MARIELA RUIZ, CPA, PLLC

Helping Individuals and Businesses Financially Thrive.

Category: Uncategorized (page 2 of 3)

What Can a General Ledger Tell You About Your Business?

According to The Blueprint, “The general ledger is an essential part of accounting and bookkeeping processes. The general ledger serves as a repository for every transaction that is recorded, and is a must for any business using double-entry accounting.” Companies can use a general ledger as a way to view specific details from transactions from month to month or even the current year. Learn more about what a general ledger can do for your business.

Manage Expenses

Have you noticed you are paying more utilities and rent? Are there increased costs for professional services you were not aware of? You can access your transactions by running a general ledger report to see activity. These transactions are recorded in different account types, such as assets, revenues, expenses, etc. Within your expense category, you can find detailed information on rent, payroll, and professional services you use. A general ledger allows you to manage overhead costs and get an overall view of your business expenses.

View Monthly Activity

If you need to look at expenses from March to April, run a general ledger report for more details. This accounting practice is encouraged for company owners to see their activity for a specific time period. The general ledger will have beginning and ending balances for the months you need. Any activity between those time periods are shown, which can be activity from sales, payroll, inventory adjustments, and more.

Catch Any Errors

If there is an unusual increase in expenses from a certain category, turn to your general ledger. You can look for errors by viewing the activity. In addition, you can check on any journal entries recorded or modified. Corrections for any errors can be made within the journal entry. If the journey entry is true, then no correction is necessary.

Conclusion

When you need general ledger accounting, contact MARIELA RUIZ, CPA, PLLC. We review and analyze your general ledger for any discrepancies and determine if corrective action is necessary. To learn more about our general ledger service, call (956) 997-0067 or visit us online here.

How Receiving Unemployment Affects Your Taxes

Unemployment insurance is a benefit that most W-2 employees can qualify for if they’ve lost their job for reasons outside of their control. This includes partial or total unemployment, whether they were laid off entirely or had their hours reduced significantly.  

Withholding vs Not Withholding

When signing up for unemployment insurance either online or by mail, there’s a small box near the bottom that allows you to choose if you’d like your unemployment income to be taxed now (withholding) or when you file your taxes in the spring (not withholding). As a result of not checking this box and not having taxes withheld, many are surprised to discover they owe more at tax season than they ever did when employed.

Why 2020 and 2021 Are Unique

While all of the above remains true year after year, the next tax season will pose a lot of firsts for many. Most employers and employees have never experienced mass layoffs and closures like we saw in 2020, and will not know what to fully expect when filing their taxes in 2021.

When The CARES Act was passed to help keep the economy afloat, those making less than thirty thousand annually before filing for unemployment ended up receiving a much higher income than they had when working. It’s crucial for those who received unemployment benefits in 2020 and did not choose to have their taxes withheld to understand they may owe a considerable amount of money when filing in 2021.

Final Thoughts

With all that has happened with the economy and unemployment in 2020, the path forward has never been more confusing. When you need professional assistance with your taxes, bookkeeping, payroll, accounting and more, visit us here for help you can rely on.

Financial Forecasting for Your Business

In order for your business to be successful in the future, it’s essential to have a financial forecast. What is a financial forecast? It’s an overview of your company’s current finances and resources. You can use it as a guide for budgeting and strategic targets for the future, allowing you to stay on track with goals for your business. It gives a detailed forecast of business trends so you can maneuver the direction you want the company to go. Learn more about the benefits of financial forecasting by reading our blog.

Clearing a Path

Preferred CFO says it best – “Having accurate and up-to-date financial records is vitally important for day-to-day operations. However, having an accurate financial forecast can be the difference between success and failure for a company.” This type of forecast reflects your company’s finances and resources, giving you the information you need for future planning, including long-term goals. These goals can be anywhere from six months to a year or even longer.

Confidence with Growth

Having confidence in your company is one thing, but it’s different when you have definite goals that you want to achieve. Of course, there are certain steps you must take, but with a financial forecast, it can help you get there. Following an accurate forecast can assist with growth within your business, as well as create trust and confidence with investors.

