a trademark of Tony Novak CPA

Category: Small Business

  • Small business cash flow management for a recession

    Preparing for a recession means preparing for the unknown. That’s a tough thing to do! The best advice is to think conservatively and get a second opinion from a CPA with experience in recovery from recessions and other economic disasters.   One tool is to use existing accounting data, supplemented with new information, to create a visual cash flow forecast. After we see a timeline picture like this, it is easier to add the additional protections to ensure adequate cash under a possible downturn in the economy.   Should we be looking at this type of cash flow information for

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  • Earned income is not recharacterized or “netted” for self-employment tax calculation

    This is an except from a client email that addresses the point that we don’t recharacterize income by passing it through LLCs, partnerships and S-corporations. Earned income is subject to either wage taxes or self-employment tax.   “You asked whether income generated by ZZZZZZ Consulting LLC, taxed as a partnership, can be treated in any manner other than earned income by the partner/member ZZZZZZ Group LLC, taxed as an S corporation, and ultimately its one shareholder, you. Secondly, you asked whether income earned in this manner, if it is earned income, is properly categorized as self-employment income or whether it

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  • Collaborative Accounting vs. Traditional Accounting

    Collaborative Accounting vs Traditional Accounting We have a history of successful collaborative accounting work with small business clients in several different industries, so it is natural for us to prefer this approach to small business accounting engagements as often as is appropriate. This post is meant to briefly describe key distinctions between traditional vs. collaborative accounting.   Defining the scope of work Traditional A core principle of an accountant’s work is a clear understanding of the client, the industry, the work, and its cope and limitations. Protections are often built into the agreement to prevent ‘drift’.   Collaborative The core

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