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One of the most common bookkeeping issues we see, especially with small business owners—is the use of business bank accounts or business credit cards for personal purchases. While it may seem harmless (especially if the expense is later coded correctly), the IRS views this practice very differently than many owners expect. This blog breaks down what happens when personal expenses run through business accounts, how the IRS looks at it, and why it can create bigger problems during an audit....

When tax season rolls around, the word “extension” can cause confusion — and sometimes, a false sense of relief. Many taxpayers hear “I’m on an extension” and think that means they have extra time to pay their taxes, but that’s not quite right. Let’s break down what an IRS extension really means, why your CPA might file one, and what you should know about interest, penalties, and deadlines. What Is an IRS Extension? An IRS tax extension gives you extra time to file your tax return — not...

What is considered a business asset for income tax purposes? For tax purposes, a business asset is generally property, plant, or equipment used in the normal course of business that has a useful life of more than one year. Assets can be tangible (such as machinery, computers, furniture, and vehicles) or intangible/digital (such as certain software or licenses). Under IRC Section 263(a), the IRS requires businesses to capitalize the costs of acquiring, producing, or improving tangible...