Travel Receipts Got You Sour as a Lemon??? Make Lemonade

I hope everyone had a great holiday this past week. If you were one of the many people traveling this past week, I am sure you have quite a few receipts from your trip that you may want to organize to see how much you spent over the holiday.

Or maybe you are a constant business traveler that is tired of trying to keep up with all of your receipts when you travel for business.

If this describes you, I am sure that the time it takes to organize and tally up what you spent, and where has you as sour as a lemon.

Here's a quick video on a new web-based product with a corresponding smart phone app that can make lemonade out of those receipts. Let me know what you think.



The Tech Accountant

Update: Lifelock has acquired Lemon to expand in the the mobile arena. A new app to play with on Andriod and iOS.

Warren Buffet and Jay-Z preach financial literacy

Here's a coolcartoon video of rapper Jay-Z and Warren Buffet teaching kids good money management. Enjoy.



The Tech Accountant

Summer is Over - Time for Reports Cards and Football

The summer is almost over, and school is back in session. If you have kids, you’ve probably already met the teachers. You may have even enjoyed college football and NFL starting recently.

It’s probably been a long time since you’ve sat in a classroom yourself. But school is never out if you’re looking to make the most of your money in today’s challenging economy.

Here are some classes I'm considering teaching this fall to keep more of your hard earned money in your pocket. Let me know what you think:

• Math 1040: Where are tax rates headed?

• History 2010: Lessons from last year’s mistakes?

• Social Studies 463: Write off meals and entertainment

• Chemistry 162: Is there a “secret formula” for paying less?

• Anatomy 213: What’s the best strategy for healthcare benefits?

If you want to keep the most of what you make, you can’t wait ‘til finals or game day for answers. You need to study now and have a playbook ready just like the football players and coaches. Putting tax-wise ideas and strategies in place today could help avoid an ugly surprise when “Report Cards” and the "Tax Playoffs" come due April 15!

The Tech Accountant

Know the Rules For Employees and IC's

There is a difference when terminating and employee versus and independent contractor (IC). Better know the rules.

The Tech Accountant

Travelers RMplusonline

IR-2011-69: IRS Increases Mileage Rate to 55.5 Cents per Mile

IR-2011-69: IRS Increases Mileage Rate to 55.5 Cents per Mile

The IRS has increased the standard mileage rate for the rest of the year starting on July 1st to %55.5 cents a mile. The standard rate is used to deduct the costs of operating a vehicle for business or other purposes. The IRS attributes the increase to the rise in gas prices and their effort is to offset taxpayers costs.

The IRS also increased the rate for deducting medical and moving expenses to $23.5 cents per mile. The rate for charitable mileage remains the same.

Taxpayers who use their automobiles for business purposes may also want to track actual mileage to ensure that they are reaping the most tax benefit. There are special rules regarding actual versus standard mileage rates so be sure to speak with your tax professional for additional guidance.

The Tech Accountant

5 Taxpayers the IRS is Targeting

There was a great deal of news that occurred over this past weekend but one of the more important stories was probably the deal between AT&T and T-Mobile to merge pending government approval. This will make AT&T the largest mobile provider and will affect a great deal of customers. There is however a little bit of other news that many tax payers may want to know regarding a new list out from the IRS.


According to the IRS, they are targeting specific groups of taxpayers for audits this year and taxpayers need to ensure that their return will not be flag by the IRS’s “Discriminant Function”. The 5 areas where the IRS is putting more focus is:

1. Schedule A Filers – Those that itemized their deductions

2. Schedule C – Those solo entrepreneurs that are not corporations

3. Schedule E – Those that own rental properties

4. Cash Basis Businesses – Those businesses that only use cash and not credit

5. Sales of Assets and other investments – Those taxpayers that have investments or assets for investments

What’s a taxpayer to do to ensure that their return is not flagged by the IRS? The most important factor is keeping good records that proved your deductions or credits are valid and that you qualify for them. Keeping good records can also help if your tax return is selected for an audit. Audits go a bit more smoothly when your paperwork is organized and typically result is no change or maybe even a little more money back for you.

