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Every small business owner remembers their first major financial decision point – that moment when managing the books starts keeping you up at night. Maybe you’re drowning in receipts, scratching your head over tax questions, or just have that gut feeling you’re leaving money on the table. If you’re nodding along, it might be time to bring in the pros. But here’s the million-dollar question: do you need a bookkeeper, accountant, or CPA?

Think of these financial pros like leveling up in a video game – each one unlocks new powers and abilities. Let’s break down the differences between a bookkeeper vs accountant vs CPA and when you might need each.

Bookkeepers: Your financial record keepers

Bookkeepers handle the day-to-day finances for a business. They handle:

• Keeping track of every dollar coming in and going out of your business.

• Making sure bills get paid and you get paid (accounts payable and receivable).

• Running payroll and keeping employee payment records straight.

• Making sure your bank statements match your books.

• Creating the basic reports you need to keep tabs on your business.

You probably need a bookkeeper when:

• Basic bookkeeping is eating up too

• You’re dealing with more than 100 transactions each month.

• You’ve got employees and payroll to deal with.

• Your receipt pile is getting out of hand.

Accountants: Your number crunchers

Accountants take all that organized data and turn it into useful information. Think of them as your financial translators. They’re great at:

• Taking those numbers and telling you what they actually mean.

• Setting up systems to keep your finances running smoothly.

• Creating detailed reports that help you make better decisions.

• Giving you the heads up on tax stuff before it becomes a problem.

• Looking at your numbers and suggesting smart money moves.

It’s time for an accountant when:

• You need a pro to set up your accounting system the right way.

• Those financial reports might as well be written in hieroglyphics.

• You need help planning for the future and creating solid budgets.

• Tax season starts feeling really complicated.

CPAs: Your strategic financial advisors

Certified Public Accountants (CPAs) CPAs are like the all-star team of the financial world. They’ve passed some seriously tough exams and have to keep learning to stay certified. They can help with:

• Next-level tax planning and prep that could save you big money.

• Official financial statements that banks and investors love.

• Strategic advice to help your business grow.

• Going toe-to-toe with the IRS if needed.

• Bringing deep knowledge about your specific industry.

You’ll want a CPA in your corner when:

• Your taxes involve multiple states or get super complicated.

• Someone (like a bank or investor) needs official financial statements.

• You need help making big financial decisions.

• You’re thinking about buying or selling a business.

• Following all the rules and regulations is keeping you up at night.

Finding your perfect financial match

Choosing the right financial pro depends on a few things about your business:

• How big and complicated it is.

• What your industry requires.

• Where you are in your growth journey.

• What you can afford to spend.

• Where you want to take your business.

Most businesses start with a bookkeeper and level up as they grow. Some need the whole squad, while others might just need one or two pros on their team.

How Archer Lewis can help

We’ve got your back whether you need basic bookkeeping or full-service CPA support. We can take a look at your business and help figure out exactly what you need. And as your business grows we’ll grow with you.

Discover how we can support your financial management needs.

You’ve got enough on your plate without stressing about taxes. Here’s a straightforward guide to breeze through year-end tax planning for small business owners, so you can get back to what matters — running your business.

Which tax forms do you need?

Different business structures require different tax forms:

• Running a one-person show? You’ll need Schedule C with your personal Form 1040.

• In a partnership? Form 1065 is for you, plus Schedule K-1 for each partner.

• Got an S-corporation? Look for Form 1120S and Schedule K-1 for shareholders.

• Running a C-corporation? Form 1120 is all yours.

• Single-member LLC? Schedule C is your form (unless you’ve chosen to be taxed like a corporation).

Gather your documentation

Money coming in:

• Bank statements showing what your business earned.

• Statements from PayPal, Square, Stripe, or other payment systems you use.

• Your list of who owes you money.

• Records of any other income, including cash (yes, that tip jar counts).

Money going out:

• Receipts for everything your business bought.

• If you’re claiming car expenses, you need mileage logs.

• Home office measurements and bills if you’re claiming that space.

• Records of equipment you bought.

• What you spent on marketing.

• Monthly utility bills.

Taking care of your team

For your employees:

• Double-check that W-4 forms are up to date.

