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Chris Blach, QuickBooks ProAdvisor |
 Billing for inventory parts is easy. Pick the items from a list and specify a quantity. Poof. Done.Billing for costs, time or mileage is a little more complex. QuickBooks has built-in tools to help you do this, but it’s a bit of a process.To simplify your work flow, do this groundwork first:
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May 17th, 2012
Filing Amended Returns: The Facts
May 17th, 2012|
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| What if you’ve already filed your return, but realized that you were eligible for a deduction or credit that you didn’t take, or worse–discovered an error and need to “fix it” on your return?
Fortunately, there’s an easy answer: file an amended return. Here’s what you need to know if you’re considering filing an amended federal income tax return. 1. When you need to amend an income tax return, use Form 1040X, Amended U.S. Individual Income Tax Return. You can use Form 1040X to correct previously filed Forms 1040, 1040A or 1040EZ. 2. An amended return cannot be e-filed. You must file a paper return. 3. Generally, you do not need to file an amended return to correct math errors. The IRS will automatically make that correction. Also, do not file an amended return because you forgot to attach tax forms such as W-2s or schedules. The IRS normally will send a request asking for those. 4. Be sure to enter the year of the return you are amending at the top of Form 1040X. Generally, you must file Form 1040X within three years from the date you filed your original return or within two years from the date you paid the tax, whichever is later. 5. If you are amending more than one tax return, prepare a 1040X for each return and mail them in separate envelopes to the appropriate IRS campus. The 1040X instructions list the addresses for the campuses. 6. If the changes involve another schedule or form, you must attach that schedule or form to the amended return. 7. If you are filing to claim an additional refund, wait until you have received your original refund before filing Form 1040X. You may cash that check while waiting for any additional refund. 8. If you owe additional 2011 tax, file Form 1040X and pay the tax before the due date to limit interest and penalty charges that could accrue on your account. Interest is charged on any tax not paid by the due date of the original return, without regard to extensions. Give us a call today if you need assistance filing an amended return. |
Employee or Independent Contractor – Which Is It?
May 17th, 2012|
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| If you hire someone for a long-term, full-time project or a series of projects that are likely to last for an extended period, you must pay special attention to the difference between independent contractors and employees.
Why It Matters The Internal Revenue Service and state regulators scrutinize the distinction between employees and independent contractors because many business owners try to categorize as many of their workers as possible as independent contractors rather than as employees. They do this because independent contractors are not covered by unemployment and workers’ compensation, or by federal and state wage, hour, anti-discrimination, and labor laws. Read the rest of this entry » |
How to Spot an IRS Impersonation Scheme
May 8th, 2012|
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| The IRS does not send taxpayers unsolicited e-mails about their tax accounts, tax situations, or personal tax issues. If you receive such an e-mail, most likely it’s a scam.IRS impersonation schemes flourish during filing season. These schemes may take place via phone, fax, Internet sites, social networking sites, and particularly e-mail.Many impersonations are identity theft scams that try to trick victims into revealing personal and financial information that can be used to access their financial accounts. Some e-mail scams contain attachments or links that, when clicked, download malicious code (a virus) that infects your computer or directs you to a bogus form or site posing as an IRS form or Web site.
Some impersonations may be commercial Internet sites that consumers unknowingly visit, thinking they’re accessing the genuine IRS Web site, IRS.gov. However, such sites have no connection to the IRS. If you want to know whether a site is legitimate or if you think you have been the victim of identity theft or fraud, please contact us. We definitely don’t want you to get scammed. |
Six Tips for People Who Pay Estimated Taxes
May 8th, 2012|
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| If you have income that is not subject to withholding you may need to pay estimated taxes to the IRS during the year. Whether you need to pay estimated taxes is dependent upon your financial circumstances, what you do for a living (if you’re self-employed for example), and the types of income you receive. Here are six tips from the IRS that explain estimated taxes and how to pay them.1. If you have income from sources such as self-employment, interest, dividends, alimony, rent, gains from the sales of assets, prizes or awards, then you may have to pay estimated tax.
2. As a general rule, you must pay estimated taxes in 2012 if both of these statements apply: 1) You expect to owe at least $1,000 in tax after subtracting your tax withholding (if you have any) and tax credits, and 2)You expect your withholding and credits to be less than the smaller of 90 percent of your 2012 taxes or 100 percent of the tax on your 2011 return. Special rules apply for farmers, fishermen, certain household employers and certain higher income taxpayers. 3. Sole Proprietors, Partners, and S Corporation shareholders generally have to make estimated tax payments if they expect to owe $1,000 or more in taxes when they file a return. 4. To figure estimated tax, include expected gross income, taxable income, taxes, deductions and credits for the year. You’ll want to be as accurate as possible to avoid penalties and don’t forget to consider changes in your situation and recent tax law changes. 5. For estimated tax purposes the year is divided into four payment periods or due dates. These dates are generally April 15, June 15, Sept. 15 and Jan. 15 of the next or following year. 6. The easiest way to pay estimated taxes is electronically through the Electronic Federal Tax Payment System, or EFTPS, but you can also figure your tax using Form 1040-ES, Estimated Tax for Individuals and pay any estimated taxes by check or money order using the Estimated Tax Payment Voucher, or by credit or debit card. Give us a call today if you need help making estimated payments. |
What to Do If You Haven’t Filed an Income Tax Return
May 8th, 2012|
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| Filing a past due return may not be as difficult as you think.
