Tax Time, How QuickBooks Helps You De-stress
The reasons for putting off tax preparations are endless – and understandable. But when we procrastinate on this tedious job, tax filing deadlines mean marathon sessions grappling with tax records. Not only is this unpleasant, but it also makes it more likely you’ll make potentially costly mistakes on your return.
Conscientious daily work habits – including a diligent eye on tax issues – can help prevent this painful scenario. QuickBooks offers many built-in tools to help you minimize the tax-time terrors.
Stay on Top of Your Receivables in QuickBooks 2011
Even if your sales are up, slow customer payments may be damaging your cash flow. If you often come up short when it’s time to pay your tax obligations, it may be that you’re not chasing down your receivables adequately.
QuickBooks Pro and Premier 2011 added a number of features to help with this. The new Customer Snapshot gives you instant access to key customer information – things like open balance, number of days to pay, and recent invoices and payments.
A new vertical pane next to transaction forms displays an overview of your interaction with the customer or vendor. Beyond saving the time you used to spend looking up historical information, this feature can alert you to collection opportunities. A new Collections Center also automates e-mailed collection notices.
Figure 1: QuickBooks Pro and Premier 2011 display vertical panes next to transactions to help you catch unbilled items and open balances.
If you’ve got any questions about these newer versions of QuickBooks, give my office a call.
Older Versions’ Cash Flow Tools
Previous versions of QuickBooks also help you maximize customer payments. Enter an invoice for a customer who has outstanding time charges and/or costs, and a dialog box reminds you of that.
Figure 2: If you’re invoicing a customer who already owes you money, QuickBooks will remind you – and include the past due balance in your current form.
Also, QuickBooks’ integration with Microsoft Word makes short work of collection letters. Open the Customer Center, then click Word | Prepare Collection Letters and follow the wizard. The Payment Snapshot (Company Snapshot | Payments) is a page you should visit daily; its tables and graphs spell out who needs nudging.
Intuit also offers solutions that let you accept payments online, so you don’t have to wait for checks to arrive in the mail. Talk to us about which one might be best for you and how to get started with it.
Keep Documents Close
However you store receipts and other tax-related paper, it can be frustrating to match paper to QuickBooks data. QuickBooks 2010 introduced the ability to attach scanned documents to any screen that has the Attach icon. Using this tool faithfully will reduce the time and frustration associated with your tax preparation. Prices start at $9.95/month for one attachment per list item or transaction; 30-day free trial.
Figure 3: Click on this icon to attach a scanned paper document to a QuickBooks item.
Use “Classes”
QuickBooks uses the accounts assigned to your transactions to categorize your tax-related data. You can also slice your data in additional ways by using classes to break out account balances by filters, like by departments, consultants, or locations. But you must use it faithfully for it to be effective.
To get started with classes, first make sure that you’re set up to handle them. Click on Edit | Preferences, then click the Accounting tab and Company Preferences. Click on the box next to Use class tracking if it isn’t already checked, and on Prompt to assign classes if you want QuickBooks to remind you before you save an unclassified transaction.
Figure 4: Make sure your Company Preferences are set to accommodate class tracking.
Next, go to Lists | Class List, and then click the Class tab in the lower left corner. Select New. Type your new class name in the field that appears and check the Subclass of box if you want to make this a subclass. Assign these classes in transactions where appropriate, and you’ll have neatly categorized data for the Profit & Loss by Class, Profit & Loss Unclassified, and (new in 2011) Balance Sheet by Class reports. Classes can also be displayed in other reports.
Built for Tax Reporting
Unfortunately, QuickBooks can’t prepare your taxes for you – but these tools help shape your data so tax deadlines are less stressful and your returns more accurate than in the days of pencil and paper.
QuickBooks organizes data in the background by, for example, assigning your transactions to the appropriate accounts, so your reports tell the right story. Another helpful feature includes the ability to print 1099s, W-2s, and W-3s.
QuickBooks’ design encourages you to look at tax-related issues every day, which can be a very good thing come filing time. Take advantage of this – along with our expert advice – and you can be more confident and less frantic during your periodic interaction with the IRS.
A Week in Perspective
“Ah, how good it feels! The hand of an old friend.” – Henry Wadsworth Longfellow
A loophole big enough to drive Robert D. Flach through – New proposed regulations on the requirements for preparers to e-file tax returns will be good news for hand-prepared return holdouts like blogger/preparer Robert D. Flach. The regulations appear to require paper-preparers to e-file only if they will be actually mailing the tax returns.
Waiver to e-File. – Yesterday the IRS released Notice 2010-85 with the proposed rules for a tax return preparer to get a waiver from e-filing. In November of 2009, Congress mandated preparers to electronically file their client’s returns if they prepare over 10 returns. The IRS decided to phase this in and for 2010, the rules apply to preparers who file over 100 returns. In 2011, the threshold is down to 10. The IRS has developed two kinds of exemptions and finally released the details and procedures for requesting a waiver.
Chocolate: Good News. Bad News. Tax News? – Several news stories during the past few weeks have inspired me to write about chocolate, . . . .
. . . . It’s disappointing how lawyers and tax practitioners can make something as wonderful as chocolate the focal point of legal arguments and tax debate.
THE WANDERING TAX PRO: TAX HISTORY – 1643, 1861, 1872, 1894, 1895, 1913, 1916, 1917, 1918, 1922, 1932, 1935, 1941, 1942-1945, 1953, 1954, 1961, 1964, 1970, 1972, 1974, 1975, 1979, 1981, 1984, 1986, 1987, 1990, 1993, 1998, 2001, 2003.