• Make sure I-9 forms are complete with proper ID.

• Get a clear picture of employee benefits and costs.

• Pull together your year-end payroll info.

For your contractors:

• Get W-9 forms from anyone you paid $600 or more.

• Double-check your payment records — accuracy matters.

• Get 1099-NEC forms ready (they’re due January 31).

Dates you can’t ignore

Mark these on your calendar (seriously, do it now):

• January 31: Get W-2s and 1099-NECs sent out.

• March 15: S-corporation and partnership returns are due.

• April 15: Personal returns (including sole proprietors) need to be in.

• April 15: C-corporation returns are due.

Year-end vs. quarterly taxes: Understanding the difference

Think of quarterly taxes like paying your bills throughout the year, while year-end taxes are your final reconciliation.

Quarterly payments:

• Your best guess at what you’ll owe.

• Cover both income and self-employment tax.

• Keep you from getting hit with penalties.

Year-end taxes:

• Show what really happened with your money.

• Include all the ways you can save on taxes.

• Tell you if you’re getting money back or need to pay more.

• Give you the big picture of your finances.

Maximize your deductions and credits

The end of the year is the last time to maximize your tax savings.

Look into these deductions:

• Business equipment (Section 179 lets you write off the full cost).

• What you spend on employee benefits.

• Learning and development costs.

• Business insurance.

• Marketing and advertising expenses.

• Business travel costs.

• Your home office expenses.

Don’t forget these tax credits:

• Health care tax credit for small businesses.

• Credit for hiring from certain groups (work opportunity credit).

• Research and development work.

• Making your business more accessible.

Start early for the best results

Getting a head start means you can:

• Find and fix any missing paperwork.

• Talk to a pro about anything confusing.

• Make smart choices about big purchases or when to collect payment.

• Put tax-saving strategies in place before the year ends.

Professional help makes a difference

This checklist is great for getting organized, but let’s be honest — taxes get complicated as your business grows. That’s where we come in. At Archer Lewis, we’re small business tax experts who speak your language. We keep up with all those confusing tax law changes so you don’t have to, and we’re pretty good at finding tax savings you might not know about.

Ready to take taxes off your plate? Discover how we can make tax season less of a headache and more profitable for your business.

Let’s talk about keeping more money in your business. While nobody enjoys thinking about taxes, smart business owners know that tax credits can significantly boost their bottom line. Tax credits for small businesses aren’t just nice-to-have bonuses — they’re powerful tools that can help fund your next big move, whether that’s buying new equipment or bringing on your next star employee.

Why claiming tax credits matters

Think of tax credits as a reward from the government for activities that strengthen the economy. Unlike other tax benefits, credits reduce your taxes dollar for dollar, making them especially valuable for businesses watching their bottom line.

Tax credits vs. deductions: Understanding the difference

While both credits and deductions lower your tax bill, they work differently:

• Tax credits directly reduce taxes owed, dollar for dollar — a $1,000 credit saves you $1,000.

• Tax deductions lower taxable income — a $1,000 deduction in the 25% tax bracket saves $250.

This difference makes credits particularly powerful for small businesses looking to maximize tax savings.

Key tax credits small businesses should know about

Here are six valuable credits worth exploring. Remember, every business is unique — consulting with a tax professional ensures you understand all available opportunities.

Small business health insurance credit

This credit helps smaller employers provide health coverage. Key points:

• You have to have fewer than 25 full-time equivalent employees.

• Your average employee salary must be under $56,000 annually (adjusted for inflation).

• Employers must pay at least 50% of employee-only health insurance premiums.

• The credit covers up to 50% of premiums paid (35% for tax-exempt employers).

• This credit can only be claimed for two consecutive years.

Employer credit for paid family and medical leave

This credit rewards employers who support their team during important life events, covered by the Family Medical Leave Act (FMLA). Here are the details:The credit ranges from 12.5% to 25% of wages paid during leave.

• You must provide at least two weeks of leave annually.

• The policy needs to cover at least 50% of regular wages.

• Leave must be available for up to 12 weeks per employee annually.

• Your written policy required with non-interference language.

