Category: News

We know hiring an accounting firm costs money. And we know we’re probably not the cheapest bookkeeper or tax preparer in town. We’re okay with that.

Because the cheapest option is not always the least expensive option.

There are a lot of costs business owners do not think about when they decide to handle accounting internally, wait until tax season, or stay with a firm that is not really serving them well. Those costs usually do not show up as a neat monthly invoice. They show up in wasted time, bad information, missed planning opportunities, cleanup projects, unanswered questions, and decisions made without really knowing what the numbers are saying.

And those costs can add up fast.

Start with your time.

If you are a business owner and you value your time at just $50 per hour, which is honestly pretty conservative, seven hours of your time is worth $350. That is not hard to burn through.

A few hours categorizing transactions. Some time reconciling accounts. Twenty minutes trying to figure out why QuickBooks did something weird. Another hour pulling reports. Then maybe you are researching a payroll issue, looking for a receipt, or trying to decide how something should be recorded.

Before you know it, you have spent the equivalent of our monthly fee doing work that probably is not the best use of your time.

Maybe you are not doing it yourself. Maybe your office manager is doing it. If that employee makes $20 per hour, how many hours of their time until internal bookkeeping becomes more expensive? That does not include payroll taxes, benefits, or the opportunity cost of everything else they could have been doing during those hours.

And this is where we have to point out the obvious: all of those calculations assume the accounting is being done correctly.

Doing your own books is cheap until it isn’t.

We see this all the time.

Someone internally has been handling the accounting. Maybe they are smart. Maybe they know QuickBooks pretty well. Maybe they have been doing it for years.

That still does not necessarily mean they understand the accounting behind the transactions.

There is a huge difference between knowing how to enter something into QuickBooks and knowing where it should go, what it affects, whether the balance makes sense, and what downstream issues it may create.

We have stepped into businesses where everyone thought the books were “fine,” only to find incorrect loan balances, old accounts receivable, transactions sitting in the wrong places, unreconciled accounts, payroll entries that did not clear correctly, or processes that had been set up wrong from the beginning.

At that point, someone has to fix it.

We are currently working through situations where cleanup projects are costing clients thousands of dollars. The frustrating part is that many of those issues would have been much easier and cheaper to correct when they first happened.

Cheap accounting gets expensive really quickly when you have to pay someone to do it twice.

Having a CPA does not automatically mean you have a good CPA.

This one may be a little uncomfortable, but it needs to be said.

We have picked up more work this year from problems created, missed, or ignored by other accountants than ever before.

And almost every time, the client says the same thing:

“I didn’t know. I trusted them.”

Of course they did.

Most business owners are not accountants. You should not have to second-guess every recommendation your CPA makes or spend your free time Googling whether their advice is right. Part of what you are paying for is professional judgment.

But trust still has to be earned.

We recently spoke with a potential client who had been operating as an S corporation for two to three years. Her tax person at the time told her she did not need to pay herself through payroll.

That is a big problem. The expensive part was not hiring the tax preparer. The expensive part was getting the wrong advice and trusting it for years.

So what do we do to earn your trust?

We do not expect clients to trust us just because we have “CPA” in the name.

We build review processes into our work. We have licensed professionals on our team. We have people who focus on specific areas of accounting, tax, and payroll instead of expecting one person to know everything about everything. We also have experience across a wide range of industries, which matters because the accounting issues facing a property management company can look very different from those facing a medical practice, construction company, law firm, retail business, restaurant, or professional service company.

And we talk to each other. If something is outside one team member’s normal area, we do not just guess and move on. We collaborate, we review, and we figure out the right answer.

That does not mean we are perfect. No accounting firm is.

But it does mean we have built Salt Creek around checks, communication, and specialization because your accounting should not depend on whether one person happened to remember everything.

We want you to ask the “silly” question.

This is probably one of our favorite things about how Salt Creek operates.

We do not bill hourly for our ongoing service packages, and we do not charge for routine questions.

That is intentional.

We never want a client to hesitate before emailing us because they are worried a five-minute question is going to turn into a bill.

Send the email. Seriously!! Some of the best conversations we have with clients start with questions they think are probably insignificant.

“Can I pay for this through the business?”

“Should I buy this now or wait?”

“Can I hire another employee?”

“I got this letter. Do I need to worry about it?”

“Why does this number look weird?”

“Can I take money out of the company?”

“This person told me to do this. Does that sound right?”

Sometimes the answer is simple, sometimes that little question opens the door to a much bigger conversation about taxes, payroll, cash flow, entity structure, compensation, or something else that absolutely matters.

We would rather talk to you before you make the decision than charge you later to help clean up the consequences.

That is why our pricing model is structured the way it is. We want communication to be easy.

Waiting until tax time is not always the bargain people think it is.

Another place business owners try to save money is by waiting until the end of the year to deal with the bookkeeping.

On the surface, it sounds reasonable. If you mainly need the books for your tax return, why pay for them every month?

Because by tax season, most of your opportunities are already gone.

When Salt Creek prepares a tax return from books we did not prepare or regularly review, our tax preparation fee is higher. We have to spend more time understanding the books, reviewing the balances, figuring out what makes sense, identifying issues, and asking questions before we can rely on the numbers.