Plan of Action

With your financial forecast in hand, you can plan what resources you will need, including when and how to use them. For example, resources for your company may include cash investments, materials, employees, and so on. Using the forecast as a reference, you can make decisions based on accurate financial information. Answers to questions such as “how much do I need to make sure I don’t run out before the next funding round?” or “how many employees do I need to prevent overstaffing or understaffing to achieve this quarter’s goals?” are made much clearer.

Conclusion

MARIELA RUIZ, CPA, PLLC offers financial forecasting and projections for clients in the city of Mission and surrounding areas. With our certified public accountants by your side, you can be confident in our services and the success of your business. Get in touch with an accountant at MARIELA RUIZ, CPA, PLLC today!

Should You File Your Taxes Jointly or Separately?

For married couples who live together and share finances, tax season can bring with it a lot of questions about how you should file and why. In this month’s blog post we briefly dive into what couples need to know before filing their taxes and how they can determine if they should file jointly or separately.

Married Filing Jointly

Your filing status determines your tax rate and the amount of deductions you can qualify for. For most couples filing jointly is the best option for several reasons. Basically, married couples can continue to qualify for a lower tax rate despite having a higher taxable combined income. This tax break in addition to one of the largest standard deductions offered by the IRS makes filing jointly the best option for the vast majority of married couples.

Married Filing Separately

The circumstances in which a married couple would benefit more from filing separately are far and few between. They mostly include situations where one spouse has outstanding deferred debt that needs to be collected promptly. Examples can include having large amounts of student debt or costly outstanding medical bills. Filing separately is also the best option for couples who are expecting to get divorced within the year.

Final Thoughts

If you’re still unsure of which status makes the most sense for you, call on a highly qualified and experienced CPA. One tax service does not fit all so it’s important to turn to a professional who is committed to finding the absolute best option for you and your family. Contact the experts here for a variety of services including forensic accounting, tax services, financial consulting, bookkeeping, and much more.

Steps to Take Before Filing Your Taxes

Before you contact your tax preparer, ensure you have the necessary documents to hand over. It’s important to have previous year’s tax information, as well as current receipts and documents. Getting an early start on gathering these items will not only speed up the process, but give your tax preparer more time to double check all of your information. Learn more about which forms you will need to file a complete tax return.

The Essentials

Forms from employers, banks, and other businesses need to be filed your tax return, so have these documents ready to go. Some of the most common forms include Form W-2, Form 1099, and Form 1098. These documents indicate the income you’ve received from the previous year. If you are unsure about which documents need to be filed, get in contact with your tax preparer for confirmation.

The Receipts

Receipts act as a form of proof to show so you can properly itemize your deductions. Whether you choose itemize or claim the standard deduction, it’s a good idea to compare your findings and see which one has the greater write-off. Your list of expenses may include anything from medical costs and mortgage interest to charitable contributions. Consult with your tax preparer if itemizing is worth it.

The Tax Return from Last Year

Grab your tax return from last year, even if you are using the same tax preparer. You can look over it for any inconsistences and ensure your current tax return is up to date. It can also provide details about forms you received from last year, and that you have these forms from this year too. Investopedia also comments, “If you made small gifts, you may not have received any acknowledgment from the organization, but you can still deduct these contributions as long as you have a canceled check or other proof.”

Conclusion

The process of filing taxes can be confusing, so let our certified public accountants do the work for you. We are here to prep your tax documents and handle all forms with the utmost professionalism. Refer to MARIELA RUIZ, CPA, PLLC for tax preparation services today.

The CPA: Your Litigation Support Professional

There are a wide variety of types of court cases that can require the additional support of a CPA. Oftentimes in civil and business litigation, courts and powerful legal teams will require a CPA to weigh in based on their expertise in finances and accounting. Follow along with this blog to learn about the types of cases they typically work on and how having a CPA on your legal team can help you get the case results you seek.

