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What Is a Balance Sheet?

A balance sheet is one of the three primary financial statements used to assess a company's financial position at a specific point in time. It provides a snapshot of a company's assets, liabilities, and equity. The balance sheet follows the fundamental accounting equation: Assets = Liabilities + Equity Here's a breakdown of the components of a balance sheet: Assets: Assets represent what the company owns or controls and can include tangible assets (such as cash, inventory, property, plant, Read more [...]
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Understanding the Tax Implications of Investment Income

Investment income refers to the money you make on various types of investments, such as stocks, bonds, mutual funds, real estate, and interest-bearing accounts. It can be categorized into two main types: ordinary income and capital gains. Ordinary Income: Ordinary income from investments includes interest, dividends, and rental income. Let's briefly explore each: a) Interest: If you earn interest from investments like savings accounts, certificates of deposit (CDs), or bonds, that income is Read more [...]
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5 Ways to an Accountant’s Heart

In the last few years, the shortage of accounting professionals has grown tremendously, and many business owners are struggling to find reputable, quality accounting services. Prices for accounting services may have gone up due to this supply/demand imbalance, and they will keep going up for years to come– due to the shortage of accounting graduates and the overall pipeline. It makes sense to explore how to work better with your accountant as they become more and more scarce and in demand. A Read more [...]
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What Income Are You Required to Pay Tax On?

In general, income can be received in three ways – money, services, and property – and IRS requires you to declare most of this income on your tax return. Income is taxable unless specifically exempted by law, and in some cases, even nontaxable income must be disclosed on your tax return. Taxable Income Typically, the following types of income are required to be declared on your tax return, and you must pay tax on them: Wages Salaries Commissions Strike pay Rental income Read more [...]
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Is Your Business Considered a Hobby by the IRS?

Are you running a business? Or just having fun with a hobby? The IRS has strict rules for determining the difference between a business and a hobby for tax purposes. While expenses incurred to conduct a business are deductible, expenses incurred for a hobby may not be, causing your taxes to increase. A person that conducts an activity for profit is allowed to deduct the expenses that are ordinary and necessary in that industry. If the expenses exceed the income, a loss is incurred. This loss Read more [...]