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Virtual Accounting Blog

What You Should Know about Taxes and Virtual Currencies

These days’ virtual currencies seem to be all the rage. Did you know about the tax consequences? Before you decide to try out the virtual currencies here are some tax consequences that you need to know.

You should be aware that the IRS is watching virtual currency transactions very closely. There have been some misconceptions about tracing virtual currency transactions. However, they can be traced back to their owners by cyber sleuths and governments. If you live in the U.S. you will have to report all of your Bitcoin transactions as well as other virtual currencies, to the IRS.

You must carefully report and pay tax on your transactions if you decide to hold or use virtual currencies. You would be wise to act as if you are being audited, because there’s a good chance you could be audited.

Because Bitcoin or other virtual currencies are not legal tender, they are considered property by the IRS. This means if you are paid in Bitcoin, you will have to report it as income based on its fair market value, on the dateyou received it.

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An Instruction Guide for Travelling the Country in A Van (while working full time)

Have you ever thought about quitting your job and travelling the country in a van? Stop the presses. You can travel the country in a van without quitting your job—if you work for a distributed-model company. The bigger question: Have you thought through all the details?

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Small Business-What You Should Know

Many small business owners are optimistic about the good economy but still have a lot of questions about the new tax bill and how it will affect them in 2018. A lot of owners are also concerned about all the sexual harassment issues that have been headlining the news too. Here is a list of things that may affect your small business.

* Economy. Though it may not always result into more jobs, if the economy continues the way it’s going it may translate into more profits and growth. In 2017 surveys, most small businesses said that they planned to stick with their current hiring patterns, some saying they would add 1 or 2 employees in the next 6 months.

The stock market was up as was consumer spending at the end of 2017, giving a boost to those who have a 401(k) a stronger feeling of financial stability. Though in the past few weeks the markets have been fairly volatile, they seem to be stabilizing at this time. If the economy slows do you have a plan to keep your company afloat?

* Taxes. The benefits of the new tax bill aren’t across the board, even though the tax rates will change for many small business owners no matter what your entity. Some business owners will lose out because work in accounting, law, or consulting, or have income above the tax thresholds. The IRS is still in the process of writing some of the regulations for the new tax bill. There are some things that are known, such as;

* Section 179 deduction. Small businesses can get an immediate tax break on equipment purchases such as, computers, vehicles, or manufacturing equipment. This deduction doubles in 2018 to $1 million.

* Standard mileage rate. The 2018 business mileage rate is 54.5 ¢ per mile.

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Secure Your Investments-Diversify

Are you heavily invested in your company’s stock? No matter how much you love your job or how well your company is doing right now, it’s never a good idea to invest too heavily in only one stock. Even if it’s the company stock, the market can be pretty unstable at times. You could be taking a big risk by not diversifying your savings. Your whole retirement savings could be gone in a flash if the market were to bottom out. That’s why it’s important to diversify your investments.

Exactly what risks are you taking when you load up on your employer's stock?

* The belief that employer shares are less risky is an illusion. Over investment in any company minimizes diversification, exposing your portfolio to increased risk.

* You have a double whammy potential. No company has protection from economic downturns. If your employer's business slow down, you may lose your job, as well as growth in your retirement portfolio from the company's market value.

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Sunk Costs- Know When to Walk Away

What is “sunk costs”? Generally speaking, sunk costs are past expenses that are no longer relevant to your current decisions. For instance, if you purchased new software and hired the firm to install the software on your computer system and for whatever reason, there are a lot of errors that keep occurring. Soon you find that you are having to spend even more cash to have the software company update the system over and over. You have to decide if the cost is worth it or if it’s time to move on to something different.

Sometimes an owner or manager may feel they have invested a lot of time and money and if they moved on to something different they will have wasting all their initial investment. This is not true. This is “sunk cost”. It’s time to move past sunk costs with the confidence of knowing it's the smartest business decision you can make. 

Other examples of sunk costs are sometimes found in advertising,

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Payroll Fraud- Is Your Company Vulnerable?

No matter how careful you are, every business can be susceptible to payroll fraud. Even if you only have a few employees, there is no guarantee that your cash will be safe unless you, as the owner, handle all the aspect of your accounting and payroll. 

