Whether your business has employees or works exclusively with vendors and independent contractors, you’ll need to meet tax reporting requirements to operate successfully. This information can help you do just that…
Before our Sidekick Accounting experts get into the tax filing details, let’s answer some basic questions about forms and worker status.
What is and why do I need a 1099 Form?
Form 1099-MISC is tax form that businesses use to report types of non-employee compensation. That could be anything from royalties and rent to prize money and payment for professional services. As a business owner, you submit Form 1099 to your payees or independent contractors as well as to the IRS. Businesses that pay more than $600 for services rendered by non-employees need to file a 1099 form.
W-2 employees versus contractors: What’s the difference?
From a tax reporting perspective there is a difference between your employees and the independent contractors you hire. Your employees are workers you hire under an employment agreement, whether they’re full-time or part-time. You as the business owner are responsible for providing your employees with supplies, offering benefits, and paying taxes on their wages. Independent contractors are another story, as these individuals work for themselves. Rather than an employment agreement, you’d issue a contract that spells out expectations and payment terms.
In addition, tax percentage requirements also differ with your employees versus independent contractors. Business owners must pay a percentage of their employees’ taxes—6.2% for Social Security tax, 1.45% for Medicare, and whatever state and federal unemployment taxes apply. But independent contractors are responsible for paying their own taxes, which is 15.3% (2.9% for Medicare and 12.4% for Social Security).
W-2 Filing Must-Haves for Business Owners
Keep this information in mind as you prepare to file Form W-2 for your employees:
Don’t Make These 1099 Mistakes
A Form 1099 Learning Opportunity for You…
Looking for more guidance on when and how to issue 1099s for your small business? Sidekick Accounting owner Megan Schwan will be sharing her knowledge in an online course in January 2021. Contact us and we’ll add you to the email list so you can register when details are available.
Our federal government seems to be focused more on infighting than implementing the additional COVID-19 relief that so many individuals and businesses rely on. But hope is not lost—there are resources to consider for the critical funding your small business needs.
From loans and grants to help with managing cashflow, the experts at Sidekick Accounting compiled links and tips you can explore to keep your operation running during these continually challenging times.
Explore the Small Business Development Center (SBDC).
The Small Business Development Center (SBDC) is the most comprehensive small business network that serves the U.S. and its territories. With nearly 1,000 centers nationwide, SBDC provides businesses with free consulting and at-cost training on many topics. Statewide, businesses can rely on the Wisconsin SBDC network for the latest local resources and information to help small businesses navigate through this ever-changing COVID-19 landscape.
Apply for small business funding through We’re All In grants.
In addition to SBDC, the Wisconsin Economic Development Corporation (WEDC) is another valuable resource, especially for funding through its We’re All In grant program. We’re All In provides much-needed financial assistance to thousands of Wisconsin small businesses affected by COVID-19. In fact, WEDC recently opened up a Phase 2 of We’re All In Small Business Grants.
This second phase awards grants of $5,000 based on a business’s annual revenue. Businesses with more than $0 but less than $1 million in annual revenues (gross receipts less returns and allowances) and one to 50 full-time equivalent employees (FTEs) in 2019 are eligible to apply. Priority will be given to applicants that did not receive funding from the Phase 1 of the We’re All In Small Business Grant Program. Review the FAQs about this grant program, then complete a We’re All In Phase 2 application if you’re eligible.
Manage your cashflow more effectively.
As you know, cashflow is critical to running your small business successfully. From managing inventory to spreading out expenses, there are many ways you can manage cashflow to survive and even thrive during this difficult time. In addition to cashflow tips in our previous post, here are some other ways to manage cashflow more effectively:
Need more help securing funds for your small business? Contact Sidekick Accounting.
If you’re a small business owner in Wisconsin or another state, don’t let these challenging times get the best of you. From offering guidance to help you secure funding to developing a comprehensive accounting plan for your business, the Sidekick Team is a trusted resource for solutions and results that help keep you financially healthy. Contact us at your convenience to schedule a complimentary consultation.
Staying on top of your finances as a small business owner is no small feat, but it’s essential to running a successful operation. There are many accounting obstacles that most businesses face, but these are the five biggies, and what you can do to avoid them.
