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eCommerce Business Stages – Profits Under $100,000 Part 2

Not sure if someone is a CPA?

Just search your state board of public accountancy and look up the person’s name. Most people who advertise themselves as “accountants” or “bookkeepers” are not usually licensed CPAs providing you with greater transparent protections.

A reliable, knowledgeable CPA is just one part of the equation; the other part is making sure your CPA understands eCommerce and its nuances. “Firms that can provide a differentiated value – beyond traditional compliance services – will have the upper hand as the industry continues to revolutionize.” The kind of CPA you’re searching for should have the same priority as you: helping you reach your goals.

Getting Started

The first item on your agenda is to create a solid business plan. The U.S. Small Business Administration (SBA) agrees: “A good business plan guides you through each stage of starting and managing your business. You’ll use your business plan as a roadmap for how to structure, run, and grow your new business.”

Moreover, your business plan is the initial document you can introduce to your CPA. A comprehensive traditional business plan usually includes the following sections:

• Executive summary

• Company description

• Market analysis

• Organization and management

• Service or product line

• Funding requests

• Financial projections

But, hey, let’s be honest—how many people actually do one of these business plans before starting a business? We’d say we’ve met very few in all of our years starting businesses who actually had one of these things. The most important is keeping an updated cash-flow forecast.

So, while it’s a good idea to have a plan, putting all of this work together is not necessarily needed to get your first online sale. Sometimes eCommerce businesses just happen. You buy some products, list them online for sale, and — boom! You’re now a business making money. Just don’t forget to now also get a CPA.

Also, don’t forget about taking advantage of a third-party application that will help you to manage your multiple online selling channels; again, this is an area that we can direct you through. Many eCommerce businesses move quickly through the four growth phases, and you’ll want to be in the best position to succeed as your business expands and your needs increase.

For sellers with profits of $100,000 – $500,000

Record-Breaking Tax Refunds by Insogna CPA

The entire Team at Insogna CPA is excited to announce we helped our clients grow their revenues totaling $2,357,000 in 2019. This is from all returns prepared as of Dec 31, 2020.

A special thank you to all of our valued clients. We are excited to continue working with you, year-over-year, and looking forward to a successful 2021!!

Record Breaking Revenues 2021

The entire Team at Insogna CPA is excited to announce we helped our clients grow their revenues totaling $215,464,385 in 2021.

A special thank you to all of our valued clients. We are excited to continue working with you, year-over-year, and looking forward to a successful 2022!!

Senior Care Costs and Financial Resources for Texas

Did you know that twelve percent of Texans are over the age of 65?

While longevity is a wonderful byproduct of our modern society, the downside is that age often arrives at a cost. Declining health often means that seniors require daily support; from meal preparation to hygiene and medical nursing care. These necessities quickly become expensive. In the state of Texas, there are options for seniors in need of care, as well as financial resources and options the family may need to consider.

In-home Care

Sometimes, an elderly family member may need someone to shop, cook meals, and do some light house cleaning chores. If cooking has become an issue, there is a Texas outpost of the national Meals on Wheels organization, providing food to seniors for little or no cost.

If you are comfortable having an outsider visit an elderly family member in their home, there are many in-home care services available from agencies and franchises, as well as from individuals. Several national resources are also available, such as Care.com and visitingangels.com, but there are local and county options as well. Costs can vary widely and payment is either by the hour or a day-rate. There are also local and state agencies that provide some limited financial and services support. Details on those programs are available on the Texas Health and Human Services (HHS) website. If the senior owns his/her home but is running low on cash, looking into a reverse mortgage may provide the needed cash for services while allowing them to remain in the home.

Assisted Living and Nursing Home Care

The inability to cook meals or travel to the store, a pharmacy, or a doctor without assistance is relatively easy to remedy with piecemeal service options, from ride-share and UBER to delivery services. However, if your elderly family member has a deteriorating medical condition, such as Alzheimer’s, dementia, or physical impairment such as onset Parkinson’s, or blindness, being alone may no longer be an option. If a live-in caregiver is not an option, he/she may not be able to remain in their home. If this situation develops, it may be time to investigate an assisted-living or nursing home alternative.

If the individual is still relatively ambulatory and possesses strong cognitive powers, moving to an assisted living situation can be an ideal solution. Assisted living facilities offer both single and shared living quarters and provide meals and activities that are ideal for someone who would benefit from social interaction. They are expensive, unfortunately. In Texas, costs for assisted living facilities range from $4,000, to as much as $10,000, a month or more. Of course, amenities vary widely as well.

Facilities are licensed. There is also a nonprofit organization, Assistedliving.org that may be a useful guide to the cost, location, and quality of Texas providers. Again, they may range in cost from high $3,000 to $10,000/month. Most assisted living facilities offer step-up care options or can refer you to comparable facilities when your senior needs nursing care, or memory care support.