Taxpayers should file all tax returns that are due, regardless of whether full payment can be made with the return. Depending on an individual’s circumstances, a taxpayer filing late may qualify for a payment plan. It is important, however, to know that full payment of taxes upfront saves you money. Here’s What to Do When Your Return Is LateGather Past Due Return Information Gather return information and come see us. You should bring any and all information related to income and deductions for the tax years for which a return is required to be filed. Payment Options – Ways to Make a Payment There are several different ways to make a payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, money order, cashier’s check, or cash. Payment Options – For Those Who Can’t Pay in Full Taxpayers unable to pay all taxes due on the bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be lessened. Based on the circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, a temporary delay, or an offer in compromise. Taxpayers who need more time to pay can set up either a short-term payment extension or a monthly payment plan. •A short-term extension gives a taxpayer up to 120 days to pay. No fee is charged, but the late-payment penalty plus interest will apply. •A monthly payment plan or installment agreement gives a taxpayer more time to pay. However, penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan. In terms of how to pay your tax bill, it is important to review all your options; the interest rate on a loan or credit card may be lower than the combination of penalties and interest imposed by the Internal Revenue Code. You should pay as much as possible before entering into an installment agreement. •A user fee will also be charged if the installment agreement is approved. The fee, normally $105, is reduced to $52 if taxpayers agree to make their monthly payments electronically through electronic funds withdrawal. The fee is $43 for eligible low-and-moderate-income taxpayers. What Will Happen If You Don’t File Your Past Due Return or Contact the IRS It’s important to understand the ramifications of not filing a past due return and the steps that the IRS will take. Taxpayers who continue to not file a required return and fail to respond to IRS requests for a return may be considered for a variety of enforcement actions. If you haven’t filed a tax return yet, please contact us. We’re here to help!
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Financial Tips for May 2012
May 8th, 2012|
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When to Review Your Life Insurance CoverageIt makes good financial sense to periodically examine your life insurance coverage to make sure the coverage is still sufficient. After all, life insurance is often a family’s most important financial and estate planning tool. With today’s frequent changes in financial circumstances and goals, it’s a good idea to re-examine your life insurance coverage on the occurrence of any of the following: •Marriage or divorce; Consult with us if you think it might be time to adjust your life insurance coverage. A Slip of the Lip May Bring on a Tax AuditMany taxpayers have learned, to their dismay, that it generally isn’t wise to talk carelessly about their taxes – especially about sensitive areas. Why? Because the wrong person overheard their careless talk and “turned informer,” either for revenge or in the hope of an “informer’s reward.” An informer’s “tip” to the IRS will often trigger a tax audit. Even though the taxpayer has done nothing improper, he or she may have to suffer through the audit. Not only is this time-consuming, but it can also result in additional taxes due to the discovery of an innocent error on the return or the disallowance of a marginal deduction.
Check Your Credit ReportOrder a copy of your credit report from AnnualCreditReport.com (do not contact the three nationwide consumer reporting companies individually). Read the report carefully and report any discrepancies to the appropriate agencies. This not only ensures that the records are accurate, but also helps prevent others from obtaining credit in your name. Review Budget vs. ActualsCompare April income and expenditures with your budget. Make adjustments as appropriate to your May expenditures. Make sure you have invested your planned savings amount for April. Make Withholding AdjustmentsBased on the results of your prior year’s tax return, make any necessary adjustments to your tax withholding by completing Form W-4 and giving it to your employer. |
Client Spotlight: Concept Construction Corporation
April 20th, 2012|
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Concept Construction Corporation:
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Spring Cleaning: Tax Records You Can Throw Away
April 19th, 2012|
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| Spring is a great time to clean out that growing mountain of financial papers and tax documents that clutters your home and office. Here’s what you need to keep and what you can throw out without fearing the wrath of the IRS.Let’s start with your “safety zone,” the IRS statute of limitations. This limits the number of years during which the IRS can audit your tax returns. Once that period has expired, the IRS is legally prohibited from even asking you questions about those returns.The concept behind it is that after a period of years, records are lost or misplaced and memory isn’t as accurate as we would hope. There’s a need for finality. Once the statute of limitations has expired, the IRS can’t go after you for additional taxes, but you can’t go after the IRS for additional refunds, either. Read the rest of this entry » |
10 Facts About Mortgage Debt Forgiveness
April 18th, 2012|
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| Canceled debt is normally taxable to you, but there are exceptions. One of those exceptions is available to homeowners whose mortgage debt is partly or entirely forgiven during tax years 2007 through 2012.Here are 10 things you should know about Mortgage Debt Forgiveness.
1. Normally, debt forgiveness results in taxable income. However, under the Mortgage Forgiveness Debt Relief Act of 2007, you may be able to exclude up to $2 million of debt forgiven on your principal residence. 2. The limit is $1 million for a married person filing a separate return. 3. You may exclude debt reduced through mortgage restructuring, as well as mortgage debt forgiven in a foreclosure. 4. To qualify, the debt must have been used to buy, build or substantially improve your principal residence and be secured by that residence. 5. Refinanced debt proceeds used for the purpose of substantially improving your principal residence also qualify for the exclusion. 6. Proceeds of refinanced debt used for other purposes, to pay off credit card debt for example, do not qualify for the exclusion. 7. If you qualify, claim the special exclusion by filling out Form 982, Reduction of Tax Attributes Due to Discharge of Indebtedness, and attach it to your federal income tax return for the tax year in which the qualified debt was forgiven. 8. Debt forgiven on second homes, rental property, business property, credit cards or car loans does not qualify for the tax relief provision. In some cases, however, other tax relief provisions — such as insolvency — may be applicable. 9. If your debt is reduced or eliminated you normally will receive a year-end statement, Form 1099-C, Cancellation of Debt, from your lender. By law, this form must show the amount of debt forgiven and the fair market value of any property foreclosed. 10. Examine the Form 1099-C carefully. Notify the lender immediately if any of the information shown is incorrect. You should pay particular attention to the amount of debt forgiven in Box 2 as well as the value listed for your home in Box 7. |
