FAQs

Why are insurance companies auditing me?

When you purchase a commercial insurance policy, it is only for a specific period. At the end of that period, insurance companies choose to confirm that the policy you purchased is correct. For that reason, they proceed to review your state, bank, and/or tax documents to verify your information related to your policy and the validity of it.

Why do I have an audit if I already had one last year?

A commercial insurance policy is for a specific period of time, in most cases for one year. Since every time you buy a policy, you are purchasing new coverage for another future period, and each time that period ends, insurance companies will request an audit. In short, as long as you continue having a commercial insurance policy, you will continue receiving audit requests annually, depending on how often your policy renews.

I do not have legal status in the country. Can I still have my company?

Of course! In the United States, there is no law that prohibits creating a company as an undocumented or unauthorized person in the country. It is only necessary to have an ITIN number and a residential address within the United States.

What is an ITIN? Individual Taxpayer Identification Number

The Individual Taxpayer Identification Number, or ITIN, is a tax processing number issued by the Internal Revenue Service. The IRS issues ITINs to people who need to have a U.S. taxpayer identification number but do not have one and do not qualify for one.

An ITIN does not:

Authorize you to work in the United States
Provide eligibility for Social Security benefits
Qualify a dependent for the Earned Income Tax Credit

What is an EIN? Employer Identification Number

An Employer Identification Number, or EIN, is a unique identification number made up of nine digits. Small and large companies use it for tax procedures and processes. The number, also known as FEIN, allows you to create your business tax account.

You need to obtain an EIN if you have employees, operate your business as a corporation, partnership, or limited liability company, withhold taxes on income paid to a nonresident foreigner, or if you have a Keogh plan.

Some entities such as trusts, estates, mortgage investment conduits, farmers’ cooperatives, plan administrators, nonprofit organizations, and other types of organizations must have an EIN.

At Archie Contable, we can obtain this number completely free for you when you register your company with us.

Why do I need to file a business tax return?

If you own a business, the IRS and your state may require you to report your business income and expenses every year. Even if your business made little money or had a loss, you may still need to file depending on your business structure.

What documents do I need for my business taxes?

You usually need your income records, bank statements, receipts, invoices, payroll reports, contractor payments, loan statements, asset purchases, prior year tax return, and any tax forms received, such as 1099 forms.

Can I deduct business expenses?

Yes. Business expenses may be deductible if they are ordinary and necessary for your business. Common examples include supplies, advertising, rent, software, insurance, professional fees, mileage, phone, internet, and payroll.

Do I need a separate business bank account?

Yes, it is strongly recommended. A separate business bank account makes your bookkeeping cleaner, helps support your deductions, and makes tax preparation easier.

What happens if I do not file my business taxes?

You may face penalties, interest, IRS notices, state notices, and problems renewing licenses or applying for loans. Ignoring tax filings usually makes the problem more expensive.

Do I need to pay estimated taxes?

Many business owners need to make estimated tax payments during the year. This depends on your profit, tax situation, and whether enough tax is being paid throughout the year.

What is the difference between gross income and net profit?

Gross income is the total money your business receives before expenses. Net profit is what remains after subtracting business expenses. Taxes are usually based on profit, not total deposits alone.

Can I file my business taxes if my bookkeeping is not ready?

You can, but it is not recommended. Incomplete bookkeeping can lead to missed deductions, incorrect numbers, tax notices, or higher taxes.

What is bookkeeping?

Bookkeeping is the process of organizing and recording your business income, expenses, bank activity, invoices, payments, and financial transactions.

Why does my business need bookkeeping?

Bookkeeping helps you know how much your business is making, what you are spending, what you owe, and what you can deduct. It also makes tax filing faster and more accurate.

How often should bookkeeping be done?

Bookkeeping should ideally be done monthly. Waiting until tax season can make the process slower, more expensive, and less accurate.

What do I need to provide for bookkeeping?

You usually need bank statements, credit card statements, receipts, invoices, loan records, payroll reports, sales reports, and access to accounting software if you use one.

Can you fix old bookkeeping?

Yes. Cleanup bookkeeping is available when records are behind, incomplete, duplicated, or incorrectly categorized.

What is bookkeeping cleanup?

Bookkeeping cleanup means reviewing and correcting prior months or years of transactions so your records are accurate and ready for taxes, reports, or financial review.

What is bank reconciliation?

Bank reconciliation means comparing your bookkeeping records with your bank statements to make sure the numbers match and nothing is missing or duplicated.

Do I still need bookkeeping if I have a small business?

Yes. Small businesses often need bookkeeping even more because every deduction and cash flow decision matters.