What You Need to Know about Accounting and Tax Preparation for Start-Ups

Starting a business means that you are juggling many tasks and responsibilities: setting up bank accounts, creating accounting systems, designing a website, building out customer service platforms, tax preparation strategies, business development, and more. Even though it is a lot of work to launch the business, it is worth the efforts because of the long-term benefits you will enjoy.

The truth is that the solid foundation created right now will have a lasting effect on the success of your company. In the beginning stages, it might be tempting to skip a few steps and rationalize that you will work on those systems or processes after the business is up and running. But you could be hindering growth and opportunities by procrastinating the most important aspects that affect the financial health of your company.

The best thing you can do is get it right the first time. Commit to putting in the time and effort to creating systems that are built to last. A few months or years down the road you will be grateful that you didn’t skip these important elements.

Today, we are going to focus on tax preparation and strategy for small businesses. This topic is one that is often procrastinated. Since tax season only rolls around once a year, it’s easy to assume that you can wait until April to work on taxes. It’s time to change your mindset on this topic. Implementing a good tax strategy right now will save an incredible amount of money due to the decreased tax burden. Plus, you will have the processes in place to support bigger tax responsibilities that will come in the future when your business expands.

Tax Preparation Can Feel Like a Chore

Most small business owners will agree that taxes can feel like a chore. Do you get a headache just thinking about the stacks of paperwork and accounting calculations that need to be done? Not only do you need to crunch the numbers, but you also need to stay current with the latest changes in tax laws and other applicable industry regulations.

It is common to feel stressed or worried about the requirements that need to be met for tax preparation. As a small business owner, you don’t need to carry this responsibility without support. You are already focused on product development, marketing, and more. Instead of spending your free time with your head buried in numbers, it makes sense to outsource these services to the pros. A good accounting team is key to help you develop the right tax strategy and transform the results that are available in the future.

Your accounting team will make start-up and small business taxes transparent and clear. Tax preparation doesn’t have to be difficult when you are working with the right team. You’ll find that our staff at Easier Accounting understands the best practices for every industry, helping to take the stress out of tax time. We’ve worked with many small businesses over the years, giving us the hands-on experience to know the optimal way to structure your tax preparation, paperwork, and filing.

Assessing your Current Situation

If you are going to improve your tax strategy, it is important first to assess your current situation. Are you preparing to launch a new company? Are you structured as a sole proprietorship? Did you form a corporation for your business efforts? Do you have a partnership that needs to be included?

These details might seem simple, but they will impact the way the tax strategy is designed. It is essential that you offer as much information as possible to your accounting team, ensuring that nothing is overlooked in your tax preparation.

Basic Steps for Tax Preparation

Whether you are just getting started with your business efforts or you are looking for ways to improve the financial health of your existing company, there are a few basic steps that should always be followed for tax preparation:

  1. Choose a Tax Preparation Provider: The best solution is to choose an accounting team that will work with your company throughout the year. You can find financial experts that offer one-time tax services. But these short-term services don’t create a long-term mindset that is necessary to maximize tax strategy. Pick an accounting team, such as Easier Accounting, that offers ongoing support to ensure your company is on track during every season of the year.
  2. Gather Records and Information: Maintaining documentation of all transactions that move through your company is essential so that you can track every penny that is earned and spent for business purposes. Exact records vary depending on the type of company that you are running. Examples of income records include sales transactions, gross receipts, allowances, cost of sold goods, tax refunds or credits, interest earned from bank accounts, and more. Expense information should include costs for vehicles, marketing, employee payroll, contract labor, office expenses, utilities and rent, maintenance and repairs, depletion, professional services, insurance, inventory purchases, fees and commissions, and anything else that required you to spend money for business purposes.
  3. Organizing the System: It can be a hassle to sort through a year’s worth of receipts when it is time to do your taxes each spring. Instead of spending hours on the paperwork once a year, it is better to have a proven system in place that makes it easy to track and categorize expenses throughout the year. When these transactions are organized and managed on an ongoing basis, then you can simply run a report that shows the information that is necessary for tax preparation.
  4. Filling Out Tax Paperwork: The IRS has paperwork for everything, so you need to make sure that you are filling out the right forms that apply to your company. Most companies don’t need to use the majority of the forms that are out there. Depending on the structure of your company, you may need Form 1040, Form 1040-ES, Form W-2 and W-3 for employees, Form 1099 for contractors, Form 941, Form 943, Form 944, Form 1120S, Form 1065, and more. Do you feel like your head is spinning just reading through all of those options? You don’t need to get into the fine print to figure out which forms apply to your situation. Instead, lean on the knowledge offered by your accounting team. Not only will your accountant provide guidelines regarding the forms that are required for tax preparation. But your accounting team can also handle the information that is entered on these forms.
  5. Submitting Tax Forms: Now that all of the work has gone into the information needed for income and expense categorization and filling out the applicable tax forms, it’s time to submit the paperwork. These submissions need to be sent to the IRS. Additionally, there are deadlines to send specific tax forms to employees and contractors each year. Not only are you responsible for annual tax filings, but other deadlines need to be met throughout the year for employment taxes, estimated tax payments, and more. Your accountant can help you keep track of these deadlines and oversee submission through an e-filing process. The documents can be filed on printed paper as well, although the e-filing is becoming more popular due to the immediacy of the filing results.

