As the third quarter of 2023 is coming to a close, there are a few days to be aware of.
September 15 - Estimated Tax Payments due (for calendar year filers)
September 15 - Deadline for extended partnership and S-corporation returns
October 16 - Deadline for extended individual and C-corporation returns
To avoid any potential penalties and further interest charges, it is important to file your returns timely. If you or anyone you know needs to file a tax return, we can help. You can schedule a call with us here.
Three Beginner Financial KPIs
KPI’s - or Key Performance Indicators, are metrics used in businesses to evaluate performance. Most KPI’s you can benchmark against similar types of businesses in your industry to see how you stack up. Here are some simple financial KPI’s I suggest ALL business keep track of on a monthly basis and owners should be able to answer off the top of their head when looking back at prior periods:
Revenue Growth: At what rate is your revenue increasing or decreasing over time? To get even more detailed - this can be done at a service-level or product-level.
Gross Profit Margins: I personally like these on a service or product level, but this is the profit you’re left with after you deduct any direct costs of delivering/making the service or product.
Net Profit Margins: This is your net profit after you’ve subtracted from gross revenue the cost of goods sold, overhead, interest and taxes. This one is especially important to watch because it’s not uncommon to see this start to shrink when a business scales (and especially as the number of employees grows), so business owners need to keep a close eye on this.
Ca-Ching at the IRS
When you owe the IRS money, you have to pay interest on your amount due (this interest rate is adjusted quarterly).
But did you know if the IRS owes you money, they also must pay interest on that amount due?
This big news this week is that the new IRS interest rate is now 8% for Q4, compounded daily.
That means if you owe money, it’s in your best interest to get it paid off ASAP.
And if the IRS owes you money? Cha-Ching!
Cancel Your Own Debt
This is one of the more concerning pieces of advice I see on social media, but basically, people claim you can issue yourself a 1099-C and cancel your own debt.
As with most things - there is partial truth here. A 1099-C is a form you receive if your debt is canceled. However, there are two important things to remember:
The 1099-C is issued by a 3rd party, you can’t self-issue and cancel debt you owe to an outside party.
Any debt canceled on the 1099-C IS CONSIDERED TAXABLE INCOME TO YOU. Got $50,000 of debt canceled? Congrats, that’s now $50,000 of income to you that you’re paying taxes on.
As always - if something sounds too good to be true - it is folks.
Comments