You can also increase your credit percentage by offering higher wage replacement rates. For example, paying 100% of regular wages during leave qualifies for the maximum 25% credit rate.

Research and development credit

Don’t let the name fool you — this credit extends beyond traditional research:

1. It covers employee wages for research activities.

2. It includes research supplies and materials.

3. It applies to contract research (65% of payments).

4. It’s available for software development.

5. It helps fund product and process improvements.

To qualify, activities must:

1. Create new or improved products/processes.

2. Rely on hard sciences.

3. Address technical uncertainty.

4. Involve experimentation.

If these conditions are all met, startup businesses may apply up to $250,000 against payroll taxes.

Work opportunity tax credit

This credit encourages hiring from groups facing employment barriers:

Qualified groups include:

• Veterans.

• Long-term unemployment recipients.

• SNAP benefit recipients.

• Designated community residents.

• Vocational rehabilitation referrals.

Eligible employees must work at least 120 hours. You must certify within 28 days of start date. This credit varies by target group and hours worked, and it’s based on first-year wages, up to 40% of eligible wages.

Disabled access credit

This credit helps offset costs of making businesses more accessible by offsetting the cost of ADA compliance.

• Available for businesses with $1 million or less in revenue.

• Must have 30 or fewer full-time employees.

• Covers 50% of eligible expenses over $250.

• Maximum credit is $5,000 annually.

Eligible modifications include:

• Providing accessible parking.

• Installing ramps and lifts.

• Modifying restrooms.

• Adding Braille signage.

• Providing accessible equipment.

The disabled access credit is available for small businesses with:

• $1 million or less in revenue.

• 30 or fewer full-time employees

Employee tip credit

Particularly valuable for food service businesses, this credit helps offset FICA taxes on reported tips.

Requirements include:

• Proper tip reporting procedures.

• Employee documentation.

• Minimum wage compliance.

Mistakes to avoid

Many business owners miss out on valuable credits because of:

• Incomplete documentation.

• Misunderstanding eligibility requirements.

• Overlooking available credits.

• Calculation errors.

Many small business owners leave money on the table by not claiming all available credits or making errors in their applications. The IRS estimates that millions of dollars in available tax credits go unclaimed each year.

Partner with a professional

Tax credits change frequently, and requirements can be complex. At Archer Lewis, we help small business owners identify and maximize available credits while ensuring compliance. Our experienced team specializes in making tax strategy understandable and actionable for businesses like yours.

Don’t leave valuable tax savings unclaimed. Learn how we can help you take advantage of tax credit opportunities.

If you’ve got employees, there’s no way around payroll taxes. These taxes might seem overwhelming, but we’re here to help you get a handle on the ins-and-outs of how to do payroll for your small business.

What are payroll taxes?

There are three main types of payroll taxes you’ll need to handle as a small business owner:

1. FICA taxes — think of these as your Social Security and Medicare contributions. Both you and your employees chip in 6.2% for Social Security and 1.45% for Medicare. The good news? These rates stay the same for every paycheck, so once you’ve got the hang of calculating them, you’re set.

2. Income tax withholding — this is the money you hold back from employee paychecks and send to the IRS. The amount varies based on each employee’s W-4 form. This helps your employees pay their taxes in installments rather than one big bill on April 15.

3. FUTA (Federal Unemployment Tax) — this one’s all on you as the employer. While it starts at 6% on the first $7,000 of each employee’s wages, most business owners end up paying just 0.6%, thanks to a state tax credit. Just make sure you’re paying your state unemployment taxes on time to qualify.

Why payroll taxes aren’t like other bills

If you take one thing from this article, let it be this: The IRS sees payroll taxes differently from your other business expenses. Why? Because when you withhold taxes from employee paychecks, that money technically belongs to the government — you’re just holding onto it temporarily. The IRS takes this very seriously and isn’t shy about enforcing the rules.

Common costly mistakes

Let’s talk about some payroll tax pitfalls that can trip up small business owners:

1. Using withheld taxes as a temporary business loan: When cash is tight, it might be tempting to “borrow” from those withheld taxes — but trust us, this is a recipe for disaster.

