“What’s First, Tax or Bookkeeping?” Many companies ask these kinds of questions. They own multiple companies and restaurants. They are applying for a loan. However, the lender will ask them to file their taxes because we assist them in loan applications for the financial statements. I said we do not put the card in front of the horse; what does it mean that numbers you’re putting on your tax return are based on your annual record-keeping or bookkeeping. This is based on your balance sheet, your financial statements your cash flow; when we check their books, they’re applying for a $750,000.00 loan, then we see the books, and they are negative $500,000.00 for their profit and loss way.
Back in the year 2018. They asked us why we don’t just do the year 2021, bookkeeping, and tax return. I said it’s going to be difficult. Because when you do that you your data entry will be wrong which means when you miscategorize your income there’s so many or you did not report all your income and then you did not itemize your expenses well let’s say for example what we saw there was a floating $150,000.00 uncategorized income that is a big red flag to the IRS then another thing we put the PPP loan as a taxable income that is not a taxable income because it’s a forgivable loan there are just so many things to do, and that’s why I said it’s like you are for me I’m not trying to be mean, but this is the best way to describe it you’re trying to treat your stage four cancer using a Tylenol; that’s what I have to be straightforward about because we have to go back to 2018 in able to correct and fix all the problems that they have in their books and that is not going to fly by to the lender and also to the IRS; that’s why I said you need to pay your taxes, you need to have to generate money or, if you don’t want to spend your taxes right now, you can apply for and tax the Federal.
I mean deferred tax products or sheltered tax products, make sure when you have a company, make sure do not declare so many losses or negative in your financial statements it’s going to backfire to you whenever you want an investor whenever you wish to apply for the loan this is all coming back to you. It makes your life so difficult that’s why what are you doing what are you waiting for? You must start your company by doing your bookkeeping and taxes precisely. If you want to avail our virtual tax and bookkeeping, all you have to do is click here for our free 30-minute consultation today; stay safe.