad financial habits. With diligence and perseverance, these habits can be broken.

These bad money habits are exactly why it’s imperative to have a CPA on your team to help you break the bad financial habits which are extremely hard to break all on your own.

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What to Bring When You Meet With Your CPA to File Taxes

If you have never hired a CPA before to handle your taxes you may be a little overwhelmed during your first meeting. You can be overloaded with a great amount of information and terminology which may be unfamiliar to you. While this meeting can be overwhelming, it can be one of the best decisions you ever make as a business owner.

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Tax Items

If you’ve ever wondered what exactly you should bring when you first meet with your CPA to file taxes, here are a few items to get you started:

Notebook

Bring a pen and paper with you and get ready to take notes when you go meet with your CPA. Every piece of information they provide you with is designed to help you as a business owner. If you don’t write it down, statistics show that you are almost guaranteed to forget it. Take copious notes during your meeting.

Pay Stubs

Your CPA needs to know exactly how much money you are bringing in each and every year, and the only way to demonstrate this is with a pay stub. Make sure you bring in the pay stubs from the last year of both you and your spouse (if you’re married) to help your CPA better calculate your potential refund.

Childcare Bills (if you have children)

Childcare bills (specifically for daycare and doctor’s visits) are important to include when you’re meeting with your CPA. CPAs can work with you to use these items as potential tax write-offs for you and your family.

Dependent Care Information

Do you have a parent or spouse or someone who is a dependent of yours who needs special care? There’s also a tax write off for you, but only a CPA can help you through that process as they’ll know more information about how to adequately navigate that situation than anyone else.

Business Related Travel Documents

As a business owner, it’s important that you always track your mileage when traveling. This will not only show you how much you’re traveling each month, but it will also be used as a business travel expense that you may be rewarded for at the end of the year by the IRS.

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Three Most Common Tax Mistakes

Mistakes on tax returns can trigger audits and lead to rejected returns. It is important to double and triple check your returns before filing them to prevent delays in processing your returns. Below are the three mistakes which are most commonly made on tax returns.100billcash

Transposed Numbers

Transposing numbers is easy to do. It is important to enter two or three digits at a time, and use something to keep your place when transferring long series of numbers. A pencil or highlighter is a good way to maintain your place in the sequence.

Misspelled Names

It is rather unlikely that you will misspell your name or a family member’s name, but tax professionals can make mistakes. It is necessary that you double-check all names before submitting returns. Even check that your children’s names are properly spelled as that can have an effect on your return.

Incorrect Filing Statuses

If you are married, your filing status has to match, especially when you opt to choose the married filing separately option. If you are a single parent or in a domestic partnership, you and your partner should decide who will claim head of household. Single parents should make sure they can claim their children as both parents cannot claim the same child.

Final Thoughts

Take the extra few minutes to check all of your calculations, spellings, and sign your forms. Make sure that you have completed all of the additional forms and worksheets associated with your return. Run through your entire return, even electronic versions, before submitting your return.

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Four Tax Facts You Should Know Before Starting a Business

There is more to income taxes as a business owner than you might think. Many business owners do not realize that filing personal income taxes is required, which can get them into deep financial trouble. Below are a few facts which will help you start your new business.businessscrabble

Business Type Determines Tax Liability

Choose how you classify your business carefully as it will determine the tax burden for your new business. S corporations, for example, pay taxes at shareholder levels. There cannot be more than 100 shareholders for a single stock.

Startup Expense Deductions

Once your business is up and running, you may be able to deduct some of your startup costs. Small businesses do have expenses which can be deducted before the first day of business. Costs accumulated prior to opening can be deducted.

Estimated Payments Are Required

If you do not file all of the taxes that you owe, penalties can be placed on you. Use the previous tax year’s income, including credits and deductions, to calculate estimated tax burdens. Startups are typically tax exempt in their first year.

Self-Employment Tax Payments Are Required

When you earn money but no one takes out withholdings for Medicare and social security, you are self-employed and are responsible for paying those taxes out-of-pocket. The downside to self-employment taxes is that you pay 1.5 times what a traditionally employed person does.

In Conclusion

With a better understanding of taxes for new business owners, you should be able to start planning ahead. Using some of your personal profits to save for self-employment taxes can help take some of the stress off of you.

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Three Tax Tips to Keep in Mind if You Win the Lottery

Winning the lottery brings on immediate excitement, relief and fear. The fear is that you have an almost unlimited amount of money to spend in your lifetime as most jackpots are more than a single person needs to cover their expenses for the remainder of his life. You have to know how to claim your winnings and how to invest it to reduce your tax burden.MegaMillionsLottery

Check State Income Tax Laws

Not all states have individual laws requiring lottery winnings to be reported as income. Check your state laws, or inquire with an in-state tax preparation specialist, while remaining anonymous, about the laws. You may not have to claim the income for state purposes, but you will for federal income tax.

Choose the Annuity Payment Option

Choosing the annuity payment option is better for you in more than one way. In reference to taxes, you are only taxed on the amount of payments received (income) each year, not your entire winnings. It may take more time to receive your money, but it controls distribution which ultimately results in more money in your pocket.

Donate to IRS-approved Non-Profit Organizations

Making donations is something many lottery winners do, and in some cases it is merely to reduce tax liabilities. For a donation to count as a deduction of income, it must be made to an IRS-approved non-profit organization. The IRS website has a list of approved non-profit organizations available.

Final Thoughts

Before doing anything with your lottery winnings, hire a financial advisor and tax attorney to help setup bank accounts, trusts and keep your anonymity safe. It is important to claim your funds as anonymous if your state permits it.

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  • Huddleston Tax CPAs / Huddleston Tax CPAs – Bothell
    Certified Public Accountants Focused on Small Business
    19125 N Creek Parkway #120 / Bothell, WA 98011
    425-242-3836

    Huddleston Tax CPAs & accountants provide tax preparation, tax planning, business coaching,
    QuickBooks consulting, bookkeeping, payroll, offer in compromise debt relief, and business valuation services for small business.

    We serve: Tukwila, SeaTac, Renton. We have a few meeting locations. Call to meet John C. Huddleston, J.D., LL.M., CPA, Lance Hulbert, CPA, Grace Lee-Choi, CPA, Jennifer Zhou, CPA, or Jessica Chisholm, CPA. Member WSCPA.