That takes time, and it can slow down the return process.

If we discover accounting issues while working on the tax return, the tax work may have to stop until the bookkeeping gets fixed. Depending on timing, complexity, and how quickly answers come back, that can absolutely affect turnaround time and whether a return can reasonably be completed before a deadline.

But even that is not the biggest issue. The bigger issue is that you spent the whole year running your business without good financial information. You were still making decisions. You just may not have had reliable numbers behind them.

Can you afford another employee? Is payroll getting too high? Can you make that equipment purchase? Why is cash lower even though sales are up? Is one part of the business actually more profitable than another? How much money should you be setting aside for taxes?

If the books are six or nine months behind, you are answering those questions with incomplete information.

That can be a very expensive way to save $340 a month.

Tax planning has a shelf life.

There is also a huge difference between tax preparation and tax planning.

Tax preparation tells us what happened.

Tax planning gives us a chance to do something about it.

If we do not see your numbers until tax season, the year is already over. Payroll decisions have already been made. Purchases have already happened. Cash has already moved. Certain deadlines may have passed.

Sometimes we still have options. Sometimes we do not.

One of the advantages of having your accounting and tax work connected is that we can see what is happening while there is still time to talk about it.

We are not just looking backward at what happened last year. We are trying to help you make better decisions before the opportunity passes.

Monthly accounting also keeps small problems small.

Think about a transaction that happened last week.

You probably remember what it was.

Now imagine us asking you about that same transaction eleven months from now.

Do you remember it then? Does your office manager? Is the receipt still easy to find? Is the employee involved still working there?

Questions that take two minutes to answer today can become annoying little research projects when everything gets pushed to year-end.

That is another thing monthly accounting does that is not always obvious from the price tag. It keeps the books moving, keeps questions current, and keeps little issues from quietly turning into big ones.

And then there are the “oh crap, we need financials” moments.

Maybe you need a business loan. Maybe you are buying another company. Maybe someone wants to buy yours. Maybe you are adding a partner, refinancing debt, or applying for financing. Whatever the reason, sometimes businesses suddenly need current financial statements.

If your books are up to date, great. We have something to work with. If nobody has touched them in nine months, those nine months of accounting suddenly become urgent. Urgent accounting is usually not the cheapest accounting.

So what are you actually getting when you hire Salt Creek?

If you are comparing us to someone who is just entering transactions and reconciling the bank account, yes, we may cost more. We also include more.

You are getting a team that reviews the work.

You are getting access to people with different areas of expertise in accounting, tax, and payroll.

You are getting professionals who ask questions when something does not make sense instead of just forcing a transaction somewhere and moving on.

You are getting a pricing model that allows you to email us without wondering if the meter is running.

You are getting a firm that wants you to ask the question before making the decision.

And you are getting people who explain things in normal language.

We do not think financial statements should be mysterious documents that only your accountant understands.

They are your numbers.

You should know what they are telling you.

We know we are not the cheapest option. We also know what we bring to the table.

We are comfortable saying that.

There will almost always be someone willing to prepare your tax return for less. There will almost always be someone willing to do your bookkeeping for less.

But price alone is a pretty bad way to choose the people you are trusting with your business finances.

Ask what is actually included. Ask who reviews the work. Ask who you are talking to when you have a question. Ask whether routine emails cost extra. Ask how accounting and tax planning work together. Ask whether the firm is looking at the numbers or just processing them.

Then think about the costs that do not appear on the proposal.

What does it cost when you spend your own time doing work outside your expertise? What does it cost when your office manager spends days doing bookkeeping instead of running the office? What does it cost to fix a year of bad accounting? What does it cost when nobody catches the problem? What does it cost when you cannot get an answer from your accountant? What does it cost when you trust bad advice for three years? What does it cost to make decisions without good numbers? What tax opportunities disappear because nobody looked until it was too late?

We know what we think Salt Creek is worth.

The better question is whether you are ready to find out too.

You pull up your Profit and Loss statement, scroll to the bottom, and see that your business made money.

Great!

Then you check the bank account and think, “Well, that doesn’t look right.”

If the business made a $100,000 profit, shouldn’t there be an extra $100,000 sitting in the bank?

This is a common point of confusion for business owners, and understandably so. The Profit and Loss statement says you made money. Your bank account seems to have missed the memo.

The good news is that your P&L probably isn’t wrong. It just isn’t telling you the whole story.

Profit measures whether your business earned more than it spent during a specific period. Your bank balance tells you how much cash is available at one moment in time.

Those numbers are connected, but they are not the same. Here are some of the places your cash may have gone.

You Paid Down Debt

Let’s say your business makes a $2,000 loan payment.

The full $2,000 leaves your bank account, but only the interest portion appears as an expense on your Profit and Loss statement. The principal portion reduces the loan balance on your Balance Sheet.

If $1,700 of the payment goes toward principal and $300 goes toward interest, your cash decreases by $2,000 while your profit only decreases by $300.

Your business did not “lose” the other $1,700. It used that cash to pay down debt. That can be a very good thing, but it still means the money is no longer sitting in your bank account.

Over the course of a year, those principal payments can create a significant difference between the profit on your P&L and the cash you actually have available.

You Took Money Out of the Business

Owner draws and distributions reduce cash, but they generally do not reduce the business’s profit.