Lock ‘em In. – the best post of the week, and by far the best idea I have heard.
Oprah, cars and taxes … again!
Tax Consequences of Oprah’s Latest Car Giveaway – One of the highlights of my income tax course is the hilarious 5-minute video of Jon Stewart’s Daily Show segment on the tax consequences of Oprah’s 2004 giveaway of Pontiacs to her studio audience:
Oprah was back at it last week, giving away to her studio audience a 2012 VW Beetle, a $1,000 Nordstrom gift card, an iPad, and a limited edition Oprah 25th anniversary watch from Phillip Stein encrusted with 58 hand-set diamonds, among other things:
Oprah apparently learned her lesson from the 2004 tax fiasco, with Volkswagen and Oprah agreeing to pick up her audience members’ tax bills:
House approves extension of middle-class tax cuts in symbolic vote – Here’s today’s not news flash. The House this afternoon wasted dwindling legislative time voted 234 to 188 for legislation to extend some of the expiring Bush tax cuts.
The bill now goes to the Senate where it will die.
I need to get some of these back into my Quotes; SPEAKING OF TAXES
How to Lower Your Heating Bills This Winter – The chilly season is upon us. If you live in North America, you’ve probably had at least a few cold nights by now. Up in my neck of the woods — in the Boston area — we’ve had our central heat running for a few weeks. Which means we’re in full swing winterizing, with an eye to keeping the heating bills low.
15 Year End Tax Deductions To Remember Unless You Want To Give The IRS a Tax Free Loan – As the year draws to a close it’s always a good idea to review your tax situation and in light of that, we have put together a collection of fifteen tax deductions worth considering to lower your overall tax bill. But act soon, because if you wait until next year to evaluate your current tax status, it may be too late to qualify for some of these widely available tax credits and deductions.
Should you pay off credit cards with a home equity line of credit?
Your tax accountant can make or lose you more money than any person in your life, with the possible exception of your kids ~ Harvey Mackay
3 Unconventional Investment Moves to Make in 2011 – All of us know about conventional investment movements once they become popular. In the late 90s, it was stocks. In the mid-2000s, it was real estate. Some are now saying that the next hot trend is gold. Riding these trends can be highly profitable, if you get in at the right time.
The problem with following trends is that the easy money is usually made before the trend gets very popular, and once the trend becomes more about popularity than about investing fundamentals, and more about buying in the hopes of flipping on the investment to a greater fool than about buying based on fundamentals, then that might be a sign that things are getting dangerous
Corporate Tax: there is no good or evil. There are only incentives, and those too weak to lobby for them. – Ultimately, I think the only real measure of a tax avoidance strategy is whether it’s legal, not whether it’s consistent with the “spirit” of the law, whatever that is. The whole notion of the law’s “spirit” assumes that tax loopholes appeared in the law by accident. As opposed to being secreted there deliberately by well-paid lobbyists and their congressional allies. Often, the spirit of the law is tax avoidance, not tax payment.
2011 STANDARD MILEAGE ALLOWANCES – The Internal Revenue Service today issued the optional standard mileage rates that are used to calculate the deduction for business, medical, moving, and charitable use of an automobile in 2011.
The middle-class tax hike nobody’s talking about – Are you ready to give up $30 a month?
That’s what may come out of your paycheck if — as expected — the Making Work Pay tax credit expires at the end of the year.
The credit was enacted last year as part of the Recovery Act to put more cash in people’s pockets. For the past two years, it has boosted paychecks by up to $400 for single filers and $800 for joint filers by reducing the tax withheld and giving a credit for that amount. That’s $33 or $67 a month.
Being Bad to Customers is Bad Business – This is a must read.
CPAs & Financial Planners / Relationship Growth – Many CPAs are taking a more holistic approach with their clients and their financial needs. The number of CPAs that are performing financial planning for clients is growing. Currently the PFS (Personal Financial Specialist) designation afforded only to CPAs by the AICPA is growing by about 5% a year. Many clients who don’t have a financial planner do have CPAs, and they trust them with their money. From what I have seen, there are positives and negatives to this.
Low interest rates on savings accounts at least mean less taxes -
College a necessity? – . . . the price of college cannot keep going up at the rate it’s been going up. It has gone up exponentially while people’s incomes have not, college costs have outpaced inflation. At the rate it’s going up tuition at a private university will hit $100k in less than 20 years. Who really can afford it?
Saving Money From the Comfort of Your Living Room – Before online shopping became popular, you’d have to patiently sift through the Sunday newspaper to find the latest coupons or drive out to the stores to see if they had any ongoing coupon promotions. Those days are now behind us as it’s possible to get the best online coupon deals to save money from the comfort of your living room.
Building Credit From Scratch – Are Young Adults Doomed for Financial Failure? – Young adults are faced with a unique set of challenges that cause many to struggle with credit. Inexperience, school loans, social pressures, and financial optimism all lead down the path of least resistance – a really bad credit score. However, it’s important to remember that there are long-term consequences of bad credit, and restraint today can pay off big time down the road.
Six year-end financial tasks – Here are a few tasks that are worth doing to tie a financial bow on 2010:
Notice Gives Guidance on In-Plan Roth Rollovers – On Friday, the IRS issued guidance on how plan participants can make rollovers from a 401(k) or 403(b) plan to a designated Roth account in the same plan (Notice 2010-84). Such in-plan Roth rollovers are now permitted under IRC § 402A(c)(4), as amended by the Small Business Jobs Act of 2010, effective for distributions made after Sept. 27, 2010.
