Trucking & Logisticsm7grp

The Trucking Cycle: Anticipating the Year Ahead

New to trucking? More home time lately? Post-holiday season means slower freight and fewer miles, affecting pay. January to March is typically slow. Plan ahead for these times. Here’s what to expect and how to prepare.

January through March: Enjoy Your Home Time

It’s the slow season, so drivers get more time at home – enjoy it! Expect 10-20% fewer miles and shorter runs, but it’s better than no miles. Companies balance short and long hauls. Financially, there might be a slight pay decrease, but you can prepare for this during busy times.

April through June: Business as Usual

By April, or even sooner, freight volumes balance out, and you’ll haul normal loads again. Work-wise, you’ll return to regular volumes and miles, while maintaining a healthy home life. Financially, things stabilize, and you can expect normal paychecks.

July through September: Things Start Heating Up

This is an interesting time in trucking. Freight volumes increase above normal, and many drivers take holidays. While they’re away, companies struggle to fill loads, offering more miles. Taking extra miles now reduces home time but boosts your earnings. This is the time to save money for the slow season.

October through December: Make Hay While the Sun Shines

This is the busiest time in trucking. It’s so hectic you’ll soon wish it were January. Seasoned drivers sacrifice home time to earn more now, knowing they’ll have plenty of home time in January and February. Miles can increase by 10 to 20 percent, significantly boosting your income.

As you anticipate the various seasons and their impacts on your work and home life, it’s essential to have a reliable partner to assist you along the way. At M7 Group, we specialize in trucking accounting and logistics, offering tailored solutions to support drivers like you. Whether you’re facing the slower months of January through March or the bustling period of October through December, our expertise can help you navigate financial challenges and optimize your earnings. Consider partnering with M7 Group to streamline your operations and maximize your success on the road. Explore how our services can benefit you: Trucking & Logistics
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Personal Tax, Taxesm7grp

What Should You Do If You Missed the Tax Deadline?

Tax Day was April 15, 2024 for most Americans — if you live in one of the states with automatic extensions, you’ve got a little more time, but if not, you’re out of luck. If you didn’t file an extension or complete your tax return by midnight on Monday, you’re now delinquent.

Did you miss the 4/15 Tax Day deadline?
Review M7 Group’s tax partners to find the perfect match for you

For taxpayers who are certain they’ll receive a refund on their 2023 tax return, the only harm in missing the tax deadline is letting the IRS hold on to your money a bit longer. However, if you owe taxes, you don’t want to wait — penalties and interest can pile up quickly.

What if I missed the deadline and I’m expecting a tax refund?

If you’re expecting money back from the IRS from your 2023 tax return, there are no penalties for filing late. In fact, you have three years to file your 2023 tax return before the IRS turns your tax refund over to the Treasury and your money is gone forever.

Your tax refund might be delayed by filing late, but you should still expect to receive your money in four to six weeks.

You could be making good use of the money the IRS owes you, and the longer you wait to file your taxes, the more you lose out. Whether you use your tax refund to pay down credit card debt, start an emergency fund, make investments or even just treat yourself to a nice dinner or vacation (depending on your refund amount), you want your money as soon as possible. Letting the IRS keep your tax refund longer only deprives you of possible interest and spending power.

What if I missed the deadline and I owe money on my taxes?

If you missed the tax deadline, didn’t file an extension and you owe taxes, there’s a good chance you will incur both late filing penalties and late payment penalties. You’ll also have to pay interest on the money that you owe until it’s completely paid.

 

What are the fees and penalties for filing taxes late?

There are two basic penalties that the IRS charges for filing taxes late when you owe money: a failure-to-file penalty and a failure-to-pay penalty. On top of that, you’ll also pay interest on the amount you owe.

 
 

The failure-to-file penalty hurts the most. It’s generally 5% of the amount you owe for each month or part of a month that your return is late, with a maximum penalty of 25%. If your return is more than 60 days late, the minimum penalty is $435 or the balance of your taxes due, if less than that.

The failure-to-pay penalty will also cost you money, but not nearly as much — a big reason to file an extension on time even if you can’t pay anything. This penalty is usually calculated at 0.5% of any taxes owed that aren’t paid by the deadline. The IRS again charges the penalty for each month or part of a month that your payment is late, with a maximum 25% penalty total.

