Borrowing Money: Pros & Cons

 

The Pros of Borrowing Money

Achieve Major Financial Goals:

• Home Loans: Borrowing money through a home loan allows you to purchase a home without having to save the entire amount upfront. This can be a stepping stone to building wealth through home equity.
• Business Loans: Business loans provide the capital needed to start or expand your business, helping you seize opportunities and grow your enterprise.
• Auto & Motorcycle Loans: These loans make it possible to buy a reliable vehicle, which is essential for commuting, travel, and personal freedom.

Flexibility and Convenience:

• Recreational Loans: Loans for recreational vehicles like boats and RVs can enhance your lifestyle, providing opportunities for travel and leisure.
• Personal Loans: Personal loans offer flexibility for various needs, such as home renovations, medical expenses, or consolidating high-interest debt.
• Credit Cards: Credit cards provide convenient access to credit for everyday purchases and can offer rewards and benefits.

Build and Improve Credit: 

Responsible borrowing and timely repayment can help build and improve your credit score. A higher credit score can lead to better interest rates and more favorable loan terms in the future.

Fixed Monthly Payments: 

Many loans come with fixed monthly payments, making it easier to budget and manage your finances. Knowing your monthly obligation helps in planning and avoiding financial surprises.

Potential Tax Benefits: 

Some loans, such as home mortgages, come with potential tax benefits. Interest paid on home loans may be deductible, reducing your overall tax burden. (Consult your tax professional)

The Cons of Borrowing Money

Interest Costs: 

Borrowing money comes with the cost of interest, which can add up over time. High-interest rates, especially on credit cards and personal loans, can significantly increase the total repayment amount.

Debt Burden: 

Taking on debt means committing to regular repayments, which can strain your finances, especially if your income fluctuates or if unexpected expenses arise.

Impact on Credit Score: 

While responsible borrowing can improve your credit score, missed or late payments can negatively affect it. A lower credit score can hinder your ability to borrow in the future and result in higher interest rates.

Risk of Over-Borrowing: 

It's easy to borrow more than you can comfortably repay, leading to a cycle of debt. It's crucial to borrow only what you need and can afford to repay without compromising your financial stability.

Additional Fees and Penalties: 

Loans often come with fees such as origination fees, late payment penalties, and prepayment penalties. Understanding all associated costs before committing to a loan is essential to avoid unexpected financial burdens. 

Source

 

What Kind of Records Should I Keep

Purchases, sales, payroll, and other transactions you have in your business will generate supporting documents. Supporting documents include sales slips, paid bills, invoices, receipts, deposit slips, and canceled checks. These documents contain the information you need to record in your books. It is important to keep these documents because they support the entries in your books and on your tax return. You should keep them in an orderly fashion and in a safe place. For instance, organize them by year and type of income or expense.

The following are some of the types of records you should keep:

• Gross receipts are the income you receive from your business. You should keep supporting documents that show the amounts and sources of your gross receipts. Documents for gross receipts include the following:
  • Cash register tapes
  • Deposit information (cash and credit sales)
  • Receipt books
  • Invoices
  • Forms 1099-MISC

• Purchases are the items you buy and resell to customers. If you are a manufacturer or producer, this includes the cost of all raw materials or parts purchased for manufacture into finished products. Your supporting documents should identify the payee, the amount paid, proof of payment, the date incurred, and include a description of the item to show that the amount was for purchases. Documents for purchases include the following:
  • Canceled checks or other documents reflecting proof of payment/electronic funds transferred
  • Cash register tape receipts
  • Credit card receipts and statements
  • Invoices
• Note: A combination of supporting documents may be needed to substantiate all elements of the purchase.

• Expenses are the costs you incur (other than purchases) to carry on your business. Your supporting documents should identify the payee, the amount paid, proof of payment, the date incurred, and include a description of the item purchased or service received that shows the amount was for a business expense. Documents for expenses include the following:
  • Canceled checks or other documents reflecting proof of payment/electronic funds transferred
  • Cash register tape receipts
  • Account statements
  • Credit card receipts and statements
  • Invoices
• Note: A combination of supporting documents may be needed to substantiate all elements of the expense.