Living off of Cash, Not Credit? – I’ve been weighing the pros and cons of using credit cards and wanted to see what you guys think on the subject.
Durbin Says U.S. Debate to Go Beyond Bush Tax Cuts – Senator Dick Durbin of Illinois, the senate’s No. 2 Democrat, said negotiations over extending the Bush-era tax cuts also will include prolonging emergency unemployment benefits and other tax credits.
Substantiation rules for out of pocket charitable expenses?
Online Sales Changing the Tax Game – Forty-five states rely on sales taxes on goods and services as part of their annual state budgets; the exceptions are Alaska, Delaware, Montana, New Hampshire and Oregon. Rates range from 4% to 8.25% at the state level, with local additions boosting rates to over 10% in some municipalities. That should translate into a combined boost of over $1 billion in sales taxes for those states that do charge sales taxes — not a bad haul by any standards.
However, state and local governments shouldn’t start spending those dollars yet.
The Impact of Zero Years – Remember when we talked about how your Social Security Benefit is calculated? Your highest 35 earning years during your career are put into a formula, and the earnings are indexed, then averaged by dividing the result by 420, the number of months in 35 years. And if you have less than 35 years of earnings, those years become zeros…
10 Steps to Small-Business Success in 2011 – Economists say the Great Recession–the longest and deepest since World War II–ended 18 months ago and that the U.S. economy is, in fact, growing again. But growth is relative. Even the rosiest economic forecasts for 2011 come in well under 3 percent growth. Unemployment is still high, and consumer spending is still sluggish.
That doesn’t mean sit and wait for things to improve. Rather, retool for the economy that exists today, and will be lingering for many tomorrows. Here are 10 places to start.
Lost, Harry Potter, and Accounting
Year-End Tax Planning in 2010 – The Wall Street Journal has a good summary of some year-end tax planning issues and strategies given the uncertainties about federal tax liabilities in 2011. Two of the points are of particular interest: capital gains/losses and 401(k) conversions.
CBO: Trends in Federal Tax Revenues and Rates
Smart Year-End Tax Moves for Investors – There are plenty of reasons for taxpayers to scream. Here it is, year-end tax-planning time, when investors must decide whether to take gains or harvest losses and make important retirement-account choices. Yet crucial questions remain—not only about next year’s tax law but also about this year’s.
Business owners, this one should make you re-think. Making Room for Reflection Is a Strategic Imperative.
Texas CPAs suggest toys that teach children about saving, budgeting, investing – With many people facing challenging financial situations and an economy desperately trying to rebound, the Texas Society of Certified Public Accountants (TSCPA) believes this holiday season is the perfect time for children to learn the importance of money-mindedness with affordable toys and board games that won’t break the bank.
Four Key questions to Ask Yourself Before Starting a Small Business – If you have always wanted to start a small business, you are not alone, the majority of working adults have thought about starting their own business but most simply don’t follow through because they don’t know how.
IRS commissioner chides Congress for its delay in dealing with expired taxes – The Bush tax cuts that expire Dec. 31“Marcia, Marcia, Marcia” of tax legislation. Everyone is fixated on what individual income tax rates will be in 2011. But more pressing, says the head of the Internal Revenue Service, are the laws that have already been stricken from the tax code. Lawmakers swear they’ll get to the lapsed tax laws. And I’m sure they will. Eventually. But it’s the precise timing of reinstated tax laws that could pose big problems for the IRS and, in turn, for us taxpayers. are the
Getting Tax Breaks from Paying for College – even if you’ve shelled out a ton of money for college, the government does help out a little. Several tax deductions and credits can save you years of payments.
6 tax breaks that anyone can claim – Tax deductions and credits aren’t just for big companies and finance-savvy folks. Look over the list below; you might be surprised how many tax breaks — in the form of both credits and deductions — can be applied to your tax return.
Your New Little Tax Deduction! – Having your first child is an exciting time in your life and I’d like to congratulate you on the birth of your newborn. Along with the rest of the changes this new responsibility brings there are also many parts of the tax code that will impact you financially.
Billionaire Warren Buffet Says the IRS Should Raise Your Taxes! – Well…maybe not your taxes, unless your among the wealthy taxpayers (most of whom fully support the Bush Tax Cuts for obvious reasons). In contrast to most, Warren Buffet fully supports letting Bush Tax Cuts for upper-income taxpayers expire.
Do The Wealthy WANT Tax Cuts? - According to this Philadelphia Inquirer article, “more than 400 U.S. business owners and professionals signed a petition [more here]” asking Congress and the Administration to let the Bush tax cuts for the wealthy expire. Some of the thoughts expressed by several of the people who signed the petition mesh with arguments I have been advancing for the past several years.
What to Consider When Giving a Holiday Bonus – Holiday bonuses can go a long way to making employees happy, but this year’s cash or gift will set the stage for next year’s. Here’s what to consider when choosing a holiday bonus.
End of Year Tax Tips for Investors -
Got liquid assets like mutual funds or planning to buy them? Your investments will need some tending before the year comes to an end to make sure you’re following a good tax strategy. Congress’ indecision on tax rates is making this a particularly tricky year.
WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’
BlogRoll Beans Early Snowfall Edition
Just a reminder, you can go to my company web site Tax Center page where you’ll find this year I have a Free Tax Organizer. You’ll need a .pdf reader to open this 14 page organizer. You can also find my Online Tax Organizer, used mostly by clients and/or those who will be clients.
Enter your email to subscribe to the L & R Tax Preparation monthly newsletter.