The IRS also charges interest on late taxes. Determined by adding 3% to the short-term federal interest rate, the IRS interest rate is currently 7%. That rate is adjusted quarterly, and interest is compounded daily.

 

Can I file an extension past the tax deadline?

Unfortunately, no. Tax extensions provide taxpayers six additional months to complete their tax returns, but they must be filed by the tax deadline. Taxpayers filing extensions must also include the estimated amount of money that they owe using IRS Form 1040-ES. Online tax software can also quickly calculate your estimated taxes.

If you wanted to file a tax extension with the IRS, you needed to do it by the April 15 deadline. Extensions needed to be filed electronically or postmarked (if using IRS Form 4868 on paper) by midnight April 15, unless you’re in one of the areas given automatic tax extensions due to natural disasters. In that case, you can file a tax extension up until your new tax deadline. Regardless of your tax deadline, any tax extension you file will only prolong your deadline until Oct. 15, 2024.

 

What if I filed an extension on time?

If you filed a tax extension by the April 15 deadline, you get an extra six months to file your 2023 tax return. As long as you paid an estimated amount that’s close to what you owe, you won’t be subject to fines or penalties if you file your return and pay any remaining tax liability by Oct. 15, 2024.

If you don’t pay enough money with your tax extension, you may be subject to the late payment penalty. The IRS expects your estimated payment to be at least 90% of your total tax liability. The agency may charge a 0.5% per month penalty on the amount of unpaid taxes if you paid less than that, so you should still complete your tax return and file it as soon as possible.

 
 

What if I can’t afford to pay the taxes I owe?

Owing taxes that you don’t have the money to pay can be incredibly stressful. However, you can take action now that will lighten both your financial and psychological burdens.

Consider an IRS payment plan. If you can pay off your tax debt within 180 days, the IRS will let you apply for a short-term payment plan that costs nothing, although you’ll still accrue penalties and interest until your debt is paid off. It’s easy to apply online or at a local IRS office.

If you need more than 180 days, you can apply for a long-term payment plan that costs $31 for automatic monthly bank payments via direct debit, or $130 for non-direct debit payments. Low-income taxpayers — those with adjusted gross incomes at or below 250% of the federal poverty guidelines — can waive the fee for the direct-debit instalment plan or pay $43 for the non-direct debit plan.

You might consider other borrowing options outside of the IRS. If your tax liability isn’t too high, you could use a credit card with a 0% intro APR to pay your taxes, assuming you can pay off that debt before the intro period expires. For larger tax debts, you could consider a debt-consolidation loan, though your rate may be higher than the 7% currently charged by the IRS.

Bookkeepingm7grp

The importance of a Personal Tax Accountant

Navigating the complexities of personal taxes can be a challenging task for Canadian residents. In this blog, we’ll explore why hiring a personal tax accountant is a wise decision and how it can benefit both your financial well-being and peace of mind.

 

While it’s beneficial to attract customers through enticing financial incentives, it’s crucial to emphasize the value our accounting services bring to their businesses. Encouraging clients to choose our company goes beyond monetary advantages, emphasizing the unparalleled expertise, personalized attention, and strategic financial insights that set us apart in the realm of accounting.

Expert Tax Knowledge

Expert tax knowledge is invaluable when navigating complex tax laws and regulations. Tax professionals, such as CPAs or tax attorneys, can help you optimize deductions, credits, and tax strategies, potentially saving your business money and ensuring full compliance with tax authorities. Their expertise is particularly essential in situations involving tax audits or complex financial transactions.

Time Efficiency: Accounting Services

Hiring a personal tax accountant provides access to a professional with in-depth knowledge of the ever-changing tax laws and regulations. They can identify opportunities for tax optimization, ensuring you take advantage of deductions, credits, and exemptions to minimize your tax liability while remaining fully compliant with tax laws.

