Tag Archives: Preparing Your Tax Return

5 Practical Tips You Can Implement To Raise The Liquidity Ratio Of Your Business

Having a good liquidity ratio is exceptionally important for all business no matter whether they are big or small. In layman terms, liquidity indicates the company’s self sufficiency and whether it can make timely payments of bills and other expenditures incurred all round the year. As the old catch phrase goes, cash is truly kind and here are 5 ways you can improve the liquidity ratio of your business without making drastic changes in the way you run your business.

Roll Your Extra Cash into Interest Accounts

There will be times when you have a lot of extra cash on hand and there are not many expenses that you would have to pay for except for some of the fixed costs. This situation is favorable for your business because you can simply move that extra amount to an interest bearing account to make surefire profit from it without making a risky investment.

 Whenever you need the cash, you can move it into the current account as and when you need it. You will be amazed at how much extra income you have generated by just making this one smart move.

Review Overhead Costs From Time To Time

Another method you can adopt to improve the liquidity ratio of your business is to check the cost of your overheads from time to time on a regular basis. By doing so, you will actually be able to find a way to reduce the costs which will have a positive impact on the liquidity ratio inevitably. Some of the overhead expenditures that you can cut down on are advertising, professional fees, rent and indirect labor.

Say No to Unproductive Assets

One of the major reasons why some businesses tend to have bad liquidity ratios despite of having everything else in check is because they store unnecessary unproductive assets that the business is better off without. Remember that a smart businessman is one who spends money on assets that play a vital role in revenue generation for example, the office building, cars, trucks and equipment to name a few. If your business is still holding onto assets that are of no use anymore, it’s time to chuck them out and make some extra cash on the side.

Keep a Tab on the Account Receivables

In order to have an optimal liquidity ratio, the business owner must pay attention to all the aspects of running a business. One such aspect that needs to be monitored closely is the account receivables. You must make sure that timely payments are being made by all your clients and no bad debt is recorded.

Go Easy On the Drawings

In a sole proprietor business, the profit made by the businessman is ultimately his income and he may withdraw it at any time for his personal use. But in order to maintain a good liquidity ratio, it is advised that you go easy on the drawings for excessive amount of withdrawals can portray a negative impact on the liquidity ratio of your business unnecessarily. So be on the lookout when you withdraw amounts for your personal use to avoid cash drains.

If you have trouble with accounting and bookkeeping, then free yourself from your accounting responsibilities by hiring CFAs and CPAs from SK Financial CPA at highly affordable rates.



The 3 Most Effective Tax Planning Strategies for Small and Medium Scale Businesses

The prime focus of tax planning is to arrange one’s financial activities for the year in such a way so that the lowest possible amount for tax payment is incurred. Undoubtedly, the most difficult time for small and medium enterprise owners is the tax season in which they have to pay a taxable amount on all the income they’ve earned during the previous financial year.

Most business owners end up paying more than they should because they are not well aware of the legal tricks they can use to minimize their tax burden. But now, you can save up on taxes by following the three awesome tax burden reduction strategies mentioned in this blog.

Reduce Your Income

One of the key determining factors in figuring out the taxable amount is adjusted gross income also called AGI in short. Your tax rate and different tax credits also rely on AGI. Since the AGI play a vital role in the entire journey of determining and making tax payments accordingly, it is best to pick the adjusted gross income as the starting point of your tax planning process. If you are not sure what AGI exactly is, it is actually the entire income collected from all resources minus the adjustments made to the aggregate income.

Ideally, if your total income is high, your AGI will also follow the higher trend and if you make less income, your AGI for the year will decrease automatically. Therefore, the most effective method to minimize the tax load is to slash down your income. But how exactly can you reduce your income? The answer is pretty simple. Just set aside a large chunk of your income for your retirement plan by following the conventional IRA plan or 401k at work plan.

Boosting Your Tax Deductions

You can also smooth out your tax situation over all by focusing on your taxable income. Now the taxable income actually is the left over amount that is calculated once all the deductions and exemptions are cut off from AGI. Itemized deductions is what you should aim for in various categories such as interest on mortgage, charity, health care, tax planning and preparation expenses, local as well as state taxes and expenses linked to investments.