• Travel, transportation, entertainment, and gift expenses
  If you deduct travel, entertainment, gift or transportation expenses, you must be able to prove (substantiate) certain elements of expenses. 

• Assets are the property, such as machinery and furniture, that you own and use in your business. You must keep records to verify certain information about your business assets. You need records to compute the annual depreciation and the gain or loss when you sell the assets. Documents for assets should show the following information:
  • When and how you acquired the assets
  • Purchase price
  • Cost of any improvements
  • Section 179 deduction taken
  • Deductions taken for depreciation
  • Deductions taken for casualty losses, such as losses resulting from fires or storms
  • How you used the asset
  • When and how you disposed of the asset
  • Selling price
  • Expenses of sale

• The following documents may show this information:
  • Purchase and sales invoices
  • Real estate closing statements
  • Canceled checks or other documents that identify payee, amount, and proof of payment/electronic funds transferred

• Employment taxes

  There are specific employment tax records you must keep. Keep all records of employment for at least four years.

 Source

End-of-Year Bookkeeping Wrap-Up

Wrap up your books before year-end for accurate financials, smoother tax prep, and a strong start to the new year. Contact Powers Bookkeeping today to schedule your year-end wrap-up.

Schedule your Consultation Today!

Year-End Bookkeeping Recommendations for Business Owners

As the year wraps up, taking a few proactive steps now can make a big difference in how smoothly you head into the new year. We recommend business owners consider the following before closing out the books:

• Make sure all bank and credit card accounts are reconciled so your numbers reflect reality
• Take a fresh look at income and expenses to catch miscategorized or missing items
• Confirm payroll and payroll tax filings are complete and accurate
• Review vendor payments and prepare for upcoming 1099s
• Follow up on outstanding invoices and unpaid bills to improve cash flow
• Check sales tax filings to avoid surprises later
• Review your profit & loss and balance sheet to understand how the year really performed
• Organize receipts and financial documents while everything is still fresh
• Plan a quick check-in with your bookkeeper or tax professional before year-end

Addressing these items now can help reduce stress, avoid last-minute issues, and set your business up for a confident start to the new year. Powers Bookkeeping is here to guide you through a smooth year-end close.

Contact us today! 

(916) 302-9153

info@powersbookkeepingservice.com

Happy Holidays!

 

We hope you have a safe and healthy holiday season! 

Happy Holidays from all of us at Powers Bookkeeping Service, Inc!

916-302-9153

Reminder: It's 1099 Season

Be sure your business has all the necessary W-9s so that you can properly issue 1099s in January. This can include all contractors and vendors you paid over $600 from your business.

Here is link to the current W-9 form you can have your contractors/vendors fill out. This will help alleviate any scrambling at year end.

3 Ways to Prepare Your Books for Tax Season

1.) Organize Your Receipts and Records

Gather all your receipts, invoices, and financial documents from the year. Use a system (physical or digital) to sort them by category, such as income, expenses, and deductions. This will save time and ensure all details are noticed.

2.) Reconcile Your Accounts

Ensure your bank statements, credit card accounts, and bookkeeping software match up. Reconciling ensures your records are accurate and up to date, which is essential for filing taxes correctly.

3.) Review Your Financial Reports

Please review your profit and loss statement, balance sheet, and cash flow statement. These reports clearly show your business’s financial health and help identify potential deductions or adjustments.

Need Help?

Tax season can be overwhelming, but you don’t have to tackle it alone. Powers Bookkeeping Service, Inc. ensures your books are accurate, organized, and ready for filing. Contact us today to schedule a year-end bookkeeping review!

Living Paycheck to Paycheck? Here Are Some Tips for Avoiding Extra Fees...

Living paycheck to paycheck is exhausting. As soon as your paycheck comes in, you have to spend it all on necessities like rent, utilities, insurance, and paying off debt. There’s usually little, if anything, left for savings or recreational activities.  Then, something even worse happens: you’re hit with a fee. You might have missed a payment deadline, overdrawn your account, lost your credit card, or encountered a different situation that decided your wallet needed another gut-punch. It might only sound like $12, the cost of a cheap meal out, but it’s $12 you don’t have and desperately need for something else. 

