Restaurant CPA Columbus Ohio
Maximize your restaurant’s success with financial expertise in the food industry.
Restaurant CPA Services
While most people view restaurants as places that prepare delicious meals, we recognize that running a restaurant span beyond the food and involves juggling inventory, staff, equipment, and good financials to make sure your operation is running profitably.Â
Amidst all these responsibilities, it’s easy to feel overwhelmed by the financial intricacies of the business. That’s where our team of experienced CPAs comes in. We specialize in the unique needs of restaurant businesses and offer comprehensive accounting and tax services tailored to your industry.
Our team of experienced CPAs understands the intricacies of the restaurant industry, offering comprehensive accounting and tax services designed to alleviate the burden and provide you with peace of mind. With our expert guidance, you can focus on what you do best – crafting exceptional dining experiences for your customers – while we take care of the financial intricacies that come with owning a restaurant.
- We will handle the entire process of accounting, from setting up Quickbooks, maintaining your chart of accounts, and managing your expenses and taxes.Â
- We will proactively advise you on the best ways to get tax deductions.
- By utilizing our comprehensive accounting techniques, you will be equipped with valuable data that can facilitate making informed business decisions. This will enable you to navigate strategic choices with ease, such as determining the profitability of discounts and promotions to encourage more people to come to your restaurant.Â
- Our extensive understanding of accounting principles specific to the restaurant industry enables us to provide you with a precise analysis of your profits, margins, and other vital metrics, empowering your decision-making to grow your restaurant business.
Managing your CPA Company finances with Hogan CPA, a QuickBooks ProAdvisor
QuickBooks provide features such as financial tracking, inventory management, cost analysis, payroll and employee management, all customizable with financial insights. By integrating with point-of-sale systems and other restaurant management apps, QuickBooks enables restaurants to access up-to-date information on sales, expenses, inventory levels, and employee data. This data allows restaurant owners and managers to make informed decisions, optimize operations, improve profitability, and monitor key performance indicators more effectively. Accurate financials helps restaurants answer strategic questions such as:
- How are sales trending compared to previous periods?
- Which items or menu categories are driving the most revenue?
- Are there any notable changes in customer preferences or purchasing patterns?
- How can inventory be optimized to reduce waste and minimize stockouts?
- Are there any cost spikes or anomalies that need to be investigated?
- Are there any staffing gaps or overlaps?
2. Tax Management
The complex revenue and expense streams of a restaurant make calculating taxes a challenging task. Different types of employees that may have varying rates or tips, expenses such as equipment and maintenance, insurances, discounted meals during happy hour, and more can be diverse.
To simplify tax management, integrating Quickbooks can help pull data from reports and save time. Furthermore, our services can assist in estimating tax liabilities for quarterly estimates, selecting the appropriate entity for your business, and managing both tax preparation and planning.
Why Choose a CPA Specializing in the Restaurant Industry?
Choosing a CPA specializing in the food service industry offers several benefits for restaurant owners. We have in-depth knowledge of financial and tax considerations specific to restaurants including:
Tip Reporting and FICA Tip Credit:
Restaurant employees often receive tips, which need to be accurately reported for income tax withholding and FICA (Social Security and Medicare) tax purposes. Properly tracking and reporting tips while ensuring compliance with IRS regulations can be complex. Additionally, restaurants may be eligible for the FICA Tip Credit, which requires separate calculations and documentation.
Employee Classification:
Restaurant owners need to correctly classify their employees, distinguishing between hourly, salaried, and tipped employees. Each classification has different tax implications and may require different payroll tax calculations and reporting.
Uniform Capitalization (UNICAP) Rules:
The UNICAP rules require restaurants to capitalize certain direct and indirect costs as part of their inventory or fixed assets. Complying with these rules and properly allocating costs can be challenging for restaurant businesses.
Depreciation and Capital Expenditures:
Restaurants often have significant investments in equipment, furniture, and renovations. Properly classifying these expenses as either deductible repairs or depreciable assets, and determining the appropriate depreciation methods and recovery periods can be complex.
Cash Flow Management:
Restaurants often experience fluctuations in cash flow due to seasonality and other factors. Managing cash flow and ensuring that taxes are appropriately withheld and paid on time can be critical for tax compliance.
Tax Planning for Restaurant Companies
Tax Deductions
Owner-operators have a plethora of responsibilities to manage, including staffing, training, managing finances, and ensuring timely payment of their taxes. No matter the business model of your restaurant, we can help you plan and save taxes. Here are a few of the tax deductions that you may be eligible to claim:
- Cost of Goods Sold (COGS)
- Wages and Benefits
- Rent and Lease Payments
- Utilities and Overhead Expenses
- Equipment and Supplies
- Repairs and Maintenance
- Depreciation
- Marketing and Advertising
- Business-related Travel like purchasing inventory or meeting suppliers
- Entertainment expenses like hiring live musicians
- Employee Training and Education
Program Expenses:
Expenses directly related to the nonprofit’s programs and activities can be deducted. This includes costs for materials, supplies, travel, and other expenses incurred in delivering the organization’s services.
