Small business owners can deduct a wide range of expenses as long as they are considered ordinary and necessary for running the business. This includes rent, utilities, business insurance, office supplies, marketing costs, professional fees (like bookkeeping or tax prep), employee wages, software subscriptions, mileage, and more. Keeping accurate records is essential to substantiate these deductions if the IRS ever reviews your return.

Yes, most businesses are required to file a return annually, even if they didn’t earn a profit. In fact, reporting business losses can be beneficial, as these losses may be used to offset income in future years or, in some cases, against other forms of income. Filing also ensures you're compliant with both the IRS and your state’s requirements, helping you avoid penalties for non-filing.

Tax filing is a once-a-year task that involves preparing and submitting your tax returns based on your income and expenses from the previous year. Tax planning, however, is a proactive, year-round strategy that helps minimize your tax liability through smart decisions, like timing income, managing deductions, and leveraging credits. At B & K Financial, we help clients with both, ensuring compliance while reducing tax exposure.

We recommend keeping copies of your tax returns and all supporting documentation for at least 7 years. This includes receipts, invoices, bank statements, payroll records, and any communication with tax authorities. Although the IRS typically audits returns from the past three years, certain situations—such as substantial underreporting of income—can extend the statute of limitations to six or more years.

W-2 employees are part of your payroll, with taxes withheld and benefits possibly offered. Employers are responsible for employment taxes and labor law compliance. Independent contractors (1099) are self-employed and handle their own taxes. The IRS has strict guidelines for worker classification, and misclassifying workers can lead to back taxes, penalties, and legal issues. We help businesses classify correctly to stay compliant.

If you’re self-employed or receive income not subject to withholding, you're required to pay estimated taxes quarterly. The IRS due dates are typically April 15, June 15, September 15, and January 15 of the following year. Failing to pay on time can result in interest and penalties. B & K Financial helps calculate and schedule estimated payments to keep you penalty-free.

Yes, if you use part of your home exclusively and regularly for business purposes, you may qualify for a home office deduction. This can include a percentage of your rent or mortgage, utilities, insurance, and repairs. You can use either the simplified method (a set rate per square foot) or the actual expense method. We'll help determine which option offers the greatest benefit.

Sales tax rules vary by state and industry. If you sell taxable goods or services, you're generally required to register with your state’s tax agency, collect the appropriate sales tax from customers, and file returns regularly. B & K Financial helps you stay compliant by assisting with registration, calculating rates, and preparing timely filings. We can also integrate tools to automate this process.

The cash method records income and expenses when money is received or paid, making it simpler for small businesses. The accrual method records income when earned and expenses when incurred, providing a more accurate picture of your financial health. Choosing the right method can impact your taxes and financial decisions. We’ll evaluate your business and recommend the best approach.

There are many legal ways to reduce your tax burden. These include contributing to retirement accounts like IRAs or 401(k)s, itemizing deductions where beneficial, taking advantage of education or energy-efficient home credits, managing investments tax-efficiently, and timing income and expenses strategically. With proactive tax planning from B & K Financial, we’ll tailor a strategy that aligns with your financial goals.

The first step is not to panic. IRS notices are common and often just require clarification or minor corrections. As a client of B & K Financial, you can send us the notice, and we’ll review it for you. We’ll explain what it means, determine if any action is needed, and assist you during your audit against the IRS if necessary—saving you time and stress. For more information, you can schedule a meeting with one of our experienced CPAs.

Yes, if you discover an error or omission on a previously filed return, you can file an amended return using Form 1040-X. You generally have up to three years from the original filing date (or two years from when you paid the tax, whichever is later) to amend a return. We assist clients with amendments to correct errors, update deductions, or claim refunds they missed.