FAQs

Yes, if you use a portion of your home exclusively and regularly for business purposes, you may be eligible to deduct related expenses such as rent, utilities, and maintenance. However, there are specific criteria to meet, so it’s advisable to consult a CPA to ensure proper documentation and compliance.

Tax deductions reduce your taxable income, while tax credits directly reduce your tax liability. Deductions are based on eligible expenses, while credits are often tied to specific actions like education or renewable energy adoption. Understanding how to maximize both can significantly impact your tax liability.

Reconciling bank statements is crucial for ensuring the accuracy of your financial records. It helps identify any discrepancies between your records and the bank’s records, detects errors, and prevents fraudulent activities, providing a clear picture of your business’s financial health.

Cash accounting records transactions when money changes hands, while accrual accounting records transactions when they’re incurred, regardless of when the money exchanges. Choosing the right method affects how you recognize income and expenses and impacts financial reporting accuracy.

Regular account reconciliation is essential for accuracy. For most businesses, reconciling monthly is recommended. This helps identify errors, detect fraud, and provides a clear overview of your financial situation. Automated tools and professional assistance can streamline this process.

While small businesses might manage basic bookkeeping in-house, professional bookkeeping services offer benefits like accuracy, compliance, and time savings. Outsourcing allows you to focus on your core business activities while experts ensure your financial records are maintained accurately and efficiently.