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Outsourcing CFO (Chief Financial Officer) services enables small and medium-sized businesses (SMBs) to access expert financial strategy without the high cost of a full-time executive. By hiring an outsourced CFO, businesses gain tailored guidance for growth and stability. 

How does it work?

An outsourced CFO is a financial expert or firm hired part-time or on a contract basis to provide strategic financial management. Unlike a full-time CFO, with salaries often ranging from $150,000–$300,000 annually, an outsourced CFO charges hourly or monthly rates ($2,000–$10,000/month). They handle tasks like financial planning, forecasting, budgeting, cash flow management, and fundraising using cloud-based tools. For SMBs, this delivers C-suite expertise cost-effectively, with CFOs collaborating with owners or accountants to focus on high-impact areas like profitability or investor relations.

Key Benefits of Outsourcing CFO Services

1. Cost Savings: Outsourcing cuts costs by 50–80% compared to a full-time CFO, as businesses pay only for needed services. For example, a $1M-revenue retail startup might spend $5,000/month on an outsourced CFO versus $20,000/month for a full-time hire, saving $180,000 yearly.

      2. Scalability: Outsourced CFOs adjust to business needs, offering 10 hours/month for startups or 40 hours for scaling firms.

     3. Improved Budgeting: CFOs create data-driven budgets aligned with business objectives, using forecasting to optimize resources.

Practical Examples of Outsourced CFO Impact

1. Cash Flow Management: A $2M-revenue manufacturer faces seasonal cash flow issues. The CFO negotiates longer supplier terms and secures a credit line, real-time dashboards via tools like QuickBooks ensure positive cash flow, avoiding layoffs.

Outcome: Cash reserves grow by 20%, eliminating overdraft fees.

2. Fundraising: A SaaS startup needs $500,000 in seed funding. The CFO builds financial models and pitch decks, coaching the founder for investor meetings. The startup secures $600,000, exceeding its goal.

Outcome: Revenue grows 30% in six months with accelerated product development.

Addressing Common Concerns

Loss of Control: Owners fear external CFOs may not align with their vision.

• Solution: CFOs act as advisors, collaborating closely with owners via transparent reporting. Contracts can define boundaries.
• Mitigation: Choose an industry-experienced CFO with a compatible communication style.

Data Security: Sharing financial data raises privacy risks.

• Solution: Reputable CFOs use secure platforms (e.g., Xero) with encryption and NDAs.
• Mitigation: Verify security protocols and request references.

Lack of Commitment: Outsourced CFOs may lack the dedication of full-time staff.

• Solution: Experienced CFOs prioritize results for repeat business and reputation.
• Mitigation: Select providers with long-term client relationships and clear deliverables.

Tips for Choosing a Reliable Outsourced CFO Provider

Verify Industry Experience: Choose a CFO familiar with your sector (e.g., healthcare, tech) for tailored solutions.

• Example: A healthcare startup needs a CFO versed in compliance.

Check Credentials and References: Confirm qualifications (e.g., CPA) and request client testimonials.

• Example: References from similar-sized businesses validate reliability.

Evaluate Technology: Ensure the CFO uses cloud-based tools compatible with your systems.

• Example: AI-driven forecasting tools enhance projection accuracy.

Assess Communication: Select a CFO whose updates match your preference (e.g., weekly calls, email summaries).

• Example: Busy founders may prefer concise reports.

Start Small: Test with a short-term project, like budgeting, before long-term commitment.

• Example: A three-month cash flow project evaluates fit.

Conclusion

Outsourcing CFO services provides SMBs with expert financial strategy at a lower cost, offering cost savings, scalability, and better budgeting. From stabilizing cash flow to securing funding, outsourced CFOs drive growth. By addressing concerns like control and security and choosing a reliable provider, businesses can thrive in 2025.

This article originally appeared on https://acgdept.com

Owning rental property can be a smart way to build wealth but it also comes with tax responsibilities. Whether you’re renting out a single-family home, an apartment, or just a room in your house, you need to report that rental income properly to stay compliant and maximize your allowable deductions.

Here’s a clear breakdown of what rental income is, how to report it, and which expenses you can deduct.

What Counts as Rental Income?

The IRS defines rental income as any payment you receive for the use or occupation of property. This includes:

• Monthly rent payments
  
• Advance rent (even if it’s for a future year)
  
• Security deposits (if not returned to the tenant)
  
• Lease cancellation fees
  
• Expenses paid by the tenant (if they cover something you normally would, like repairs or utilities)
  
• Services in exchange for rent (e.g., if a tenant paints the unit in lieu of payment)
  

Even if you rent out your property for only part of the year, the income you earn during that period must be reported.

Which IRS Form Should You Use?

If you own the property as an individual or a single-member LLC, you’ll typically report your rental income and expenses on Schedule E (Form 1040), Supplemental Income and Loss.

Schedule E allows you to:

• Report income from up to three properties on one form
  
• Deduct expenses (covered below)
  
• Calculate your net rental income or loss
  

If you’re part of a partnership or own the property via an S corporation or multi-member LLC, you’ll file differently, usually with Form 1065 or Form 1120S, and then report your share of the income on your personal return using a Schedule K-1.