If your business earns a $100,000 profit and you take $60,000 in distributions, the Profit and Loss statement may still show the full $100,000 of profit.

Meanwhile, the bank account knows you transferred out $60,000.

This is also why taking additional distributions does not automatically reduce your taxable income. You are generally taxed based on the business’s profit, not simply on how much money you withdrew.

Sometimes the answer to “Where did all the cash go?” is simply, “You took it home.”

There is nothing inherently wrong with that. The important part is knowing how much the business can afford to distribute while still covering taxes, debt payments, payroll, and normal operating expenses.

You Bought Equipment or Other Assets

Large purchases can make cash disappear without creating an equal expense on the Profit and Loss statement.

If your business pays $30,000 cash for a vehicle, equipment, or another long-term asset, the full $30,000 leaves the bank account. Depending on how the purchase is recorded and depreciated, only part of it may appear as an expense during that period.

The rest remains on the Balance Sheet as an asset.

There may be tax strategies available for certain purchases, but buying something only for the deduction rarely makes sense. Spending $30,000 to save a portion of that amount in taxes still means you spent $30,000.

Please buy the equipment because the business needs it, not because someone on Facebook said it was a “write-off.”

Your Customers Haven’t Paid You Yet

If your business invoices customers, income may appear on your Profit and Loss statement before the money reaches your bank account.

You made the sale. You earned the revenue. You may have even celebrated the revenue.

But if the invoice is still sitting in Accounts Receivable, you do not have the cash yet.

A business can look profitable while struggling to pay its bills because too much income has not been collected. Strong sales are helpful. Strong collections are what allow you to make payroll.

If profit is increasing but cash is not, unpaid customer invoices are one of the first places to look.

You Paid Bills From an Earlier Period

The opposite can happen with Accounts Payable.

Your business may have recorded an expense in an earlier month but paid the bill during the current month. When the payment is made, cash decreases, but the expense may not appear on the current Profit and Loss statement because it was already recorded.

The same applies to business credit cards. A credit card payment is not automatically a current expense. It may simply be paying for purchases that appeared on a previous P&L.

This is also why recording credit card payments as expenses creates such a mess. The purchases are the expenses. The payment reduces the credit card balance.

Your Cash Is Sitting on a Shelf

For businesses that sell products, cash can end up tied up in inventory.

Purchasing inventory reduces the bank account, but the full purchase may not immediately appear as an expense. Generally, inventory becomes part of Cost of Goods Sold when the product is sold.

Until then, it remains an asset on the Balance Sheet.

That asset may technically have value, but it cannot pay the electric bill while it is sitting in a stockroom.

A growing inventory balance can consume a surprising amount of cash, especially when products are not selling quickly.

You Paid Taxes

For many business owners, particularly owners of pass-through entities, federal and state income taxes are paid personally rather than recorded as an expense on the business’s Profit and Loss statement.

The business reports a profit. That profit creates a tax liability. The owner then uses cash from the business to pay the taxes.

The cash is very much gone, but the tax payment may not reduce the profit shown on the business’s P&L.

This is why tax planning and cash-flow planning need to work together. Knowing the projected tax liability is only useful if you also have a plan for the cash needed to pay it.

“No surprises” should include both the amount due and how you are going to fund it.

Your P&L Isn’t Lying to You

Profit still matters. A business must be profitable over time to remain financially sustainable.

But profit alone does not tell you whether the business can make payroll next week, purchase equipment, pay estimated taxes, reduce debt, or fund an owner distribution.

Your P&L tells you whether the business earned money. Your Balance Sheet shows what the business owns, what it owes, and how much has been invested or withdrawn. Your Statement of Cash Flows helps connect the two by showing how cash moved through operating activities, investing activities, and financing activities.

Together, they explain what actually happened.

So, Where Did the Cash Go?

A better question is:

What did the business use its cash for?

Maybe it paid down debt. Maybe you took distributions. Maybe customers have not paid yet. Maybe the cash was reinvested in equipment, inventory, or growth.

Some of those uses may be completely reasonable. Others may point to slow collections, too much debt, uncontrolled spending, or distributions the business cannot comfortably support.

The goal is not simply to pile up cash in the bank. The goal is to understand where the cash is going and make sure those decisions support the business you are trying to build.

Because seeing a profit on your P&L is good.

Understanding what happened to the cash is even better.

One of the things I notice most often in local business groups is people asking for recommendations.

“I’m looking for a CPA.”

“I need a bookkeeper.”

“Who’s your tax guy?”

“I need an accountant.”

The funny thing is, those terms get used interchangeably all the time.

As someone who’s spent my career in accounting, I completely understand why. Most business owners weren’t taught the differences, and honestly, our profession hasn’t always done a great job explaining them.

But understanding the difference can save you time, money, and a lot of headaches.

Bookkeeping Is More Than Categorizing Transactions

One of the biggest misconceptions I see is that bookkeeping is simply entering transactions into QuickBooks and reconciling the bank account.

If that were true, accounting software could replace all of us.

The reality is that bookkeeping isn’t about where to click in QuickBooks.

It’s about understanding why a transaction belongs where it does and how that decision impacts your financial statements, your tax return, and ultimately, your business decisions.