Turn your accounting challenges into solutions—contact us ASAP.
You have enough to worry about when it comes to running your busines successfully—get peace-of-mind accounting services from Sidekick. In fact, small business owners throughout Wisconsin and nationwide count on us to promote their financial health through results-driven accounting solutions. Discover what we can do for you—call 414-310-7689 or email us.
Setting up a payroll management system. Following tax laws. Navigating recent tax credits and the Payroll Protection Program (PPP)…You have a lot to juggle when it comes to payroll for your small business. The experts at Sidekick Accounting Services are here to help with some timely, practical payroll tips.
Start with an Employer Identification Number
If your business is brand new, you’ll need to register for an Employer Identification Number (EIN). For tax purposes, an EIN for businesses is the equivalent of a Social Security Number for individual employees. Obtaining one should be the first financial task on yours list, as many banks won’t let you open a business account without one. Note that you may need a state-level EIN in addition to a Federal EIN, depending on where your business is located.
Determine Payroll Schedule and How to Calculate Wages
Figure out how and how often you’ll pay your employees. Most small businesses pay their employees on a weekly or bi-weekly basis; you’ll have to decide what works best for your payroll practices and what complies with federal and state minimum payday laws. When it comes to calculating wages, you’ll need to determine if you’ll have hourly employees (nonexempt) or salaried employees (exempt).
Implement a Time-Tracking and Payroll System
How will you track employees’ time and calculate their wages? Will you do payroll by hand, or use payroll software to streamline your timesheets and payroll operations? Do you have the accounting know-how to management your payroll properly, or does it make more sense to hire a payroll professional? These are all questions you’ll need to address so you can implement the best timesheet and payroll system for your small business.
Know and Follow Wage Laws
This is perhaps the trickiest aspect of payroll to navigate, yet every business needs to comply with all state and federal wage laws. You must pay the proper FICA taxes (such as Social Security and Medicare), local and state taxes, and income taxes for each employee. Be sure you’re making payroll tax deposits that synch with your scheduled tax liability. It’s important that you or someone in your business understand your legal and financial obligations.
Navigate the COVID-19 Economic Landscape for Small Businesses
You may have qualified and received a loan through the Payroll Protection Program (PPP), but perhaps you still have several questions about PPP next steps, or need information on other loan resources through the U.S. Small Business Administration. Remember that beyond payroll, there are other ways to keep your small business prosperous amidst this pandemic.
Work with Payroll Experts Dedicated to Small Businesses
Helping small businesses like yours thrive is a daily occurrence at Sidekick Accounting Services. That’s because we focus on education and support so you have the financial tools you need to triumph in your industry. We serve clients throughout Wisconsin and the U.S. with flexible, effective monthly accounting services. Contact us to learn more.
You’ve tried some post COVID-19 strategies during this difficult time, but you still need resources to help you stay profitable or even just stay in business. Our team at Sidekick Accounting has your back with these current funding resources and smart ways you can manage cash flow.
Lending Options for Small Businesses
Economic Injury Disaster Loans (EDIL). As a result of the Coronavirus pandemic, the U.S. Small Business Administration (SBA) provides low-interest loans to small businesses, agricultural businesses, and private nonprofits throughout the U.S. SBA has resumed accepting EDIL applications as of June 15, 2020.
Main Street Lending Program. Established by the Federal Reserve, the Main Street Lending Program provides loan options to small and medium-sized businesses and nonprofit organizations that were in solid financial standing before COVID-19.
Loans through the Wisconsin Women’s Business Initiative Corporation (WWBIC). Through its COVID-19 Fast Track Loan Program, WWBIC provides two financing options for businesses: 1) a line of credit (minimum of $5,000; maximum of $10,000), or 2) a term loan (minimum of $5,000; maximum of $15,000).
Tips to Help Manage Your Business Cash Flow
Manage inventory better. Too much inventory on hand costs money. Explore inventory management options that let you keep levels as low as possible so you can maximize cash flow and profitability.
Have a backup plan. Emergency cash is a must for any small business. You can allow for unexpected expenses by keeping your business credit score in good standing so you have access to a business loan or business credit card as a source for last-minute funding.