Deductible Rental Expenses

The good news? You can deduct ordinary and necessary expenses related to managing and maintaining your rental property. Common deductions include:

• Mortgage interest
  
• Property taxes
  
• Repairs and maintenance
  
• Property management fees
  
• Insurance premiums
  
• Utilities (if paid by the landlord)
  
• Depreciation on the property (over 27.5 years for residential)
  
• HOA fees
  
• Legal or professional services (e.g., tax prep, attorney fees)
  

Important: Improvements (like adding a deck or renovating a kitchen) must be capitalized and depreciated over time, not deducted in full the year they’re made.

What About Partial Rentals or Shared Space?

If you’re renting out part of your primary residence (like a basement unit or a room on Airbnb), you’ll need to allocate expenses between personal and rental use based on square footage or usage.

Only the portion related to the rental is deductible.

Passive Activity Rules and Loss Limits

Rental real estate is typically considered a passive activity, meaning you may be limited in how much loss you can deduct. However, if you actively participate and your modified adjusted gross income (MAGI) is under $100,000, you may qualify to deduct up to $25,000 of rental losses.

Real estate professionals (those who spend 750+ hours a year in the business and meet material participation rules) can deduct losses without the passive activity limit.

Keep Detailed Records

Accurate documentation is critical. Keep:

• Rent receipts
  
• Lease agreements
  
• Invoices and proof of payment for expenses
  
• Mortgage and insurance statements
  
• Depreciation schedules
  

Using property management software or bookkeeping tools can make reporting much easier at tax time.

Reporting Short-Term Rentals (Airbnb, Vrbo, etc.)

If you rent out property for less than 15 days per year, you don’t have to report the income at all. But if you go over that threshold:

• Income must be reported
  
• Deductions are proportional to rental days
  
• You may receive Form 1099-K or 1099-MISC from platforms like Airbnb
  

Be aware that short-term rentals may be subject to self-employment tax in certain situations, especially if services like cleaning, meals, or concierge are included.

Final Thoughts

Reporting rental income isn’t just about compliance, it’s also an opportunity to lower your taxable income through legitimate deductions. Whether you’re a first-time landlord or building a real estate portfolio, understanding the rules around rental income is key to staying ahead.

If you need help navigating your specific situation or want to make sure you’re maximizing your deductions, consult a tax professional or visit bocataxprep.com for personalized guidance.

Whether you’re selling handmade candles, freelancing as a graphic designer, or driving for a rideshare service, launching a side gig is exciting but it also comes with new tax responsibilities. Here’s what you need to know to stay compliant and avoid surprises at tax time.

1. Classify Your Income Correctly

Most side gigs are treated as self-employment income. That means:

• You’ll report your earnings on Schedule C (Profit or Loss from Business) with your Form 1040.
  
• Gross receipts minus business expenses determine your taxable profit.
  

2. Keep Detailed Records

Good record-keeping is your first line of defense:

• Track every dollar: sales, tips, platform payouts.
  
• Save receipts for supplies, software, mileage, and home-office expenses.
  
• Consider using a simple spreadsheet or an app like Wave or QuickBooks Self-Employed.
  

3. Understand Self-Employment Tax

In addition to income tax, you owe self-employment (SE) tax which covers Social Security and Medicare:

• SE tax rate is 15.3% on your net earnings.
  
• Half of that (7.65%) is deductible as an “above-the-line” adjustment.
  

4. Make Estimated Quarterly Payments

Because taxes aren’t withheld from your side-gig income, you may need to pay estimated taxes:

• Due dates: April 15, June 15, September 15, and January 15 of the following year.
  
• Estimate your yearly income, compute both income and SE tax, then divide by four.
  
• Use Form 1040-ES vouchers or pay online via the IRS’s EFTPS system.
  

5. Deductible Business Expenses

Reduce your taxable income by subtracting ordinary and necessary expenses, such as:

• Equipment (laptop, camera)
  
• Materials (raw goods, printing costs)
  
• Marketing (website fees, ads)
  
• Travel (mileage, parking)
  

Tip: If you work from home, you might qualify for the simplified home-office deduction (up to $1,500 per year).

6. Know When You’re an Employee vs. an Independent Contractor

Platforms sometimes misclassify workers. True contractors:

• Control how and when you work.
  
• Provide your own tools.
  
• Bear business risk.
  

7. Understand 1099 Forms

If you earn more than $600 from a client or platform, you’ll likely receive a Form 1099-NEC (Nonemployee Compensation). Even if you don’t receive a 1099, you’re still required to report all income. Don’t rely solely on these forms to track your earnings and keep your own records.

8. Separate Your Finances

It’s smart to open a separate bank account for your side gig. This makes it easier to track income and expenses, simplifies recordkeeping, and helps you stay organized if the IRS ever asks questions. If your side gig grows, you might also consider forming an LLC or registering a business name, but that’s not required to get started.

Final Thoughts

Starting a side gig can bring in extra income and open new doors, but it also means taking charge of your tax responsibilities. Keep good records, set aside money for taxes, and don’t be afraid to ask for help if you need it. A little planning now can save you a lot of stress later.

If you’re unsure where to begin or want peace of mind, consider booking a consultation with a tax professional who understands side gigs. You can learn more at bocataxprep.com.