The best way to do this is to record all your itemized expenses incurred throughout the year in an excel spreadsheet and review it from time to time. By recording all these expenditures, you can easily compare your standard deduction with the itemized expenses incurred within the one year time frame. Remember to always consider the higher of your standard deduction or itemized deduction. When itemizing your expenses, make sure you pay more attention to three main categories; donations to charity, state taxes and interest on mortgage.

Using Tax Credits To Your Advantage

Once you have adjusted your taxable income to reduce your tax burden, the next step is to take full advantage of the tax credits. Some tax credits that can help in minimizing the taxable amount considerably are going to college, adopting a child or setting aside money for retirement.

SK Financial CPA is where you should get help from when filing for taxes by letting professional CPAs and CFAs give you advice on how to present your accounting statements for the year.

10 Most Tax-Friendly States in the U.S and 10 Least Tax-Friendly States in the U.S.


1. Delaware

State income tax: 2.2%-6.6%
State sales tax: None
Gas taxes and fees: $0.23 per gallon (National average is $0.31)

2. Wyoming

State income tax: None
State sales tax: 4%
Gas taxes and fees: $0.24 per gallon

3. Louisiana

State income tax: 2%-6%
State sales tax: 4%
Gas taxes and fees: $0.20 per gallon

4. Mississippi

State income tax: 3%-5%
State sales tax: 7%
Gas taxes and fees: $0.18 per gallon

5. Alabama

State income tax: 2%-5%
State sales tax: 4%
Gas taxes and fees: $0.21 per gallon

6. Arizona

State income tax: 2.59%-4.54%
State sales tax: 5.6%
Gas taxes and fees: $0.19 per gallon

7. Nevada

State income tax: None
State sales tax: 6.85%
Gas taxes and fees: $0.33 per gallon

8. New Mexico

State income tax: 1.7%-4.9%
State sales tax: 5.125%
Gas taxes and fees: $0.19 cents per gallon

9. South Carolina

State income tax: 3%-7%
State sales tax: 6%
Gas taxes and fees: $0.17 cents per gallon

10. West Virginia

State income tax: 3%-6.5%
State sales tax: 6%
Gas taxes and fees: $0.36 cents per gallon

10 Least Tax-Friendly States in the U.S.

1. California

State income tax: 1%-13.3%
State sales tax: 7.5%
Gas taxes and fees: $0.50 per gallon (National average is $0.31)

2. Connecticut

State income tax: 3%-6.7%
State sales tax: 6.35%
Gas taxes and fees: $0.49 per gallon

3. New Jersey

State income tax: 1.4%- 8.97%
State sales tax: 7%
Gas taxes and fees: $0.15 per gallon

4. New York

State income tax: 4%-8.82%
State sales tax: 4%
Gas taxes and fees: $0.48 per gallon (varies by county)

5. Hawaii

State income tax: 1.4%-11%
State sales tax: 4%
Gas taxes and fees: $0.48 per gallon (varies by county)

6. Rhode Island

State income tax: 3.75%-5.99%
State sales tax: 7%
Gas taxes and fees: $0.33 per gallon

7. Maine

State income tax: 6.5%-7.95%
State sales tax: 5.5%
Gas taxes and fees: $0.32 per gallon

8. Minnesota

State income tax: 5.35%-9.85%
State sales tax: 6.875%
Gas taxes and fees: $0.29 per gallon

9. Vermont

State income tax: 3.55%-8.95%
State sales tax: 6%
Gas taxes and fees: $0.33 per gallon

10. Illinois

State income tax: 5%
State sales tax: 6.25%
Gas taxes and fees: $0.39 per gallon


Top Tips to Follow When Preparing Your Tax Return

Preparing and filing a tax return can be quite a critical task. While the smallest of the mistakes can result in a criminal offence, the minutest of the changes can help you save some money too. It all depends on how efficient your accountant is and how prepared you are for the task. While selecting good accountants, like SK Financial CPAs, is a good measure, following some basic tips can help you collect information and prepare documents for the filing crunch time.

Review Your W-2 Wage Information And 1099s’ Transactions
Check both of these documents thoroughly to see if there are any discrepancies. Make sure that all numbers documented on the forms are accurate. In case of any mistakes, make sure that all issues are ironed out as soon as possible.

