How to Achieve Financial Goals with a Budget

Posted on November 10th, 2018

Planning ahead for your finances can save you stress down the road, and ensure the success of your personal and professional goals. Outlining a monthly budget is one of the most effective ways to both organize your finances and chart your progress. The following guideline offers some helpful suggestions to stay organized and motivated as you chart your financial future.

The Importance of Setting Up a Budget

Assessing the amount of money you earn every month after taxes is the first step toward setting up a reliable budget. Next, you should determine how much is needed to satisfy monthly bills and necessary living expenses. Setting up a budget will go a long way toward helping you accomplish your financial goals as you streamline purchases. Splitting your monthly income into three categories is a popular budgeting method. Under this system, half goes toward absolutely necessary expenses like housing, transportation, utilities, and food, 20% covers retirement and debts, and the last 30% is spent on personal expenses, such as entertainment, personal care, or charity, to name a few examples. As far as personal purchases are concerned, you should really weigh the overall value of what you’re spending money on. Is the purchase an impulse? Does it benefit your daily life in any way beyond instead gratification? One popular sentiment many apply to their spending habits is the idea that memories are more valuable than individual material goods.

The Big (and Small) Picture

As you establish your financial goals, it’s helpful to organize a plan that addresses each goal in smaller, bite-sized installments. We can easily overwhelm ourselves with long-term goals, so assessing what can be realistically accomplished within the near future may ensure long-term success.

Along with drawing up a budget, creating a financial calendar will help organize your tax schedule, whether you have upcoming appointments or need to remind yourself to pay quarterly taxes on time. This visualization can also help you track long-term goals through smaller, more immediately achievable tasks, while also allowing you to track your current status. Knowing where you stand will help you stay current on financial goals. Tracking your net worth can also prevent the resumption of bad spending habits and stop current ones in their tracks.

Making the Most of that 20%

The simple act of listing your debts will help you form a plan of attack. Focusing on interest rates instead of what you owe will allow you to effectively prioritize the payoff of individual debts. The bill with the highest interest rate is costing you the most money, so it should take top priority on your list. Once that debt is paid, apply the same method to the next item.

Why Your Business needs Quickbooks

Posted on September 13th, 2018

QuickBooks is a software solution designed to manage payroll, inventory, sales, and a variety of small business needs. It features marketing tools, merchant services, as well as training solutions. This beneficial software program addresses the unique needs of different industries.

As a business owner, you may be wondering how QuickBooks can benefit your enterprise. Below are some of the many reasons why experienced EA, Shannon Sheridan, highly recommends this software to all businesses.

What Quickbooks Can Do for Your Business

Control Cash Flow– Instead of using your online banking records, you can keep your QuickBooks file updated regularly. By entering your financial transactions often and doing daily reconciliations with this software, you will obtain a detailed awareness of your cash flow.

Invoice Customers– When customers want to pay for products or services, the last thing you want to do is wait to send them an invoice. QuickBooks allows you to create and submit your invoice, simplifying the accounts receivable process. Accurately invoicing customers will minimize errors made and streamline cash flow.

Manage Bills and Accounts– Keeping your vendors and suppliers happy is essential. Utilizing the ‘enter bills’ and ‘pay bills’ functions in QuickBooks ensures you stay on top of keeping your vendors settled and satisfied. Using this feature through QuickBooks reduces unnecessary data entry and increases productivity.

Payroll Management– It is highly recommended to outsource your payroll to minimize any liability risks. When you outsource payroll processes, it is important to record this correctly in QuickBooks. Many payroll companies offer files that make it easy to interface with your QuickBooks software.

Financial Reporting– Businesses using QuickBooks take advantage of the financial reporting feature provided by the software. As you well know, financial reporting is a vital step in the bookkeeping process. Without running or analyzing reports you are missing out on opportunities to improve services and be more profitable.

QuickBooks can be a pivotal tool in helping you run your business. Your software should be an ally that aids you in making important business decisions.

Shannon Sheridan, your Palm Harbor Enrolled Agent, is passionate about helping business owners with their financial needs and obligations.

We encourage you to contact our Palm Harbor firm today to see your business flourish.

Tax Tips for Small Business Owners

Posted on September 4th, 2018

Every year, investigative tax notices are mailed to small business owners. While these are not always official audits, they raise a red flag, and proprietors should know how to prevent and address these inquiries in turn.

This list addresses the best tax practices for small businesses to keep them abreast of tax changes and trends, and away from IRS scrutiny.

