Tag: taxes

Why We Run Quarterly Payroll for Our Clients

July 10, 2025by Anna FaulkLeave a comment

For many of our clients—especially those structured as S-corporations—quarterly payroll isn’t just a convenience, it’s a strategic and compliance-driven necessity. At Incline Business Essentials, we’ve developed a quarterly payroll model that aligns with IRS requirements and supports proactive tax planning. Here’s why we do it and how it helps your business.

S-Corporation Owners Must Pay Themselves a “Reasonable Wage”

One of the core requirements of an S-corp structure is that business owners who actively work in the company must be paid a reasonable salary through payroll. This salary is subject to standard payroll taxes, and it’s critical to stay in compliance with the IRS. Skipping this step can lead to audits or penalties.

By running quarterly payroll, we help ensure owners are consistently paying themselves a fair wage in a timely manner, while also simplifying the administration of payroll for smaller teams who may not need or want a monthly cadence.

Strategic Tax Planning: Avoiding Year-End Surprises

Another major advantage of quarterly payroll is the ability to strategically manage federal and state tax obligations. We work closely with you and your CPA to estimate the total amount you should be paying into the IRS and your state throughout the year—not just from wages, but including pass-through income that may affect your tax bill.

Once these estimated totals are calculated, we set up additional withholdings through payroll to help ensure you’re on track. This approach:

Helps smooth out tax payments over the course of the year
Reduces the risk of underpayment penalties
Minimizes the shock of a large year-end tax bill
Provides peace of mind for business owners who prefer to pay taxes incrementally

Our Process: Collaborative and Tailored

Each quarter, our team:

Coordinates with your CPA (or uses our best estimates based on past tax performance and current year projections) to determine estimated tax obligations.
Runs payroll to deliver your reasonable salary and any additional withholdings needed.
Files and remits taxes to federal and state authorities, keeping your compliance on track.
Monitors and adjusts withholdings as needed throughout the year to reflect changes in business performance or tax policy.

The Bottom Line

Quarterly payroll isn’t just about ticking a compliance box—it’s about using payroll as a tool to manage your cash flow, reduce surprises, and make smart, informed financial decisions. If you’re an S-corp owner, this cadence allows us to keep you aligned with IRS rules and on track for smoother year-end filings.

If you have questions or want to revisit your withholding estimates, let’s talk. We’re here to help make your financial systems work for you—not the other way around.

1099 Procedure

December 23, 2024December 26, 2024by Anna FaulkLeave a comment

1099s are forms that need to be issued in January to your vendors and subcontractors. Please watch the video or read below for more info.

Who Should Be Issued 1099s?

Your company is required by law to issue 1099s to any subcontractor who performed a service for your company within the calendar year they were paid more than $600, and the individual or a company that you paid is not registered as an S corp.

Subcontractors

Subcontractors can vary wildly. Fo example, maybe you hired a person to help you with your website, and you paid that person more than $600 in a year. Or if you hired someone to come in and help you with some carpentry, so they were acting as a true subcontractor. This is another example of someone who would need a 1099. Again, these, these would be issued to companies or individuals who are not an S corp who were paid more than $600 within a calendar year for a service they performed within your business.

Rent and Lawyers

In addition to this, we are also required to issue 1099s to an entity that you are paying for rent. So if that entity or individual is not an S corp, we will issue a 1099 to that entity or individual. We are required to issue 1099s to lawyers regardless of how much you’ve paid them

1099s Only For Checking Account Payments, Not Third Party or Credit Cards

One other piece of clarification is that 1099s are required to be issued for payments that have run through your checking account. For example, if you’ve written a check to a subcontractor or you’ve paid cash to a subcontractor.

We will not be issuing 1099s for subcontractors that you paid via credit card or any other third party payment platform. So like PayPal, for example, if you’ve paid someone through PayPal, we will not be issuing a 1099.

We cannot issue 1099s to your subcontractors that you’ve paid through a third party app because the third party is required to give some reporting to the IRS and if we were to issue a 1099 to those vendors, then the income would end up being double reported.

So it’s very important that we not issue 1099s for these kinds of third party apps. So again, if you have any questions about this, feel free to reach out, but just know this is how we will be handling it. As we approach end of year, please again, assist us with any W9s that we may need to collect on your behalf.

Preparing Bookkeeping for the End of Year: A Guide

November 21, 2023by Anna FaulkLeave a comment

As we approach the end of the year, it’s time to start thinking about wrapping up your bookkeeping. Yes, I know what you’re thinking – “Finally, a chance to put my accounting skills to use!” But before you break out your calculator and spreadsheet wizardry, let’s talk about what this will entail.

Well, dear reader, I have some delightful news for you. As you stand on the precipice of spreadsheets and numbers, there’s a trustworthy ally ready to swoop in and carry some of that bookkeeping weight – Incline! That’s right, you’re not alone in this numerical forest. Incline will come with its accounting superpowers, ready to tackle the tangled jungle of receipts, invoices, and tax forms. So hold off on that emergency coffee order and remember, Incline is here to handle the heavy lifting. Breathe easy, keep your calculator at bay, and let’s move on to the next step, shall we?

Gathering The Essential Documents

You’ve got Incline by your side, and now it’s time to bring in the artillery – your essential documents. Think of this as a treasure hunt, only instead of a buried chest of gold, you’ll be unearthing paperwork. First things first, did you make any big purchases or sales this year? Are there any new flashy cars, fancy equipment, or items that had you parting with more than $2500? If so, you’ll need to rustle up the purchase documents. Your CPA will need copies.

Bringing in the Big Guns: Final Loan Statements

Now that we’ve dug up the treasure chest of purchase documents, it’s time to gear up for the next level of our financial scavenger hunt – Final loan statements. These are like your report cards but for your debt. They show how well you’ve been managing your loans. Only this time, instead of grades, you’re looking at the interest and balance of the loan, specifically as of 12/31/23. Your CPA will need these to understand how much interest you can write off. So, dig through your files, drawers, email inboxes, or wherever you stash these. And remember, each one you find brings you one step closer to completing your year-end bookkeeping. Put on your adventurer hat, and let’s get to it!

Time to Send Us Your Tax Documents: The Grand Finale

Now that you’ve excavated your final loan statements, and your CPA has stopped crying tears of joy, it’s time for the grand finale. You’ve reached the pièce de résistance of our financial adventure – sending us your tax documents.

Your tax documents are like the secret sauce in your financial burger, the cherry on top of your accounting sundae. They include W-2s, 1099s, 1098s, K1s, and all other tax forms that the IRS loves to pore over. So, it’s time to channel your inner detective and gather these crucial documents.

These little nuggets of information are crucial for us to help you file your taxes. Remember, like a good detective, no piece of paper is too insignificant! Send us all documents that carry the information needed to file your taxes. Your diligent documentation now could be the difference between a smooth tax filing experience and a stressful one. So let’s get to it, shall we?

Don’t be shy, send them over posthaste! Your CPA is waiting with bated breath for this accounting banquet. Remember the IRS has a knack for finding missing forms, so let’s beat them at their own game. Incline is here to help you every step of the way. So, polish off that magnifying glass and start rifling through your paperwork. Your end-of-year bookkeeping is a sprint to the finish line and you’re almost there!