2. Classifying employees as contractors: Sure, classifying workers as contractors might seem like a smart way to avoid payroll taxes, but the IRS looks at who’s really controlling the work, not what’s convenient for you.

3. Missing deadlines: Even being a day late can trigger penalties — the IRS doesn’t mess around with deposit schedules.

4. Not following the Equal Pay Act: Paying different rates for similar work isn’t just morally wrong, it could be setting you up for legal troubles.

5. Incomplete information: Incomplete tax forms, missing I-9s, or shoddy payroll records will also cost you.

6. Forgetting some forms of compensation: Those holiday bonuses and employee perks? They count for tax purposes too.

Getting any of these wrong can cost you big time — we’re talking penalties up to 100% of unpaid taxes, personal liability, and in worst-case scenarios, even criminal charges.

Making life easier: Software and professionals

The good news is you don’t have to be an expert in the complexities of payroll to be compliant. Modern payroll software can handle a lot of this heavy lifting for you. Good software will crunch the numbers, keep you on schedule with deposits, generate your forms, and maintain those all-important records. Think of it as your first line of defense against costly mistakes.

Want even more peace of mind? That’s where professional payroll services come in. We stay on top of changing tax laws, handle tricky situations like employees working across state lines, and free you up to focus on what really matters — growing your business. And here’s a secret: Professional help usually costs way less than what you’d pay in penalties if things go wrong.

Don’t let payroll taxes worry you. The payroll pros at Archer Lewis are here to take this burden off your plate. Learn how we can help.

It’s tempting to pay for everything from the same account when you’re just starting out. After all, money is money, right? Not exactly. We work with small business owners every day and see the headaches that come from mixing personal and business finances. Here’s why separating business and personal finances will save you time, stress, and potentially money down the road.

1. Simplifying accounting and bookkeeping

One of the most immediate benefits of separating your finances is that it will make your accounting and bookkeeping processes way easier. You’ll be able to:

• Track income and expenses accurately.

• Prepare financial statements.

• Manage cash flow better.

• Find tax-deductible expenses.

Without separating your accounts, you’ll find yourself wading through personal and business transactions, wasting valuable time and maybe even missing important details.

2. Make tax time less painful

Don’t make tax season more stressful than it needs to be by having to untangle personal and business finances. By keeping things separate, you’ll:

• Reduce the risk of missing business deductions.

• Avoid accidentally claiming personal expenses as business deductions.

• Simplify the process of filing business taxes.

• Be less likely to trigger an audit.

The IRS expects you to maintain accurate records of your business income and expenses, and they’ll penalize you if you’re not compliant. If you separate your accounts, you’re way more likely to sail through tax season without issues.

3. Better financial reporting and analysis

You need correct financial reporting to make informed business decisions. Keeping your personal and business accounts separate allows you to:

• See your profit margins more accurately.

• Identify trends in your business’s financial health.

• Make data-driven decisions about investments and growth opportunities.

• Present clear financial information to potential investors or lenders.

These benefits can give you a competitive edge and help you steer your business towards long-term success.

4. More reliable expense tracking and budgeting

When you separate your finances, you gain a clearer picture of your business expenses. So you’ll be able to:

• Create and stick to a realistic business budget.

• Find places where you can cut costs.

• Plan for future expenses and investments.

• Manage your cash flow better.

Your dedicated business account can also be used to set up automatic payments for recurring expenses, so you can set it and forget it.

5. Protecting your personal assets

As a small business owner, you’ve worked hard to build both your company and your personal financial stability. Mixing your accounts can put your personal finances in danger, but separating them will:

• Limit your personal liability in case of business debts or lawsuits.

• Protect your personal credit score from the effects of business setbacks.

• Make it easier to get business loans or lines of credit.

6. Building credibility with customers

Using your personal account for business can make you look like an amateur. Dedicated business accounts show:

• You’re running a real business, not just a side hobby.

• Customers can trust you with their money.

• You have a long-term vision for your company and aren’t going anywhere.

If customers trust you, you’re much more likely to earn the kind of good reputation that will lead to more business opportunities.

Take the next step

If you’re still using one account for everything, don’t worry. But the sooner you separate your finances, the better off you’ll be. Start by opening a business checking account and getting a business credit card. These simple steps will make a big difference in how you run your business.

