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Managing Financial Transactions, 
Bookkeeping Basics 
and Small Business Tax Tips 
Wray Rives, CPA CGMA 
Certified Public Accountant 
Chartered Global Management Accountant
Topics 
 What it means to be in business for 
yourself 
 Getting paid and paying others 
 Dealing with independent contractors 
 Bookkeeping  the simplified version 
 Handling the more confusing deductions 
 Taxes 
 Tips
Welcome, business owner 
As a business owner you must: 
Generate your 
own income 
Fund your 
expenses 
Track and 
report 
income and 
expenses 
Contribute to 
Social Security 
and Medicare 
Pay income 
taxes on 
your profit 
Pay those 
taxes 
4 times 
a year 
Track and 
report 
payments 
to contractors
Money inmoney out 
Goal: Get paid quickly 
Income 
 Use free online tools to track time and invoice 
 Use Paypal to get paid (www.paypal.com) 
 Create simple contract (www.docstoc.com) 
Goal: stay organized, Expenses avoid missed deductions 
 Get a separate checking account 
With online bill pay 
 Get a separate credit card 
With annual summary
Using contractors 
 Make sure they are contractors, not 
employees 
 Independent contractor agreement 
 Fill out a W9 
 Report all payments > $600 in a year 
 File 1099 at end of year
Bare-bones bookkeeping 
Keep it simple 
 Use cash method 
 How much did you 
earn? 
 How much did you 
spend?
Key deductions 
Home office deduction (form 8829) 
Meals & Entertainment 
50% deductible 
Cost of Goods Sold 
Depreciation 
Do you spend more than 
$25,000 on equipment 
in a year? 
No 
Then dont worry  write it off 
Mileage 
$0.56 per mile for 2008 
Electronic records are permitted 
Value of inventory on Jan 1 
+ 
$$ spent on new products 
- 
Value of inventory on Dec 31 
Square footage 
of office 
Square footage 
of residence 
X 
Household 
expenses 
(rent, insurance, 
Utilities, etc)
Taxes 
Self employment taxes  Social security: 15.3% of first $117,000 
income 
 Medicare: 2.9% of all income 
Income taxes Based on total household income 
Quarterly payments 1st quarter: April 15 
2nd quarter: June 15 
3rd quarter: September 15 
4th quarter: January 15 
Safe harbor provisions No penalty if you pay either: 
 The same amount you paid last year 
 90% of what you should pay this year 
Penalty for underpayment Interest on the amount of underpayment, 
currently at 3%
Tips 
 Track/save everything  you can always 
figure out details later 
 Be cheap  cash is king, barter 
 Embrace technology  it is your friend 
 Value your time
Wray Rives, CPA CGMA 
www.NeedaCPA.com 
 wray@NeedaCPA.com 
 @rivescpa

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Bookkeeping primer

  • 1. Managing Financial Transactions, Bookkeeping Basics and Small Business Tax Tips Wray Rives, CPA CGMA Certified Public Accountant Chartered Global Management Accountant
  • 2. Topics What it means to be in business for yourself Getting paid and paying others Dealing with independent contractors Bookkeeping the simplified version Handling the more confusing deductions Taxes Tips
  • 3. Welcome, business owner As a business owner you must: Generate your own income Fund your expenses Track and report income and expenses Contribute to Social Security and Medicare Pay income taxes on your profit Pay those taxes 4 times a year Track and report payments to contractors
  • 4. Money inmoney out Goal: Get paid quickly Income Use free online tools to track time and invoice Use Paypal to get paid (www.paypal.com) Create simple contract (www.docstoc.com) Goal: stay organized, Expenses avoid missed deductions Get a separate checking account With online bill pay Get a separate credit card With annual summary
  • 5. Using contractors Make sure they are contractors, not employees Independent contractor agreement Fill out a W9 Report all payments > $600 in a year File 1099 at end of year
  • 6. Bare-bones bookkeeping Keep it simple Use cash method How much did you earn? How much did you spend?
  • 7. Key deductions Home office deduction (form 8829) Meals & Entertainment 50% deductible Cost of Goods Sold Depreciation Do you spend more than $25,000 on equipment in a year? No Then dont worry write it off Mileage $0.56 per mile for 2008 Electronic records are permitted Value of inventory on Jan 1 + $$ spent on new products - Value of inventory on Dec 31 Square footage of office Square footage of residence X Household expenses (rent, insurance, Utilities, etc)
  • 8. Taxes Self employment taxes Social security: 15.3% of first $117,000 income Medicare: 2.9% of all income Income taxes Based on total household income Quarterly payments 1st quarter: April 15 2nd quarter: June 15 3rd quarter: September 15 4th quarter: January 15 Safe harbor provisions No penalty if you pay either: The same amount you paid last year 90% of what you should pay this year Penalty for underpayment Interest on the amount of underpayment, currently at 3%
  • 9. Tips Track/save everything you can always figure out details later Be cheap cash is king, barter Embrace technology it is your friend Value your time
  • 10. Wray Rives, CPA CGMA www.NeedaCPA.com wray@NeedaCPA.com @rivescpa

Editor's Notes

  • #7: - No assets, liabilities and owners equity - No debits and credits - No chart of accounts - No cash vs accrual