You might feel dread toward these impending fees when you pay a bill, or they come at you from out of nowhere. If you live paycheck to paycheck and want to make sure as much of your hard-earned money goes where it should, follow these seven tips for avoiding unnecessary fees. 

Avoid Banks that Charge Maintenance Fees 

Bank “maintenance fees” are particularly sinister. Financial institutions charge them if you don’t meet specific requirements, such as holding a minimum balance in your account ($1,500 in the case of many big banks) or making frequent direct deposits over a specified amount. You might not even be aware of them unless you check your billing statement. 

It’s not fair that banks charge you money for not having enough money. Maintenance fees are often monthly and can accumulate over time — Americans paid $3.5 billion in maintenance fees in 2017. These fees perpetuate the poverty cycle because if you live paycheck to paycheck or have irregular income (like freelancers), of course you don’t have $1,500 in your account at all times. 

Don’t use banks that charge maintenance fees. Many big banks do, but examples of financial institutions that don’t include Ally Bank, Capital One Bank 360, and FNBO Direct. 

Deposit Money the Long Way 

Deposit money into your account the long way, if possible. This process means being patient when getting paid, especially if you’re a contractor or freelancer that relies on services like PayPal. 

PayPal offers multiple bank transfer options, including Standard Transfer and Instant Transfer. The former is free and takes one to three business days, but the latter costs 1% of the transaction up to $10. Opt for the Instant Transfer option when you can, or use mobile deposit with a physical check. 

Use Apps that Don’t Charge Minimum Fees 

However, the pay cycle is notorious for delays that make living paycheck to paycheck even more difficult. It’s entirely possible that you need your money now, not later — but what can you do about it? You can’t exactly force direct deposit to go faster. 

One solution is to use financial apps that allow you to access your paycheck without having to wait weeks for it. One such app is Earnin, which you can use to access up to $100 of your paycheck per day, up to $500 per pay period. The app deducts the amount you took out on payday without mandatory fees or interest. Earnin is community-driven, so you can pay however much you think is fair as a thank you for its service. 

Set Up Auto Pay 

Are late fees the bane of your existence because you regularly forget to pay a bill on time? Apps like Earnin can help you avoid late fees, but consider setting up auto-pay on your credit card and other if you can afford to do so. This way, you never have to remember payment deadlines; your account will pay what you owe automatically. 

Sign Up for Low-Balance Alerts 

If you cannot risk auto-pay because you’re worried about insufficient funds, then sign up for low-balance alerts with an app or through your bank. Low-balance alerts will notify you when your account balance has dipped below a certain number — possibly of your choosing, depending on the service — so that you know when it’s time to replenish your account with additional funds or to watch your budget before bills are due. 

These alerts aren’t perfect because banks can be slow to share information with external apps. However, they can help avoid bank overdraft fees, which financial institutions charge if you opt-in to its overdraft protection service. While the ability to overdraw your checking account and complete transactions regardless of funds seems convenient, there are other pros and cons to consider (you can also open a checking account with no overdraft fees). 

Use Your Bank’s ATMs

ATM fees are one of the most-hated fees in the U.S. You incur these fees if you want to access your money from a machine that’s not in your bank or credit union’s network. 

Only use ATMs within your financial institution’s network when possible. If none are around, you can obtain cash at a supermarket that offers cash back options with a small purchase (which sounds like a fee in itself, so only buy something you need!). 

Opt-Out of Paper Communications 

Your bank is going to communicate with you, and you would be wise to pay attention. Unfortunately, many banks default to mailing paper communications instead of using digital means — and then charge you for it. Log into your online account or call your bank’s customer service line to opt-out of paper notifications and save yourself some cash. 