Need help getting started? The team at Archer Lewis works with small business owners like you every day. We can help you set up a system that works for your business and show you how to use it effectively. Sometimes a little expert guidance makes all the difference. Learn how we can help make your financial life simpler and more secure.

Managing taxes can be one of the trickiest parts of running a small business, especially if you’re doing it on your own. One of the biggest challenges is making sure you don’t get hit with underpayment penalties for estimated taxes. If you’re not familiar with these penalties, they can be a costly surprise that eats into your profits. But the good news is, with the right knowledge, you can easily avoid them. Let’s break down what you can do to stay on top of estimated taxes.

What are underpayment penalties for estimated taxes?

When you work for yourself, the IRS wants their share throughout the year, not just at tax time. Think of it like paying rent — you wouldn’t wait until December to pay all 12 months at once, right? The IRS feels the same way about taxes. Miss these quarterly payments, and you’ll be looking at penalties that could have been avoided. And while penalties might not seem huge at first, they add up quickly and can turn into an unnecessary financial burden.

The “safe harbor” rule: your new best friend

Here’s some good news — the IRS actually tells us exactly how to avoid penalties. They call it the “safe harbor” rule. This lets you avoid underpayment penalties as long as you pay at least:

1. 90% of the total tax you owe for the current year, or

2. 100% of the tax you owed the previous year (110% if your adjusted gross income was over $150,000).

By meeting one of these requirements, you’re considered to be within the safe harbor and won’t be penalized. Even if you have a killer year and make way more than last year, remember to make safe harbor payments and you won’t face penalties as long as you hit these numbers.

Payment timing: quarterly is key

Mark these dates on your calendar:

• April 15

• June 15

• September 15

• January 15 (of the next year)

These are your quarterly tax deadlines. Missing them is like missing a credit card payment — it’ll cost you extra.

If you’re only making payments once a year when you file your tax return, you’re setting yourself up for penalties.

Working a regular job? Here’s a pro tip.

If you’re still working for someone else and have a salaried job in addition to your business, you might not need to worry about making quarterly estimated payments. Instead, you can adjust the withholding on your W-2 income to cover both your business income and salary.

To do this, just increase the amount of tax that’s withheld from your paycheck. This way, you can use your regular paycheck to effectively cover the taxes you owe on your business income, and you don’t have to stress about making separate payments. You can update your withholding by submitting a new W-4 to your employer.

Handling seasonal income

Some businesses are seasonal — maybe you run a beachside cafe or a Christmas tree farm. The IRS gets it. You can pay based on what you actually earn each quarter instead of having to estimate your annual income upfront. This takes more math but could save you money if your income varies a lot throughout the year.

Oops! I got a penalty anyway.

Don’t panic if you’re hit with a penalty. The IRS might give you a break if you have a good reason (like a family emergency or honest mistake). You can file Form 2210 to request a waiver and explain your reasoning. The IRS will review your case and may reduce or eliminate the penalty if they find your story credible.

Another option is to reach out to a tax professional for help. Sometimes penalties happen simply because you didn’t fully understand the process, and a tax pro can help you review your payments and make sure you’re back on track moving forward.

In conclusion

Managing estimated taxes isn’t as complicated as it might seem, but it does take some planning. Think of it as setting aside money for taxes before it burns a hole in your pocket.

Looking for a partner in your tax journey? At Archer Lewis, we speak plain English, not accountant-ese. We’re here to help you understand your numbers and keep more of what you earn. Learn how easy tax planning can be when you have the right team in your corner.

Running a small business often means wearing multiple hats, and sometimes that includes being your own accountant. While managing your own books makes sense when you’re starting out, your finances usually get trickier as your business grows. Here are six common small business accounting mistakes you might be making, along with some straightforward solutions to fix them.

1. Mixing personal and business finances

We get it — when you’re just starting out, using your personal checking account for everything seems like the path of least resistance. But mixing personal and business finances is a recipe for confusion down the road.

Why it’s a problem

• It makes tracking your business expenses a nightmare.

• It can complicate your tax situation.

• You could put your personal assets at risk.

