Costly advice from ill-informed tax preparers
Posted by Kim Perkins on June 28th, 2011
A married couple, came to us with their shoe box of files and receipts. The husband and wife each had their own business to operate. Her tax attorney, (in another state), had advised her not to file her tax return until all of the data from her husband’s business was compiled. That was wrong and a costly mistake. Green Apple Resources stepped in and waded through six years of receipts to generate six years of tax returns. Including Federal, Mass and NH. The IRS assessed penalties both for late filing and late payment. Plus interest! How can this be? The couple had reasonably relied on the advice of a tax attorney, they told the tax court.
U.S. Tax Courts have continually held in favor of the IRS: Taxpayers have an obligation to file a return based on the information available to them at the time. Returns can be amended when further information becomes available!
The Bottom Line: It is not reasonable to delay filing any return to the IRS. If it is necessary, the tax payer may file for an extension but must complete a tax return, based on available information, by the extension deadline.
If you have failed to file your taxes in a timely manner, there are failure to file penalties as well as underpayment penalties and interest. Don’t wait! File something now, even if it will need to be amended later. It will cost less to have the tax return done twice then to deal with Uncle Sam later.
Remember, your success is our business, and…
We want to be… At The Core!
QuickBooks 2008 has been retired!
Posted by Kim Perkins on June 25th, 2011
In May of 2011, Intuit retired QuickBooks 2008. What does this mean for your business, is this the Final Judgement, referred to by a retired civil engineer in California? If you use the product saved on your computer it will continue to operate just fine, barring any glitches within your computer, its files, memory, or processing speed. What will happen is Intuit will no longer create nor send out updates to the 2008 versions of QuickBooks. Furthermore, live support for QB 2008 will no longer be offered.
I should also mention:
Online banking will no longer work: QB 2008 will not connect with your financial institution.
Bill Pay and Billing Solution will be discontinued.
QuickBooks Payroll will be deactivated.
QuickBooks E-Mail and Online Backup will also be deactivated.
Why is Intuit doing this? Because newly developed software, such as Office 2010, Windows 7, and certainly Windows 8 are too “busy” to be compatible with older versions of QB. And, Intuit software engineers decided that a newer versions of QuickBooks, designed to nest neatly within the parameters of newer operating systems, was necessary. So QB “sunsets” versions older than three years.
Very important: Before you upgrade to QuickBooks 2011, your current files must be backed up and saved to prevent loss of information. The retrieval of lost data is a time consuming process. Your time spent recovering files is costly in ways other than money spent. Contact us if you need help with the upgrade process.
Green Apple Resources is a QuickBooks Pro-Advisor, with 15 years experience in accounting, tax preparation, and accounting technology. We customize our services to meet your specific needs. We take pride in being fast and accurate.
Contact us: kim@greenappleresources.com
Common errors made by QuickBooks users.
Posted by Kim Perkins on May 19th, 2011
Intuit, the creators of QuickBooks, has released a list of the most common errors made by users of the accounting tool. Below are examples of the most egregious:
- Do not use the sample files provided by QBs as your actual company files! These are samples and are limited in their scope. They will not operate as a live file for your business. You must create a new company file for your business.
- Do not write a check and forget to apply the payment to the bill! QBs offers several options for paying your bills. Once you have chosen an option you have to stick with it, otherwise you may end up paying the bill twice. Here’s what you do: If you enter a bill through the Enter Bills window, pay it through the Pay Bills window.
- Don’t enter invoices and then make a deposit without going through the Receive Payments step. I wrote about this at length in the last newsletter, but it bears repeating! When you receive a payment, apply it to the appropriate invoice. I see a lot of “messy books” where the people go right to the Make Deposits screen, and the invoices aren’t shown as being paid. It’s not just messy, it doubles your taxable income!!
- Don’t accidentally record your customers payments twice. When you receive a payment for an invoice and enter it in the Receive Payments screen, QBs automatically puts the money into the Undeposited Funds account. Do not go forth and make a separate deposit for the same amount against the same invoice. Follow the directions to move the payment from the Undeposited Funds account to your bank account.
To your wealth,
Kimberly Perkins
Tax season is over!!!
Posted by Kim Perkins on May 13th, 2011
Let’s put that behind us and get back to the issue at hand. Proper bookkeeping!!
It is not too early to prepare for next year. Begin preparing for 2011 by organizing your receipts, NOW! What you save and how you save will reduce your tax obligation. Furthermore, it will teach you how to use the 1099, et.al., forms.
Sort your receipts and question everything. Some receipts are self-explanatory: medical/dental/prescriptions, but what about your fitness subscription?
Ask Green Apple Resources. We can help. Your success is our business!
Best Regards to you and yours,
Kimberly Perkins
Quickbooks and Tax Definitions
Posted by Kim Perkins on February 28th, 2011
Taxable Benefits: Taxable Benefits are employer provided “non-cash” compensations. They include complimentary tickets, employer-provided vehicles, use of the company time-share, etc. According to Internal Revenue Code Section 1.61-1, all compensation paid to, or on behalf of, an employee constitutes wages subject to income and employment tax withholding, unless specifically excluded by the IRS Code.