A Week in Perspective
New PTIN System Set in Motion by IRS – On Tuesday, the IRS officially implemented its new Preparer Tax Identification Number (PTIN) system. From now on, all tax preparers will have to be issued PTIN (even if they already have one) in order to be qualified to prepare and submit tax returns for their clients in 2011. This included all paid classes of tax preparers including CPAs, enrolled agents and tax attorneys. This is in line with the IRS initiative to properly register and regulate the thousands of tax preparers in the country.
Tax Professionals Must Now Pay The IRS For The Right to Prepare Tax Returns PTIN’s Are Now For Sale – Well, now a tax professional must buy the right to prepare a tax return. I suppose this isn’t any different from having to pay a fee every year to renew my CPA license. Just one more thing to add to my overhead costs.
Problems with PTIN Online System? Don’t Wait to Register – Tax preparers heads up, according to the new IRS rules, you have until January 1, 2011 to register for your PTIN (preparers tax identification number). I’m getting a little concerned about the IRS’s ability to GET IT DONE by the January 1, 2011 due date.
Online PTIN Application Now Available, But… – The IRS released the final regulations for the new PTIN process for tax professionals. There’s an FAQ available, too.
Don’t you feel more competent already?
Is it reasonable for Congress to demand “Plain Talk” from the IRS? – Bottom line: if we Americans want a tax code that we can understand, we need to demand it directly from Congress. This is my favorite post this week.
Don’t Let a Rule of Thumb Rule Your Wallet – Rules of thumb are great little guidelines when you’re talking to large groups of people. A perfect example is the “rule” that you should have “1.5 times your annual salary by age 35″ described in the recent retirement checklist from CNNMoney. If you’re in that age group, you can read that rule of thumb and quickly compare your current retirement savings to get a general idea of what kind of shape you’re. If you have $5,000 and you make $35,000 a year, you might be panicked enough to start beefing up your retirement savings. If you’ve make $35,000 a year and you’ve got $100,000 socked away, you’ll probably feel that you’re ahead of the game. There’s just one problem…
Varying cost of living – it depends on the lifestyle you aspire to.
Taxes on garage sale earnings – The federal tax laws provide for IRS collection of tax on capital gains. So, notes IRS Publication 525, “if you sold an item you owned for personal use, such as a car, refrigerator, furniture, stereo, jewelry, or silverware, your gain is taxable as a capital gain.”
But who’s ever had a capital gain on an exercise bicycle, old toys or an out-of-style suit sold at a garage sale?
Now we know what happened or is happing with Monica L. over at Confessions of a CPA. She landed a job. Nicely done Monica. She explains in her post First Days.
Tax-Exempt Tips For Oct. 15 Due Date –
BlogRoll Beans – September 28th edition.
Cure for the Financially Overwhelmed - Do you experience any of these symptoms when thinking about your personal finances: Budget dizziness, Debt fever, Sweaty emergency fund palms, Late fee hair pulling, Banking knots in your stomach, Retirement savings rash. If you experience any of these symptoms when you think about your finances, I am not a doctor but I believe you have what is called financial overwhelmedness.
Tax cut timing could be costly
Bye, Bye Paper – The IRS has announced that they will no longer be sending tax packages to individuals or businesses. Later in the year, they will send a card to taxpayers (ind and business) who prepared their own paper return last year notifying them of the change and telling them how to obtain the forms they need.
Tax Help News: Seven Deadly Sins of Tax Resolution Every Taxpayer Needs to Know
Tax Foundation Releases Two Reports Focusing on High-Income Taxpayers – The Tax Foundation has released two reports focusing on the expiration of the Bush-era tax cuts and high-income taxpayers: one examining top marginal effective tax rates by state, and another profiling demographic characteristics among top earners.
Should the IRS Give Taxpayers an Itemized Receipt? – What is provided to a taxpayer with a $5,400 tax bill? Nothing. For many Americans, the amount they pay in taxes is larger than any purchase they make during the year, but studies show they know almost nothing about where that money goes to.
US Savings Bonds – What Are Savings Bonds and How do They Work?
The Importance of Cash Flow Management – One of the most important aspects of managing your personal economy is understanding where your money is coming from, and where it is going. You should also know when all of this is happening. Cash flow management in your personal finances is important, since it keeps you from overdrawing your account and helps you plan ahead for larger expenses. When you know how money flows through your personal economy, you are in control.
What is the Difference Between HSA and FSA Accounts?
Use Flexible Spending Account Balance by End of Year – If your health insurance plan provides a Flexible Spending Account or FSA option I highly recommend you use it. You are getting a tax break for every dollar you put into the account. If you use those dollars toward eligible healthcare expenses then you never pay taxes on that money.
Yes, you read that correctly.
The Soft Skills You Need to Get Hired There are Old School tactics and there are New School tactics for every facet of job seeking. One key to your success today is knowing how to capitalize on your soft skills. Wondering what your “soft skills” are? Read on!
H&R Share Prices Expected to Drop due to IRS Action – H&R Share Prices Expected to Drop Due to IRS Action. In the next tax year, the IRS has declared they will no longer supply tax preparers the ‘debt indicator’ of a taxpayer. The debt indicator is a code the IRS has provided every year to tax preparers that indicate the amount of tax refunds the taxpayer is entitled to receive. The debt indicator information supplied by the IRS would include any amounts of child support, back taxes and other debts that would reduce the amount of refunds.
Making Work Pay Credit not likely to be extended – Congress’ effort to stimulate the economy included pushing through a series of tax breaks in 2009. The centerpiece of the legislation was the Making Work Pay Credit, which was intended to provide tax relief for working and middle class families. It may not last beyond this year. The idea was to allow more taxpayers to have cash in their pocket during the year, as opposed to at tax time, by adjusting the amount of earned income withholding.