The Tech Accountant

IRS Videos for All

As the IRS continues toward a more technology focused operation, taxpayers will be glad to know that the IRS recently added videos to their tools to assist taxpayers with a myriad of tax issues. Topics include disaster information, education, filing and paying taxes, IRS Audits, IRS Liens, post filing issues, recordkeeping, retirement plans and scams & fraud. The videos are broken down by individuals, small businesses, tax professionals, and governments. The IRS has also provided a section for those taxpayers that speak Spanish. The videos can be found here and typically run from 3 to 15 minutes.


This is another resource for taxpayers (and tax professionals) to use to understand their tax situations.

The Tech Accountant

Tax Relief and Your Small Biz

For most small business owners, the year 2010 was a continuation of hard economic times felt during the past two years. The economic indicators now state that there are signs that the economy is starting to recover, however many small business owners are still waiting to feel the effects of the recovery. In an effort to assist the small business owners, Congress passed and the President signed into law the Tax Relief, Unemployment Insurance Reauthorization and Job Creation Act of 2010 on December 17. The multi-billion dollar tax package includes a great deal of modifications to current tax law affecting small business owners and extends many tax provisions that expired at the end of 2009.


Small Businesses Modifications

The 2010 Tax Relief Act provides businesses with better incentives for investing in property that will help them run their businesses more efficiently. The Act increases the bonus depreciation limit from 50-percent to 100-percent for property purchased during periods September 8, 2010 thru December 31, 2011. The Act also extends 50-percent bonus depreciation on property purchased from December 31, 2011 thru December 31, 2012. Small business owners that have certain long lived property or transportation property may be eligible for 100-percent expensing for property placed in service before January 1, 2013.

The depreciation incentives for small business owners do not stop there, in addition to bonus depreciation; Code Sec. 179 Expensing (named after the IRS Code) has been modified. The investment limits were increased under previous legislation and the 2010 Tax Relief Act grants a $125,000 limit and a $500,000 limit on investment for tax years beginning in 2012. Depreciation allows small business owners to expense property purchased against their taxable income. The modifications to the tax law allow small business owners to recover the cost of property used in the businesses fast than traditional depreciation methods.

Small Business Extensions

There were quite a few extensions of previous tax law that were set to expire or expired in 2009. Among those extensions includes:

• 100 percent exclusion of gain from qualified small business stock

• Transit benefits parity

• Work Opportunity Tax Credit (with modifications)

• New Markets Tax Credit (with modifications)

• Differential wage credit

• Brownfields remediation

• Active financing exception/look-through treatment for CFCs

• Tax incentives for empowerment zones

• Special rules for charitable deductions by corporations and other businesses

Keep in mind that many of the 2010 Tax Relief Act’s provisions are temporary. It is important to plan early to maximize your tax savings. Be sure to speak with your tax professional to get all the details regarding the tax law changes.

The Tech Accountant

Small Biz vs. Form 1099's

I was under the impression that I would have more details regarding the proposed repeal of the Form 1099 reporting requirements today, but did not know it would be bad news.


Yes folks the Senate failed to repeal the 1099 requirements that many small business owners were hoping they would finish before the year end.

This means in 2012 small businesses will have the burden of providing a 1099 for any purchases that total $600 or more. Additionally very little information had been provided regarding the increased 1099 reporting requirements for landlords (in another bill this year) that starts in 2011.

Get ready for increased workloads small businesses for the score right now is Form 1099 (1), Taxpayers (0).

The Tech Accountant

Cloud Accounting for Small Biz's

Just in time to get small business owners ready for the new year and tax season, cloud accounting vendor Outright has partnered with Google and Shoeboxed.com to offer small business owners an easier way to integrate back office admin functions with their accounting product. Be sure to watch the video below and see how using cloud products can save you money, increase productivity, and focus on growing your business.

 

The Outright product is mainly geared toward sole proprietors (Schedule C)....sorry for everyone else, but there are cloud options available for you too.

The Tech Accountant

A Lame Duck still Quacks

All the votes have been tallied and all the precincts have reported…some people are happy with the outcome and some are not. Whether your Congress person won or not is not the issue at this point, the issue lies in what is going to happen in the lame duck session of Congress for the rest of the year and will you as a taxpayer be prepared. Here’s a quick rundown of what is on the table for taxpayers before the year ends:


• Bush Tax Cuts extended?

