City of Portland/Multnomah county residents pay the highest income tax rates in the nation? Let’s find out.
You have been working on your small business for quite some time and now are ready to sell. One thing creeping up in your mind is the tax impact: How much would I owe on taxes. The better question you have been asking yourself would be “is there a way to reduce my tax bill?”
The good news is that there are many ways to reduce your tax liabilities.
We have recently started working on some accounting cleanup projects for a small construction business with roughly $5M sales a year. It turns out that the owner solely owned the business for over 10 years and has not filed his individual tax returns for the past 10 years! Sadly, this is a typical tax resolution case and not uncommon. The owner strongly desires to get back on track with compliance, which takes a lot of courage.
How to save taxes by restoring your state income tax deductions that you lost
Nowadays, outsourcing accounting jobs offshore is increasingly getting more attention. With improved communication over countries, this particular area of offshore work benefits by reducing cost and increasing work efficiency. However, along with the benefits, there are many challenges to be faced. These dangers can become more significant if not handled on time. However, with the proper preparation, you can successfully eradicate these complications to achieve desired results.
Here are some dangers of offshore accounting you need to know about-
- Reduced Security: All the information when offshoring your business is stored over the internet. The client’s financial data is very critical to hackers. Even though cyber security has improved, hackers are developing their skills further. If you have a large business, you can easily get high-end cyber security and protect all your information from cyber thieves. However, the hackers usually target small firms that cannot buy good protection and use the data of such small businesses for personal benefits. Therefore, the clients may have issues with the confidentiality of their data.
- Trust: It is essential to ascertain that the company you outsource your business to works for your best interests. Trust is necessary to prevent relational and performance risks and to keep client’s confidence in your company. There should not be hidden agendas or data theft concerns with your company. To build trust, you can have constant communication with the offshore offices and observe how they work.
- Communication Troubles: Language barriers often create difficulties. The teams on both ends need to communicate clearly to better understand the expectations and goals of the client. Interaction is crucial in producing the expected output. You should ensure that everyone you hire is multilingual and knows the language of the country you offshore your work to.
- Management Differences: Individual teams can have different approaches towards the same result. In such cases, the two managers should understand that both methods will have the same outcomes. However, the teams’ performance can be affected by different working and operational manners, and there should be a structured method to be followed by the entire company.
- Cultural Differences: Often, the two nations dealing together have significant cultural differences. Although it should not come in the way of professional work, it is preferred to respect each other’s culture. There are also differences in the national holidays for different countries, which might be a hurdle to cross for many employees. Your company should have open-minded people to accept your clients from whatever culture they come from to ease the tension between the two.
- Different Time Zones: Differences in the time zones can create communication barriers as both teams will be working at unusual timings according to their time zones. The clients can benefit from round-the-clock services with offshore businesses. Therefore, the company can get people from different places. However, it is difficult to bring the complete team together if needed during an emergency.
About Hoshi CPA, LLC
Hoshi CPA, LCC offers expert planning services to business owners, executives, and independent professionals in Tigard, Oregon. Udai Hoshi assists individuals, Japanese-speaking communities, and U.S. business owners with tax planning, tax compliance, tax resolution, and CFO services. You can call us at (503) 388-6580 or drop an email at staff@hoshicpa.com to know more.
Financing can be confusing and stressful when there are too many irregular patterns in the market. Prudent investing helps investors understand the market, use assets to gain profits, and reach their set goals. However, all investment forms are subject to certain risks. Some forms offer more protection to your assets than others. Acknowledging yourself with prudent investing can help you make better-informed decisions about your finances.
What is Prudent Investing?
A prudent investment involves using the investor’s assets in the most beneficial and suitable way to reach their objectives. It considers many factors like the risk and returns profiles and the time limit decided by the investor.
Role of Fiduciaries in Prudent Investing
Fiduciaries are the financial advisors, attorneys, sponsors, and CPAs that investors entrust with making prudential investments on their behalf. The fiduciaries are bound to make sound judgments to only make profitable decisions for their clients.
Moreover, fiduciaries study the trends of their selected investments to ensure they are achieving their forecasted goals. The investments should match the client’s portfolio well. The fees deducted should also not affect the returns significantly.
The Prudent Investor Rule
The prudent investor rule specifies that the fiduciary should treat the investor’s assets and stocks as their own. They should make every decision to benefit the investor to preserve their assets and avoid investing in risky assets. They should choose assets that give the overall portfolio a low risk of loss.