QuickBooks is software.

Accounting is a profession.

So…What’s the Difference?

Bookkeepers
A good bookkeeper records transactions, reconciles bank accounts, processes payroll, and keeps your financial records organized.

Without accurate bookkeeping, everything else falls apart.

What they shouldn’t be expected to do:
A bookkeeper generally shouldn’t be expected to provide tax planning, recommend the best entity structure for your business, or serve as your strategic financial advisor.

Accountants
“Accountant” is a broad title.

Some accountants have accounting degrees. Some have professional certifications. Some specialize in tax. Others focus on financial reporting or advisory services.

What they shouldn’t automatically be expected to do:
The title alone doesn’t tell you someone’s education, credentials, or areas of expertise. It’s always okay to ask.

Enrolled Agents (EA)
An Enrolled Agent is federally licensed by the IRS and specializes in taxation.

They prepare tax returns, represent taxpayers before the IRS, and help clients navigate tax issues.

What they shouldn’t be expected to do:
While many EAs have broad experience, their specialty is taxation. Financial reporting and business advisory services may not be their primary focus.

Certified Public Accountants (CPAs)
CPAs complete extensive education, pass a rigorous licensing exam, meet experience requirements, and complete continuing education throughout their careers.

CPAs have one of the broadest scopes of practice in the accounting profession.

But here’s something people don’t always realize…

Not every CPA specializes in the same things.

Some focus on audits.

Some specialize in nonprofits.

Some work almost exclusively in tax.

Others build careers in healthcare, manufacturing, government, or forensic accounting.

A CPA license doesn’t mean someone specializes in everything. It means they’ve built a strong professional foundation and continue developing expertise throughout their career.

Why This Matters

Think about building a house.

Your foundation doesn’t have to be the most exciting part of the project, but if it’s wrong, everything built on top of it is affected.

Your bookkeeping works the same way.

Tax returns are only as good as the books they’re built from.

Business decisions are only as good as the financial statements you’re relying on.

If the foundation isn’t right, neither are the conclusions.

How We Approach It at Salt Creek

At Salt Creek Consulting & CPA, we’ve intentionally built a team where each person works within their area of expertise.

Our bookkeeping and accounting professionals are degreed accountants.

That matters because they’re doing much more than recording receipts and disbursements.

They understand accounting principles.

They understand financial statements.

They understand how today’s bookkeeping decisions affect tomorrow’s tax return.

They know when something doesn’t look right, and they know when to involve another member of our team.

Our CPAs and Enrolled Agent then build on that foundation through tax planning, compliance, and business advisory services.

Everything works together.

If you just need someone to reconcile your bank account each month, there are many people who can help with that.

But if you need someone to use those reconciled bank accounts to produce reliable financial statements, identify potential issues, minimize tax surprises, and help you make informed business decisions, that’s a different level of service.

That’s why we believe bookkeeping is about much more than data entry.

It’s the foundation of every financial decision you’ll make as a business owner.

The next time you’re looking for “a bookkeeper,” don’t just ask what software they use.

Ask about their education.

Ask about their experience.

Ask who reviews their work.

Ask how they communicate with your tax professional.

Because the person recording your transactions today is helping shape the financial decisions you’ll make tomorrow.

Let’s start here—no one starts a business because they love bookkeeping.
At best, it’s something you tolerate. At worst, it’s the thing you avoid until it turns into… a situation.
And for a while, doing it yourself makes sense. You’re keeping costs low, figuring things out, wearing all the hats.
But there comes a point where DIY bookkeeping quietly stops being “responsible”… and starts holding your business back.
If you’re not sure where that line is, it usually looks something like this:

You’re always playing catch-up.
Not in a “quickly reconciling last week” kind of way—but in a “I’ll block off a few hours and knock out the last three months” kind of way.
At that point, you’re not really doing bookkeeping anymore. You’re guessing. And guessing doesn’t give you numbers you can actually use—it just gets you through.

Your numbers technically exist… but you don’t trust them.
You can pull a Profit & Loss. Sure.
But if someone asked, “Is this accurate?” and your honest answer is something along the lines of “I mean… probably?”—that’s a problem.
Because your financials are supposed to help you make decisions. Not sit there looking official while you ignore them.

Tax season feels like a panic every single year.
No matter how many times you say, “next year I’ll be more organized,” somehow it’s always the same scramble.
You’re pulling things together last minute, sending it over, and hoping it’s close enough.
And yes—we’ll figure it out. That’s what we do.
But there’s a big difference between cleaning things up after the fact and actually planning ahead in a way that saves you money.

Your business has grown… but your systems haven’t.
More clients. More revenue. More transactions.
Same DIY setup from when things were simple.
That’s usually where things start to break. Growth adds complexity whether you like it or not, and your bookkeeping has to keep up.

You avoid it altogether.
This is the one most people don’t say out loud.
If you’re avoiding your books, it’s not because you don’t care—it’s because it feels overwhelming, unclear, or honestly just not worth your time.
And that’s the point where DIY bookkeeping officially stops working.

Here’s the part most people get wrong

Outsourcing bookkeeping gets looked at as an expense.
But what’s it costing you to keep doing it yourself?
Because every hour you spend trying to stay caught up, second-guessing your numbers, or stressing about taxes… is time you’re not spending growing your business.
The thing you’re actually good at.
When you get that time back—and have clean, reliable numbers to make decisions with—you don’t just “have better books.”
You run a better business.