Using a Professional for Small Business Tax Services

One of the biggest mistakes you can make is attempting a DIY tax filing when you don’t know much about accounting processes for the IRS paperwork. If you want to set your company up for success, then you need to be sure that you are working with a small business accountant who will oversee every step of this process.

Certified tax preparers help by working through the calculations and information needed for the paperwork. Additionally, your accountant will ensure that the paperwork is filed with the IRS before the deadline.

Keep in mind that scammers try to take advantage of unknowing individuals and small businesses owners. Make sure that you choose a reputable accounting company. Your tax preparer should have a preparer tax identification number (PTIN) that is issued by the IRS. Always research the accounting company before handing over sensitive financial information and business details.

Quality Tax Preparation Services for Your Business

You deserve quality tax preparation services, including ongoing accounting support throughout the year. If you are searching for the right services for your small business, then we invite you to talk to our experienced team at Easier Accounting. We understand the best systems for tax strategy and preparation, and our team is just a phone call away.

Choosing our team means that you have access to a group of knowledgeable tax accountants that will offer personalized recommendations to improve the results for your company. Our goal is to streamline your financial systems while reducing the tax burden and improving overall results for your company. For details about the services that are available, you are invited to contact us at Easier Accounting. We’re just a phone call away: (888) 620-0770.

Taxes are Due April 17: Are You Ready?

Tax season is drawing to a close, leaving many entrepreneurs and sole-proprietors rushing to gather the last-minute details that are needed for the filing. This time of year can be stressful if you haven’t been consistent with your expense and income tracking throughout the year. But, there is still time available to gather the information that is needed for taxes so that you can optimize the results of your tax filing.

Why April 17th?

Usually, tax filings and payments are due on April 15th, so why is the due date different this year? If April 15th falls on a weekend, then the tax day will be adjusted to a weekday. This year, the 15th falls on a Sunday, so the IRS adjusted the due date to the 17th instead. Now, everyone has two business days after the standard due date to finish up the filing details and submit all of the paperwork and payments.

Even though you have an extra two days this year, don’t delay the preparation of your paperwork and payments! It is important that you take action right now so that you aren’t pushing the deadlines as the final due date approaches.

In fact, it is often a good strategy to finish your paperwork in advance. Then, you can relax at the end of tax season knowing that everything is already done.

What should you be focusing on to prepare for your tax filings? Here are a few things that you need to do to make sure that your small business is ready for tax time:

Gather Deduction and Write-Off Details

One of the benefits of owning a small business is that you can maximize the deductions and write-offs that are related to business expenses. Any time you spent money that has an impact on your business activities, then that cost can be considered a write-off.

But, these transactions aren’t beneficial for your taxes if you don’t track the expenses. Keep a record of the costs that were incurred throughout the year. Then, this information needs to be provided to your accountant to ensure that everything is included in the right categories on your tax paperwork.

Common write-offs include office supplies, computers, cell phones, inventory, contractor work, website maintenance, and more. If you have a home-based business, then don’t miss the benefits of writing off a portion of your rent or mortgage, as well as some of your utilities. Your accountant can help you determine the right amount that needs to be written off for these payments.