• Estate Tax?

• AMT?

• Health Care Reform?

I am not a betting man but would have to think that more than likely some taxes are going to go up. What taxpayers do before this year ends is important but you may need to call the psychic hotline or a crystal ball to assist you. When I looked into my crystal ball this is what I have come up with.


Be sure to speak to your tax professional (psychic) to ensure that all of your ducks are in a row for the upcoming tax season.

The Tech Accountant

A Win for Small Businesses

Not too long ago our friends over at Microsoft released a very robust product called Microsoft Security Essentials, an antivirus product. The cool thing about this release is that the antivirus software is one of the highest rated products on the market and it is a free download. The only downside was that the End User License Agreement (EULA) only allowed for personal use (although I wonder how a sole proprietor with a single computer case would apply to the situation but that’s a whole other topic).


Well Microsoft has in a sense thrown small business owners a bone this month by amending their EULA to allow the software to be used by small businesses with 10 or fewer PC’s. This is a great way for a small business to save money by reducing their technology expenses, become more productive since the software is less of a resource hog on the computer, and protect their PC’s and whatever is on those PC’s.

Here is a video with the details:



When tested the software ran smoothly in the background and did not slow the computer down at any point (like when running scans or updates). There may be a chance that the software is not a good fit for your small business, so be sure to speak to a technology consultant to accurately assess your needs.

The Tech Accountant

Uncertain Tax Planning

The fall season typically brings about a change. Whether it is change in the temperatures, the changes in the leaves, or the change in the time (fall back) around this time of year everyone is experiencing a change. One thing that should not change during this time of year is a taxpayers’ ability to properly plan for the upcoming tax season. This year however, is one of the most difficult tax years to plan for due to the uncertainty in the Congress and our economy. The economy is currently filled with uncertainty making many small businesses hold on to their hard earned money and not hire more workers. Congress is adding their uncertainty to the pot by recently adjourning without addressing the expiring Bush tax cuts in addition to other important tax issues (AMT, estate tax, and more).


What is a taxpayer or small business owner to do in a situation of uncertainty? Listen to some of the ideas we have come up with for our clients here.



The Tech Accountant

A look back at the tax season

Now that the tax extension deadline is one day into the rear view mirror, many taxpayers (and us tax professionals too) would like to take a break away from taxes. This gives me the opportunity to sit back and reflect on some of the more memorable comments I heard during the year regarding taxes and filing. There were quite a few areas of tax law where some taxpayers I spoke with were unclear as to the rules but some of the major ones had to do with extensions with balances due, and failing to file a tax return.




Tax Extensions

When a taxpayer does not have all the information to accurately complete their return by the deadline, the IRS will allow for an extension of time to prepare the tax return. To request an extension, taxpayers must file Form 4868 (individuals) or Form 7004 (businesses) on or before the due date of the return. Typically this is where the misunderstanding starts. An extension of time to file your return does not include an extension of time to pay your tax liability. Taxpayers filing extensions should estimate to the best of their knowledge their tax liability and send a payment when filing their extension.



Failure to File

When a taxpayer does not file a tax return by the due date (including extensions) a failure to file penalty may be incurred. This rule has been in existence for quite some time, however many taxpayers are unaware of the penalty. This may also be a good time to notify taxpayers that the failure to file penalty has been increased for income tax returns filed more than 60 days after the due date (including extensions). Returns filed after 2008 qualify for the increased failure to file penalty in which the minimum penalty will be $135 or 100% of the tax not paid.

These are just two of the more frequent misconceptions that I personally heard about during the year, but there are more. With all the recent changes in tax law, there are sure to be more “grey” areas where many taxpayers may fall thru the cracks. One the reasons I always say taxes are a year round strategy that can be proactively done with your tax professional instead of reactively at year end.

The Tech Accountant

1099 Reporting...What's New???

Recently while speaking with a construction client, the topic of 1099’s came up and my client asked me if he was going to have to give a 1099 to every vendor that he does business with (he has a lot of vendors) and when would this start. As I gave him the details (i.e. requires businesses to file information returns if they pay more than $600 to a single vendor, won’t have to start until 2012) I could tell he did not want to deal with the burden of filing all those 1099’s. Well it seems Congress doesn’t want to deal with the burden of repealing the new 1099 reporting rules either.