What this looks like done right

Clean, current books.
Numbers you actually trust.
Financials that help you make decisions—not avoid them.

Not just once a year. All year.

Where we come in

At Salt Creek, we take this off your plate completely.
We clean it up, keep it maintained, and turn your financials into something that actually works for you.
No judgment. No lectures about your past “misc” categories. We’ve seen it all.
Just solid numbers and a team that takes care of you.

If you’re reading this thinking, “okay yeah… this is me,” you’re exactly who we work with.
You don’t have to keep doing it the hard way.

Book a new client inquiry here:
https://calendly.com/brooke-saltcreek

Let’s get your books cleaned up and actually working for you.

Busy season is hard—long hours, a lot of pressure—but it’s also incredibly rewarding.

It’s worth it when we get to see real changes in our clients’ bottom lines… and their lives.

We truly love what we do and the people we get to help. Here are just a few (of many) ways we were able to make an impact this year.

Client #1: More Revenue, Lower Taxes

This S-Corp owner increased revenue by about $200K this year—but only increased profit by $12K. And not by “stupid spending” or mismanagement, we focused on strategic spending.

One thing we implemented was SIMPLE IRAs for both him and his wife (who is also an employee) and maxed them out.

That increased the salary expense line and the company match, but because the contributions are pre-tax, it didn’t increase their W-2 taxable income.

Result:
Salaries and company contributions were up about $63K—mostly benefiting the owner and his wife—and even with more revenue, we cut his tax burden nearly in half.

Client #2: S-Corp Election Strategy

This client came to us late in 2024 as a single-member LLC filing on Schedule C, so there wasn’t much we could do for that year.

But we planned ahead and implemented an S-Corp election for 2025.

His taxable income actually increased by about $10K this year…

…but his taxes decreased by $13K.

We eliminated a large portion of self-employment tax and built in proper withholding through payroll.

Bonus:
Instead of owing ~$17K at tax time, he only had to pay in about $3K.

Client #3: No More Surprises

We prepared this client’s return last April, but that was just the start of the relationship.

He’s an S-Corp owner who was tired of getting hit with big tax bills at the end of the year.

We took over payroll, adjusted his wages to increase withholding, and started quarterly tax planning based on his actual income.

His income increased significantly—his tax liability went up about $28K.

But instead of owing nearly $30K on April 15…

He got a small refund.

No penalties. No scrambling. Just a plan that worked.

(He was so happy he brought me a bottle of wine—always appreciated 😄)

Client #4: From $14K Shock to a Plan

A retired widow came to us after being hit with a $14K tax bill the year before.

She opted for our most basic package, which includes an annual planning meeting.

We intentionally scheduled that meeting to include her investment advisor so everyone was at the table.

We walked through different scenarios involving RMDs and QCDs and landed on a number she felt comfortable with.

She told me:
“I really don’t want to pay more than $10K.”

Final tax bill: $9,411.

She stayed within her goal, was able to give to the charities she cares about, and had a clear plan moving forward.

What Sets Us Apart

These are just a few of our wins this year—and we’re proud to share them.

How do we do this? Every tax return we prepare includes tax planning.

You can choose your level of support—annual, quarterly, or monthly strategy calls—and we encourage you to include other important people in your financial life (like investment advisors).

We focus on the consulting side—understanding your situation and helping you make decisions—not just checking boxes and filling in blanks.

That’s where the real value is.

Hiring your first employee is exciting, it means your business is growing!

But payroll can also feel overwhelming. Between federal requirements, Arkansas registrations, and tax filings, many business owners aren’t sure where to start.

The good news? You don’t have to figure it out alone.

At Salt Creek Consulting & CPA, we help Arkansas business owners set up and manage payroll every day. This guide walks you through the basic registrations required before your first payroll.

And if you’re working with us, we’ll guide you through each step, so nothing gets missed.

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What You Need to Start Payroll in Arkansas

Before you can legally run payroll, your business must have several registrations at the federal and state level.

Most Arkansas employers need the following:

• Business registered with the Arkansas Secretary of State
• EIN (Employer Identification Number)
• Arkansas Withholding Tax account
• Arkansas Unemployment (SUI) account
• Workers’ Compensation insurance
• A process for new hire reporting and employee paperwork

Let’s break these down.

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1. Register Your Business with the Arkansas Secretary of State

Before setting up payroll, your business should be properly registered with the Arkansas Secretary of State and in good standing.

Most businesses operate as:

• LLCs
• S-Corporations
• Corporations

If your entity name, address, or ownership information doesn’t match across agencies, it can delay payroll registrations. We always double-check this during payroll onboarding.

If you formed your business with us, you’re already taken care of here. If you need help, we highly recommend working with Jared Kibbey at naturalstatelaw.com for quick service, vast knowledge and fair pricing.

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2. Get an EIN from the IRS

Your Employer Identification Number (EIN) is your federal business tax ID.

You need an EIN to:

• File payroll tax returns
• Pay federal payroll taxes
• Issue W-2s to employees
• Register with state payroll agencies

If you already have an EIN, we’ll just need a copy of your IRS confirmation letter (often a SS4).