Unnecessary fees make it extra challenging for people living paycheck to paycheck to save money. If you want to lose as little of your money as possible to predatory financial institutions, research what fees your bank (or prospective bank) charges and which they are most likely to make you pay, depending on your situation. Source

Common Tax Forms

Filing taxes usually goes hand in hand with tax forms—whether paper or electronic. Depending on your individual situation, you may receive a lot of them. That's reason enough for starting early—if you find you're missing one, you'll want to give yourself plenty of time to track it down.

Your specific financial circumstances will determine which forms you receive each year, but here are some of the most common IRS forms to be aware of and a brief description of their purpose:

• W-2: Used by employers to report total annual compensation, payroll taxes, contributions to retirement accounts, and other wage information.
• 1098: Used by lenders to report mortgage interest, mortgage insurance premiums, and any points you might be able to deduct during the tax year.
• 1098-E: Used by lenders to report interest paid on student loans.
• 1098-T: Used by educational institutions to report payments for qualified tuition and related expenses, and scholarship or grant amounts.
• 1099-B: Used by financial institutions to report proceeds from sales of securities and other financial instruments to help investors track their capital gains or losses.
• 1099-DIV: Used by financial institutions to report dividends and other distributions.
• 1099-INT: Used by financial institutions to report interest income.
• 1099-MISC: Used by businesses and payers to report royalties, rents, prizes, rewards, and other miscellaneous income.
• 1099-NEC: Used by hiring agencies or companies to report payments to independent contractors, freelancers, and other non-employees.
• 1099-R: Used by financial institutions to report distributions from retirement accounts, pensions, annuities, insurance contracts, profit-sharing plans and other similar financial products.
• SSA-1099: Used by the Social Security Administration to report Social Security benefits.

Planning to itemize?

If your deductions exceed the standard deduction for 2025—$15,750 for a single filer, $23,625 for head of household, and $31,500 for joint filers—it makes sense to itemize them so you can keep more of your earnings. (For those 65 or older or blind, there is an additional $1,600 deduction if you are married or $2,000 if you're unmarried.)

Also, the One Big Beautiful Bill Act introduced several new tax deductions starting this year, which you can use whether you itemize or not. These include:

• Senior Tax Deduction of up to $6,000 for those 65 or older, or $12,000 for qualified married couples
• Tips Income Deduction of up to $25,000 per household
• Overtime Income Deduction of up to $12,500 per person (with a maximum amount of $25,000 for joint filers)
• Auto Loan Interest Deduction of up to $10,000 for a new car purchase

Note, however, that these new tax deductions are subject to various limitations such as phase outs based on your income. They are also temporary: unless they are extended, they will expire after 2028.

If you do end up itemizing, you'll need to have proof in the form of receipts and other documentation to support your figures. You don't have to submit the receipts with your tax return, but you'll need them in case you're audited by the IRS. And you don't want to be caught without them, so be sure to save them for at least seven years. If you lost or didn't save some of this information, don't fret—you may be able to use other documents, such as credit card statements or canceled checks, as evidence during an audit. Source

Donating Safely and Avoiding Scams

When you decide to support a cause you care about, you want your donation to count. Doing some research and planning your giving can help ensure your donations get where they’ll do good. Here are tips to help you plan your donation– and avoid scams... 

Do some research online

• Looking for a charity to support? Search for a cause you care about – like “hurricane relief” or “homeless kids” – and phrases like “best charity” or “highly rated charity.”
• When you consider giving to a specific charity, search its name plus “complaint,” “review,” “rating,” or “scam.”
• Use these organizations to help you research charities.
• Donating by cryptocurrency? Watch for scammers who want to take your donation.

Be careful how you pay

• If someone wants donations in cash, by gift card, or by wiring money, don’t do it. That’s how scammers ask you to pay.
• To be safer, pay by credit card or check.
• It’s a good practice to keep a record of all donations. And review your statements closely to make sure you’re only charged the amount you agreed to donate – and that you’re not signed up to make a recurring donation.
• Before clicking on a link to donate online, make sure you know who is receiving your donation.