Even the smallest write-offs can add up to big savings in the future. Make sure to maintain a conversation with your accountant with anything that could be used as a write-off. For example, you might consider tracking your miles to use the travel as a write-off. Anytime travel or entertainment is needed for business purposes, a portion of the food, tickets, and hotel can also be used to reduce your tax burden.

Keeping track of all of the money that is spent will add up to a significant tax benefit over time. If you don’t already have records to provide for your accountant, then right now is a great opportunity to gather the details for the upcoming tax filing.

DIY vs. Professional Tax Filing

Start-up business owners are always looking for ways to save money. Even though it might sound like a good idea to use software for DIY tax preparation, it is common for inexperienced business owners to make huge mistakes with their paperwork. One missed line item or mistake in the way the information is entered could change your tax liability by thousands of dollars.

Yes, you will need to spend a little money for assistance with your tax filing. But, these services are invaluable when you compare the amount of money that is saved from professional tax preparation. Spend a little bit of money right now so that you can improve your tax strategy and save a lot of money on the taxes that are due.

Also, consider the benefit of having ongoing tax support throughout the year. You should be talking to your accountant more than once a year. Most business owners turn to financial professionals when the tax due dates are looming. It is a mistake if you aren’t leveraging their knowledge and tax strategy throughout the other months in the year though. For example, you might adjust your budget or the spending cycle to manage your tax bracket. Keeping your income in a lower tax bracket can be a big deal if you want to save a lot of money on taxes.

Don’t overlook the benefit of reduced stress levels when you have an experienced tax professional handle the filing for you. Instead of spending your evenings and weekends stressing over tax preparation, you can relax and enjoy time with your family. Your accountant will handle the paperwork and number crunching, helping you achieve the best results that are available from your tax filing. You can relax and watch your stress levels drop when you don’t need to worry about these details by yourself.

Employees, Contractors, and More

As you are calculating expenses, it is important that you distinguish the differences between employees and contractors. When a person is on your payroll, there are specific payroll taxes and other costs that need to be calculated every time a check is cut. Then, these costs need to be paid to the government at certain times throughout the year. At the end of the year, the totals need to be calculated and reconciled, ensuring that the right information was submitted with the payments.

In comparison, a contractor is paid without the burden of employee taxes. You can cut a check to the contractor to pay for the invoice, without a need to subtract a certain percentage for taxes that need to be withheld for the payments.

Both employees and contractors should receive tax forms at the end of the year if they were paid $600 or more in a given calendar year. Employees should receive a W2 that outlines their payments and taxes that were withheld. Contractors need to receive a 1099-MISC form. Missing these payments and forms is a common mistake that could impact the legality of the people that you hired.

Implement a New Tax Strategy for Next Year

If you found that tax preparation was too stressful this year, then it might be a sign that you need to implement a new tax strategy. Consider the option to wait until the dust settles after tax season is over. Then, you can schedule a time to talk to your accounting team about new systems or strategies that need to be used for the new year.

Most accountants are quite busy through tax filing day, and even a little bit after tax season is over due to extensions. But, there is plenty of time to discuss proactive strategies after April 17th. You need to have a good relationship with your accountant so that you can tap into their expertise throughout the year. Ask questions to learn about tax strategies. Look for solutions so that you can apply these new techniques in your business.

Go Digital

Are you still collecting receipts in a shoebox or filing folder? These old-school accounting practices are outdated and inefficient. As a result, tax season can be a nightmare if you are sifting through the paperwork to double-check the data-entry.

Instead of creating more work by managing manual accounting transactions, look for ways that you can digitize the system. Using a good software program is a great option to simplify the ongoing workload and ensure that you don’t miss important transactions. Recording everything electronically means that your expenses archive will be ready when it is time to file taxes next year.

Many of these accounting systems are designed to enter transactions automatically based on the line items that move through your bank account or credit card statement. You can set up filters that categorize certain transactions automatically. For example, a transaction from Staples or Office Max is always categorized as office supplies. Then, a few manual adjustments will be needed for uncommon transactions, such as a one-time plane ticket purchase for a conference that you are attending.

Working with an Accountant is a Valuable Way to Improve Your Business

If you aren’t already working with an accountant, then it is essential that you step into the wonderful world of outsourced accounting. These services give you access to top-notch financial guidance and recommendations, without the need to spend money on another employee. You will notice a big difference in the profits and success of your company when you are leaning on the expertise of an experienced financial team.