Spread out expenses. Of course it’s easy to remember to make all of your payments on the same day each month, but that’s also extremely difficult to manage from a cash flow standpoint. Work with the digital banking options you have to set up staggered automatic payments, or use accounting software to track cash flow each month.
Consult an expert. If the accounting and financial side of your business isn’t your strong suit, it makes more sense to hire a professional. From helping you select the right accounting software to managing your vendor and cash flow statements, these are tasks an expert can handle so you have more time to dedicate to your business.
Monthly Accounting Packages Help You Stay Financial Fit
If you’re like most small businesses in Wisconsin and throughout the U.S., you want reliable bookkeeping solutions so you can focus on what you do best—grow your business. The Sidekick Accounting team offers you an affordable monthly package that covers all aspect of what you need to stay financially fit. Schedule a time that’s best for you to learn more about our services.
Reopening is a much-welcomed feeling after what we’ve all experienced these past few months. But there are serious challenges to overcome for so many small businesses, especially from a financial perspective. Prosperity is possible again with some strategies in place.
From beefing up your online presence to planning for any future crises, our Sidekick team has your back with these suggestions:
How to Support Wisconsin Small Businesses During COVID-19
You know how uncertain and anxious the COVID-19 pandemic has made everyone across our state, country, and world. The best way to forge on is to focus on coming together and find ways we can lift each other up, starting at the local level. That’s why the experts at Sidekick Accounting Services encourage business owners and consumers alike to support small business in Wisconsin.
From helpful business resources to destinations where you can shop and dine locally, we’ve provided a valuable list of links for helping proprietors and residents in three of Wisconsin’s biggest business hubs—Greater Milwaukee, Greater Green Bay, and the Fox Valley—survive and thrive.
Show Your Support in Greater Milwaukee
On a statewide level, one of the most up-to-date and expansive sites for small business owners is the Wisconsin Small Business Development Center. From small business loans and paycheck protection, to entrepreneurial and educational resources, this is a go-to for a wealth of information.
How Sidekick Creates Successful Small Businesses
Do you need support that’s specific to your business? From start-up success packages to payroll and bookkeeping assistance, Sidekick Accounting Services is dedicated to small business success throughout Wisconsin and nationwide. Contact us to learn more about how our services give you the peace of mind you deserve as a business owner.
Congratulations you’ve been funded! Now what?
You want to get most if not all of your loan forgiven so what do you do now?
multiple forms of funding that it does not cover the same expenses. In QuickBooks you can use
class codes, in other software there may be a similar equivalent but in either case you can just
add payroll journal, checks or receipts to a separate folder deemed “PPP Expenses”
2. One thing you will also want to do is pay attention to your FTE (Full time employee) number.
The maximum amount of forgiveness will be based off of this number. What does that mean? Well,
say you had 70 employees during either “test” period (Feb 15, 2019 to June 30, 2019 or Jan 1,
2020 to Feb 29, 2020) and then during the 8 weeks after funding you had 65 average employees.
That means that your maximum forgiveable amount is 92.86% of the loan. Plus remember 75%
of the funds need to be used for payroll and 25% can be used for rent, utilities or interest.
3. You will also want to make sure that you have not decreased wages for the position by more
than 75%. You have to pay people at least 75% of what they were getting paid prior to COVID-19
4.Talk to your bank, just like each lender had their own application process… each bank will have
their own forgiveness process as well. You will want to make sure you are communicating with
your banker throughout the 8 weeks to make sure you have the right documentation to go back
to them after 6/30/2020 with the right documents.
This time has definitely brought many things to light and some of it has completely knocked us over.
Securing funding via the PPP is great but as always, you want to make sure you are utilizing those funds
appropriately and make wise decisions. You do not need to stress or panic in regards to spending funds,
it does not need to be a stressful process. Just be sure your funds/loans, etc are not overlapping
expenses. There has been a special committee appointed to monitoring the use and disbursement of
these funds (Special Inspector General for Pandemic Recovery). Which may mean that you could
undergo an audit, however, if you keep good accounting records and pay your employees about the
same as before, you shouldn’t have any issues.