List of top 15 Best Tax Practice Tips for Entrepreneurs
1. Maintain thorough and separate records of employees and contractors.
2. If you set up any location based business, even temporarily, keep records of all expenditures and educate yourself on the local tax laws.
3. Use a tax software accounting system – this can help you develop appropriate reports at tax time and can alert you of changing tax rules.
4. If you hire a tax accountant make sure they have experience with taxes as they relate to your specific business.
5. Keep records—including serial numbers and detailed receipts—for all business equipment, office machines, and vehicles.
6. Don’t use funds that are earmarked for taxes as a means to tide your business over in hard times. This will result in a worse financial crunch come tax time and if you can’t pay, you risk the loss of your tax ID.
7. Educate yourself on the correct way to estimate your taxes – This may be overwhelming and a tax professional is highly recommended for small business owners.
8. Determine an appropriate fiscal year so that you can plan better for tax time: A fiscal year refers to an accounting year that does not end on December 31.
9. Tax records should be kept for a minimum of three years – unless related to property and depreciation. In that case, tax records should be kept for three years past the time ownership ends.
10. Keep detailed records on business vehicles’ usage – both on the job and off.
11. When operating on foreign soil and dealing with other currencies and tax laws, be sure your tax professional is vigilant in obeying the new rules on foreign bank accounts enacted in the Foreign Account Tax Compliance Act, or FATCA.
12. Work with your tax professional to determine whether you should operate as a partnership, an S corporation, an LLC, or a sole proprietorship.
13. Become familiar with your requirements in regards to the Affordable Care Act.
14. If you are not able to pay taxes owed to the IRS, or another tax agency, contact your tax professional right away. There are appropriate steps that can be taken and ignoring it only makes it worse.
15. If you are paid in cash – that payment is taxable. The IRS has sophisticated technology to track spending habits and bank accounts to build their case.

Let the experts handle your taxes for you. It is usually a mistake for a business owner to complete their own taxes, and doing so can distract you from making your company a success.

Top Seven Ways to Avoid Audits

Posted on August 30th, 2018

An audit notification from the IRS can be worrisome. While some tax returns are selected for audit at random, most of the time, auditors choose a company to audit their finances because they detect inaccuracies.

Receiving help from a qualified accounting professional prior to filing your taxes can help you avoid the pitfalls that land a tax return on the auditor’s desk. Below are some helpful tips that can help you avoid an audit.

Provide Accurate Data

When small businesses have disorganized bookkeeping, the likelihood of entering incorrect data and misrepresenting the company’s income increase. If you handle this aspect of your finances in-house, using a credible accounting software program will ensure the numbers add up accurately. Additionally, enlisting the help of an experienced tax professional can give you an extra layer of protection against filing a return with mistakes.

Be Mindful of Your Industry Trends

The IRS will often take notice when an entrepreneur files a tax return that reports income far above what similar companies in the industry earn. While no one would recommend making less money, it’s important to have clear records of how the money was earned, spent, and invested so it doesn’t raise any red flags.

Hire Trustworthy Personnel

Whether you employ a full-time bookkeeper or outsource the work to a firm, your accountant’s credibility can impact your company’s finances and reputation. Trusting that your employees are making ethical decisions for your business will give you peace of mind in the event the IRS wants to examine your books more closely.

Avoiding the IRS Audit Lottery

While many consider the audit lottery to be a completely random selection, the IRS uses sophisticated risk models to determine if should be scrutinized further. Companies that have accurate financial statements or avoid making excessive and hasty deductions will be less likely to earn the attention of an auditor.

Keep Off the IRS Computer Scoring System

The IRS uses a computerized scoring system, separate from the lottery, to determine a candidate for an audit. This program, known as the Discriminant Function System rates the company’s potential for change and potential for unreported income based on data from similar businesses in the industry. Disclosing all relevant information and reporting every bit of income will help keep this score lower.

Know Your Business Partners

The IRS will likely want to take a closer look at your tax return if a business partner has undergone an audit themselves. By maintaining open communication with your partners regarding finances, you’ll be prepared if an IRS notification shows up in your mailbox.

Establish Ethical and Structured Controls

Whistleblowers are taken quite seriously by the IRS when they are informed of potentially unethical practices in an organization.  Business owners can avoid this impactful complication by establishing ethical processes that leave no room for improper or illegal accounting practices.

Schedule a Consultation in Palm Harbor Today

Our team at Shannon Sheridan, EA, have the training and experience to make the IRS audit process less stressful for business owners. Additionally, we provide you with the professional insight that can help you avoid undergoing an audit altogether. Contact us today in Palm Harbor to schedule an initial consultation.