The new 1099 reporting requirements will raise about $19 billion as part of the Patient Protection and Affordable Care Act. The burdens that the requirements put on the small business owner are sure to increase their administrative duties/costs considerably. There have been a couple of ideas being kicked around in Congress lately. One was to increase the amount required to file reports from $600 to $5000 and another was to exempt businesses with 25 or fewer employees. Obviously neither idea was passed.

So where do we stand now? Congressional leaders say that they have heard the cry from the masses and will repeal the law sometime before the first of the year (hopefully). I guess this will have to be as separate legislation since it was not attached to recent small business legislation signed into law. We will be sure to keep you posted on any changes in the 1099 reporting requirements as they are made.

The Tech Accountant

Form 1099 reporting - Need Your Input

Small business owners are in for a treat starting in 2012 if they do not voice their opinions. Under Section 9006 of the Healthcare Act all businesses, tax exempt organizations, and federal, state and local government entities will be required to issue Forms 1099 to vendors who they make purchases from totaling over $600 during the calendar year.

What?!?!

So if you are a small business owner, the new law is going to increase your paperwork burden for the end of the year and may possibly increase your accounting fees. Currently there is a bipartisan effort to have this portion of the law repealed, but nothing has changed as of yet.

I would recommend that small business owners take the time to leave comments with the IRS regarding this new law. At the following link:

IRS Requests Pubic Input on Expanded Information Reporting Requirement

To hear my personal input, listen below.

The Tech Accountant

Just Checking

I came across a pretty interesting article today regarding making payments with checks versus using a new technology called "Peer-to-Peer" payments. Feel free to check out the article here.

Then take our poll (on the left) and let me know your thoughts.

The Tech Accountant

You Have Choices in the Cafeteria

Thanks to the IRS and Notice 2010-38, small business owners (SBO’s) with cafeteria plans now have guidance on how to provide the recently passed tax free health coverage for employees with children. The employees’ children must be under the age of 27 and are eligible for the tax benefits from March 30th 2010. The term “child” can mean a son, daughter, stepchild, adopted child or eligible foster child. Those SBO’s that have cafeteria plans may allow their employees to immediately take pre-tax salary reductions to provide coverage to their employee’s children.

According to IRS Commissioner Doug Shulman the changes will “make it as easy as possible for employers to quickly implement this change and extend health coverage on a tax-favored basis to older children of their employees.”

The Tech Accountant

Cutbacks and Loan Offers

I as was going through my morning reading yesterday I came across two articles that may be good news for many small business owners. The first is hopefully a sign that the small business economy is on the way back to recovering. According to a report by ADP, small businesses are still slashing jobs, but they are at a smaller rate. The economy may be on the rebound for Wall Street, but as unemployment numbers continue to climb, the recovery takes a little more time to affect the small business owner. Since the rate of job cuts for small businesses is going down somewhat, this may be a good sign that small business owners can again be productive in the coming months.

Another article is sure to assist small business owners in the recovery, the only problem is many small business owners don’t even know about this new program. A recent survey by the George S. May International consulting firm indicated that over 75% of small businesses were not aware of the new SBA loan programs that were included in the American Recovery and Reinvestment Act. The ARC (American Recovery Captial) loan program allows small businesses deferred payment loans up to $35,000. The only problem is many small businesses had no clue about the program. This may be a good time for those small businesses that need assistance to stop by your local SBA office and investigate securing one of these loans. Now that you know about the loans, there is no reason to miss out on the program.

B. N. S.

Weekend Shopping

I was in the store this weekend picking up some snacks for the Sunday football games and could not help but notice that some of the sizes of my favorite snacks had been reduced considerably. A 16oz size of snack crackers has been reduced to a 13.4oz and the price is the same or at many times more than what it had been before. I thought to myself that I would have to pass on those snacks and decided to make my own.

When I get into the office this morning and check the newswires, I couldn’t help be click on the following article that essentially deals with my weekend experience. I guess the lesson to be learned from the story and my own experience is to be a more cost conscious consumer.

B. N. S.