What to Know B-4 Filling out a W-4

When I got my first job at sixteen my new boss handed me a form that asked me how many allowances I wanted to take. “Allowances?! Mom told me in no uncertain terms I had to take this job because I WASN’T getting an allowance anymore.”  

So just what was this allowance thing anyway? Essentially, withholding allowances are different life circumstances that directly affect how much money is withheld from your pay. (i.e. Are you single or married? Can anyone else claim you as a dependent? Do you have children or dependents? Do you work more than one job? etc.)

I give you the mystical, magical, famous Form W-4 (*tada*). The IRS requires new employees to fill this out for their employers….looks like this (click to enlarge):

This worksheet is to help your employer know how much to withhold from your paycheck. The top part of page one, as well as page two, are for your use only. These parts are to help you figure out how many allowances you are entitled to take. Page two gets into more specifics for example, if you and your spouse both work, you’re single and work more than one job, or if you plan to itemize.

So what’s it all mean?

More allowances…Mo’ Money

The more allowances you claim, the less income tax will be withheld from your paycheck- aka mo’ money. However, this mean, yes you get more money in your paycheck and less tax taken out in that moment, but in the future this could mean you’ll owe the IRS mo’ money, which could translate to mo’ problems…depending on how you feel about making a payment to the IRS.

Less allowances…Mo’ Refund

The alternative to this is you claim less allowances, so taking more tax from your paycheck up front, meaning in the short term your paycheck will be a little less, but come April, you are more likely to get a refund from the IRS than owe them money.

An additional option…Withhold Additional Money

You can also choose to have additional money withheld from each paycheck if you’d rather pay the IRS upfront and not chance owning come April (this is where a conversation with your CPA could be helpful…have them do an estimate to ensure you’re withholding the correct amount).

Bottom line- The total number of allowances you claim impacts the size of your paycheck and whether you will get a refund or owe money come April.

The key to this, as in anything in life really, is finding balance and what works for you. Would you rather have a little less in your paycheck now and not owe much or maybe even anything in April? Or do you prefer to have more of your money now and plan on paying later? As always, if you’re unsure about how something may affect you financially, you should reach out to your friendly CPA to have the conversation about what may be best for your given situation.

Before Becoming Harold

In the time I’ve spent working for an accounting firm, there’s a regular occurrence that happens around here. A client calls to tell us about a big decision he’s just made but is running into some snags. Let’s call this client Harold. Harold has gone off and made a big purchase, without talking to his CPA first. Now of course Harold has every right to do that, but this time it’s lead him down a path of it having some not so great tax implications. If only dear ole’ Harold had reached out to his CPA BEFORE, he may have had a different story.

It’s because of clients like good ole’ Harold that Dan Myers wanted to start a company like Kuberneo CPA in the first place. I remember him telling me pretty early on that in the past he just did clients’ tax returns and would see places where he could have helped if only he’d had the chance the previous year, but alas, here he was doing the return so it’s too late. Dan wanted to get into a position of being able to offer strategy to his clients to help make smart tax moves…thus Kuberneo CPA was born.

Never fear future Harolds, I have made a BEFORE list for you. In addition to asking your financial planner, it’s a good idea to meet up with your CPA BEFORE making moves in a lot of these areas. Just taking the time to have the conversation could save you a lot of money, effort and heartache.

  • Before starting the home buying process
  • Before deciding what to contribute to your retirement account or making changes to your retirement account ESPECIALLY withdrawing money early
  • Before setting up a college savings plan
  • Before setting up a business on your own
  • Before changing your business’ structure
  • Before creating partnerships with foreign entities
  • Before moving your business to another state or country
  • Before hiring an employee
  • Before hiring a subcontractor
  • Before paying off a loan (especially your mortgage)
  • Before selling a rental property or business asset
  • Before making big purchases
  • Before making an optional job change
  • Before going to a donut shop alone, without asking your accounting staff if they’d like anything

Hey Harold, you still with me? It’s not that your CPA will tell you “no” regarding a big decision, but they can offer critical information for the decision making process and may be able to offer strategies or alternate options that can help you achieve your goals while minimizing taxes. One more quick note- in general, it’s a good idea to set up a meeting with your CPA sometime between October-December if you haven’t been checking in with them throughout the year. This allows time to implement tax saving strategies, before the end of the year.