How Outsourced Accounting Can Save You Time and Money

Posted on August 14th, 2018

Many business owners delay the hiring of an external accountant or enrolled agent because they think that seeking this help is not affordable. When the benefits of this approach are compared to its cost, outsourcing accounting functions is not as expensive as it seems. In fact, it can save a company money.

Better Fraud Detection

Small business owners are the most frequent target of fraud and embezzlement. This results from business owners splitting their attention between several different roles. Without an expert’s dedicated attention to their books, they cannot notice fraud in time to stop it from growing out of control.

An outsourced accounting professional provides the dedicated attention needed to spot fraud early. You protect your assets by outsourcing your accounting functions.

Time Management Improvements

“Crunch time” is a familiar part of any business’ operation, especially when reviewing your records so you can file taxes by deadline. Many companies do not have someone on hand to help them maintain an organized filing system for their statements. During the tax season crunch, they then should catch up and organize those records.

With an outsourced accountant, you avoid the tax season crunch time. Your records stay organized, and you have a professional to handle the filing process for you.

More Effective Growth

When accounting is restricted to in-house resources, it can be hard to update your bookkeeping and tax approaches as quickly as your company is growing. In contrast, the collaboration, resources, and expert knowledge of an outsource accounting firm allows your books to grow with you. There are always challenges to overcome when building up your enterprise, but you can avoid several of them by hiring an independent professional.

Contact Us for Outsourced Accounting Support

Shannon Sheridan, EA, provides outsourced accounting services. We help businesses near Palm Harbor, Clearwater, and Safety Harbor draft statements, files taxes, and look for ways to improve operations. For more information about these services, call us and schedule a consultation today!

The Difference Between an EA, CPA, and Accountants

Posted on August 1st, 2018

Keeping proper track of your finances, preparing for tax season, and understanding your compliance with the IRS is confusing. Individuals looking for guidance have several options when choosing between an EA, CPA, or the standard accountant. But, similarities among these professionals and their roles often make the decision even more difficult.

To better understand their differences, look at the specializations and services each one offers.

Enrolled Agents

An Enrolled Agent (EA) is a tax practitioner licensed by the IRS who has unlimited rights to represent taxpayers before them. EAs are considered tax specialists. They have a vast knowledge of everything pertaining income tax, inheritance tax, gift tax, estate, payroll, retirement, and non-profit taxation.

These specialists tend to focus on preparing taxes and resolving financial disputes. In addition to an IRS-administered testing and application process, enrolled agents must complete a minimum of 72 hours of continuing education every three years. EAs are federally licensed, meaning they can practice anywhere in the US.

Certified Public Accountants

CPAs have a variety of knowledge on all topics relating to accounting, such as auditing, taxes, business law, and finance. Some specialize in more than one service as not all focus specifically on taxation.

The requirements of education for a CPA depend on the state in which they plan to practice. Most require at least a bachelor’s degree, two years of public accounting experience and a passing score on the exam for licensure.


An accountant monitors and records the cash flow. It is their responsibility to verify the accuracy of all the financial transactions and make sure they follow current regulations.

By using numbers and financial statements, they review the financial health of a company, organization, or individual. Accountants analyze profits and losses, providing information that investors and business owners need.

Contact Shannon Sheridan for Comprehensive Business and Financial Assistance

Shannon Sheridan is a licensed EA and provides her expertise to individuals and business owners alike. She has the experience you need to solve financial challenges or fulfill tax obligations.

If you need financial guidance, we encourage you to call or visit our Palm Harbor office today. Our EA welcomes new and existing clients with an open-door policy.

How the Tax Reform Affects Businesses in 2018

Posted on July 15th, 2018

The recent tax reform is changing how businesses are taxed and can result in significant savings. Although its implications aren’t fully understood, it’s possible to capitalize on available opportunities. Overall, the reform is designed to simplify taxation and re-balance the system of credits and deductions, helping businesses profit more.

For more information on these updates and how they affect your business, Shannon Sheridan, EA, is your tax expert. She wants to help your business improve profits and realize its potential. The following are a few ways to enhance your bottom line this year:

Corporate Tax Rates

Effective January 1st of this year, the corporate tax rate for C-corps was capped at 21 percent. This is highly beneficial to large and growing businesses taking on investors. The tax reform did not change or put a limit on many of the existing deductions, helping large businesses further reduce their taxes owed. Later this year, other entities may have their profits returned as deductions, allowing them to pay less on their Adjusted Gross Income, which will be a boon for small and independent businesses.