Forensic Accounting

While forensic accounting may sound like a job reserved for detectives or the secret service, it is broad term used when a certified accountant applies the theories and principles of accounting in a legal setting. A CPA hired for litigation support purposes will review bank statements, receipts, time sheets, and any other necessary financial documents involving the case.

Business and Civil Litigation

Too often complex accounting, appraising, and tax issues find their way into business litigation. A certified public accountant with litigation support experience most often work either for or against a business to prove or disprove alleged disputes. For example, forensic accounting can either make or break cases involving bankruptcy, fraud, data analysis, damage evaluations and more.

In addition to business litigation, civil litigation cases will often require the additional support and expertise of a CPA as well. Most often their role in court will be as a consultant, but there are times when they are asked to stand as an expert witness too. Civil cases that could benefit from a CPA’s support can include those involving marital settlements, taxes, valuations and more.

Conclusion

When litigation is simply unavoidable, ensure that you have a solid legal team working in your favor. A CPA working to support your case will able to provide a judge and jury with indisputable evidence and facts that less qualified individuals wouldn’t have been able to uncover. For a CPA who’s highly experienced in providing top notch litigation support and forensic accounting services, contact us today!

What is Forensic Accounting?

Forensic accounting is a combination of accounting, auditing and investigative skills used to examine financial settings of an individual or business. These accounting experts are enlisted during a fraud or embezzlement among other legal proceedings, where they provide accounting analyses to help the court better understand the financial crimes that took place. Insurance companies, police forces, banks, and government agencies typically employ them. The financial information that they compile can be used in court, and may be asked to testify in court as well as provide visual aids to support the trial evidence that they discovered.

There’s a variety of forms in which an accountant provides these services. Read along as we discuss a few of them.

Litigation Support

Running a business or company is not an easy task, and when dealing with financial crimes or legal disputes, simply relying on your in-house staff to resolve an issue is not enough. This is where litigation support comes to play. Litigation support is used in litigation cases where the quantification of damages needs to be determined, through legal research and valuation of property. These services are provided to help both parties involved come to a resolution before they reach the courtroom. If a dispute reaches the courtroom, the forensic accountant may then be asked to testify as an expert witness.

Civil and Criminal Investigation

Forensic accounting in criminal investigations is used to determine if financial criminal matters such as employee theft, fraud, and insurance fraud have been committed. A forensic accountant can be used during a civil matters as well. A civil investigation will help identify: hidden assets in a divorce case, breach of contracts, or business valuation disputes. 

Finding the Right Forensic Accountant

The right forensic accountant delivers a vast array of accounting services during legal matters. Their evidence can be used during court, and will often be asked to testify as an expert witness. They are reliable, thorough, and highly experienced in accounting, and have a good understanding of the courtroom.

Mariela Ruiz, CPA, PLLC is here to provide efficient and trustworthy forensic accounting services to the community of Mission, TX. From litigation support to criminal and civil investigation, you can depend on our team to help your company determine the facts in your current financial situation. To learn more about our accounting firm and services, visit our website.

Strategic Tax Planning Tips

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Planning for the upcoming tax season? Perhaps you’re already thinking about next years? If you want the best outcome for your tax return, it’s a good idea to do a little bit of research before you click ‘submit’ to the IRS. From looking over previous tax documents to claiming medical and education expenses, there are many ways you can make a difference when it comes to filing. Follow along in our blog for strategic tax planning tips.

Check Last Year’s Documents

Before starting on your current taxes, review the previous year to check for errors. If you have documents like W-2 and 1099s in your filing cabinet, go through them and make sure there are no inaccuracies. Identifying any problems early on can give you more time to resolve any issues with the company who sent the document.

Organize Investment Earnings

According to WrapManager, “the IRS requires that you report your interest and dividend categories separately.” With your investment accounts, it’s important to keep all statements and records pertaining to your earnings. Even if yearly statements have an overall review included, details of monthly or quarterly statements may be needed for your filing too.

Write Down Medical or Education Expenses

Having proof of medical records will allow you to make tax deductions, but only if you have the proper documentation. Claims that are commonly made can be anything from travel expenses to medical appointments, treatments that aren’t covered by insurance, and much more. Likewise, college-related expenses can also be deducted. Costs for tuition, books, and boarding are just a few examples. WrapManager advises to “keep track of these records throughout the year, either in a paper folder or an electronic file.”