Benefits of Prudent Investing
- Diverse asset classes: Prudent investing allows investors to invest in more than one investment type, which reduces the volatility of your overall portfolio. Some of the types may be stocks, bonds, commodities, cryptocurrency, and forex.
- Choose your way of investing: Many people believe that they should only invest in the bigger stocks and bonds. However, a good investment plan will invest more in larger stocks and bonds with a regular pattern. You should also make few investments towards fast-moving non-traditional asset classes like equities, cryptocurrency, and foreign stocks.
- Portfolio rebalancing: Prudent investing helps investors rebalance their portfolios regularly while their profit percentage is still high. Investors can resell some stocks to reduce their stock holdings and invest in less favorable and non-traditional asset classes. They can also cash out the winners on time before the market turns again.
- Reduction on commission: Investors can reduce the commission and fees involved in purchasing new trade. Even a minimal fee can add up and become a large sum of your potential investment return. Exchange-traded funds (ETFs) are helpful in buying a portfolio of such selected stocks.
- Minimize taxes: Prudent investment involves strategies that can help minimize investment tax. For instance, you can invest through IRA and reinvest in gains without involving taxes. However, if a taxable account is used for investments, you can keep stocks over a year to lower the tax rates. Short-term trades are more prone to higher tax rates. Moreover, you can use index funds and index ETFs to further reduce taxes.
About Hoshi CPA, LLC
Hoshi CPA, LLC offers expert planning services to business owners, executives, and independent professionals in Tigard, Oregon. Udai Hoshi assists individuals, Japanese-speaking communities, and U.S. business owners with tax planning, tax compliance, tax resolution services, and CFO services. You can call us at (503) 388-6580 or drop an email at staff@hoshicpa.com to know more tax-related services offered by HOSHI CPA in Portland, Oregon.
Many people take credits for different purposes and cannot pay that debt in time. Moreover, some people take more credit to pay off the pending debt, getting stuck in the unending loop of money problems. Management plans can help save enough money to pay your debts and live life without many compromises gradually. However, starting off with a debt management plan may seem scary, but limiting and expertly managing the expenses will help you in the long run.
Here are some practical tips for managing and paying off your debt and putting an end to your financial struggles-
Tip #1: List Your Debts
Most people usually owe a debt to one source like loans or credit card companies. However, many take credits from multiple sources and cannot handle the mayhem properly. To ensure you know where you owe the money, make a list of all the lenders or companies you need to pay back. You can also add the interest rate, total money pending, and a due date to the list for a clearer picture. Keep updating this list as you pay off to know how much debt is pending.
Tip #2: Make a Budget
Living with limited funds doesn’t necessarily mean giving up everything you like. You can still go out for occasional dinners or recreational activities, but all with a plan in hand. Staying on a budget will let you know how much money is coming in and how much money you are spending on things. Often we buy unreasonable stuff we can’t afford; knowing that you are on a limited budget will help you save money. And saving money means paying off your debts quickly.
Tip #3: Prioritize Some Debts Over the Others
Many debts might come with higher interest rates, especially the credit card debts of larger amounts. You can use the list of debts you created to rank them according to the interest rates they carry. First, you should pay off the debts that can cost more money if left unpaid as fines to clear out the list and increase confidence. The smaller debts can be paid off slowly whenever you think you saved more than you had to.
Tip #4: Pay Your Bills Timely
Unpaid bills can increase the debts you owe because of the interest rates and fines they carry. It is best to pay them off as soon as you receive them. Further, you can use a calendar to notify you several days before the due date and use automated payments so you can skip the possibility of getting fined.
Tip #5: Pay the Minimum Amount
If you struggle to keep your finances in line, you can always pay the least minimum on your credits to prevent getting penalties. Paying the minimum amount might not help you get over your debts, but it can keep your account from getting into the defaulter’s list.
About Hoshi CPA, LLC
Hoshi CPA, LLC offers expert tax planning services to business owners, executives, and independent professionals in Tigard, Oregon. Udai Hoshi assists individuals, Japanese-speaking communities, and U.S. business owners with tax planning, tax compliance, CFO, and tax resolution services. You can call us at (503) 388-6580 or drop an email at staff@hoshicpa.com to know more.