Save Bank Statement Copies And Brokerage Statements Throughout The Year
These documents can help you clarify what cash inflows are tax-deductible and if there are any tax losses carried forward from last year that can be used in this tax year.

Keep Documented Proof Of IRA Contributions
IRA contributions can help you receive tax deductions. If you have made any such contributions during the year, keep their proofs in the form of cancelled checks and brokerage statements.

Collect Information About All Your New Dependent Family Members
The tax laws allow you to receive credit for every family member who is dependent on your income. This means that if there has been a new addition to your family in the current year and he or she is dependent on you, then claim his or her social security number as soon as possible. When your accountant is filing your tax return, present him with these details to receive tax credit.

Save All Receipts Of Expenses Incurred As Part Of Your Job Or Your Business
All work related expenses, not reimbursed by your employer or most of the expenses incurred in the name of your business, can be used to gain tax credit. If you are unable to present any proof of your expense or purchase, you will not be able to use it as a tax-deductible item.

Save Proofs For All Charitable Donations
The government, in general, encourages all citizens to contribute for the betterment and the welfare of the society and the country. As part of this encouragement, the IRS allows you to use these charitable donations as tax-deductible items and gain credit for all contributions made. However, again, it is important to have appropriate documentation to prove your contribution.

Keep In Handy The Last Year’s Tax Return
Presenting your accountant with the previous tax year’s return can prove beneficial to you almost always. There might be certain pieces of information that your accountant can use to help you alleviate your tax responsibilities and help you gain legal tax credit. For example, any amount of carried forward tax loss can be used this year to your advantage.

Tax returns and tax payments do not necessarily have to be a nightmarish event. If you are responsible in keeping all your receipts, all relevant documentation and have a good accountant, filing tax returns might not be a bad thing.

Sitting Down with a Tampa CPA and Preparing for Next Year


Tax time can be a stress filled time of the year for everyone. For both business owners and individuals alike, the race is on to file on time and accurately, to maximize deductions and to minimize penalties. The slightest mistake on tax forms can cause a company to lose out on valuable deductions, and being late by a week can add up in interest. Whether it is business taxes, personal taxes, or both, between January and April, everyone is pressed for time, trying to get all their paperwork in order to meet that April 15th deadline. After everything is filed, all that needs to be done is to wait and see if everything goes through as planned. By the time September rolls around, often the last thing on peoples’ minds is sitting down with their Tampa CPA and reviewing their tax plan for next year.

With no deadlines looming, September is the perfect time to do a financial performance review with your Tampa CPA.  With the details from last year’s returns, including any missed opportunities and prior losses, fresh in mind, it can be beneficial for everyone to start thinking now about what they want for next year’s taxes. For both business owners and individuals, starting the tax planning process in the fall works greatly to their advantage in the spring.

Having regular quarterly consultations with your Tampa CPA can benefit any business.  From planning for any potential tax issues that may come up, to doing a financial check up and ensuring your business is on the right track, to doing tax research on your behalf, so that you and your business can maximize your after-tax income. A consultation ahead of time can help you plot your course for next year.

And even if the taxes that need to be planned are strictly personal taxes, a consultation with a Tampa CPA months ahead of time, can yield great results. From income splitting to maximizing family and household deductions, being proactive with tax planning can pay off for individuals.  CPA’s can help structure your cash flow to help you pay for things such as vacation homes, education, and discovering which investments are best for you.

And, if you are in the market for a new Tampa CPA, now is the best time to look. As many offer free consultations, you can shop around and see which one meets your business, personal, or family’s needs, without the rush or pressure that comes from looking at tax time. You will have the opportunity to review their credentials ahead of time and ask around and determine which CPA you chose to hire. The right CPA is as crucial to your financial health as a doctor is to your physical wellbeing.

Tax time doesn’t need to be stressful. Sitting down with a Tampa CPA now, in September, rather than waiting until March or April, can benefit anyone. With no deadlines looming and no pressure to file on time, individuals and business owners alike can take the time to make the right decisions for their specific needs.