Conclusion

Talk with a tax professional at MARIELA RUIZ, CPA, PLLC today. We work with individuals and businesses that need assistance with tax planning and much more. For a full list of our financial services, visit our website here. You can also reach us at (956) 997-0067 to speak directly to one of our advisors. Contact us today!

Ways Small Business Owners Can Prepare For Tax Season

Just the thought of tax season approaching can cause people of all kinds to stress. Whether you are self-employed or own a small business, taxes are confusing and overwhelming. If you are a small business owner, we’re here for you! Follow along with these tips to see how you can best prepare for filing!

Here are some tips: 

One of the first ways you can feel prepared is by consistently keep your personal tax information separate from your business’s tax information. It is important to remember you will have to file each separately, so keeping them from getting mixed together is a great way to avoid stress later on down the line. 

Another great way to prepare is by keeping track of all your business records. Ensuring your payroll and other lists detailing your expenses are all in order is a great way to feel less lost. When you can easily lay everything out, there will be less confusion! If you are struggling with understanding the types of documents needing to be saved, hiring a professional bookkeeper is the best way to ensure your confidence. 

Finally, seek help with payroll! While it may seem easy enough, hiring a professional who can keep track of all your payroll expenses and documents is a great investment. Not only can you cross the worry of weekly payroll duty off your list, but also come tax season you are going to have a perfectly laid out file. You and your tax professional will be much happier with perfectly kept records from an experienced bookkeeper!

Conclusion

Tax season is unavoidable, so instead of stressing and putting off the inevitable, feel prepared! Hire a bookkeeping expert to help you year-round. Visit MARIELA RUIZ, CPA, PLLCto get started today.

How to Minimize Your Chance of an Audit

Tax season is upon us. Whether you intend on getting money back from the government or paying in, every citizen is at risk of being audited if the IRS is tipped off by discrepancies or other suspect information on your tax return. Read the following tips to learn how to avoid an audit this tax season.

Inaccurate Donated Amounts

The IRS encourages individuals to donate clothes, food and even used cars to charities. It does this by offering a deduction in return for a donation. The problem is that it is up to the individual owner to determine the value of the item. As a general rule, the IRS likes to see individuals value the items they donate anywhere between 1% and 30% of the original price. Unfortunately, many taxpayers ignore this guideline or simply aren’t aware of it.

There are several other ways that the taxpayer can ensure that they are valuing donated goods at an equitable price.  One of the ways is hiring an appraiser to write a letter, naming their opinion on the worth of the item.

Simple and Avoidable Math Errors

Many returns are selected for audit due to basic mathematical mistakes. When filling out your tax return (or double-checking your accountant’s work) make sure that the numbers add up. Also, make sure that the total dollar value of and/or losses are properly calculated. Even the smallest errors can alarm the IRS.

Failure to Sign

A surprisingly large number of people simply forget to sign their tax returns. Don’t be a part of this group. Failure to sign the return will almost guarantee additional examination because the IRS will wonder what else you might have forgotten to include in your records.

Under-Reported Income

It is vitally important that you report all income that you received throughout the year from work and/or from the sale of an asset. If you fail to report income and get caught, you will be forced to pay back-taxes plus penalties. While it may be tempting to not report some income, it’s better to be safe than sorry.

Home Office Deductions

Be careful with home office deductions. Deductions that are too large in proportion to your income can raise a huge red flag. For example, if you earned money as an accountant working from home, extravagant home-office related deductions will raise the ire of the IRS.  Deduct only items that were used in the course of your business.

Conclusion

When it’s time to file your annual taxes, make sure you cover all your bases to avoid scrutiny from the government. While there is less than a 1% chance you will be chosen for an audit, there’s no reason to not take every precaution just to be safe. For exemplary accounting services and tax services you can trust, contact the experts at Mariela Ruiz, CPA, PLLC.

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