When it comes to operating businesses and brands, understanding the core basics of taxation is really important. It is a common misconception that digital brand taxation laws are somehow less stringent. Karla Dennis, one of the most successful, famous, and impactful tax advisors in the United States, believes that all brands should at least understand core tax basics. Karla is the CEO of Karla Dennis and Associates, Inc., a top-class tax advisory, accounting, and business services firm. Even though digital brands are the future, she says, the basic accounting principles still apply. She says that digital brands keep track of all their income and expenses in the same way as other businesses do. You need a separate bank account and must keep your receipts regardless of your payment methods.
There are some mistakes that digital brands today frequently make. Karla highlights the three most common mistakes that digital brands make while doing their taxes:
- Not Keeping Receipts
Digital brands believe they carry out all transactions digitally and therefore assume they do not need to keep receipts. That’s a grave mistake. They do not take the time to download their receipts. They assume they can find the paperwork any time after logging on to their portals.
- Not Keeping Archives
Karla believes that digital brands often make the mistake of not keeping copies of their assets, such as videos or ads. She believes that since the business paid for creating those assets, they need to keep an archive of them even if they are no longer in use. She recommends keeping a reproducible medium of the assets, which would be really helpful in the event of an audit.
- Making International Transactions Without Knowing the Rules
Karla says that many digital brands pay people outside of the US or pay people as contractors without realizing there are special rules that govern the pay of people who are international and special requirements to ensure you can pay someone as a contractor.
Karla Dennis and Associates, Inc. offers many services to help digital brands grow and ensure that they are truly profitable. Accounting, profit maximization, and tax savings in the digital brand space, to mention a few, are some of the areas of expertise of Karla’s firm. Sometimes digital brands make a good revenue, increasing their top line. Karla’s firm helps businesses drive the bottom line in their pocket profits as well. Karla and her firm ensure the optimum performance level of businesses and that the amount of taxes they pay is at the legal minimum. Her firm also helps businesses learn how to take legal write-offs.
Photos are courtesy of Karla Dennis