Tax Reform Discussions in 2011? – “Rep. Levin seeks early action on tax reform next year” reports that the House Ways & Means Committee chair wants to have lots of tax reform hearings in 2011. He says: “We’re serious about looking at our tax code.” The Hill also reports Congressman Levin saying that reform needs to happen in a non-election year.
Something about tax cuts from The Onion – Follow her link it is a must read for sure.
ARE WE BEING RUN BY ARSEHOLES? – THE DAILY SHOW had a bit that asked the question “Are We Being Run By Arseholes?”. The answer they came up with was an obvious “Yes”.
Tax breaks in the new small business bill
Small Business Jobs Act of 2010 – On September 27, 2010 (Monday), President Obama signed an additional economic stimulus bill – the Small Business Jobs Act of 2010 (H.R. 5297).
Small Business Jobs Act of 2010 Into Law – What it Means for You
HR 5297 Small Business Jobs Act of 2010 Outline of Tax Stuff – This is wonderful. Thanks Stacie.
Buying Long-Term Care Insurance To Save For The High Cost of Assisted Living – There’s a great deal of talk today about the “graying of America.” Thanks to advances in medical technology, many people are now living 20 or more years beyond normal retirement age. However, quite a few of these people must deal with poor health during those years. And, the increased longevity, coupled with expanded health care needs, can place enormous social and financial strain on these individuals and their loved ones.
A week about What is a Series LLC and more. Be sure to check out the whole week of post over at Diane Kennedy’s US Tax Aide blog.
An great answer to a frequent question Ask the taxgirl: Reporting Income Not on a W-2
Also today another round up A Post Wall Roundup.
The blogroll works now Thanks Joe.
Currency – A New Financial Site for Young Adults – Currency offers great content, featuring writing from over 25 leading personal finance writers (including yours truly!) from various backgrounds, including journalists from major publications, best-selling authors, and a variety of bloggers from different genres such as personal finance, career advice, travel, lifestyle, and related topics. The articles are written in a fun and informative manner, featuring a more personal and conversational approach than you will find at most financial websites.
In a blogging friend scurry to get his clients extensions done, he posted yesterday A TAX FIX, directing you to his other writing gig as he hasn’t been posting at TWTP in his effort to “GIT-R-DONE”
Three Quickbooks Shortcuts to Save You Time!
Homemade Gift Series #3: Caramel Apple Jam – So what exactly do you do with eight and a half pounds of apples? You make something with them, of course.
A Week in Perspective
THE NEW E-FILE MANDATE – “. . . An individual or couple may engage a tax professional, such as me, to prepare the federal income tax return that he/she/they is/are required to file. While, as is the case with just about every situation where a person or company provides goods or services for compensation, the preparer has certain legal and ethical responsibilities regarding the preparation of the return, the tax pro is hired by the taxpayer to simply prepare the return. . . .”
In the post mentioned above (please read the whole post), my friend asked many a tax bloggers/professionals for our response “I am very sincerely interested in the comments of my fellow tax professionals, and especially my fellow tax bloggers (are you listening Annette, Kay, Kelly, Mary, Trish, Bruce, Dan, Jim, both Joes, Russ, etc.?) on this post.” Of all of us out here and those ask of in particular I was disappointed in the number of us who have responded.
A few even chose to respond by a post on their perspective blogs A Line in the New Jersey Sand and It Depends on What the Meaning of the Word ‘Is’ Is. The rest of the comments can be read here including mine.
In his post I AM RIGHT – BUT A LOT OF GOOD IT WILL DO ME! RDF concludes what we have all said.
Those of the most popular sites or those who have the most readers I was/am ashamed that so many of you did not respond to RDFs inquiry as to what you thought. He asked even with the thought ““on the record” by submitting a comment, or “off the record” by email”. You should have.
This mandate affects all of those who prepare, and I know RDF isn’t the only one who has issue with it. I use software (two different brands actually), and I have issues with it. Are you charging for e-filing your clients returns? If so, are you just sitting there counting the money you might make by being able to charge everyone? Shame on you. This country prides itself on being able to give us the freedom to choose. This mandate takes a peace of that away.
The Recession is Over – The recession lasted 18 months and just as we didn’t know there was a recession until we were well into it, we are now told it ended in June 2009.
Tax Breaks Expiring Soon – No, Not Those Tax Breaks
I found a new blog. I’ll introduce it by saying this is a worthwhile read How important is small business to the US?I have had it on by blog roll for a few days. Add it to yours if you like the way Wray writes.
Another new one I found recently and I have on my blog roll (Is that supposed to be one word? Blogroll, or Blog roll? Hummm, maybe two I think) 21st Century Taxation. The post that took me there is good. Making Work Pay Credit & Economic Stimulus – Need for Better Discussion. As above at this to your RSS feeder/reader if you like the way this blog is written.
Insider Tips to Stop IRS Notice of Deficiency- And Save Your Cash!
As in above I am wondering what has happened to Monica L. The Tax CPA and Confessions of a CPA hasn’t had a post since August 16th at one and August 27th at the other.
Monica, you still out there?
What about Stacie from Stacie’s More Tax Tips, Stacie, are you going to be writing anymore? I have to say you post are missing and we are missing your post.
Self-Employed Folks Get a (Tax) Break
Tax Help For Business Owners Who Owe Unpaid Employment Taxes or Delinquent Payroll Taxes – Are you a small business owner or an independent contractor? If yes, did you know that the IRS is stepping up their enforcement just so that they can go after taxpayers like you more aggressively? The IRS assigns a higher priority to the collection of payroll taxes than personal income taxes.