BEFORE you end up like Harold, be sure to take the time to ask yourself, “Should I set up a meeting with my CPA to discuss this first?” and “When am I bringing Bethany a donut?”

RCAO Reporting for Duty

14 or so years ago, an enthusiastic 12th grade student walked into her small hometown bank in rural Michigan to open her first checking account. Can you feel the excitement?!

Well for me, there was A LOT of excitement actually! I was preparing to leave my little town behind for the slightly bigger town I’d be attending college in that fall and needed an ATM/debit card. Up till this point in life I had a savings account and cash stored in the very secret location of… the top of my closet.

The bank signed me up and besides a lollipop (Where do they even get these? Is there a special candy for banks store?), they also sent me home with a checkbook for my new account. I had watched my mother write in her checkbook my whole life and I had also taken a class in middle school that taught us how to balance a checkbook (A skill I was surprised to find out most of my peers never had been taught really), so thankfully, with a little refresher, I was ready to go. Responsible Checking Account Owner (or RCAO…ooh that’s catching!), here I come!

While RCAO hit a snag here or there with keeping up with her checkbook, the world of internet bank really gave her a leg up. I could check my bank balance anywhere, anytime…so much so that most of my peers didn’t even use checkbooks anymore (So much so that some jerkfaces might make fun of one RCAO for using her checkbook still…it’s fine, it’s fine).

With accessibility on my side, referencing my checkbook against my monthly bank statements became easier than ever. It wasn’t until I came to work for Kuberneo CPA that I found out this action even had a name (besides, “Oh crap how much money is actually in my bank account?”)…Reconciliation.

Reconciling your account (bank or credit card) simply means comparing what’s in your accounting system (QuickBooks, Your checkbook, etc.) verses what’s in the bank. A few reasons it’s important to do this:

  • Ensure you have accurate information to make financial decisions
  • Ensure you’re being charged the correct amount for things you’ve paid for
  • Ensure detection of identity theft or fraud
  • Ensure everything’s made it into your ledger and nothing has been missed

Obviously, this is important to me personally, but if you own a business, it’s even more important that your accounts are reconciled every month. The financial decisions you’re making will be based on what your accounting reports are saying, which get their information from your accounting system…don’t you want that system to have accurate information? (Psst- the answer is yes)

One last tip if you’re getting started: It wasn’t till the last six months that I have transitioned away from using a physical checkbook and now have an app I use on my phone, but I still reconcile my account with my statements every month. (Only now it’s even more likely to be accurate because it does the math for me!) RCAO over and out.

I’m Successful and I Know It

The Sale

If you own a business, are looking to start one or just love new idea’s, Shark Tank is probably your favorite show. Almost every other night when my wife and I are able to, we’ll sit in front of our TV and just debate one sided with or against the sharks. The show is a perfect reality for anyone wanting to grow and expand their business.

I’d like to invite you into a unique business opportunity that I fully believe will change the rest of your life, for the good. I’ve surveyed tens of Americans from all over this country and found something worth investing both your time and money in. I live in Orlando, with my company based primarily online and I am looking to expand my business beyond my home into stores, that I know the American people and even global citizens will find beneficial. I’m asking: $600,000 for 10% stake in my company. Now that I’ve left you on the edge of your seats, I’d like to present: Lemon flavored water.

Some businesses want to grow before they KNOW

Well, I don’t have a crystal ball, but I can predict it’s going to be hard to convince a room full of sharks that lemon flavored water a 6 million dollar business – even with headquarters in Orlando in the summer! Just like in the show, the reality of expanding your business is that you’re going to run into snags.

In order to stay on top of your growth I’ve come up with, something super cheesy, that I am very proud of:






Nothing is going to work without being excessively honest with yourself. That is the only way you’ll KNOW to GROW.