If not, we can help you obtain one quickly.

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3. Register for Arkansas Withholding Tax

If you have employees in Arkansas, you must withhold Arkansas state income tax from their wages.

To do this, your business must register for an Arkansas Withholding Tax account with the Department of Finance & Administration (DFA).

This account allows you to:

• Report employee wages
• Remit withheld state income taxes
• File required payroll reports

To setup follow these steps:

1. Visit https://atap.arkansas.gov > Business > Register a business and follow those prompts
   Once approved, create an ATAP Account
2. Go back the ATAP website> Click “Sign Up”:
   1. Enter the business’s information:
   2. Federal Employer Identification Number (FEIN).
   3. Legal business name and ZIP code.
   4. Create a username, password, and security questions.
   5. Confirm via email if prompted.
3. Add Wage Withholding Access
   1. Once logged in:
   2. From the ATAP dashboard, select “Add Access to an Account”.
   3. Enter the Withholding Tax Account Number.
   4. This links the withholding account to their ATAP profile.

Once it’s active, we handle the filings and payments for you.

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4. Register for Arkansas Unemployment (SUI)

Most employers must also register with the Arkansas Division of Workforce Services for unemployment insurance.

This is commonly called SUI (State Unemployment Insurance). Here’s how to sign up:

https://www.workforce.arkansas.gov/Tax21/Home.aspx

Click “Register for DWS Employer Account” on the left side of the screen
Follow the prompts
We will need a copy of the letter with the account number and insurance rate!

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5. Workers’ Compensation Insurance

Arkansas typically requires workers’ compensation insurance when a business has three or more employees, although some industries require it sooner. We recommend you check with your insurance agent before hiring your first employee!

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What Salt Creek Handles for You

Once everything is set up, our job is to make payroll simple and stress-free.

We take care of:

✔ Payroll calculations
✔ Federal and state payroll tax payments
✔ Quarterly payroll filings
✔ Year-end W-2 preparation
✔ Compliance deadlines

Our goal is simple: accurate payroll, filed on time, without the headaches.

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Common Questions from New Employers

Can I run payroll before these accounts are set up?

Technically yes, but it often causes tax notices, penalties, and filing problems. We recommend setting up everything correctly first.

How long does payroll setup take?

Most payroll setups take 1–2 weeks, depending on how quickly state registrations are processed.

What if I’m an S-Corp owner paying myself?

You’ll still need most of these registrations. We’ll help make sure your owner payroll is set up correctly.

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Payroll Doesn’t Have to Be Complicated

Most business owners didn’t start their company because they love payroll compliance.

That’s where we come in.

At Salt Creek Consulting & CPA, we help Arkansas business owners handle payroll correctly so they can focus on running their business.

If you’re onboarding with us, we’ll guide you through the entire setup process step by step.

No guesswork. No surprises.

Just payroll done right.

At Salt Creek Consulting & CPA, we know small business owners wear a lot of hats. You’re focused on serving clients, managing your team, and keeping things running, not on memorizing every tax code update. But this one is worth paying attention to.

Starting January 1, 2026, employer-provided meals that were once partially deductible will no longer qualify under the One Big Beautiful Bill Act (OBBBA). That includes most meals provided for the “convenience of the employer,” which covers a lot of what service-based businesses do every day.

What That Means
For years, business owners could deduct part of the cost of meals they provided to employees when it benefited the business. Things like:

• Buying lunch for your team during busy weeks.
• Providing dinner during tax season or project crunch time.
• Keeping stocked snacks, drinks, or coffee in the office.
• Ordering lunch for in-office trainings or long meetings.

All of those counted as “meals of convenience.” Starting in 2026, they won’t be deductible anymore.

What’s Changing
Here’s the short version:

• Meals provided to employees on your business premises will no longer be deductible.
• Office snacks, coffee, and catered meals are included.
• On-site cafeterias or meal programs are also affected.

So even if the meal serves a valid business purpose, if it’s for your team’s convenience rather than client-facing, the IRS will consider it nondeductible.

What You Can Still Deduct
Not everything is going away. You can still deduct:

• 50% of client or business development meals if business is discussed and it’s not excessive.
• Meals while traveling for business.
• 100% of meals tied to company events, like a holiday party or team picnic.

Why It Matters for Service Businesses
If you own a service-based business, this change will probably hit close to home. These “meals of convenience” are often part of how we get work done. During tax season, construction projects, or long client pushes, feeding your team feels like the right thing to do.

But come 2026, those costs will hit your bottom line a little harder.

Let’s say you spend about $8,000 to $10,000 a year on meals and snacks for your staff. That expense used to reduce your taxable income. Once the deduction is gone, you’ll lose that tax benefit, which could mean paying a couple thousand more in taxes each year depending on your bracket.

What You Can Do Now

1. Start tracking meals separately.
   Break out meal categories in your bookkeeping: client meals, employee meals, travel meals, and event meals. This will help you see exactly what’s changing.
2. Reevaluate your meal programs.
   Look at how often you’re providing food and whether it’s necessary for business operations. You might decide to scale back or make it employee-paid going forward.
3. Communicate with your team.
   If you plan to adjust how you handle meals, let your employees know ahead of time. Framing it as a tax law change, not a cutback, helps keep the trust and transparency you’ve built.
4. Keep receipts and documentation.
   For any meals that remain deductible, you’ll still need to document the who, what, where, and why.
5. Plan ahead for 2026.
   You’ve got one more full year under the current rules. Use that time to budget and make changes gradually rather than all at once.