Costs associated with a nursing or assisted living facility vary. However, the senior’s assets, including a home (unless alternative asset planning has been undertaken years in advance), will be drawn down to pay the monthly costs. There are often entry fees or deposits of thousands of dollars that may or may not be drawn upon for monthly expenses. While room and board, including meals, may be part of the monthly cost, other incidentals, such as hair salon services, cable, and turn-down services, may cost extra.

Finally, if a senior has spent down their assets and requires nursing home care, it is never too early to visit Medicaid options. Medicaid is both a Federal and State-run program. There are nursing facilities in the state that accept Medicaid-eligible seniors, but space is often limited. There are many asset limitations for Medicaid and the paperwork could take weeks, perhaps months to complete.

Of course, financial planning today often includes consideration for older parents and relatives that may need assistance—both physically and financially—beyond their means. Talking to your accountant and estate planner is a good first step in discovering what options and resources will be needed in advance of when your senior needs a helping hand.

Please do not hesitate to reach out to Insogna CPA for more information or a discussion on this matter.

Insogna CPA Amongst Top 18 Best Accountants in Austin for 2021

In October, Insogna CPA was notified of its inclusion in the Expertise.com Best Accountants in Austin list. Out of over 170 accountants ranked for this award, Insogna CPA was nominated via customer referral and was then ranked #18.

“Our goal is to connect people with the best local experts. We scored Austin Accountants on more than 25 variables across five categories, and analyzed the results to give you a hand-picked list of the best.” the Expertise website states.

Selection Criteria

Availablity
Qualifications
Reputation
Experience
Professionalism

It’s an honor to be named among the winners and receive a score of A+ for reputation and professionalism,” commented Chase Insogna, CPA, and managing partner. ” We truly love helping our communities members and providing the best services we can to clients.”

Availablity
Qualifications
Reputation
Experience
Professionalism

Our Other Awards

The Buzz About QSB Stock

With so many promising companies in the early stages of development, QSB stock gives everyday investors the chance to support the businesses they believe will be the next successful venture. With the attractive business tax benefits of qualified small business stock (QSBS) adding to the allure of investing in startups, QSBS is fast becoming a popular option for private shareholders looking to invest in shares with low minimum investment requirements.

For those who are not yet familiar with QSBS, it is helpful to understand what it is and what QSBS offers so you, too, can reap the benefits.

Breaking Down QSB Stock

Qualified small business stock (QSBS) refers to shares of stocks from qualified small businesses in the United States as defined under 1202 of the Internal Revenue Code. It is stock purchased from qualified small businesses after August 10, 1993. QSBS comes from any active domestic C corporation with assets valued at its original cost not exceeding $50 million soon after the stock issuance.

Qualified Small Business Eligibility Provisions

Qualified small businesses that may sell QSB stocks can include organizations in industries such as retail, manufacturing, and technology. It excludes hospitality, professional services (law, healthcare, architecture), agriculture, mining, and finance (banking and insurance). The companies, to be eligible, must use at least 80 percent of their assets actively in one or more of the qualified businesses and remain as a C corporation for the investor’s withholding period of the QSB.

QSB Tax Benefits

People who invest in QSBS can enjoy the following benefits:

100-percent exclusion from U.S. federal capital gains tax
100-percent exclusion from the AMT (alternative minimum tax)
100-percent exclusion from the 3.8 percent NIIT (net investment income tax)

However, for QSB stock issued before September 28, 2010, section 1202 gives a lower percentage tax exclusion, usually 50 or 75 percent. There is also a 28 percent tax rate for gain not excluded and subject to the NIIT.

Gain Exclusion Limitation

The tax savings under Section 1202 provide a generous limitation to the amount of gain from QSBS each taxpayer and issuer can exclude Section 1202 limits savings from business taxes of individuals to greater than:

$10 million, or $5 million for married couples who are filing separately.
Ten times the taxpayer’s combined basis in the amount of QSBS sold during the taxable year.

QSB Tax Exemption Eligibility Requirements

For individuals to claim the business tax benefits from a QSBS, they must meet the following requirements.

The investor should be an individual, not a corporation.
The investor should be US citizens or non-United States citizens living in the US.
The investor must have purchased the stock directly from the company and not in a secondary market such as the New York Stock Exchange (NYSE) or NASDAQ.
The investor must hold the QSBS for at least five years before selling and must have purchased the stock with either property, cash, or as a payment for service rendered. However, if the investor wants to sell the QSB stock before the required five-year holding period, the investor may avoid paying tax by investing the profit from the sale into another QSB stock granting the investor has held the QSB stock traded for over six months. If the QSBS meets these requirements, the investor has 60 days to complete the rollover into another QSB stock.
The C corporation that issued the stock must use 80 percent of its assets in qualified trades of businesses.

Insogna CPA will ensure that you get maximum benefits from your QSB stock. Contact our team of wealth building experts today to get started!