Solution: Take a few minutes to open separate business accounts and stick to using them for all your business transactions.

2. Lax bookkeeping

When you’re juggling a million tasks, bookkeeping often falls by the wayside. Before you know it, tax season arrives and you’re drowning in a year’s worth of receipts and transactions.

Why it’s a problem:

• Catching up on months of bookkeeping is incredibly time-consuming and stressful.

• You might miss important deadlines or deductions in your rush to catch up.

• You won’t have a clear picture of how your business is doing throughout the year.

Solution: Block out a little time each week for bookkeeping and use good accounting software to make it easier. If you’re swamped or things get complicated, there’s no shame in bringing in a professional bookkeeper.

3. Not tracking expenses accurately

Every dollar counts in a small business, whether you’re buying major equipment or just grabbing office supplies. Yet many business owners treat expense tracking as an afterthought.

Why it’s a problem:

• You might miss out on valuable tax deductions.

• It’s harder to understand your true profitability.

• You can’t identify areas where you might be overspending.

Solution: Keep all your receipts and develop a system for categorizing expenses. Many accounting software products let you snap photos of receipts with your phone, making it easy to capture expenses on the go. Remember, small expenses can add up over time.

4. Not reconciling bank statements fast enough (or at all)

Bank reconciliation isn’t always the most exciting, but it’s crucial for catching errors and preventing fraud.

Why it’s a problem:

• You might miss fraudulent charges or bank errors.

• Your financial statements won’t be accurate.

• Working with the wrong numbers can lead to cash flow issues.

Solution: Make reconciling your accounts a monthly habit. Most accounting software makes this pretty painless, and you’ll sleep better knowing your numbers are accurate.

5. Overlooking cash flow management

While profit and loss statements are important, they’re not the whole story. Your business needs healthy cash flow to thrive.

Why it’s a problem:

• You might struggle to pay bills even when you’re profitable on paper.

• You could end up with unnecessary debt or late fees.

• Growth opportunities might pass you by if you’re short on cash.

Solution: Get in the habit of forecasting your cash flow. Consider offering early payment discounts or negotiating better payment terms with vendors to keep cash flowing smoothly.

6. Mishandling payroll

If you have employees, payroll mistakes can be really really costly, both financially and legally.

Why it’s a problem:

• Messing up withholdings can lead to penalties for your business.

• Misclassification of employees as contractors can create legal issues.

• Pay errors can damage your employees’ morale and trust in your business.

Solution: Make sure you understand your payroll tax obligations inside and out. Consider using payroll software or working with a payroll service. Keep up with labor laws and regularly review how you classify your workers.

While there’s nothing wrong with managing your own books, knowing when to ask for help is just smart business. A good accountant does more than keep you compliant — they can help your business grow and thrive.

Feeling overwhelmed? Or just want to make sure you’re on the right track? At Archer Lewis, we’re here to help you build a solid financial foundation for your business. Learn more.

Taxes aren’t exactly thrilling, but they’re a crucial part of your business success. And if you have questions, you’re not alone — many business owners struggle with self-employment tax. Whether you’re just starting out or have been managing your books for a while, understanding this tax is essential for your financial health. Read on for a rundown of what you need to know.

What exactly is self-employment tax?

Self-employment tax is your contribution to Social Security and Medicare — it’s currently 15.3% of your income. When you work for someone else, your employer splits this cost with you. But when you’re self-employed, you’re covering the whole amount yourself. That breaks down to 12.4% for Social Security (but only on the first $160,200 of your earnings as of 2023) and 2.9% for Medicare.

Remember, while it might feel like a big chunk of change, you’re investing in your future retirement and healthcare benefits.

Who needs to pay self-employment tax?

You’ll need to pay self-employment tax if you’re:

• A solo business owner running an unincorporated business.

• A freelancer or independent contractor doing gig work, writing, design, or other services.

• Part of a business partnership.

If you earn $400 or more in net self-employment income during the year, you’re on the hook for self-employment tax.

Who gets a pass?

Not everyone has to pay self-employment tax. You might be exempt if you’re:

• An S corporation officer who takes a reasonable salary (different rules apply to your dividends).

• A member of certain religious groups that opt out of Social Security benefits.