Keep scammers’ tricks in mind

• Don’t let anyone rush you into making a donation. That’s something scammers do.
• Some scammers try to trick you into paying them by thanking you for a donation that you never made.
• Scammers can change caller ID to make a call look like it’s from a local area code.
• Some scammers use names that sound a lot like the names of real charities. This is one reason it pays to do some research before giving.
• Scammers make lots of vague and sentimental claims but give no specifics about how your donation will be used.
• Bogus organizations may claim that your donation is tax-deductible when it is not.
• Guaranteeing sweepstakes winnings in exchange for a donation is not only a scam, it’s illegal.

If you see any red flags, or if you’re not sure about how a charity will use your donation, consider giving to a different charity. There are many worthy organizations who will use your donation wisely. Source

Budgeting for the Holidays

You may have been a last minute holiday shopper last year, but planning now can help you have a happier, stress-free holiday season this year.

• Make a list, and check it twice. Experts agree that it helps to write down a list of all the people for whom you plan to shop, before you hit the stores or turn on the computer. Next to each name write down what you want to buy for that person, and how much you want to spend. You get a clear idea of the numbers involved and know in advance how many gifts you need to purchase.

• Shop for bargains once you have an idea of what you're looking for, and for whom you are buying. In addition, if you are purchasing a number of items from the same online retailer, buying all the items together can cut down on shipping costs.

• Curb impulse shopping and spending – buy only what is on your list. If you've forgotten someone, add them to your holiday budget and, if necessary, adjust the amounts you spend on others so you keep the same total.

• Make a plan for those other expenses. Give some thought to how much you'll be spending during the holiday season on things other than gifts. Be sure to include in your budget the following: postage for cards and presents that need to be shipped; wrapping paper, bows, greeting cards and other supplies; decorations; food and drink for holiday meals (and don't forget to add more, if you will be feeding guests); and travel expenses.

• Review your receipts and bills from last year. This will give you an idea of the amount you actually spent and how long it took to pay for it all.

• Save your holiday receipts from this year and either total them daily or add them up two weeks before the actual holiday.  Expenses add up fast during this busy season.  Seeing your totals will provide you with a reality check as to how much more you can afford to spend.

• Using credit during the holidays?  If so, take only the credit cards you will need and limit those to as few as possible.  And be sure to check your credit card statements carefully for any unauthorized charges.  Report such charges immediately to your financial institution or credit card company.

If you follow some of these simple tips, you should have a successful and financial stress-free holiday season! Source

8 Documents You Should Be Shredding That You Probably Aren't

We all know it’s important to shred our most sensitive pieces of information—credit card statements or applications, tax-related documents, identity cards, etc. Knowing what to shred is key to keeping your identity protected, your finances secure, and your family safe. Still, there are several often-overlooked items that could put you at risk if they aren’t also securely destroyed. If you forget to shred these documents, you’re not alone. But with the number of identity thefts and data breaches on the rise, it’s important to stay on top of your shredding habits.

The cost of identity theft is increasing as criminals get their hands on increasingly sensitive data. According to estimations by financial analysts, fraudulent transactions may reach $40.62 billion in 2027 and $49 billion by 2030. 

Here are some documents that you should be shredding and why it’s important:

1. Junk mail

Junk mail comes in every day. Unfortunately, with so many data sources available to companies, your personal data may be included in those garbage mailers and credit card offers. Don’t toss the junk mail in the trash bin; shred it. Given merely your name, address, and a credit offer, someone could take out a line of credit in your name and spend money, leaving you on the hook. Junk mail should be shredded or, in the United States, you can opt out of junk mail and pre-screened credit offers through the Federal Trade Commission’s unsolicited mail page.

2. Medical prescription labels

Prescription labels contain private information, including your name, contact information, and doctor’s name. If not disposed of carefully, someone could use the information fraudulently to refill your prescriptions or get access to your healthcare information and medical background. So shred the paper documentation that comes with your prescriptions, and soak the empty bottles in water to remove the labels. Many pharmacies and recycling centers will accept used bottles.

3. Photos and old IDs

If you’re going through a box of old pictures, don’t just toss out the duplicates—shred them. Thieves can use your old pictures or IDs maliciously to fake their identity. When deciding what to shred, make sure your old pictures and identification are on the list.