Ethics and morals in every field play an influential role. In accounting, when all the information about a person lies with the accountant, ethics become more critical for professionalism. However, today, there are many cases where codes of conduct are broken for personal gains. Following ethics in an accounting firm provides innumerable benefits along with deep self-satisfaction.
What are Accounting Ethics?
Ethics in accounting is following specific regulations and codes of conduct for the information privacy of a client. The appropriate practice of ethical principles helps build a good work environment within the firm and a positive image for the firm’s clients. It ultimately increases business by safeguarding valuable client data.
Why Follow Ethics in Accounting?
Applying ethics in the accounting field has many benefits. Some of them are-
- Maintains a standard of professionalism- When ethics are engraved in the firm, every member follows them, which gives them a reason to be professional with their work.
- Protection of clients’ data- Accounting firms have all the critical data of their clients about money usage, which they are bound to keep confidential.
- Builds the firm’s reputation- A loyal firm produces loyal clients who further promote their firm by personal feedbacks.
- Creates a trustworthy image of the firm- The client entrusts the firm’s accountants with their crucial information about money. If the data is misplaced or sold, it gives prospective clients and existing clients a wrong message about trusting the firm. But if moral values exist, there will be no such issue to deal with.
- No legal liabilities to worry about- There are no legal obligations to worry about when every person in the firm follows ethical rules. This will warrant that the firm protects its clients and its image over personal greed.
How Can Accounting Ethics be Breached?
Ethical methods are ignored in many cases today as a result of personal interests. Other reasons may be fraudulent activities, manipulating statements for self-preservation or greed, black-mailing, client request, or taking advantage. In scenarios where the firm obliges to follow ethics, but the client doesn’t want to break their image, they should take action or be liable for the breach.
What are the Effects of Ethical Breaching in Accounting?
Violating the codes set by governing bodies can have multiple effects on the conduct of the firm and other associated organizations.
- Lowered Level of Respect: In a firm that does not obey ethics, the employees find the freedom to misuse data and not respect their seniors.
- Support to Fraudulent Acts: Violations of morals can lead to fraudulent activities in the firm. The auditors can manipulate the data to hide their mistakes or illegal information for the clients.
- Firm’s Status: Breaking laws can lead to a bad reputation for the firm. It reduces the trust their clients have in their results, degrading the image of the firm. Even if the firm improves its mistake, its data will hold less weightage due to the absence of trust.
About Hoshi CPA, LLC
We are one of the trustworthy CPA firms in Portland, Oregon. Hoshi CPA, LLC offers expert planning services to business owners, executives, and independent professionals in Tigard, Oregon. Udai Hoshi assists individuals, Japanese-speaking communities, and U.S. business owners with tax planning, tax compliance, tax resolution, and CFO services. You can call us at (503) 388-6580 or drop an email at staff@hoshicpa.com to know more tax-related services offered by HOSHI CPA in Portland, Oregon.
Humans act on their impulses more often than not. And we’re all guilty of impulsive spending more than once. According to Forbes, impulsive spending means when you buy something you weren’t planning on getting. But it doesn’t have to be harmful as long as you know you can control it, and it doesn’t drown you into debt.
Impulsively splurging money can destroy our budgets, bring stress to our lives, and cause financial troubles. Check out these simple tips on how to avoid impulsive spending and take the reins in your hands!
- Become Aware of Your Impulsive Spending: The first step in behavior change is recognizing the problem. Keeping ourselves aware of our habits and sometimes the cause of these habits is essential. And once you acknowledge that uncontrolled spending is an issue, your awareness of the problem will help you follow through with a plan to stop it.
- Keep Your Goals in Mind: Use lists to write down items you need to buy before heading out to shop and only purchase what’s written in your inventory. Usually, while grocery shopping, we fall into the temptation of buying things we don’t need, but the list helps you maintain control over overspending.
- Delay the Impulse to Spend: Try window shopping without money in your wallet. Check out what you need to buy and then return after a few days after thinking thoroughly about the items. Consider if you need to buy them and at this point and if you can afford to buy them. It can go a long way in helping us control where our money goes.
- Stay on What You Need: Wandering in the store often leads to making purchases we did not know we wanted before we saw them. Store managers arrange items so that the most appealing things catch our attention quickly, and we are tempted to buy them. Simply stay focused on what you need to buy.