Are you ready to learn more about the benefits of tax preparation services and ongoing financial advice? You need to discuss the available services with our team here at Easier Accounting. We specialize in accounting services for small businesses and entrepreneurs. Our team understands the challenges of starting a company, so we are here to assist with your tax preparation and financial strategy. Call to learn more: (888) 620-0770

5 Things You Need to Do Before Talking to Your Accountant about Taxes This Year

Tax season is here, making many small business owners groan at the idea of scheduling an appointment with their accountant for tax preparation. Whether you own a small business or you are an employee, taxes are unavoidable. But, there are more things that will need to be done if you are filing your personal taxes as well as your business taxes.

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If you have an appointment scheduled or you are getting ready to talk to your accountant, there are several things that you need to consider before the meeting.

Do-It-Yourself vs. Professional Tax Preparation

The first question to ask is whether you should file your taxes on your own or hire someone to help. Even if you have completed your personal taxes in the past, it is important to know that business taxes are a bit more complicated. Even if you feel comfortable filing your tax return, it is suggested that you work with a tax professional for all business-related tax questions and filings.

Remember, tax laws change every year. So, you need to be sure that you have an accounting professional who is keeping up with the trends to ensure that your business is compliant with the new laws.

There’s no reason for you to spend the time trying to decipher tax laws! Your time is better spent on growing and running your business. Outsource your tax preparation to save yourself a headache that often comes during this time of year.

Even if you are outsourcing your tax preparation, there are a few things that you can do to be ready for the meeting with your accountant. Here are five steps that should be followed before the meeting:

Step #1: Gather Tax Paperwork

If you are filing personal taxes as an employee, then you only need to worry about a W2 and a few other financial documents for the tax return. But, there are many other documents that will need to be gathered and provided to your accountant for a business tax return. You might receive 1099’s and other statements of income. It is also a good idea to bring forms showing details about your bank accounts, investment accounts, debt interest payments, and more.

This tax paperwork shows your accountant the financial map, helping them to see the annual picture of your business income and expenses over the course of the fiscal year. Providing the paperwork decreases the likelihood that a miscommunication will occur. With this information, the accountant can crunch the numbers and figure out the best strategy for filing your taxes.

You might provide them with a stack of paperwork and call it good. Or, you might have a summary page that maps out the accounts to provide an easy-to-reference sheet for the accountant to review. Talk to your small business accounting team to see if they have any specific requests about what information you should provide during your tax appointment.

Step #2: Provide Payroll Details and Estimated Tax Payments

How much did you pay in payroll and payroll taxes? These numbers are necessary for your business tax filing. If you were consistent with tracking financial information throughout the year, this should be as simple as running a report in your accounting software to provide to your accountant.

However, it is a good idea to do an audit to ensure the reporting information is correct. These internal audits should be performed on a regular basis to identify potential mistakes or errors that were made in payroll processing or during data entry. Identifying these problems before tax filing time can help you avoid problems later.

It is also important that you provide detailed information about any estimated tax payments that were made. These tax payments should include quarterly taxes as well as other tax expenses such as employment taxes. Your accountant can help you stay ahead of these payments all year long to ensure that you don’t miss any of the necessary deadlines.

Step #3: Details about Expenses and Tax Deductions

One of the most powerful benefits of owning a business is leveraging tax write-offs where appropriate. If expenses are business-related, you can write off those costs on your taxes and reduce the amount of taxable income that will be factored into the return.

What types of expenses can you write off? It varies, depending on the type of business. If you have a home-based business, there are a few things that your tax accountant might ask about, such as utility bills, mortgage payments, and cell phone usage so that an appropriate write-off can be calculated. Other write-offs include the cost of business development, equipment, a company vehicle and more.

Here is a list of potential expenses that you might be able to use as tax deductions:

  • Marketing or advertising costs
  • Local transportation, including a mileage log for your car
  • Travel costs, including airfare, meals, hotel, taxis, and any other costs that were incurred
  • Phone lines, including cell phones, VOIP, and land lines
  • Internet, computer, and software costs
  • Payments made to subcontractors
  • Insurance and certification premiums
  • Depreciation of old assets
  • Office supplies
  • Rental costs
  • Utilities
  • Professional expenses for consultants, accountants, and lawyers
  • Bank and credit card interest expenses
  • In-home office deductions
  • Payroll costs
  • Health insurance premiums
  • Estimated tax payments
  • Maintenance and repairs

This list is not comprehensive. But, it will give you a good idea about the types of expenses that your accountant will be asking about.