GOP Pledge to America: No New Taxes (Now Cue the Dancers)
Representing the rich … or not- What all this attention to the impending end of Dubya’s tax cuts really means is there’s been, and will continue to be, all sorts of crazy numbers crunching.
Effect of expiring tax cuts on the rich
You can’t claim the ‘Hope Credit’ just because you hope you qualify for it
Lessons from Tax Reform Act of 1986 – The Senate Finance Committee held hearings today to review and reflect on the important lessons our country learned from its experiences with the Tax Reform Act of 1986 (which Dave Williams talked about in class on Tuesday).
There is a good deal worth reading and pondering in the transcripts of those hearings.
Extended bonus depreciation, $500K Section 179 deduction await President’s signature
Maybe Building Business Credit IS the Answer- The US’s population is a little over 310 million, but 27% of them are under 20. Bottomline – over half of all adults do NOT have good credit.
What do plumbers, politicians, and professors have in common?
The folks over at TaxQueriesblog have once again asked for authors. Seems those of use who want to write about tax stuff want to do so more at our own blogs than others. I joined this group of bloggers at TaxQueriesblog some time ago, when it first came about. Sadly I wasn’t and still am not able to keep up with everything and have little time to contribute to the collection of bloggers and their musings. Here is the list of contributors thus far:
I mention all of this in an effort to maybe get more over there as authors. Please check it out and make contact with those running the show to see if you can join our ranks. Maybe I should write another post for them, I haven’t added anything since. . . It’s been awhile.
A Public Service Announcement – if you text while you drive, this is a must read!
Apologies for not referencing on any PF blogs this week. If you know of other really good ones that I don’t already have in my PF blog roll please send me a note so I can get there.
I’d in closing like to mention, that I have added a few items to help spread the tax word around. You’ll notice at the end of each post there are two buttons. One for tweeting the post on twitter, and another for Google Buzz. I a few folks use these, I am asking that if you enjoy the post or feel someone you know will, please use these to get them the info.
Also I have added at the end of both my columns, some Facebook stuff. Please use these as well. The more people we can reach with our information the more who will be informed about what is. . . .
Thanks, see everyone later.
“A Week in Perspective” what about this title?
Reads from Last week
Yes This post is on top on purpose Don’t Let the Naysayers Get You Down.
From The Wondering Tax Pros WHAT’S THE BUZZ? TELL ME WHAT’S A HAPPENNIN’ I found “How Will Healthcare Reform Affect MY Taxes?” I would agree with my blogging friend here that it seems to do a good job of answering the question. And seriously if you aren’t reading his twice a week post What’s the Buzz, you missing a lot of great info.
Working from Home: Do You Have a Back-Up Plan? – One of the great things about working from home, and running your own business, is that you have a great deal of flexibility. Your dress code is flexible. Your schedule is largely flexible. The types of jobs you take can be flexible. However, there are some issues that you can run into when you work from home, and these are not so flexible.
This has to be my personal favorite this week.
Education and Wealth: You Don’t Need a College Degree, But You Need an Education – College is overrated. There, I said something you’ve probably suspected since you were in high school and may have confirmed several years after you entered the workforce. You probably know many people who excelled in college and can barely string together a cohesive thought. And you probably know many successful people who never went to college, barely made it through college, or work in a field unrelated to their degree.
THE COST OF TAX RETURN PREPARER REGISTRATION From THWTP is a statement. As I have read it, Robert is pointing out clearly, how little this is going to cost when figured out from a realistic perspective. Yes my friend, as in your practice this will only cost less than $1.00 per client or “set” as you put it. For me in my math I was just over a dollar and I have chosen not to even bother raising prices based on these new Regs. and expenses. I am sure the whole world of Tax preparation is aware (preparers) the cost are minimal. Unfortunately, most in our world will take advantage of the situation. They’ll monopolize on the idea that their cost have gone up and thus must raise their cost to their clients. What I am saying is I agree that the cost is very low per client, but money hungry tax preparers, CPA, Tax Attorneys and the others, I see them raising pricing, beyond their cost.
Shulman Power Grab To Be Paid for by $64.25 Charge Per Practitioner
IRS Announces New Return Preparer Application System and User Fee
The IRS released (IR-2010-91) the new proposed regulations amending Circular 230
“The IRS and the Treasury Department estimate that the total annual costs resulting from these requirements will be $9,880,000 for all affected practitioners and $38,632,500 for all affected continuing education providers.
Estimated total annual record-keeping and reporting burden is 1,710,000 hours
Section 10.3(f) of the proposed regulations establishes a new “registered tax return preparer” designation. A registered tax return preparer is any individual so designated under §10.4(c) who is not currently under suspension or disbarment from practice before the IRS. An individual who is a registered tax return preparer pursuant to this part is a practitioner authorized to practice before the IRS, subject to the limitations identified in these proposed regulations.”
WSJ: Give Away Money to Charity, Not to Foundations
IRS to Audit 6,000 Businesses at Random and Take Back What It’s Owed in Unpaid Employment Taxes – Earlier this year, the Internal Revenue Service began employment tax audits of approximately 6,000 U.S. companies to provide statistical data for the National Research Program study of employment tax compliance.
(Take the lesson.)
Can the Consumer Financial Protection Bureau save us from ourselves?
Please Explain To Me… – What unique internal procedures does a CPA firm that other tax firms don’t have? I really want to know too.
Results are In: You STILL Hate the IRS!