Changes to Deductions

Individuals can claim up to 20-percent of their pass-through income as a deduction, provided they earn below the income cap. This limit is based on income for individuals filing on their own or with their spouse. This deduction is not a free-for-all and requires that taxpayers meet the requirements beforehand.

Additional deduction changes include:

  • No itemization of employee expenses out of office
  • 2 percent deductions are being eliminated
  • Entertainment can’t be used as a deduction

How an EA Can Help You

Enrolled Agents are certified tax experts. We take dozens of hours of continued education to maintain this status. As the most informed accountant in the business tax sphere, our EA will help you make the most of the 2018 tax reform, navigating the changes that will be rolling out through the year.

For Business Tax Success in 2018, Call your Palm Harbor Enrolled Agent

Our firm specializes in business tax planning and preparation. We will help your corporation or privately-held enterprise maximize profits and ethically reduce what’s owed. Our services are geared to keep you in compliance with all local and federal tax regulations while also simplifying the process of doing so.

How a Tax Plan Can Save You Thousands

Posted on June 29th, 2018

Thomas Jefferson once famously said, “In this world nothing can be said to be certain, except death and taxes.” Similar to the way a person’s healthy diet prolongs their life, creating a healthy tax plan potentially saves thousands in tax payments. Let’s explore a few ways you can avoid the pitfalls many others have trouble with and stay proactive with your tax plan.

Save Money on Taxes through Wise Planning

Tax deferred investment accounts like a 401K or an IRA can greatly improve financial gains over the years. While individuals would normally have to pay anywhere from 10 to 40 percent income tax, a tax-deferred investment account relieves liability up-front and allows you to grow your money at a compounding rate.

Owning a business can be a smart way to offset large expenses. Those that own a private company have dozens of potential options in tax deductions that can relate to their business operations. Even if already employed, a person that operates a business at home can write off several deductions.

Claim the personal deductions on things like charities, mortgage loans, student loan interest, losses on investments, and child dependents. These all count towards lowering the final payment amount and increasing return, so be sure not to miss out on these on liability-relieving opportunities by obtaining tax exemptions.

Ensure your numbers are accurate. Taxpayers should not overpay or underpay their taxes, and can do so by claiming all available deductions. Overlooked deductions or inaccurate filings leave individuals missing savings that they are due or cause them to pay costly penalties. For people who have investments, missing these could potentially cut long-term financial gains by affecting their investment capital or even prevent early retirement.

How to Protect Your Earnings

As most people are not experts in tax planning, it’s a great idea to hire one. An enrolled agent can greatly improve an individual’s awareness of potential deductions and tax savings efforts. Talk with an experienced accountant to understand how you can find ways to save on your taxes this upcoming tax season.

Learn more about tax planning by calling our firm and scheduling a free consultation with Shannon Sheridan, EA, today. We are more than happy to help you with saving on future tax return and plan for a successful financial future.

Should I Choose a Roth or Traditional IRA?

Posted on June 20th, 2018

Do you have questions about which type of Individual Retirement Account (IRA) is right for you? When deciding between a traditional IRA and a Roth IRA, consider factors to such as tax incentives, age restrictions, and income restrictions before making your decision.

Tax Incentives

One of the main differences between the traditional IRA and the Roth IRA is the tax incentives provided by each. When deciding which is right for you, focus on what tax bracket you plan to be in when you retire, and if that bracket will be higher or lower than the one you’re in now.

  • Traditional IRAs – A traditional IRA is the best choice for you if you believe your tax rate will be lower in retirement than it is right now. With traditional IRAs, you are not taxed when you contribute money to your account. Taxes are paid when you withdraw the funds.
  • Roth IRAs – Roth IRAs are the best choice for you if you believe your tax rate will be higher in retirement than it is now. When you contribute to a Roth IRA, you pay taxes on the funds as you put them in. You will not have to pay taxes on funds when you’re able to withdraw.

Age Restrictions

In addition to considering tax incentives when choosing between a traditional IRA and a Roth IRA, it is important to keep in mind that with a traditional IRA, there are age restrictions for contributions.

  • Traditional IRAs – Anyone younger than 70 ½ with earned income can contribute to a traditional IRA.
  • Roth IRAs – Roth IRAs don’t have age restrictions.