The best thing that you can do is talk to your accountant in advance about potential write-offs that should be tracked for the year. Keeping detailed records of all of your expenses will ensure that you can use the deductions where they are appropriate. In some situations, you might choose to strategically purchase equipment or furniture before the end of the year in order to minimize tax burden. Other times, it might make sense to wait until January rolls around so that those deductions are available for the next year.

Make sure that you have receipts and documentation to back up the purchases that happened throughout the year. These deductions can be problematic if you don’t have documentation in case an audit happens in the future.

Step #4: Summarize Cost of Goods Sold

If your business sold any goods, you would need to have details about your inventory, including the total beginning dollar amount, purchases, and the ending dollar amount. Materials and supplies expenses also need to be figured into the business financial documents, so that you can determine overall profits and tax burdens for the year.

These numbers might seem overwhelming if you don’t know a lot about accounting. That’s why it is essential to have an experienced tax team who can offer advice and support all year long. Don’t wait until tax season to prepare the information for your accountant! Instead, have a solid system in place that will be used on a daily, weekly, and monthly basis to ensure that you have all of the financial information that will be needed.

Step #5: Bring Your Questions

Taxes can be complicated, leaving many small business owners confused about how the numbers worked out. If you have questions during the tax preparation process, it is important that you talk with your accountant to help you understand the details of the filing. Even though your tax accountant is managing the numbers and the paperwork, as a business owner, it can be very helpful for you to at least have a basic knowledge about how the calculations are summarized for the filing.

There are times when your accountant might come to you asking for specific information. Keeping open lines of communication will ensure that you have a good team to minimize the tax burden and maximize the final results.

What types of questions should you ask? Anything goes! Full-service accounting provides you with a great resource that you can tap into all year long. So, don’t feel like you need to wait until it is time for tax preparation before you talk to your accountant about the questions that arise. Strategic accounting can minimize the stress during tax time and make it easier for you to gather the necessary information when it is time to file your taxes.

Talk to an Experienced Accounting Team

The annual tax deadline is drawing near, so be sure that you are ready to have your paperwork submitted by the deadline. April 15th is the standard deadline each year. But, since this date falls on a weekend, you will have until April 18th to file your Federal tax return this year. The due dates for state tax filing varies depending on your location. It’s always best to talk to your accountant to ensure that you don’t miss the local deadlines.

Do you need help with your tax preparation? Talk to a small business accounting team to get the best service that can be catered to meet your needs. These services will ensure the financial success of your company, helping you to optimize profits and prepare for the future. For more information, talk to our team here are Easier Accounting to learn about the services that are available: (888) 620-0770

Simple Strategies to Reduce Stress during Tax Season

Tax season can be a stressful time for small business owners, especially if you haven’t been consistent with financial tracking throughout the year. As we are approaching tax deadlines, it is important to consider the financial standing of your company. Don’t get stressed out by the process though! Here are a few things that you should do to minimize the stress during this time of year:

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Gather Information about Expenses and Profits

Your accountant will need help with the financial details for the year, so you need to make sure that you are ready to provide the necessary reports and numbers for the tax filing. Make sure that you have an effective system in place which will help you to stay on top of the books, making it easy to gather the information that is needed when it is tax time. Many people find it beneficial to hire the services of a small business bookkeeper to manage these details on a weekly or monthly basis.

Double Check Employee and Contractor Info

As you are preparing W2s and 1099-MISC forms, it is a good idea to double check employee information before sending out the forms. Having an old mailing address or incorrect information can result in a situation where the employee doesn’t receive the necessary tax forms, so they will contact your company requesting to have the forms re-sent.

Save your company time and money by double checking the employee information in advance, to ensure that the form is sent to the right place. It is a good idea to have each employee verify the mailing address, name, and social security number.