So you hate the IRS? Well, you’re not the only one. Near the end of last week an Internal Revenue Service Office was evacuated after a suspicious envelope arrived.
3 Tips to Maintain Focus on Your Financial Goals
Your 2011 tax burden revised – Late last month Kay Bell reported on the Tax Foundation’s online calculator that will let you compare your 2011 federal income tax liabilities under three possible tax collection scenarios. Not a group to just sit and wait, the Foundation’s numbers crunchers have updated the interactive calculator to include the Democrats’ plan for the expiring Bush-era tax cuts. Read more. . .
Prepare for the crash tax – The taxing possibilities from jurisdictions scrambling for every possible dollar just keep coming.
How to Best Utilize Health Savings Accounts – 2010 and 2011 HSA Limits and Tax Rules
Investor or Business Owner? The Right Structure Makes a HUGE Difference
The IRS’s Dirty Little Trick on Real Estate Investors – Material Participation Rules
Court: Internet Church Is Not a ‘Church’ for Tax Purposes
The U.S. Court of Appeals for the Federal Circuit on Monday ruled that the Foundation of Human Understanding, a 47 year old § 501(c)(3) nonprofit church that conducts weekly Internet and radio services, is not a church for § 170 purposes. Foundation of Human Understanding v. United States, No. 2009-5129 (Fed. Cir. Aug. 16, 2010):
Tax Politics and Economic Uncertainty
“According to Martin Regalia, chief economist of the U.S. Chamber of Commerce, “Uncertainty is the probably the biggest factor retarding economic growth.” He made this comment at an economic summit, at which, according to this report, other participants called for cuts in government spending, reduction of the federal budget deficit, a reduction in government regulation of business, and reform of the tax system, though Regalia, according to another report, also supports extension of the Bush tax cuts.”
What is Stop Loss Pay? Stop loss pay is compensation being paid to those members of the military service who were not allowed to leave the service on time. This pay is on top of all other pay provided to the soldiers. It is specific compensation for not being able to leave the service. How to Claim Stop Loss Pay for Military Personnel
The government is paying $500 for every month that a soldier was stop lossed.
If the average stop loss length of time is 6 months that’s $3,000 due to every single one of those soldiers (on average). That’s a significant amount of money in my eyes. Enough money to propel your savings goals forward. Enough money to fund 60% of an IRA this year.
4 Ways to Maximize Your Stop Loss Pay – The government is giving a specific set of soldiers, on average, $3,000 in stop loss pay. Hopefully these men and women of our armed forces have a plan for a couple thousand dollars falling in their laps. If not, then read this post.
My two post from last week The Pulse of Your Business, and Planning Retirement Withdrawals kind of stayed from the tax info, but the information is good information for those who it was written for. Both these post are from my August Newsletter. If you’d like to sign up to receive this kind of information you can do so from the Newsletter page. For those of you who like there is an RSS link as well.
Do you want to not worry about money all the time? Or do you ever wish that you were never in debt? Here are 5 great ways to save money fast! 5 Easy Tips to Save Money.
I wish I had wrote this. Car Finance How to Decide on Whether to Lease Or Buy a New Car I have a lot of clients that would need to use this information.
Business Car Leasing The Most Economical and Smart Thing to Go For
Refinancing Myth: Looking Beyond the Monthly Payment and Calculating the True Cost of Your Refinance – Mortgage lenders often attract homeowners seeking to lower their mortgage interest rate with some simple math, usually presented in one of two ways:
1) Comparing the nominal closing costs to the total savings from 30 years of a lower monthly payment, or
2) How few months it will take before you break even with your refinancing closing costs due to lowering the monthly payment
Either way, the refinance looks very attractive: for a little cash up front, you can save far more money over the term of the loan. But don’t be fooled by the numbers – a lower monthly payment does not always mean saving more money, and it has little to do with the closing costs. The paradox can be explained easily by calculating the true total cost refinancing the loan.. . .
From L & R Tax Prep Web site refinance calculator
Other useful Calculators
Rent vs. Buy
Should you rent or should you buy your home? It takes more than looking at your mortgage payment to answer this question. This calculator helps you weed through the fees, taxes, and monthly payments to help you make a good financial decision.Mortgage Qualifier
The first step in buying a house is determining your budget. This interactive problem solver steps you through the process of finding out how much you can borrow.Mortgage Refinance Analyzer
Should you refinance your mortgage? Find out how much money you’ll save and how long it will take to breakeven on a mortgage refinance?Mortgage Reduction Analyzer
Save thousands of dollars in interest by increasing your monthly payment. Find out how much sooner you will pay off your mortgage by making extra payments?Mortgage Comparison: 15 years vs. 30 years
Determining which mortgage term is right for you can be a challenge. Use this calculator to compare these two mortgage terms, and let us help you decide which term better for you.Mortgage Points Evaluator
Should you pay points? This calculator helps you determine if you should pay for points, or use the money to increase your down payment.
Waking up sick Friday morning was just bad timing. I had a lot of things to do, where people depended on me. The work got done, but in part, no thanks to me. Saturday wasn’t much better. I was able to at least get some work done yesterday; it wasn’t near as much as I would have hoped.
In Closing this long list, I would like to point out that I have added some new links to my Blog rolls.
Angell EYE is an application development company that has been providing custom integration and web services for over 5 years. We deliver web site design and development, custom web application development and advanced web programming, FileMaker development, and more.