Business Owner-Managers Benefit from a Tampa CPA

As a business owner-manager, there is no doubt that you have your hands full between trying to grow your business and maintain a satisfying personal life. One of the biggest ways in which many owner managers struggle is trying to balance their finances between their business and personal finances. Knowing how much to pay yourself, how to set up the corporate structure of your business, dealing with family ownership, and planning for retirement are all complex issues, and ones that combine aspects of your personal finances on top of your business finances. Many business owner-managers look to different financial experts to manage their finances – one for business and one for personal finances. This is often a big mistake because there is so much overlap between the two. If you are a business owner manager in the Tampa area, a good idea would be to find a CPA (certified public accountant) to help you manage both your business and personal finances.

Benefit from a Tampa CPAWhen you own and manage your own business, it not only becomes a source of income like any other job, but an opportunity to maximize your income and create a stable future for your family. The difference between earning an income as paid by another employer and earning an income through your own business is that as a business owner, you have the power to maximize your income by making wise choices in regards to your business’ finances. By maximizing the profits of your business, you are enabling yourself to draw a bigger income, and will be creating a future source of income for your family, as they are set to someday take over the business. A good Tampa CPA will be able to guide you in making the best financial decisions for your business.

One of the things that a Tampa CPA can do for you is to help you settle on the corporate structure of your business. This might include deciding to incorporate, going public, or naming your children as to various stakeholder positions in your company. Your Tampa CPA will guide you to choose a structure that will maximize the profits (often by reducing the taxes) of your business and provide you with the most ideal personal returns. A Tampa CPA will also help you to plan for events such as retirement and transitioning the business to other family members (or third-party buyers) in such a way that your wealth is maintained and the smallest amount possible is lost to taxes and other fees.

Once you become a business owner-manager, your personal and business finances will inevitably see a certain amount of overlap. The business decisions you make will directly affect your personal wealth and investments, and this is precisely why the advice and guidance of a financial professional is important. By employing the services of a Tampa CPA, your Tampa based business will thrive, as will your own personal finances. The result will be a secure financial future for both you and your family. At SK Financial, we can offer you that security and professional wisdom to make sure your finances grow.

Should I File My Own Taxes This Year?

The many pros and cons to do your own tax filing and the benefits of having a tax preparation service file your income taxes instead.

It’s that time of year again: Tax Season. While it may be very tempting to try and complete your own tax preparation, there are a few things you should know before you begin. The tax laws and codes are accessible to everyone, but the reality is they are very complex. Understanding the US tax laws takes many years of training and expertise with filing tax returns. Since the tax laws change every year, it makes it all the more complicated to keep up with. You would need ongoing training in order to ensure your taxes get filed with all of the applicable deductions and credits for your tax situation. The downside is that you may miss something vital or incorrectly record a number, which can result in large fines, an audit, or even worse, being charged with fraud.




So, if you are still intent on doing your own taxes, then the next question you have to ask yourself is, “Am I ready to learn?” Because if you are going to take on your own tax preparation, then you need to make sure you are indeed aware and educated in all the vital information, new legislations, and guidelines necessary to claim each deduction and credit you file. If you have the time and money to invest in the proper courses and training, then filing on your own may very well be a good choice for you. However, if you are not good at arithmetic or studying, then it’s best to leave tax preparation to the professionals.


There are different tax preparation services to choose from.  A variety of companies offer online software that can be used. These different software programs can be very convenient by allowing you to complete your tax preparation in the comfort of your home. The drawback of these programs is they are set up as your standard tax filing systems, meaning that they may not get you all the deductions and credits you really have coming to you. Are you willing to take the chance on losing out on more money?


The best choice is to find a good tax preparation service with actual people, as opposed to a computer program. It is important to find an established company with a good reputation that offers many benefits with their services, along with a staff of seasoned, experienced CPA’s and tax professionals. The best tax preparation services typically offer free electronic filing, past refund reviews, free consultations, and year round assistance. Finding a company that offers a guarantee gives you peace of mind that your taxes have been done properly, and in accordance to all of the US laws. There are even some companies that allow you to drop off your taxes to be completed while you finish other errands. It’s an obvious decision to choose a service with plenty of experience, excellent customer service, and that way you can take confidence in the fact that they are doing all they can to get you the maximum refund.


If you are unsure and nervous about completing your own tax preparation, then you should definitely choose our tax professionals here at SK Financial to handle your tax returns, and let us seek out all your deductions and credits to maximize your tax refund.