- Shop Online: It is usually a better idea to shop online for apparel like shoes and clothes. When you go to a store filled with tempting options, you end up buying them. And mostly, they are never even used because you never needed them, to begin with. Simply add few choices to your cart on your desired brand site, take a few days to comprehend, and if you decide, just buy those.
- Don’t Shop Socially: It is a lovely idea to bring along your friends while you try on new things. But often, this means you will probably end up purchasing more than what you wanted to or buying something you will not need.
- Don’t Let Sales Lure You: Logically speaking, buying something at discounted prices means saving money. Although it may sound like a good idea, it is more likely a trap. Usually, we get caught up in sales excitement and buy things just because we don’t need to pay full price. Unfortunately, this justification doesn’t help your wallet stay within budget.
About Hoshi CPA, LLC
Hoshi CPA, LLC offers expert tax planning services to business owners, executives, and independent professionals in Tigard, Oregon. Udai Hoshi assists individuals, Japanese-speaking communities, and U.S. business owners with tax planning, tax compliance, CFO, and tax resolution services. You can call us at (503) 388-6580 or drop an email at staff@hoshicpa.com to know more.
Investing is a great way to make your money work for you. Through various investment vehicles such as stocks, bonds, mutual funds, futures, precious metals, and real estate, you generate an additional revenue stream for the future. A good investor should have a solid grasp of their risk tolerance, financial goals, and investment horizon to build long-term wealth.
While there is no foolproof strategy to ensure that you get the best returns on your investments, there are some factors you should remember to make a well-informed decision.
#1 Know where you stand
Before you invest, you need to know where you stand so that you can chart out the way to achieve your goals. Start by considering the following questions:
Your earnings and spending: If you’re not tracking your spending despite earning a good income, you’ll never be in control of your money.
What do you own? What you own are your assets like your house and car. Assets also include the cash you have in your savings and retirement accounts.
What do you owe? Your liabilities include your debts, including a mortgage, student loans, personal loans, and auto loans.
What have you saved? This could be an emergency fund.
How are you protected? Have you purchased any insurance to minimize the financial loss from death or illness?
#2 Your personal financial roadmap
Before making any investment decision, you need to have a plan. Building a personal financial roadmap involves considering where you are right now and building a clear picture of where you want to be. If you know when you want to achieve a financial goal, a roadmap will probably take you there. Given that everyone has different goals, you shouldn’t worry about where your neighbors or friends spend their money. Once you have started following your plan, it is important to review it frequently and make adjustments.
#3 Consider your risk tolerance
Risk tolerance is all about your ability and willingness to handle the loss while making an investment decision. Knowing the risk tolerance level can help an investor choose suitable investments that match their risk profile. You can gauge your risk tolerance by using a questionnaire, which gives more information about your investing style – aggressive, moderate, or conservative. For instance, investors with an aggressive risk tolerance focus more on stocks, while conservative investors focus more on other fixed-income investments and bonds.
#4 Know where to invest your money
There are plenty of investing options, depending on your risk tolerance. Remember that the more risky an investment is, the higher the return. Therefore, it is always a good idea to invest in a variety of different asset classes. Some basic asset classes for investors include cash, bonds, real estate, stocks, futures, and other derivatives, and commodities. A mix of asset classes will offer a diverse portfolio that can easily handle the ups and downs of the market. A good example of a diversified portfolio is holding individual stocks across several sectors and owning and renting out a few real estate properties.
#5 Speak to a financial advisor
While you may prefer to do all the financial planning independently, sometimes it makes sense to consult a financial advisor.
You have spent some time in your job and now want to plan your financial future — After starting work, we may have so many goals competing for our limited financial resources: getting married, funding a retirement account, saving for an emergency fund, and buying a house. A financial planner will help you make better financial decisions.
When you get married or divorced — Whenever you enter or leave a marriage, it is time to consider your financial goals. By taking the advice of a financial planner, the newly married couple can talk about combining assets and incomes.
About Hoshi CPA, LLC
Hoshi CPA, LLC offers expert tax planning services to business owners, executives, and independent professionals in Tigard, Oregon. Udai Hoshi assists individuals, Japanese-speaking communities, and U.S. business owners with tax planning, tax compliance, tax resolution, and CFO professional services.
Being the best IRS tax resolution company, we provide reliable accounting and tax services in Tigard, Oregon. You can call us at (503) 388-6580 or drop an email at staff@hoshicpa.com to know more.