Let’s do a quick self-analysis: (Remember, we’re being honest here)

  • Do you have a business plan?
  • Do you have a mission?
  • Have you done a SWOT (Strengths, Weaknesses, Opportunities, Threats) analysis?
  • Have you written out a desired time line? (how you plan to grow)
  • Have you gone out, doing field work for your product to get opinions?

If you answered no to any of the questions listed above, reassess yourself for a moment. You have to stop yourself from saying, “Oh, we’re growing too (fast/much/popular), we don’t have time for any of this!” These are barebone questions that are designed to help you expand your business.

If you ignore these questions, you’re going to experience a very brief success. Every person that starts a business would love for their business to successfully expand; a lot of us want our company to be the next Apple, Google, McDonald’s, or Starbucks. If you aren’t going to go back to your roots when you started your company, growing successfully will become a huge problem. Although growth to some is a huge success, to MOST, growth will be a huge disaster.

The problems that you carry in with you often expand right alongside the business. Here’s just a brief list of problems that may crop up:

  • Business grows too fast
  • Personnel issues
  • Disagreements among ownership
  • Marketing incorrectly
  • Family issues
  • Complacency
  • Metamorphosis of company culture
  • Changing role of owner
  • Lack of standards and controls
  • Technology
  • Stale products or services
  • Lack of investment
  • Stubbornness
  • Poor Leadership

If you notice, a lot of things on the list above are personal problems. If we know nothing operates willingly, then we need to be honest with ourselves. The key to business expansion is learning. Learn from your mistakes, learn from your customers, learn from your competition, just be open to being intentional to learn things you didn’t know before. The truth is that you don’t know what you don’t know. So learn!

Signs- Break Even, Loss, and Profit

Do You Know Your Company’s Breakeven Point?

The breakeven point is a critical threshold that any established business or startup should be aware of to achieve profitability.

No business owner starts their company or launches their product hoping to pour money down the drain. While making money may not be your only goal in running a business, it’s probably pretty high on your objectives. To actually start making money it’s imperative to know the threshold when you move from loss into profit – the breakeven point.

The goal of a breakeven analysis is to find the point where your revenues equal your costs. In a world of online tools and Excel spreadsheets, many small businesses take the breakeven calculation for granted. Too many entrepreneurs make the mistake of introducing their product or service to a market without fully researching the total costs involved in starting and sustaining a profitable business.

How can a breakeven analysis benefit your business?

  1. In setting your product’s price point
  2. Examining the impact of certain costs
  3. Assessing how sales will need to grow to justify additional investments into the company
  4. Identifying areas that are unprofitable and can be trimmed or improved
  5. Continuing to remain competitive when markets change

How do I conduct a breakeven analysis?

Conducting a breakeven analysis requires careful and diligent examination of costs and prices related to running your business. The key components of the breakeven analysis are:

  • Overhead costs
  • Variable costs
  • The selling price of your product or service
  • And, if you are a startup company, you may want to include initial startup costs in the breakeven analysis

The breakeven point can then be measured in by dividing your total fixed costs by your product’s contribution margin (the product price minus its variable costs). While this may be seem like a simple calculation, it can become very complex when a business has a wide breadth of products with multiple revenue streams.

Do you need more help?

Kuberneo CPA has the expertise to help your company fine tune its profit model by routinely conducting this kind of breakeven analysis. Is it time to hire an additional employee and increase overhead costs? Should you sell your product at a higher price? How will finding a less expensive source of supplies affect your bottom line? If you want refine your approach to price and costs management, please come in and talk with the Kuberneo CPA team.

Laptop with Graphs

“If someone can do it better, faster, or cheaper, let him… do it!”

Quote credit: Thomas G. Miller author of “It’s Your Business: So What Are You Going to Do About It?

Have you ever considered outsourcing your accounting and financial tasks? You are not alone. According to Forbes, finance and accounting was one of the first business processes that companies outsourced. Furthermore, outsourcing is NOT limited to large corporations. Small to medium-sized businesses are outsourcing their financial and accounting processes and reaping great benefits.