The Bottom Line
Meals of convenience have always been a nice way to take care of your team and keep things running smoothly. But starting in 2026, those meals will cost more after taxes.

This change won’t make or break your business, but it’s something to plan for. Start now so it doesn’t catch you off guard.

At Salt Creek Consulting & CPA, we help small business owners stay ahead of changes like this. If you’re not sure how OBBBA will affect your deductions, let’s review your expenses and create a plan that fits your business before the new rules take effect.

The Big Beautiful Bill was passed by Congress and signed into law in July 2025.

That means:
Tip income and overtime pay now qualify for special tax deductions starting with 2025 tax returns.
It’s not a payroll change; it’s something you’ll claim when you file your taxes.
And yes, this is for federal income tax only. You’ll still owe Social Security, Medicare, and
possibly state taxes.

What’s New for Tipped Workers?
Starting in 2025, you can deduct up to $25,000 in qualified tip income, even if you take the standard deduction. The income still shows on your W-2 and is reported like usual. But when you file your return, you can subtract up to $25K of your cash tips from your taxable income. It’s what’s called an above-the-line deduction, which just means it reduces your taxable income whether you itemize or not.

Bottom line: If you’re in the 22% bracket, that’s up to $5,500 in tax savings.

What About Overtime?
There’s a second deduction for the overtime premium you earn, that is, the extra pay for hours
worked beyond 40/week.

• Up to $12,500 for single filers, or $25,000 for married filing jointly
• Applies only to the premium pay, not your base wage
• Works the same way: shows on your W-2, deducted on your return
• Income Limits
  • Deductions start shrinking at $150,000 modified AGI for single filers
  • Or $300,000 for married filing jointly
  • Once you’re over those thresholds, the benefits taper off

What Employers Need to Know
From a reporting standpoint, nothing changes for employers when it comes to tips and overtime. You’re still required to track, report, and withhold payroll taxes (Social Security and Medicare) on all wages, including tips and OT premiums, just like before. This includes making sure tip income is properly documented via Form 4070 and reported on W-2s. And yes, you can still claim the FICA tip credit for eligible employees in food and beverage, this new law doesn’t take that away. The deductions created by the Big Beautiful Bill apply only on the employee’s individual tax return, not at the payroll level, so employers should continue regular reporting and withholding practices until the IRS issues any new guidance.

Q&A
Q: How Long Does This Last?
A: Unless Congress changes it, these deductions are in place for 2025 through 2028.
Q: Who Benefits the Most?
A: This new law can be especially helpful for servers, bartenders, hairstylists, barbers, massage therapists, drivers, delivery workers, and rideshare, nurses, law enforcement, tradespeople, and anyone logging serious OT.
Q: Anything else I should know?
A: This does not change payroll tax. You still owe Social Security and Medicare.
Q: When will I feel this tax savings?
A: The deductions will happen on your return, not in each paycheck.
Q: Who’s responsible for tracking?
A: The burdens on you to track and report correctly, don’t expect your employer to automatically do this for you.

Overall, these are great savings, but it’s not a magic wand. It doesn’t make all your tax go away, and it’s not forever. And like most tax legislation, it’s layered, so it’s worth getting advice to make sure you’re getting the most out of it.

Need Help? That’s What I’m Here For.
If you’re wondering how this affects your tax situation or want to plan ahead so you’re ready next April, reach out. I’m here to make this stuff clear, approachable, and actually useful for real people. Schedule a free consultation today!

Starting a business in Arkansas? You’ve probably come across terms like LLC and S-Corporation and thought, “What does that mean? Do I really need this? Is it worth the
paperwork?”

Let’s break it down in plain English – no jargon, no fluff – just solid advice and real options. Because at Salt Creek Consulting & CPA, we believe in accounting tailored to you, not just checking boxes and filling in blanks.

So, What’s the Deal with an LLC?

Forming a Limited Liability Company (LLC) isn’t a must for running a business—but it can be a smart move.

Here’s why:

• Protection: An LLC helps separate your personal stuff (like your car or house) from your business, which can be a lifesaver if legal issues ever pop up.
• Credibility: Having “LLC” next to your business name just sounds more legit—and your clients may think so too.
• Flexibility: LLCs give you choices, especially when it comes to taxes.

Now Let’s Talk Taxes: LLC Taxed as Sole Prop vs. S-Corp

Let’s say you own a small business in Arkansas and:

• Bring in $100,000 in revenue
• Pay yourself $50,000
• Have $20,000 in business expenses

How does that shake out tax-wise? Here’s a simple breakdown.

Scenario 1: LLC taxed as a Sole Proprietor (Schedule C)

You don’t run payroll. All your profit flows directly to your personal return.

• Revenue: $100,000
• Expenses: -$20,000
• Net Income: $80,000 (all of which is subject to self-employment tax + income tax)

That $80,000 goes on your Schedule C and gets hit with roughly 15.3% self-employment tax on-top-of your normal federal and state income taxes.