Tax Planning for Restaurant Companies
Tax Deductions
Owner-operators have a plethora of responsibilities to manage, including staffing, training, managing finances, and ensuring timely payment of their taxes. No matter the business model of your restaurant, we can help you plan and save taxes. Here are a few of the tax deductions that you may be eligible to claim:
- Cost of Goods Sold (COGS)
- Wages and Benefits
- Rent and Lease Payments
- Utilities and Overhead Expenses
- Equipment and Supplies
- Repairs and Maintenance
- Depreciation
- Marketing and Advertising
- Business-related Travel like purchasing inventory or meeting suppliers
- Entertainment expenses like hiring live musicians
- Employee Training and Education
Equipment & Depreciation
Restaurants have some of the most diverse combinations of equipment which all depreciate at different rates. From commercial stovetops and ventilation to parking lots or the building itself (if you own it) – depreciating these assets at their correct rates can be a difficult task when you have thousands of transactions per month. Depreciation allows for critical tax savings that can allow you to recoup monies during tax season and bring cash back into the business.Â
The American Jobs Creation Act of 2004Â refined the system for depreciating these expenses specific to restaurants. Most assets fall into 3 categories:
- Building and Building components: roofs, flooring, drywall, foundations, etc – depreciation over 39 years
- Land improvements: parking lots, light poles, concrete patios (non-structural), etc – depreciation over 15 years
- Office Furniture, Fixtures, and Equipment: desks, filing cabinets – depreciation over 7 yearsÂ
- Distributive Trades and Services – Food storage equipment, kitchen HVAC, POS systems, furniture unique to restaurants (tables, chairs, booths), etc – depreciation over 5 yearsÂ
- Information Systems – computers – depreciation over 5 years
There are more intricacies when it comes to trades like electrical or plumbing as one must determine if it’s part of the building (39 year depreciation) vs hook-ups like water lines to a dishwasher (5 year depreciation).Â
Entity Guidance
Additionally, you can save on taxes with the strategy for forming a business entity while also protecting yourself from liability. You can choose from the following entities:
- Limited Liability Company (LLC): LLC’s have personal liability protection, flexibility in management and ownership. They can be treated as disregarded entities (taxed like a sole proprietorship or partnership) or choose to be taxed as an S corporation or C corporation, offering flexibility in tax planning.
- S Corporation: S-corps function similarly but require more payroll deductions and require reasonable compensation for owner-employees and restrictions on the number and type of shareholders.
- Partnership: If you’re starting your restaurant business with a partner, partnership pass-through taxation to multiple owners so profits and losses flow through to individual partners who report them on their personal tax returns. Partnerships may also be subject to specific tax rules that govern the allocation the income and loss among partners.
- Sole Proprietorship: Sole proprietorships are not separate legal entities, and the owner reports business income and expenses on their personal tax return. Self-employment taxes may apply. Considering the high-degree of liability that comes with a owning a restaurant, both financially and legally, we highly do NOT recommend restaurants be a sole proprietorship.
Most restaurant owners opt for the Limited Liability Company (LLC) due to its personal liability protection, flexibility in management and ownership, pass-through taxation, and simplicity of operation. This can safeguard their personal assets, customize the management structure, allocate profits and losses, and benefit from the tax advantages of pass-through taxation. Additionally, the administrative requirements and ongoing compliance obligations of an LLC are typically less burdensome compared to other entities.
Restaurant Accounting Services with Hogan CPA
Hogan CPA Financial Services offers comprehensive accounting, tax planning, and tax management solutions designed to save you time and streamline your restaurant’s operations. Our services free up your valuable time, allowing you to dedicate more energy to marketing efforts and enjoying quality time with your loved ones.
Cost-effective Bookkeeping for restaurants
If you need part-time or fully managed help with your accounting, we collaborate with in-house staff to set up your chart of accounts, sort expenses, reconcile bank statements, and optimize your bookkeeping. With potentially thousands of transactions per month, we’re flexible and can expand services as you grow.
Estimating taxing and revenue projections
Successful restaurants with a consistent customer base allows us to audit your books, recognize trends, and help you estimate taxes based on your history of transactions. We collaborate and communicate throughout the year, helping business owners understand their tax liability and alter strategies to maximize their tax savings and efficiency.
Monitor for theft
In a fast-paced industry where keeping the customer happy is important, it can be hard to keep track of every dollar let alone make sure people aren’t taking advantage of your business by giving away an excessive number of free drinks or meals. We can help identify trends like abnormally high tips, common voided order items, premium vs well drinks, and so on.
We Keep You in Compliance
As the business owner, you are required to keep your accounting up-to-date and provide your financials if there is ever an audit. We perform all necessary financial management to keep you ready if situation ever arises.
How we help Restaurant Owners
Let us help you strategize for taxes and free up your time by taking repetitive tasks like bookkeeping off your plate.
What our restaurant CPA clients are saying
Tax Accountant CPA for Restaurants
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For A Complimentary Phone Consultation
We can assist you in growing and expanding your restaurant business. Speak directly with our restaurant accountants to explore how we can provide better support for your tax and accounting needs. Whether it’s tax planning or other financial services, we’re here to help. Click the button below to call us or fill out our form to request an appointment via email, and we’ll arrange a time that suits your schedule.
See our Frequently Asked Questions below for commonly asked questions about our restaurant CPA services.
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Restaurant CPA FAQs
Can restaurant owners claim tax credits?
Yes, there may be tax credits available to restaurant owners. For instance, they might be eligible for the Work Opportunity Tax Credit (WOTC) when hiring individuals from specific target groups or the Research and Development (R&D) Tax Credit if they engage in qualifying activities, such as developing new menu items or improving processes.
Are tips received by restaurant employees taxable?
Yes, tips received by restaurant employees are generally considered taxable income. Employees are responsible for reporting tips to their employers, who withhold the necessary taxes. It’s important to maintain accurate records of tip income for tax purposes.
Can restaurant owners take advantage of tax deferral through like-kind exchanges?
Yes, under certain circumstances, restaurant owners may be able to utilize like-kind exchanges (also known as 1031 exchanges) to defer taxes when selling and acquiring similar types of property. However, specific criteria must be met, and it’s essential to work with a qualified tax professional to ensure compliance with IRS regulations.