HUGE Tips to Save Your Agency Money at Tax Time

Accounting and Tax Tips for Digital Agencies

Bryan Nguyen, a CPA, joins The Blueprint Training to discuss accounting and tax planning topics specific to digital agencies.

Getting Started with Accounting

The recommendation for beginner agency owners is to try doing their accounting themselves. Understanding numbers and simple bookkeeping — like doing your own books in QuickBooks — can help a lot in understanding your business finances.

Recommended Tools

QuickBooks Online is recommended for bookkeeping and ProConnect™ Tax for taxation. QuickBooks integrates well with other web services including Gusto for payroll, making it a solid foundation for agency finances.

Understanding Deductions

Bryan ensures that clients record everything on their books to capture all expenses and deduct everything allowable under tax law. Having proper records is essential for maximizing legitimate deductions.

Expense Reimbursement

There should be internal accounting processes that allow submission of receipts for expense reimbursement through the payroll system or bank transfer. Accounting software like Expensify enables reimbursement applications and simplifies the process.

Business Structure

For beginners, a Sole Proprietorship or DBA (Doing Business As) is recommended. When you start, your focus should be on client acquisition rather than immediately applying for a separate legal entity.

Tax Philosophy

If you have an actual purpose to spend money, then you should go ahead and invest. But you should never spend money that you were not planning on spending just to lower your taxes. Smart tax planning is about strategic spending, not wasteful spending.

When to Hire an Accountant

For a lot of smaller companies, it does not make sense to hire a full-time accountant. However, at the $2 million mark, the processes and operations become quite sophisticated and that is when they should hire an accountant internally.