You’re paying self-employment tax on everything you earn, not just what you “pay yourself.”

Scenario 2: LLC taxed as an S-Corp

Now let’s say you elect S-Corp status and pay yourself a reasonable salary of $50,000 (IRS guidelines require a “reasonable and consistent salary”).

• Revenue: $100,000
• Expenses: -$20,000
• Net Income: $80,000
• You pay yourself $50,000 in W-2 wages
• The remaining $30,000 is taken as a distribution or stay in the business as working capital

Here’s the difference:

• You pay payroll taxes (Social Security + Medicare) on the $50,000 salary.
• But you don’t pay tax on distribution, if they do not exceed your equity in the company

This structure can reduce your tax liability, depending on your specific numbers, but it also brings added administrative responsibility.

Is an S-Corp Worth the Extra Administrative Burden?

Good question. An S-Corporation is a special tax election, not a different type of business. It can help you reduce self-employment taxes by splitting your income between salary and
distributions.

But and this is important, S-Corps do come with more rules:

• You must run payroll (even if it’s just for yourself) – this means monthly and quarterly payroll tax returns
• There are extra forms to file with the IRS.
• You become a separate entity for tax purposes – meaning a business and personal tax return
• You need to pay yourself a “reasonable” salary that the IRS could question if it’s too low.
• You’ll likely need bookkeeping dialed in every month to stay compliant.

So, is it worth it?

It depends on your unique business situation—how much profit you’re bringing in, your goals, and how involved you want to be in the administrative side of things.

How Salt Creek Can Help

That’s where we come in. At Salt Creek Consulting & CPA, we don’t believe in cookie-cutter advice. We believe in accounting tailored for you—helping you grow, stay compliant, and turning your financial statements into decision making tools.

Here’s what we offer:

• LLC Formation Support – We work with a trusted local attorney to get your paperwork filed right.
• S-Corp Setup & Guidance – We help you understand the benefits and requirements, then handle the transition if it makes sense.
• Payroll Services – Utilizing a cloud-based payroll software, we can manage your payroll, so you don’t have to worry about IRS letters or late deposits. Or we can just provide you the software for you to process and our software STILL handles the tax side of things
• Tax Returns for Sole Props and S-Corps – Whether you’re on Schedule C or filing an 1120- S, we’ve got you covered.
• Monthly Bookkeeping – By keeping your financial records up to date and accessible, we help you make better business decisions without the stress of managing bookkeeping on your own.

Let’s Figure Out What Works for You

There’s no one-size-fits-all answer here—and that’s the point. Whether you’re a side hustler, solopreneur, or scaling fast, your structure and tax setup should match your goals.

That’s why we offer free consultations to walk you through your options and help you make the best decision for you.

Schedule your new client consultation at calendly.com/brooke-saltcreek

At Salt Creek, we’re not just checking boxes and filling in blanks. We’re here to be your partner in the numbers, so you can build a business that works for you.

In speaking to several of our clients that are new business owners, I’ve realized just how confusing the 1099 process is to most. So let me break it down for you!

If you (as an individual or small business) pay any person or independent contractor—corporations not included for services performed by someone who is not your employee (including parts and materials) greater than $600 in a year then you owe them a 1099 at tax time. So what is a 1099 and how do you file it? A 1099 is a tax form that informs the IRS and the receiver that the receiver has taxable income. It needs to be filed with the IRS by January 31st of the year after the payments occur. In order to property file a 1099, you need to request a W-9 from the person you are paying. You can read the full, very detailed and accountant lingo guidance from the IRS here. Or you can read the quick and dirty as written by a real person below.

Here’s what Salt Creek Consulting’s tips when it comes to getting your 1099s filed.

• Get the W-9 before tax time. If you wait until after the work is done, it will be very hard to track down the information you need 9 times out of 10. That’s because no one really wants a 1099.
• It doesn’t matter how you pay someone, if they fall under the 1099 rules. If you pay them cash “under the table”, that cash is still income to them and should be reported.
• There are several types of 1099s. The 2 most common are 1099-NEC (non employment compensation) and 1099-MISC. The 1099-NEC is a new form within the last few years. I found this article really helpful in determining the different types and what you should file.
• Is your independent contractor really an independent contractor? Ever heard of the duck test? No? Let me explain. If it looks like a duck, quacks like a duck, waddles like a duck, it’s a duck. If your independent contractor reports to you for direction, you tell them when to work, what work to do, what uniform to wear, etc. they are likely an employee. Add them to payroll as a W-2 employee, pay the employer taxes, do the work. It’s a lot easier to do that now than to get caught and have to pay back taxes on their wages (back taxes that you could owe to both Federal and State authorities).

So what are the consequences to you if you don’t follow the IRS regulations on 1099s? You could go into bad standing with the IRS and rack up penalties – and no one wants to do that. If you miss that Jan 31 deadline by 30 days, the fine is $50 for each form, but it can go up to $260 if you do not submit the documents by August 1. If you ignore sending 1099 forms completely, you get a penalty of $530 minimum for each form, and the IRS does not have a maximum fine limit. Contact us today to help you get your 1099s filed by the deadline.

You can always schedule a meeting at: https://calendly.com/brooke-saltcreek