• A qualifying non-resident alien under specific IRS rules.

Smart ways to reduce your tax bill

While you can’t avoid self-employment tax entirely, you can minimize it:

• Track your business expenses — every deductible expense reduces your taxable income.

• Look into forming an S corporation — it could save you money on taxes in the long run, especially as you make more money.

• Contribute to a retirement plan — not only are you saving for the future, but you’re reducing your current tax bill.

Special situations to keep in mind

If you’ve been running a business for a while you know that taxes are never simple or straightforward. Here are some special cases that make things more complicated:

• Running multiple businesses? You’ll need to combine all your earnings to calculate your tax.

• Have a day job plus a side gig? You’ll owe self-employment tax on your side income even though you’re also paying taxes on your other income.

• Earning rental income or dividends? Good news — these usually aren’t subject to self-employment tax.

Self-employment tax is part of doing business, and understanding it helps you plan better and keep more of your hard-earned money. While this guide covers the basics, every business situation is unique. If you’re feeling overwhelmed or want to make sure you’re not leaving money on the table, the team at Archer Lewis is here to help. We can get tax hassles off your plate while keeping your business goals front and center.

Learn how we can help your business thrive.

Small business owners know that every dollar counts, especially when you’re just starting out. From the initial market research to setting up your office, expenses pile up quickly. The good news is that some of these costs can be written off to cut your tax bill — but it’s important to know the rules to get the most from these deductions.

In this article, we’ll cover how to write off small business expenses, including how to claim the $5,000 first-year start-up deduction and what qualifies as a legitimate business expense.

Do: Understand what qualifies as a startup expense

First things first, let’s clarify what the IRS considers a startup expense. This is what you spend before you actually open your doors for business. They might include:

• Market research.

• Advertising.

• Travel costs related to finding suppliers or distributors.

• Wages for employees in training.

• Consultant fees.

It’s important to keep detailed records of these expenses from day one. You’ll need this information when it comes time to file your taxes.

Don’t: Confuse startup expenses with organizational expenses

They sound similar, but startup expenses and organizational expenses are different as far as taxes are concerned. Organizational expenses are what you spend to actually form your business, such as:

• State incorporation fees.

• Legal fees for drafting your corporate charter.

• Accounting fees for setting up your books.

You should keep these separate from your startup expenses in your records.

Do: Take advantage of the $5,000 first-year write-off

Here’s some good news: the IRS allows you to deduct up to $5,000 of your startup costs in your first year of business. This is a fantastic way to reduce your tax burden right out of the gate. But there’s a catch…

Don’t: Forget timely filing requirements

To claim the $5,000 first-year deduction, you need to file your tax return by the due date (including extensions) for the tax year when you started your business. If you miss this deadline, you could lose out. Mark your calendar and don’t let this slip!

Do: Understand the limits of the first-year deduction

While the $5,000 write-off is great, it’s not a given for every small business. If your total startup costs exceed $50,000, the amount you can deduct in the first year starts to decrease. For every dollar over $50,000, your deduction goes down by a dollar. So if you had $52,000 in startup costs, your first-year deduction would be reduced to $3,000.

Don’t: Forget about amortization

Any startup costs that you can’t deduct in the first year aren’t lost forever. You can amortize the remaining costs over a 15-year period. This means you’ll still get the tax benefit, just over a longer time frame.

Do: Make the startup expense deduction on your tax return

It isn’t complicated to claim the startup expense deduction – you just write “Section 195 Election” at the top of your Form 4562 with the amount you’re deducting. If you don’t make the election to deduct startup expenses on your first business tax return, you won’t be able to deduct them in future years. You only have one shot, so you have to include these deductions when you file for the first time.

Don’t: Mix personal and business expenses

This is a big one. Make sure you’re only claiming expenses that are genuinely for your business. Using your business account for personal expenses, or vice versa, can land you in hot water with the IRS.

Do: Consider other types of expenses

While we’ve focused on startup expenses, don’t forget about other types of costs that might be fully deductible in your first year, such as equipment purchases (which might qualify for Section 179 expensing) or routine business expenses once you’re up and running.