 

Tax Accountant’s Audit Support 

When you have a personal tax accountant, you gain the advantage of having a knowledgeable advocate in case of tax audits or inquiries from tax authorities. Your accountant can guide you through the audit process, help prepare documentation, and represent your interests during interactions with tax authorities. This level of support can alleviate the stress and uncertainty that often accompanies tax audits, ensuring you have a trusted professional to navigate the complexities of the situation on your behalf.

 

Financial Planning

A tax accountant can significantly aid in financial planning by providing expert guidance on optimizing your tax strategies, identifying tax-efficient investment opportunities, and ensuring you take full advantage of available deductions and credits. They can also assist in structuring retirement and estate plans to minimize tax implications, offer insights into budgeting, and provide year-round financial advice, ultimately helping you achieve your financial goals while staying compliant with tax regulations.

 

Stress Reduction

Engaging a personal tax accountant can save you significant time and reduce stress during tax season. They handle the complex tax preparation process, freeing you from the hassle of navigating forms and calculations. This allows you to focus on your other financial and personal priorities while having confidence that your taxes are being handled accurately and efficiently.

Hiring a personal tax accountant is a strategic investment in your financial future. Their expertise, time-saving benefits, error prevention, financial planning guidance, and stress reduction can significantly enhance your financial well-being.

If you’re looking for expert assistance in managing your personal taxes and achieving financial peace of mind, then contact M7 Group Our personal tax accountants are here to help you navigate the complex world of taxation.

 

Get in touch with us today

Bookkeepingm7grp

Register for IRS Tool to Monetize Clean Energy Credits

Through new elective payment and transfer options, applicable businesses, tax-exempt organizations or entities such as state, local and tribal governments can take advantage of certain tax credits – even if they don’t have taxable income. They can apply these options to certain clean energy and manufacturing credits under the Inflation Reduction Act of 2022 and the CHIPS Act.

Register Online Before Filing

Before filing a tax return, the applicable business or entity must complete the pre-file registration process to receive a registration number. They can register online with the new IRA/CHIPS Pre-filing Registration Tool. Their registration number must be included on their annual return to make an effective election.

Interested businesses and entities should submit the pre-filing registration request for the tax year in which they will earn the credit. The IRS recommends that eligible entities register as soon as possible after the facility/property is placed in service and at least 120 days before filing a tax return. This allows time for the IRS to review and request any additional information before issuing the registration number before the due date of the return.

If the elective payment amount, together with other tax payments and refundable credits, exceeds income tax liability, the IRS will treat the elective payment amount as an overpayment of tax, which can be refunded or credited to the estimated tax for the next tax year.

 

Bookkeepingm7grp

10 IRS Red Flags to know for 2024

Clients always ask, is this going to result in me getting audited? The truth is that we never really know. Some audits are randomly generated, some are more likely based on income or entity structure, and some are based on the areas that the IRS knows are traditionally not handled correctly or documented well.

If you want to reduce the likelihood of your clients being audited, or even just receiving notices that will result in you have having to spend more time on returns, then make sure you handle these 10 red flags with extra care.

