Hybrid Accounting Method – Dealing With Inventory

Hybrid Accounting Method - Dealing With Inventory
(NOTE: This post fits in with a case study looking into tax implications of starting up a small business. Click here to go back to the start) A while back, I addressed the cash and accounting methods and how to choose which one you want to use in a small business. I was trying to keep things ...

Cash versus Accrual Accounting

Cash versus Accrual Accounting
(NOTE: This is a continuation of a case study looking into tax implications of starting up a small business. Click here to go back to the start) After talking to her accountant about what business entity to use for tax purposes, Amy decides that she’s going to start with a self proprietorship until business takes off. So ...

Tax Treatment of Prepaid Expenses

Tax Treatment of Prepaid Expenses
Prepaid Expenses, as the name implies, are items and services you’ve paid for but not yet received. One of the most common prepaid expense is insurance, where policies are paid for up front then, generally, run for a year. Tax treatment for prepaid expenses can be tricky, especially since the rules for deducting prepaid expenses ...