4. Travel itineraries

Heading out for a vacation? Traveling on business? Don’t forget to shred your travel itineraries. When thieves are looking for ways to bill you out of money, they can use your travel itineraries to rebook flights and hotels or gain access to your accounts. Think about how someone could verify where you’ve been and when to “prove” identity. Best to be safe and securely shred your travel itineraries.

Boarding passes also contain more sensitive information than you likely realize. Those QR codes that are on your boarding passes may contain your personally identifiable information. While the airlines need to know who’s on the plane, identity thieves can leverage that data.

5. Shipping labels

That box that came with your new shoes? If it has a plastic pouch with an insert, like a receipt, an order form, or a confirmation, it likely has personally identifiable information. Double-check your boxes before you recycle or reuse them, pull out any shipping labels, inserts, or return labels, and make sure those get shredded too.

6. Memos and notes

What computer area doesn’t have a little pad of sticky notes next to it? Those handwritten notes are incredibly convenient, super easy to use, and likely contain personal information that you don’t want identity thieves to get their hands on. What was written when the doctor called? What was jotted down during that client call? Did you scribble any passwords while on a call with IT? To be safe, include those used notes on your shred list.

7. Resumes and CVs

Whether it’s your own resume or resumes submitted via employees or prospective candidates, it’s important to shred the paper copies. Because resumes often contain personal information, like telephone numbers, email and home addresses, and job or education history, identity theft is a potential risk. And for legal purposes, securely disposing of sensitive employee information is a requirement.

8. Bank statements and canceled checks

Even if they’re old statements, they should be shredded. Your name, address, phone number, and bank account information are in those statements, along with your habits, purchases, and banking history. Even if the account is closed, shred it anyway. While many banks have moved to digital formats for canceled checks, if you have physical copies or reprints from your bank, shred them. They contain a lot of personally identifiable information that could put you at risk. Stop those canceled checks from posing a risk by having them shredded. Source

How I Organize Digital Clutter

In this video Nicholas Garofola shows us a few steps that I take to be more organized, and a little less cluttered in my digital space.

8 Benefits of Account Reconciliation

Reconciliation in accounts offers several benefits that are crucial for the financial health and operational efficiency of a business:

1.) Accuracy in Financial Records: Account reconciliation ensures that financial statements are accurate and reflect the true financial position of the business. This accuracy helps in making informed decisions and planning for the future.

2.) Fraud Detection and Prevention: By regularly reconciling accounts, businesses can identify discrepancies that may indicate fraudulent activities or errors, allowing them to take corrective measures promptly.

3.) Regulatory Compliance: Accurate and timely reconciliation in accounting helps businesses comply with regulatory requirements, reducing the risk of penalties and legal issues.

4.) Cash Flow Management: Account reconcilement helps monitor cash flow by ensuring that all transactions are recorded correctly and that there are no unexpected shortfalls or overages.

5.) Enhanced Financial Planning: With precise financial data, businesses can create more reliable budgets, forecasts, and financial plans, aiding in strategic decision-making.

6.) Improved Operational Efficiency: Automating the account reconciliation process can save time and reduce manual errors, allowing the finance team to focus on more strategic tasks.

7.) Increased Stakeholder Confidence: Accurate and transparent financial records enhance trust and confidence among investors, creditors, and other stakeholders.

8.) Internal Control: Regular account reconciliation is an internal control measure that ensures all transactions are authorized and recorded correctly.

What Does Reconciling an Account Involve?

Account reconciliation is typically performed after the close of a financial period. Accountants review each account in the financial statements and verify that the balance listed is accurate. This often involves comparing the financial statement balance to another source of information – for example, comparing the balance for the Cash account to an external bank statement.