  1. Not reporting all your income – this seems like a no brainer to practitioners, but we’ve all had the client who frustratingly ends up with a 1099 or K-1 that pops up even after we’ve drafted the return. Checklists and reminder lists can help your clients to double check what forms they need to be sending to you before filing.
  2. Taking business deductions that seem too big – computerized review has aided the IRS on this one. Business returns are reviewed by NAICS code for common percentages and averages. I once had a photography client get audited because she claimed $0 in cash sales outside of her 1099-K from her credit card processor. Her contracts all clearly stated that fees had to be paid electronically in advance of sessions, but it made her return look unusual compared to her industry.
  3. Writing off hobby losses year after year – this one has been hot since COVID. The gig economy uptick has everyone starting a side hustle and few people claiming all their income, or even properly claiming their expenses, from their side hustles. Make sure you’re talking to your clients about hobby loss rules and what constitutes a sustainable business that isn’t going to result in them owing back taxes to the IRS.
  4. Claiming the American Opportunity Tax Credit incorrectly – The IRS checks closely to make sure people take this college tuition credit properly. Be sure to ask your clients enough questions to ascertain what they actually qualify for.
  5. Health insurance credits that don’t match 1095-A – The marketplace websites estimate credits to help pay premiums but not everyone’s income actually ends up falling in line with those estimates. Over/under payments of premium credits are reconciled when taxpayers file their returns, and failure to properly report form 1095-A will always result in a notice and could also boost your client’s chances of an audit.
  6. Taking retirement money out early without the penalty – If your client had a legitimate reason to not be subject to penalties, make sure that the brokerage firm properly reports that on the 1099-R with the correct codes. Otherwise, you can expect an adjustment notice.
  7. Not reporting gambling winnings or claiming huge gambling losses – I recommend that this one stay on your annual tax organizers/questionnaires. Clients often don’t think about gambling winnings until a 1099 that they weren’t expecting pops up. Claiming huge gambling losses is another red flag. Make sure your client’s losses are backed up by proper documentation.
  8. Improperly claiming rental real estate losses – Not all tax software does this correctly so double check to ensure your clients are actually claiming rental losses properly as passive or non-passive income. Only rental real estate professionals can claim rental losses as non-passive and use it to offset their ordinary income. Don’t assume your software is doing this correctly.
  9. Falsely claiming the research & development credit – Much like the ERTC credits that were wrought with fraud and “expert” firms popping up all over the country claiming to help clients receive huge refunds, the IRS is cracking down on firms that solicit clients to claim research and development credits. Make sure your clients work with a reputable expert if they choose to go this route and review the documentation to support the credit calculations.
  10. Not reporting virtual currency transactions – The IRS hunts for unreported income from buying, selling or trading bitcoin and other digital currencies. They expect you to report it even if you just made a little money. Most clients don’t know that even transactions like coin splits and gifts are reportable income and failing to add it to their returns could raise questions. If your clients are invested in digital currency, make sure you have a conversation about what their transactions looked like.
Virtual CFOm7grp

What is a fractional CFO? (And who should hire one?)

A fractional CFO is a financial expert with years of experience who provides the job functions of a Chief Financial Officer but on a part-time basis. They often work with multiple clients on a subscription or project-basis rather than working for one company.

What is the difference between a fractional CFO and the services a traditional bookkeeper or accounting firm can provide?

Why would a business want to hire a fractional CFO? The answer is pretty simple. Many small and mid-size businesses are not ready to hire an in-house Chief Financial Officer on their team. Maybe the business doesn’t have the funds available to make a full-time hire, or maybe they just don’t have enough work to warrant a full-time employee joining the team. Either way, a fractional CFO (also referred to as a virtual CFO, outsourced CFO, or a part-time CFO) is a finance professional who provides businesses with outsourced financial services designed to help them reach business goals and improve profitability.

Fractional CFO vs. Traditional Bookkeeper or Accounting Firm

What is the difference between a fractional CFO and the services a traditional bookkeeper or accounting firm can provide? This is a question we at M7 Group provide advisory services. What is the difference between a fractional CFO and the services a traditional bookkeeper or accounting firm can provide? This is a question we at M7 Group get quite often. The answer is an advisory relationship. Fractional CFOs don’t just help you file your taxes and prepare basic financial statements. A fractional CFO helps you with data-driven decision-making, based on forward-looking financial reporting.

Fractional CFO vs. Virtual CFO vs. Interim CFO

If the term fractional CFO and virtual CFO are often used interchangeably, is there a difference between the two? Sometimes, fractional CFO is used to refer to part-time CFOs that visit their clients physically in-person. These financial professionals may visit clients in their office buildings or even work part-time in the office.

Virtual CFOs, on the other hand, deliver services in an entirely remote environment. They will log into Zoom, Teams, or other video conferencing software to meet with clients. This remote work environment allows for flexibility for both clients and virtual CFOs because services can be delivered anywhere internet access is available.

However, it is important to note that remote, part-time CFOs are often referred to as fractional CFOs, as well. Make sure you verify the mode of interaction a financial professional uses when considering hiring them for your financial needs. That way, if you have a preference for in-person or virtual services, you are aware of a candidate’s business model before hiring or signing contracts.

I’d also like to note that both fractional CFOs and virtual CFOs are very different from interim CFOs. While fractional CFOs, as well as virtual CFOs, offer ongoing services, an interim CFO only works for a business for a short time. An interim CFO is exactly as it sounds, a CFO that replaces a former CFO while a business looks for a permanent hire.