Don’t: Assume all industries are treated the same

Some industries have special rules. For example, if you’re purchasing an existing trade or business, different rules may apply to how you can deduct your costs.

Do: Keep flawless records

Good record-keeping is crucial. Save receipts, invoices, and anything else related to your startup expenses. This will make your life much easier come tax time and put you in a good place if you get audited.

Don’t: Do it alone if you’re unsure

This stuff isn’t easy. In fact, tax law is so complicated that it’s literally our full time job. If you’re feeling overwhelmed or unsure about how to sort out and deduct your startup expenses, it might be time to consult with a tax pro. At Archer Lewis, we can help ensure you’re making the most of your deductions while still following the rules.

Remember, every business is unique, and what works for one might not work for another. By understanding these basic do’s and don’ts, you’re already on the right track to making smart financial decisions for your new business.

Learn how we can help your small business with accounting.

For many small business owners, managing their own finances might work in the beginning. But there comes a time when getting professional help isn’t just a nice-to-have — it’s crucial for your business’s future. Learn when to hire a bookkeeper with these six telltale signs.

1. Your records are a mess

Let’s be honest: if you aren’t totally confident that you’re organizing your financial records properly, it’s time to bring in a pro. A professional bookkeeper doesn’t just enter numbers; they create a system that makes sense. They organize your finances in a way that:

• Makes tax season less of a headache.

• Ensures payroll runs smoothly and on time.

• Provides a clear view of your business’ financial health at any moment.

Remember, organized records aren’t just about neatness — they’re about having the right information at your fingertips when you need to make crucial business decisions.

2. Reconciliation is taking too much energy

Bank reconciliation—matching your records with your bank statements—should be a pretty straightforward task. If you’re spending hours trying to make the numbers add up, or worse, putting it off entirely, you’re setting yourself up for trouble.

A professional bookkeeper will:

• Reconcile accounts quickly and accurately.

• Catching and fixing small errors before they become big problems.

• Make sure you’re always working with current, correct financial information.

When reconciliation isn’t done properly, you’re setting yourself up to make decisions based on bad data. Having a pro handle this task can save you from expensive mistakes down the road.

3. Your business is growing

Growth is exciting, but it introduces new financial challenges. As your business expands so does the complexity of your bookkeeping needs. You might find yourself dealing with:

More complex financial transactions.

• A bigger team to pay.

• Multiple revenue streams.

• More bills to track.

A professional bookkeeper can help you manage these changes, setting up systems that scale as you grow. They’ll ensure your financial foundation remains solid while you build your business.

4. Sales are up but profits are down

This scenario is more common than you might think. Many small business owners find themselves selling more than ever, but at the end of the day, profits are still slim. If this sounds familiar, it’s a clear sign you need professional help.

A skilled bookkeeper can:

• Analyze your cash flow.

• Identify areas where you’re overspending.

• Help you understand your true profit margins.

• Suggest ways to improve your bottom line.

Usually, an expert pair of eyes on your books can reveal opportunities for profitability that you might have overlooked.

5. You’re spending too much time on bookkeeping

As a business owner, your time is precious and limited. If you’re spending more time crunching numbers than growing your business, it’s time to delegate.

A professional bookkeeper frees you up to focus on what you do best:

• Building client relationships.

• Developing new products or services.

• Strategic planning.

Remember, every hour you spend on bookkeeping is an hour you’re not spending on activities that directly grow your business.

6. You’re facing an audit or complex tax situation

The word “audit” strikes fear into the hearts of many small business owners. But with proper bookkeeping, it doesn’t have to. If you’re facing an audit, or if your tax situation has become more complex (perhaps due to expanding into new states or countries), a professional bookkeeper is key.

They can:

• Keep your records audit-ready.

• Deal with auditors or tax authorities.

• Help you navigate complex tax regulations.

• Potentially save you money on taxes with better planning.

In conclusion, while doing your own books might seem like you’re saving money, it could be costing you in ways you haven’t considered. Professional bookkeepers do more than keep your numbers straight — they help your business succeed. If any of these signs sound familiar, it might be time to talk with a pro. The experienced accountants at Archer Lewis are ready to help. Learn how we can help your business with bookkeeping.