Other examples of critical accounts that require reconciliation include:

• Cash and Investments – comparing to external bank and investment accounts
• Accounts Receivable – comparing to the AR sub-ledger
• Accounts Payable – comparing to the AP sub-ledger
• Prepaid Expenses – listing the components of the account balance
• Accrued Liabilities – listing the components of the account balance
• Intercompany Payables and Receivables – ensuring they eliminate during consolidation
• Fixed Assets – listing the components or tying out to a sub-ledger

Account reconciliation is performed to ensure consistency and accuracy in financial reporting. They are especially important and a key internal control for publicly held companies that must report financial results to external stakeholders. Source

Happy Thanksgiving!

 

Happy Thanksgiving from all of us at Powers Bookkeeping Service, Inc to you! 

We hope you have a blessed holiday!  We are thankful for you!

Powers Bookkeeping Service, Inc

(916) 302-9153

info@powersbookkeepingservice.com

Why You Should Start Investing with a Small Amount

You don’t need a fortune to begin building wealth. What matters most is starting early and being consistent. Even small investments grow through compound interest, where your money earns returns, and those returns earn more returns over time.

Example: If you start with $100 and invest $50 a month at a 7% return, you could have over $25,000 in 20 years. That’s the power of consistency.

Step 1: Open an Investment Account

Before you buy anything, you’ll need a place to invest. Here are your main options:

• Brokerage Account → Best for flexibility. Lets you invest in stocks, ETFs, and funds.
• Robo-Advisor → Automated investing, great for beginners who want hands-off growth.
• Retirement Accounts (IRA or 401k) → Tax advantages for long-term investing.

For beginners, a low-cost brokerage or investing app is the best choice. Look for one that offers:

• Fractional shares (so you can invest in big companies with just a few dollars)
• Low or no trading fees
• No minimum balance requirements
• Popular beginner-friendly investing platforms: Fidelity, Vanguard, Charles Schwab, Robinhood, Betterment, Acorns.

Step 2: Choose Your First Investment (ETFs, Index Funds, or Fractional Shares)

With $100, you’ll want diversification—spreading money across many companies to lower risk. Here are three simple ways:

1. ETFs (Exchange-Traded Funds)

Great for beginners. One ETF can include hundreds of companies.

Popular options:

• S&P 500 ETF (SPY, VOO) → Invests in the 500 largest U.S. companies.
• Total Stock Market ETF (VTI) → Covers the entire U.S. stock market.

2. Index Funds

Similar to ETFs but structured as mutual funds. Low-cost, long-term growth.

3. Fractional Shares

If a stock costs $300+, you don’t need to buy the whole share. Many apps let you invest $5 or $10 into companies like Apple, Amazon, or Tesla.

Step 3: Build a Habit of Investing Consistently

The secret to growing wealth isn’t a one-time $100 investment—it’s the habit of investing regularly.

Here’s how to build consistency:

• Automate monthly deposits (even $25 makes a difference).
• Reinvest dividends automatically.
• Stay invested during market ups and downs—don’t panic-sell.

Over time, these small contributions snowball into serious money.

Step 4: Keep Learning and Expanding Your Portfolio

Once you’re comfortable investing with $100, you can branch into:

• Dividend Stocks → Companies that pay you regular income.
• Bonds → Lower-risk investments for balance.
• REITs (Real Estate Investment Trusts) → Exposure to real estate without buying property.
• Advanced Strategies → Like options trading (only once you’re experienced).
• Start small, stay consistent, and increase your knowledge as your investments grow.
• Final Thoughts: Start Investing Today with Just $100

You don’t need to wait until you have thousands saved—the best time to invest is now. With just $100, you can open an account, choose a beginner-friendly ETF, and start building wealth.

Here’s your action plan:

• Open an investment account (brokerage or app).
• Invest your first $100 in an ETF or fractional shares.
• Add small amounts every month.
• Be patient and let compound growth work for you.

Remember: It’s not about timing the market—it’s about time in the market. Your first $100 could be the start of financial freedom. Source

1099 Reminder

Now is the time to get the information from your vendors and payees if you need to issue them 1099s in January. 

Here is a link to a W9 to get the information you need.