 

 

What Does a Fractional CFO Do?

We previously mentioned that a fractional CFO provides accounting services and is a trusted financial advisor. Your virtual CFO will provide you with their expertise and viewpoint of your financials so you can make calculated decisions to get you closer to your business goals.

How a fractional CFO does this is through a mix of financial strategies and strategic planning. They will provide “basic” accounting services that a bookkeeper or a traditional CPA firm provides like:

·       month-end close

·       financial statements

·       scheduled financial meetings

·       revenue recognition

·       management of banking relationships

These services are designed to make sure you are in “good financial standing”.

However, there are many unique fractional CFO services that a traditional bookkeeper wouldn’t provide. Fractional CFOs will use the previously listed services to gather information used to develop long-term financial forecasts, short-term forecasts, cash flow management, scenario plans, and company-wide KPIs.

These last services will help you understand where your company is currently sitting financially, and how your company can make changes to achieve certain business goals. For example, your CFO can use a forecast to show you how certain business decisions will impact your future numbers. From there, you could see if you would have the money to make a new hire or if you may have to scale back a certain product line that isn’t doing well. One of the major benefits of a fractional CFO is that they help entrepreneurs understand the financial and non-financial metrics that drive their business, in other words, the things an owner can control, like whether to grow their team, use freelancers, or change their pricing.

A fractional CFO can also provide other services like:

·       incentive plans (phantom stock, esops and variable pay)

·       performance by project

·       team member performance evaluations

·       department performance evaluations

·       customized department reports.

Taxesm7grp

Want taxes to be easy? Work on them year round, not last minute.

The way to make your annual taxes a good experience is to do your work now instead of waiting until right before they’re due. Here’s why.
 

Trust Your Money With Us

Taxes aren’t just a once-a-year phenomenon. Filing taxes begins with a plan and a daily routine. If your goal is to learn a language so you can visit a foreign country, learning in small, easy-to-digest segments makes it easy to absorb and retain. When you finally take your trip, it’s that much more rewarding.

The same is true of taxes. Attacking them in the handful of days before they’re due is a formula for stress, error and failure. Breaking down tax-related recordkeeping and related tasks into smaller segments, such as reviewing receipts and invoices an hour a week, makes the process more manageable and less overwhelming. Keeping taxes on your radar all year can even be good for your overall finances.

Make a regular tax thing

Have you ever skipped mowing your lawn for a few weeks? Suddenly, it’s up to your knees, the grass gets stuck in your blades and it takes way longer than it should. The same is true of handling your tax-related finances. If you document and file your receipts and invoices when they’re fresh in your mind, they’re easy to account for properly. That’s why you should look at them regularly — how regularly will depend on how much work there is. I recommend looking at everything at least once a month, but if you’re doing a lot of business, you may want to do it every two weeks or even weekly. Just make it part of your routine.

An excellent way to handle that is to write down an appointment in your business calendar. Writing it down will help in multiple ways. You should also physically write down what you must address at each session.

 

When you do that, you can also use the information to look forward. This can be really useful if your income differs from month to month. By seeing what you brought in in the past month, you can:

  • Get a better idea of what your year-end income will be.
  • See whether you may fall short and address that before it’s a severe problem.
  • Know which clients are your best.

When you know whether your year-end income looks like it will be much different from your previous year or what you expected, you can make plans to have money ready to pay at the end of the year or make adjustments to your estimated tax payments.

If you find you’ll have more money than you expect, it also provides an opportunity to make investments. You can buy something that will help the business — or even take a larger share home.

 

Don’t lose the paperwork

Your routine attention to tax-related paperwork will pay off at tax time. This is true whether you’ll be doing the filing, an employee will or a tax accountant will. Record the expenses that will count as deductions at your regular session closest to when they happen. This will include regular outlays such as rent; variable outlays such as utilities or internet (note the Internal Revenue Service rules if you’re declaring the costs for a home office versus a traditional office or facility); and your business phone. One of the easiest expenses to lose track of is business mileage. Entering mileage and the reason for travel will make things easier when it’s time to file.

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