Archive for September, 2011
So the IRS wants to audit you?
Posted by perkmik64 on September 29th, 2011
Every year the IRS sends out thousands of letters requesting audits of business tax returns. If you should get one, how do you react? Your first reaction may be fear, panic and anxiety. That is understandable, but non-productive. So, move on from there and read the notice of audit once again.
What is it that the letter is requesting? Talk to the person who prepared your return. If in doubt, call up the IRS auditor and ask him/her to speak to your tax preparer. Be sure to sign and date a form allowing your preparer to speak with the IRS. Then get organized. Working with the IRS can be analogous to preparing for a sporting event: you must be ready with a good defense and a great offense.
How do audits occur? Every business return is “scored” by the IRS. At random, the IRS selects a batch of returns and checks the score with an “average return”. If a selected return deviates from the average, the return is flagged for an audit. Bear in mind, being flagged for an audit does not mean that the IRS is out to get you. They want to know by what means did you arrive at certain figures which affect your tax liability.
So, how to handle an audit? The first rule is to reduce your risk of “exposure”. Do not open yourself up to further areas of investigation. If possible, meet your auditor at his office. Bring with you all documents necessary to support your business return: checks, receipts, contracts, credit card statements, etc. Remember, the IRS auditor is looking for under-reported income or over-reported expenses. Answer all questions with honesty, but briefly. Give your auditor copies of your documents but only if they are requested.
Ask for a copy of any document in the IRS file which you do not have. Do not become argumentative, belligerant, or rude.
Remember, there is never a perfect return. Every return is subject to interpretation of the tax codes. Your auditor may be a stickler for expense deductions under $100.00; another auditor may focus on expenses over $1000.00. The “picky auditor” can be frustrating and time consuming. Remember, stay calm.
Please be aware of this: no matter who prepares your return, you, as the business owner, are responsible for the contents therein. Approximately 4% of all business tax returns are audited. Handling an audit relies upon organizational skills and the ability to work with difficult personalities. And it takes time.
Green Apple Resources has represented clients during an audit. We have the skills necessary to deal with auditors. If you are having tax problems please contact us. We will assess your liability and give you a recommendation as to how to proceed.
Remember, your success is our business!
Learn how to use Quickbooks and save money!
Posted by Kim Perkins on September 22nd, 2011
Want to learn how to use Quickbooks or Quickbooks Pro? Using Quickbooks doesn’t have to be a stressful experience; here is some basic information to get you started.
QuickBooks is one of the most trusted and popular accounting software programs. QuickBooks sales account for 78 percent to 94.2 percent of all small business accounting software program sales. These numbers remain true in 2011.
Learning how to use QuickBooks is a valuable skill for both the accountant and the small business owner. Using QuickBooks properly can make routine bookkeeping tasks less time consuming and more accurate. Less time spent on bookkeeping frees up more time to spend on managing your business and increasing your sales. QuickBooks also gives you the tools for getting better and more accurate information for financial reports, management decisions, and tax returns.
It is important that your QuickBooks be set up and installed properly before you begin using it. QuickBooks has an excellent “interview” process for setting up a new company when you first start your software. You should carefully use each of the steps, including choosing a standard chart of accounts. Most skilled bookkeepers will easily use these interview steps. If you are uncomfortable with the set up process, then have a QuickBooks professional help you with the set up of your program.
Now you are ready to learn QuickBooks. It is advisable to start with one section of your bookkeeping, such as writing checks, and learn this function for a week or two and then add other functions, such as invoicing, becoming comfortable with each function before adding another.
Another option would be to set up a mock company with your QuickBooks program, using a name such as My Training Company, and use this to key in your data and practice while you are learning how to use QuickBooks. You can then set up your “real” company file when you are comfortable with QuickBooks
If you already have QuickBooks, then click on the Help button on your toolbar. From the pop up window that appears, you will be able to search through answers to almost every QuickBooks question. Be as specific as you can and you will usually get a very good step-by-step answer from the QuickBooks help section. For example, type in “how do I charge sales tax on an item” and you will be given choices ranging from a general overview of how sales tax is charged in Quickbooks as well as very specific topics involving sales tax.
If you are not able to find your answer with the internal help section, then the help pop up window also has a Live Community tab where you can present your questions and enter forums for discussion, questions, and also resources of FAQs.
If you leave the QuickBooks Help window open, the Help contents will change depending on the accounting transaction you are recording. As you begin using QuickBooks, this feature will suggest learning topics and very specific topics that will guide you in how to use QuickBooks to enter and use your data. It would be useful to leave the help section open the first several times that you use a new feature or function of QuickBooks.
Still can’t get it? There are Certified ProAdvisors who are trained to set up QuickBooks and train novices to the program.
We, at Green Apple Resources are Experts and offer our services to anyone wishing to begin the new fiscal year with QuickBooks.
Contact us!
Employer / Employee Relations
Posted by Kim Perkins on September 9th, 2011
Human Resources is part of accounting!
Do you believe Human Resources not considered part of accounting? Think again!!! Time and again, Green Apple Resources has encountered Sick Time, Paid Time Off, and employee status payouts which affect the bottom line of small businesses.
Question: What do you keep in your Employee Personnel File? The file should begin the date of hire. All job related documents or acknowledgement thereof goes into the file. Your employee handbook, outlining policies and procedures may be too cumbersome for each employee file but a signed and dated form stating that the employee received the handbook is paramount.
Here is a brief list of documents to be found in your
- Job Description and Classification
- Employees Application
- Your Offer of Employment
- IRS Form W-4
- Copy of I-9. (All originals should be kept in one separate file together)
- Signed receipt of Employee Handbook
- Performance Evaluations
- Forms Relating to Employee Benefits
- Next of Kin and Emergency Contacts
- Warnings and discipline notes
- Attendance/Tardiness Records
- Any contract between the Employer and the Employee
- Documents relating to the departure of your Employee
Although it is called a Personnel File, it is also a series of documents designed to protect you, the Employer! Remember, your business files, including Employee Personnel files can be subpoenaed by opposing attorneys at law. Do not put anything into a file that you would not want a jury to see!
Remember, your success is our business, and…
We want to be at the core!
Finding Tax Errors After You Have Filed Your Return?
Posted by Kim Perkins on September 5th, 2011
You can correct it by amending your return.
Here are some facts from the Internal Revenue Service about amending your federal tax return:
- When to amend a return: You should file an amended return if your filing status, your dependents, your total income or your deductions or credits were reported incorrectly.
- When NOT to amend a return: In some cases, you do not need to amend your tax return. The IRS usually corrects math errors or requests missing forms – such as W-2s or schedules – when processing an original return. In these instances, do not amend your return.
- Form to use: Use Form 1040X, Amended U.S. Individual Income Tax Return, to amend a previously filed Form 1040, 1040A or 1040EZ. Make sure you check the box for the year of the return you are amending on the Form 1040X. Amended tax returns cannot be filed electronically. Use a separate form for each year you are amending.
- Other forms or schedules: If the changes involve other schedules or forms, attach them to the Form 1040X.
- Additional refund: 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.
- Additional tax: If you owe additional tax, you should file Form 1040X and pay the tax as soon as possible to limit interest and penalty charges.
When to file: Generally, to claim a refund, 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.
To your wealth!