End of Year Checklist

 

Prepare Your Books for Year-End and Tax Season with Powers Bookkeeping Service. As the year comes to a close, it’s the perfect time to make sure your books are clean, accurate, and ready for tax season. A little preparation now can save hours of stress later — and help you start the new year with confidence. Here’s your step-by-step checklist from Powers Bookkeeping Service: 1. Reconcile All Bank and Credit Card Accounts Make sure every transaction in QuickBooks (or your bookkeeping system) matches your bank and credit card statements through December. This ensures your balances are accurate before you close the books. 2. Review and Categorize All Transactions Double-check that income and expenses are in the correct categories — especially for deductible items like: Office supplies Mileage and travel Equipment purchases Business meals and professional services Proper categorization helps maximize deductions and minimize red flags during tax prep. 3. Record Owner Contributions and Draws If you’re a sole proprietor or partnership, make sure all owner withdrawals and contributions are properly tracked. This ensures accurate equity reporting and avoids confusion during tax filing. 4. Review Accounts Receivable and Payables Send reminders for any outstanding client invoices. Pay any vendor bills due before year-end. Keeping these clean helps present an accurate financial picture for taxes — and improves your cash flow going into the new year. 5. Verify Payroll and Contractor Payments Confirm all employee wages, benefits, and taxes are properly recorded. Gather W-9s from any contractors you paid over $600 this year — you’ll need them for 1099 filing in January. 6. Update Asset and Depreciation Records Log any new equipment or property purchases and provide documentation to your tax preparer. This helps ensure you receive all eligible depreciation and Section 179 deductions. 7. Review Business Subscriptions and Expenses Take stock of recurring charges or unused services — cancel or adjust anything you no longer need before the new year. 8. Run Year-End Financial Reports Generate key reports for your records and tax preparation, including: Profit & Loss Statement Balance Sheet Cash Flow Report These give you and your tax preparer a complete view of your business health. 9. Back Up Your Financial Data Save a secure copy of your accounting files and financial documents. Cloud-based systems often do this automatically, but it’s smart to have a secondary backup for peace of mind. 10. Schedule a Year-End Review Set up a time with Powers Bookkeeping Service to review your books, address any discrepancies, and ensure you’re fully prepared for tax season. Start the new year organized, confident, and tax-ready. Let’s make sure your books tell the full story of your business success. Year-End Business Bookkeeping Checklist Get your books ready for tax season with Powers Bookkeeping Service Reconcile all accounts – Match your bank, credit card, and loan statements through year-end. Categorize income & expenses – Ensure all transactions are properly labeled for tax deductions. Record owner draws & contributions – Keep equity balances accurate and up to date. Review accounts receivable & payables – Collect outstanding invoices and pay open bills. Verify payroll & contractor payments – Double-check records and gather W-9s for 1099 filing. Update assets & depreciation – Record new equipment or property purchases. Audit recurring expenses – Cancel or adjust unused subscriptions. Run key reports – Profit & Loss, Balance Sheet, and Cash Flow for year-end review. Back up financial data – Save secure copies of your records and accounting files. Schedule your year-end review – Meet with Powers Bookkeeping Service to ensure your books are clean, accurate, and tax-ready. Start the new year organized and confident! Contact us today!

QuickBooks Made Simple for Sole Proprietors!

Are you running your own business and feeling overwhelmed by bookkeeping?

Join Powers Bookkeeping Service for our QuickBooks Workshop for Sole Proprietors — a hands-on session designed to help you take control of your business finances with confidence.

You’ll learn how to:

• Set up and organize your QuickBooks account the right way
• Track income, expenses, and mileage efficiently
• Reconcile accounts and prepare for tax season
• Generate reports that help you truly understand your business performance

Whether you’re brand new to QuickBooks or just want to clean up your records before year-end, this workshop will give you practical tools and peace of mind.

Date of workshop will be determined soon. 

RSVP today by contacting Tina Mosier tina@powersbookkeepingservice.com 

Happy Veterans Day

 

"Your courage and dedication inspire us all. Thank you for standing strong and serving with honor."

 Powers Bookkeeping Service

(916) 302-9153

info@powersbookkeepingservice.com