Evaluate Employee Benefits

How effective are the benefits that you are offering to employees? Many small business owners get the benefits setup and then they forget to maintain these details on an ongoing basis. Look at details such as paid time off, flexible spending accounts, retirement accounts, and bonuses that were paid during the year. Make sure that the benefits were administered correctly and that the benefits are entered correctly on the tax forms.

Are you looking for someone to help with your company during tax season? One of the best ways that you can lower your stress levels is by hiring the right team to assist every step of the way. Here at Easier Accounting we offer both bookkeeping and accounting services for your small business, and we would love to help with anything that you need. Call us today for more information: (888) 620-0770

3 Ways Bookkeeping Services Save You Both Time and Money

As a business owner, you should always been looking for ways that you can improve systems, increase profit, and reduce spending. One of the options that should be considered is to hire a bookkeeper, because these bookkeeping services can help you to save both time and money. Here are some of the benefits you will enjoy:

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Stay Up-to-Date on Business Spending

It can take a lot of time and effort to catch up on neglected financial reports. Do you find that it is hard to stay current with business transactions? There are quite a few small businesses with financial records that are a mess, because the business owner is too busy with other aspects of managing the company and doesn’t have time to deal with the monthly accounting.

Instead of procrastinating and letting everything pile up, it’s better to stay consistent with tracking financial information on a weekly and monthly basis. If you don’t have time to keep up with these tasks, then you should definitely consider the benefits of hiring a bookkeeper to help.

Keep Track of Business Write-Offs

When tax time rolls around every year, you need to have good documentation of expenses that fall within the category of write-offs for the business. A bookkeeper can help you keep track of these expenses, so you have information ready to hand over to your tax preparer.

Bookkeeping services don’t typically include tax preparation, but here at Easier Accounting we offer a wide range of financial services, including tax preparation. Instead of working with two different companies for bookkeeping and tax preparation services, you can simplify the financial process by working with us.

Outsource Payroll

Payroll can be an expense that really adds up, especially if you are paying the salary of an internal employee to handle payroll processing. Have you taken a look at the real cost of internal payroll management? By outsourcing payroll, you can save money and free up the time of your employee to help with other tasks within the company instead.

There are many streamlined systems that can be implemented to make it easy for you to outsource payroll. These systems can be catered to the individual needs of your company, giving you the ease of letting a professional service handle it for you.

Are you interested in learning more about accounting and bookkeeping services? Contact our team at Easier Accounting, and we will gladly help with anything that you need: (888) 620-0770

Why You Need a Professional Accountant to Help with Your Business Tax Preparation

As a small business owner, it is essential that you keep up with all of the tax requirements for your company. Are you putting in the time and work that is necessary to keep up with your financial goals? There are a variety of tax rules and payments that need to be considered, and it is easy to feel overwhelmed by everything that needs to be done:

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  • Quarterly tax payments
  • Payroll taxes
  • 1099 forms
  • W2 forms
  • Annual tax preparation
  • And more!

It seems like the list is never-ending, and there is always another form or payment that you need to remember.

Let the Professionals Handle Everything for You

Instead of worrying about your tax forms and preparation, it is better to focus on what you do best: managing and expanding your business. It can be a burden to carve time out in your schedule in order to get your tax stuff done, which is why you should consider a professional bookkeeper and/or accountant to help.

You will be amazed to see how easy it is to outsource your bookkeeping and accounting tasks, which frees up your time so that you can focus on other responsibilities within your business. These services include monthly bookkeeping and tax consulting, and you can also choose other services such as audit support and tax preparation.

January Tax Forms are Due Soon

Don’t forget that you need to have your 1099 forms and W2 forms sent out to employees and contractors before January 31st. If you don’t have time to get these forms done before the end of the month, then right now might be the perfect time to get started with bookkeeping and business accounting services.

Remember, you need to be planning ahead for your business tax preparation and your personal income tax preparation. It can be a stressful time to plan everything that you need, but this stress can be reduced with monthly bookkeeping services and the ongoing support from a financial professional.

If you are ready to take your business to higher levels of success in 2016, then you need to make sure that you have the right financial system in place. These services can be customized to meet your individual needs, including cash flow management, invoicing, payment management, payroll, tax preparation, and more. For more information about the bookkeeping and accounting services that can support your financial goals, then we invite you to contact us at Easier Accounting.

Call us today at: (888) 620-0770