Remember that even if you don’t exhaust the funds during the period any repayable amount is incurring
a 1% interest rate with a maturity date of 24 months from loan origination.
Hopefully things return to some type of sustainable “normal” where we can at least not worry so much
about cash flow, but in the meantime it’s good to know there are resources out there. Long story short,
keep your books in order and you shouldn’t have any issues!
Contact us for clean up, bookkeeping, payroll or tax help. We are here to partner with you and help you
conquer your books!
Well this week has been crazy. My kids are home from school... I just became a teacher. Two years ago I "homeschooled" (I use that term loosely because she had teachers online) my oldest daughter and well, let's just say that she went back to school the year after because I discovered that it was not for me when I was also trying to run a business and take care of babies.
Anyways, this week they came home and although they have teachers, I still need to help, monitor, supervise and assist and that has rocked my world. Juggling four kids, a business with four employees and a shared household is tricky... BUT I'm getting back to mental normalcy. This season is starting to and continuing to prove to be an ever changing pile of unknowns. Which in the world of being a business owner, it can be intimidating, not foreign but definitely way more than what we could possibly imagine. That being said, I've been almost tirelessly working to try and find as much as I can on how to help and where I can point people to so we can navigate through this season and still get through "Alive"
Here is what I've pulled together so far. Expect there to be additional information as the days continue because that is also changing every single day. As always, feel free to reach out and as a question or offer your own suggestions. We are here to help!
Yep, I’ve done it! I’ve taken our brand and put a new name on it. Talk about scary! The main motivation behind this was of course my change in status, however, after walking through this process, I’m really excited at getting a bit of a fresh start and refined purpose to my business. But let me tell you… I’ve decided that picking a business name is really tough and not for the faint of heart.
Our choice of name was met with a lot of various opinions and reactions which forced me to really, really contemplate what our name was going to be. I spent weeks thinking about it, nights praying, thinking, considering and thinking again. Finally after much deliberation and a company vote, we chose our new name! I was really excited about it but then I started thinking and talking and questioning my gut. To be honest, I was faltering in the chosen name! Of course, that was after I already started purchasing all of our rebranded material. *Face palm*
I was in the car driving back Appleton from Milwaukee when all these thoughts hit me. Driving is often when I do the most thinking. Sometimes I listen to books or music but sometimes I listen to silence and just think! Being the Mom of 4, there aren’t many opportunities for silence or even hearing myself think, but that’s a story for another day. As I was driving, thinking about our new name, I was trying to figure out how we really need to market this in order to be successful. The truth is that our name is different from the norm, maybe a little “cute” or unprofessional BUT it does something no other accounting firm name does… It vocalizes our passion, mission and purpose.
Since I’ve started this business my goal has always been to change the face of accounting, to do it different, to fight this statistic that 8 out of 10 small businesses fail. By educating, processing and analyzing your financial data and specializing in small business, we will help process and translate your books. Every owner needs somebody to help them grow a successful, profitable business and we want to be that somebody for you! It goes so much farther than the numbers (even the numbers are key)... We are here to help you conquer your books and assist as needed; whether that’s simply helping with the books, developing a plan to get to the next level, teaching a business owner how to understand their financials, create a budget or projection, or understand what profitability really means and what cash flow is and what the difference is, we want to be that partner for you. When you’re working on your margins and planning, it all comes back to the numbers and if you don’t know them it’s going to be a lot harder to make the right decisions for your business.
Regardless of which level you may be at as an owner you need to know what your numbers mean and how to use them to run your business more and more successfully. We are your backup and partner to creating a profitable business! We will help you conquer your finances by taking control of where your money comes and goes. We are here to help, and we will continue to refine, define and grow in our ability to do just that! So, on that note, I am so pleased to introduce you to Sidekick Accounting Services! Conquer Your Books! Change the Statistic!
2745 N MLK Dr, Suite 203F
Milwaukee, WI 53212
Schedule Your FREE Consultation today!!
Sidekick Accounting Services is an accounting company dedicated to serving other small businesses and individuals. Helping them grow and strive to their fullest potential. With Sidekick Accounting you get a whole lot more than just accounting help, you get the tools needed to continue to be successful! We are Accounting Fit for You!!