Over the past 5 years, Angell EYE has been specializing in custom eBay integration and PayPal Payments Pro solutions. 1 of only 12 PayPal Certified Ace Developers, we have had the pleasure of integrating PayPal for numerous happy clients. L & R client also
The Best Credit Card Processing System For Your Business. Unleash The Power of PayPal & Turn Your Laptop or Desktop PC Into a Fully Functional Credit Card Processing System! Credit Card Processing for Fixed Locations or Wireless Freedom,
Accept Major Credit Cards with one low FLAT RATE – L & R client also
a non-profit that connects organizations involved with aging research, facilitate the exchange of information, provide publications and bring people together to understand why aging research is requiring their full attention.- L & R client also
The Top 10 Highest State Income Taxes: All Obama Blue States
Forbes, States (And Bill Gates Sr.) Look to Soak the Rich, by Ashlea Ebeling:
- Hawaii: 11% (income over $400,000 (couple), $200,000 (single))
- Oregon: 11% (income over $500,000 (couple), $250,000 (single))
- California: 10.55% (income over $1 million)
- Rhode Island: 9.9% (income over $373,650)
- Iowa: 8.98% (income over $64,261)
- New Jersey 8.97% (income over $500,000)
- New York: 8.97% (income over $500,000)
- Vermont: 8.95% (income over $373,650)
- Maine: 8.5% (income over $39,549 (couple), $19,749 (single))
- Washington, D.C.: 8.5% (income over $40,000)
Top Ten Tax Time Tips
The following is copy and pasted from the IRS Tax tips. This is Issue Number: IRS TAX TIP 2010-01
While the tax filing deadline is more than three months away, it always seems to be here before you know it. Here are the Internal Revenue Service’s top 10 tips that will help your tax filing process run smoother than ever this year.
- Start gathering your records Round up any documents or forms you’ll need when filing your taxes: receipts, canceled checks and other documents that support an item of income or a deduction you’re taking on your return.
- Be on the lookout W-2s and 1099s will be coming soon from your employer; you’ll need these to file your tax return.
- Try e-file When you file electronically, the software will handle the math calculations for you. If you use direct deposit, you will get your refund in about half the time it takes when you file a paper return. E-file is now the way the majority of returns are filed. In fact, last year, 2 out of 3 taxpayers used e-file.
- Check out Free File If your income is $57,000 or less you may be eligible for free tax preparation software and free electronic filing. The IRS partners with 20 tax software companies to create this free service. Free File is for the cost conscious taxpayer who wants reliable question-and-answer software to help them prepare a return. Visit IRS.gov to learn more.
- Consider other filing options There are many different options for filing your tax return. You can prepare it yourself or go to a tax preparer. You may be eligible for free face-to-face help at an IRS office or volunteer site. Give yourself time to weigh all the different options and find the one that best suits your needs.
- Consider Direct Deposit If you elect to have your refund directly deposited into your bank account, you’ll receive it faster than waiting for a paper check. -(This is cheaper than RALs and is only about 14 days)-
- Visit IRS.gov again and again The official IRS Web site is a great place to find everything you’ll need to file your tax return: forms, tips, answers to frequently asked questions and updates on tax law changes.
- Remember this number: 17 Check out Publication 17, Your Federal Income Tax on IRS.gov. It’s a comprehensive collection of information for taxpayers highlighting everything you’ll need to know when filing your return.
- Review! Review! Review! Don’t rush. We all make mistakes when we rush. Mistakes will slow down the processing of your return. Be sure to double-check all the Social Security Numbers and math calculations on your return as these are the most common errors made by taxpayers.
- Don’t panic! If you run into a problem, remember the IRS is here to help. Try IRS.gov or call our customer service number at 800-829-1040.
Links:
*the red comments are of my own and not from the IRS or any of their representatives*
Five Important Facts about Dependents and Exemptions
When you prepare to file your 2009 tax return, there are two things that will factor into your tax situation: dependents and exemptions. Here, the IRS gives you five important facts that you should know about dependents and exemptions before you file your 2009 tax return.
- If someone else claims you as a dependent, you may still be required to file your own tax return. Whether or not you must file a return depends on several factors, including the amount of your unearned, earned or gross income, your marital status, any special taxes you owe and, any advance Earned Income Tax Credit payments you received.
- Exemptions reduce your taxable income. There are two types of exemptions: personal exemptions and exemptions for dependents. For each exemption you can deduct $3,650 on your 2009 tax return. Exemption amounts are reduced for taxpayers whose adjusted gross income is above certain levels, depending on your filing status.
- If you are a dependent, you may not claim an exemption. If someone else – such as your parent – claims you as a dependent, you may not claim your personal exemption on your own tax return.
- Your spouse is never considered your dependent. On a joint return, you may claim one exemption for yourself and one for your spouse. If you’re filing a separate return, you may claim the exemption for your spouse only if they had no gross income, are not filing a joint return, and were not the dependent of another taxpayer.
- Some people cannot be claimed as your dependent. Generally, you may not claim a married person as a dependent if they file a joint return with their spouse. Also, to claim someone as a dependent, that person must be a U.S. citizen, U.S. resident alien, U.S. national or resident of Canada or Mexico for some part of the year. There is an exception to this rule for certain adopted children. See IRS Publication 501, Exemptions, Standard Deduction, and Filing Information for additional tests to determine who can be claimed as a dependent.
For more information on exemptions, dependents and whether or not you or your dependent needs to file a tax return, see IRS Publication 501. The publication is available on IRS.gov or can be ordered by calling 800-TAX-FORM (800-829-3676).
Links:
- IRS Publication 501, Exemptions, Standard Deduction, and Filing Information
This information was provided by the IRS via IRS TAX TIP 2010-04 copied and pasted here to reach more people.
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