So, how can something like this happen? One way that payroll fraud could happen is when there is an overpayment of payroll or withholding taxes. Your bookkeeper could simply withhold or overpay the government. Then when the refund comes in, the bookkeeper deposits it into his/her personal account. There have been cases where the employee might have an account in the company name at a different bank. These accounts can be used for fraudulent deposits and other business receipts. 

The more employees the easier it is to pull off the payroll fraud. Your bookkeeper might create a fictitious employee or even falsely increase hours or commissions for another employee that may want to share the stolen funds. They could also hold the payroll deposits in a personal interest baring account until it’s time to make the payroll tax deposit to the government. 

What can you do to prevent payroll fraud? Large companies generally have good effective fraud controls in

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How Can a Virtual CFO Help Your Business?

Regardless of the size of your businesses, every business can benefit from the "peace of mind" that a Virtual CFO would bring to the business. So, what can you expect from a Virtual CFO? Here are multiple ways that a Virtual CFO could help your company:

* Assist you in designing a written plan that focuses on the growth of your business.

* Assist you with managing and making good decisions for the business.

* Provide a weekly report to measure your company’s key performance indicators.

* Provide a weekly “13 week” cash flow assessment that allows you to predict when you will have a surplus of cash or when you will have a shortage of cash that may require financing.

* Review your banking relationships on a regular basis so that you are prepared when the need for financing arises.

* Provide accurate and timely financial reports each month. 

* Provide assistance when reviewing the financial statements every month for both monthly and year to date results.

* Provide a “profit and loss” analysis on a monthly basis that compares your business’ performance to that of the 

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The Marketing Tool Every Business Needs

These days there is an enormous amount of technology at the tips of our fingers. You’re probably already using social media to boost your business. Word of mouth is also a great tool. But one thing every successful business needs is a good website. Some may think of having a website as an unnecessary extra expense, though it’s actually an essential form of marketing.

According to a recent survey by the Local Search Association, more businesses use social media than a business website to promote their business. The survey also found that when a customer is ready to make  a purchase, they are more likely visit the business website.

Having a website is all about control. You can’t control how social media determines who will see your posts any more than you can control who may write unwanted or nasty review just for the heck of it. If you place an ad in the local newspaper, readers may not even notice your marketing ads.

When you have business website, you are in control of the information a customer sees when they visit your site. You can add social media to your website for marketing, the company logo, product information, and a search engine so your customers can view what you are selling and learn about your business. Here’s a list to consider so you get the most out of your website.

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Tips to Improve Your Credit Score

These days your credit score plays a big role in your ability to buy a car, a home, or rent an apartment. Your credit score also plays a role in your loan and credit card interest rates. It’s also been known to be a deciding factor gainful employment. There are many reasons why it’s important to know your credit score and how you can keep your score as high as possible.

Your Credit score is derived from information compiled in a credit report. These numbers are what lenders use to determine how likely you are to repay your debts on time. Credit reports include:

* Your repayment history: Missed or late payments.

* Utilization ratio: The amount you owe creditors compared to the amount of credit available to you.

* The extent of your credit history: How long your accounts have been open.

Know Your Number. Get a current copy of your credit report and review it for accuracy. All U.S. consumers are entitled to “free” annual credit reports from the major credit reporting agencies, which are Experian, Equifax, and TransUnion. You can request all three reports at

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Company Buyout Pros and Cons

Sometimes when a company is looking to reduce costs and employees, larger companies may offer a buyout to certain employees before dealing with layoffs. Buyouts can be good for both the company and the employee. Employees that take the buyout get a nice sum of cash and companies can reduce high wage senior positions and hire new employees at an entry level wage. Here are some pros and cons for taking a buyout.

Pro: If you accepted the buyout you now have a lot of cash and freedom that you didn’t have before. You can pay off your debt, invest, travel, or start that new business you have always wanted.

Con: If you think about it, it’s not usually all that much money and won’t last as long as you think, especially after the tax man gets his share. Consider how much you need to make ends meet for a year. If you got a $100,000 buyout (before taxes) and need $70k to get by for a year, that only leaves you will $30k for the following year. You may want to find employment before the money runs out. A buyout may leave you with a lot of extra cash but it also leaves you without a job.

Pro: If you didn’t like your old job much, the buyout cash can be used to support you while you start your own business, hunt for other employment, or go back to school to start a whole new career.

Con: After taking some time off you may decide to get back into the rat race. Sometimes finding a new job could take longer than you think due to some stiff competition in your field.

Pro: If you’re close to retirement age you can use the extra cash to get you through

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