Income Restrictions

  • Traditional IRAs – You can contribute to a traditional IRA regardless of how much money you make. However, the amount of money you contribute can’t exceed the amount of income you earned that year.
  • Roth IRAs – For some high-income earners, Roth IRAs are out of the question. To contribute to a Roth IRA, single tax filers must have a modified gross income of less than $135,000 (in 2018). Married couples filing jointly must have modified AGIs of less than $199,000 (in 2018) to be able to contribute to a Roth IRA. The amount you contribute to a Roth IRA can’t exceed the amount of income tax you earned that year.

Withdrawal Rules

Both traditional and Roth IRAs allow their owners to begin taking penalty-free distributions at age 59 ½. A major difference between traditional IRAs and Roth IRAs is when the savings must be withdrawn:

  • Traditional IRAs – Traditional IRAs require you to start withdrawing funds at age 70 ½, even if you don’t need the money.


  • Roth IRAs – Roth IRAs don’t require withdrawals during the owner’s lifetime, which means that you can let your Roth IRA continue to grow throughout your life (tax-free) if you don’t need the money. To avoid incurring a tax payment, Roth IRAs require that the first contribution be made at least five years before the first withdrawal.

Since Roth IRAs don’t require that you withdraw funds in your lifetime, and beneficiaries aren’t required to pay taxes on withdrawals, Roth IRAs can be a good wealth transfer strategy.

Other Considerations

  • Traditional IRAs – Contributing to a traditional IRA lowers your adjusted gross income for that year, which can help you qualify for other tax incentives such as the child tax credit or the student loan interest deduction.

With traditional IRAs, if you are under 59 ½, you can withdraw up to $10,000 from your account to pay for qualified first-time home buyer expenses and higher education expenses, without paying the 10% early-withdrawal penalty. You are still required to pay taxes on the distribution.

  • Roth IRAs – Roth contributions (but not earnings) can be withdrawn penalty and tax free at any time. Even before age 59 ½.

If you are under age 59 ½, you can withdraw up to $10,000 of Roth earnings penalty-free to pay for qualified first-time-home-buyer expenses, if at least five tax years have passed since your first contribution.

Roth IRAs can be invested in almost anything you want: index funds, lifecycle funds, individual stocks, or other investments.

Remember, whether you choose a traditional IRA or a Roth IRA, it is important that you begin contributing as soon as possible to accrue savings, and avoid withdrawing earnings before age 59 ½ to avoid penalties.

5 Budgeting Tips to Save Cash

Posted on April 5th, 2018

Saving money is a difficult commitment to make, but it provides benefits in the long run. Life throws unpredictable events at us, and preparing our budgets to account for accidents or emergencies grants peace of mind. Saving is also one way to hold off on wanton spending that drains accounts rapidly. The following tips to save money can inspire balance in your daily financial habits.

Stick to a 30 Percent or Less Rule

It’s hard to save money without setting up a cap on your spending. When payday rolls around and there are new products or items grabbing our attention, it’s incredibly difficult. We recommend setting a limit of 30 percent of your paycheck to spend on entertainment and leisure. This reserves 70 percent use for essentials. Use 30 percent as a starting point and decrease the limit to save even more money as you become more confident in your saving strategy.

Establish Financial Goals

Nothing helps curtail personal spending and establish a direction more than creating a strategy. By writing down financial goals, such as paying off your car by a certain date, you lay a foundation for future success. Knowing where your money flows is liberating and strengthens resolve by saying no to frivolous purchases.

Manage Personal Cash Flow

Daily Dedicating one minute a day to looking over your bank account makes you aware of where you spend the most. This also promotes comfortability in managing one’s finances. Get cash out daily or weekly to keep to a specific spending amount, which is a research-proven technique that keeps your cash account stable. When swiping cards is the go-to, the convenience causes individuals to spend much more.

Shop Realistically

When new products appear on the market, whether a new gadget or guilty pleasure, it important to hold back the impulse to buy it. Impulsive shopping tends to influence purchasing habits and tricks us into buying items we don’t need.

Pay off Larger Debts

First When paying off credit card debt or loans, it’s beneficial to chip away at a loan with a higher interest rate. If you wait to pay, amounts owed increases exponentially. Although paying off smaller amounts of debt with smaller interest rates seems more manageable, they won’t cost as much as high interest debt. By hedging larger loans and limiting the traction their high interest gains, the debt is more manageable over time.

Need money to grow your business?

Talk to us! Put your best foot forward by allowing us to prepare a winning loan proposal for you. Call Now! (727) 877-8293

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