Why outsource?

  1. Outsourcing your accounting processes will give you more time to focus on your core business.
  2. Outsourcing your accounting and financial projects will give you peace of mind. When you work with a trusted accounting firm, you can rest easy knowing that experts are handling your accounting and finance related processes. [It goes without saying you’ll want to choose that “trusted accounting firm” wisely. Selecting a partner solely based on price could create more problems than it solves, but that’s an entirely different blog!]
  3. Outsourcing your accounting can help reduce your overhead costs. Instead of hiring an employee or in-house accounting staff to work full time, you can pay for only what you need. Today, you might need a bookkeeper’s services, but tomorrow a CPA. The right accounting and finance partner will have a well-versed team ready to serve your needs at different levels.
    Outsourcing your accounting can help reduce your overhead costs. Click To Tweet

But it’s MY business, I don’t want to lose control!

You may fear losing control when hiring an outside firm, but this isn’t the case. A qualified accounting team will use advanced accounting software to provide detailed and clear metrics that you wouldn’t get in-house. They will help you answer questions like, “Was that advertising campaign profitable? Can we afford a second location?” as well as providing insights you never even knew you were missing.

What’s the bottom line?

Outsourcing your accounting and financial tasks can allow your business to be more efficient and to save money overall – all while you enjoy your own clients and family more.

Question marks on paper piled up

We Want To Hear From You!

If you could ask a team of CPAs anything, what would you want to know? While we’ve been working hard behind the scenes to come up with interesting content we want to tailor it to what our readers want to know.

Ask us about:

  • Starting a business
  • Bookkeeping
  • How to get the most out of your CPA firm
  • Taxes
  • Legal & HR requirements
  • Whatever else!

Please ask us in the comments below and follow us on Facebook & Twitter to see when we post answers!

Scam Alert Road Sign

5 Ways to Spot an IRS Email Scam Message

A recent article, How to Spot an IRS Email Scam Message by Anita Campbell reports that during the first quarter of the year aka tax season, IRS email scams increase– targeting taxpayers, tax preparers, and small business owners. The scams include bogus phone calls and IRS email scams alleging to be from the IRS but, in reality, they are from a spammer.

Here is how to spot a bogus IRS email scam. Be warned.

  1. An unexpected email from the IRS is a red flag

    It’s important to bear in mind the IRS has stated that it generally does not instigate contact with taxpayers via email to request financial or personal information. This includes any kind of electronic communication, such as texting and social media platforms.

    If information is required from you, the IRS will initiate contact via USPS. It will probably be an official-looking envelope.

  2. Incorrect return address

    A return email address can be forged. Inspect the email header information diligently. Find out who actually sent the message. Remember, it’s not an official IRS communication if it’s not sent from the IRS.gov domain.

  3. Unprofessional format

    It’s not an official IRS message if you can see several typos, errors odd spacing and/or multiple fonts. If the email is in anyway messy, unprofessional looking or has misspelled words it is a fake.

  4. Incorrect or vague phrases

    The IRS is generally accurate about things like IRS form numbers, tax return processes and tax code sections. For example, phrases such as “tax payout” are not standard phrases for the IRS.  “Tax refund” should be used instead. Anything that sounds unfamiliar is probably unfamiliar for a reason!

  5. Asking for confidential information

    Almost always, the point of these spam emails is to get you to reveal confidential information. They are trying to get you to click on links in the email that will take you to a page that you believe is the IRS website, but is instead a bogus page designed to collect your valuable information. Sometimes, the intent is just malicious and they are trying to get you to download and install malware or a computer virus without your knowledge or consent on your computer.


These emails are known as IRS phishing emails. Beware and keep informed! Don’t dare click on a link or download/ open any attachment in a suspect IRS message. Just forward the suspected spam message to phishing@irs.gov.

Remember, during tax season you can avoid the stress by seeking out a CPA to help you with all your tax matters and needs.