W-4 Form: The W-4 Form, Employees Withholding Allowance Certification, is filled in by each employee and then filed with the Federal government by the employer. Because tax situations change employees may wish to review and refile their taxable status each year.
YAG: Year at A Glance. Annual report indicating the financial status of the Company.
Quickbooks: What are Undeposited Funds?
Posted by Kim Perkins on February 23rd, 2011
When a client receives a payment or payments and enters them into QBs he is frequently disturbed by the designation “undeposited funds”. What is this Undeposited Funds account, anyway? In short, it is QBs way of allowing the payments to be entered into the books, until he completes the deposit process. In short, it is a QBs “box” or “drawer”where the money can be seen; it’s on the screen as Undeposited Funds.
What does this all mean? It means that somewhere in the office vault there is a check or a group of checks which should total up to the amount in the Undeposited Funds account. But why stop there. It means that QBs is waiting for those funds to be deposited into the bank, and QBs has the tools to help with that process!!
Click on “Banking:Make Deposits” and a screen will appear which will breakdown the amount of undeposited funds into the individual checks, (when added together, those checks will total the amount in Undeposited Funds). To the left of the checks will be little blank boxes; move the cursor to a box and click on it. QBs adds a little check next to the payment. Continuing through the screen and checking off the boxes a deposit slip is being created by QBs. And, the payments are being removed from Undeposited Funds status.
At the bottom of the window it asks “continue”. Click on this button and a facsimile of the created deposit slip will appear ready for review, printing, and delivery to the bank with the checks listed on the slip.
To your wealth,
Kim
Tax Changes for W-2s in 2011
Posted by Kim Perkins on February 17th, 2011
Wow, we just sent out W-2s for tax year 2010 and the IRS is announcing changes in the W-2s for tax year 2011! Starting in tax year 2011, the Affordable Care Act requires employers to report the value of the health care coverage they provide employees on each employees annual W-2. However, to provide employers the time they need to make changes to their payroll system or procedures in preparation of compliance with this requirement, the IRS will defer the reporting requirement for 2011, making that reporting by employers optional for 2011.
A revised Form W-2 draft is available for viewing. The new W-2 will include the codes necessary to report this information to the IRS. It is expected that this Form W-2 will be issued to employees in early 2012.
What is this all about? It is for information purposes only. It is intended to show employees the value of their health care benefits so they can be more informed consumers.
Best Regards to you and yours,
Kimberly Perkins
Bookkeeping Terms of the Month
Posted by Kim Perkins on January 27th, 2011
- Liabilities: Obligations or amounts owed to lenders or suppliers. Liabilities also include amounts received in advance of future sales or services.
- Advance to Employee: An asset account used to record money given to an employee with the expectation that it will be repaid or will be used for the benefit of the business. The amount will be recorded in this current asset account until repaid or documentation presented (receipts) justifying the advance.
- Assets: Things that are owned by a business which have a value that can be expressed in dollars are assets. Equipment, vehicles, inventory, cash on hand, investments, all are considered assets. Some things have worth but cannot be assigned a dollar value; this would include customer base, company reputation, or successful brands. These items will not appear on the company asset list
To your Wealth
What are the advantages or disadvantages of subscribing to QuickBooks on line?
Posted by Kim Perkins on January 21st, 2011
As a professional bookkeeper, I work with QuickBooks. It is the premier accounting software available for the small business owner.
QuickBooks comes in a variety of packages, each package designed to meet a variety of needs experienced by individual business owners. Some packages are available through the purchase of software discs which you load onto your computer. Other packages are sold through a subscription and become available to the subscriber online, accessed through a pasword system.
So, what are the advantages of subscribing versus purchasing? The primary advantage is subscribers can access their files through any computer. As long as the business owner can log on to the internet, he or she can log into their QuickBooks account. In short, mobility! For business owners who travel or find themselves working after hours, they can log into their files outside of the office.
Another advantage is the ability to share your files with others. No cumbersome transfer of data or files. Your accountant can open your QuickBooks files from his or her office and help you close out your books at the end of any month, quarter, or year. Your contract workers or employees can access time sheets to record the number of hours worked.
Backing up your data is also an advantage. QuickBooks OnLine will safely back up your books off-site. Note: if you don’t have a Disaster Recovery Plan, develop one this month!! We have a great contact who can help you with that.
Are there disadvantages? Of course. QuickBooks OnLine does not do enough to help business owners track inventory, (this is being corrected). Toggling back and forth between screens is slower than the desktop version and if your internet is weak it can be even slower. And, there is that on-going monthly fee. You, as the business owner, must decide whether to pay an up-front licensing fee and then upgrade approximately every 3 years or pay the monthly subscriber fee. Finally, if you are experiencing chronic internet accessibility issues QuickBooks OnLine will not work as it is intended.
Do I have a preference? I am well versed in both the on-line edition and the purchased edition. And both have their places in the office. If you need help making a decision about which is best for you, please do not hesitate to call me.
To your wealth,
Kim
Scam Alert!
Posted by Kim Perkins on December 15th, 2010
‘Tis the season to be wary. Last month I alerted you to the EFTPS scam, I still get e-mails after I send in my tax payment which start out as follows: “dear doktor e-mail fail to present my payment”. This is obviously from a server phishing for electronic data. If you are not aware of what phishing is, read on. Phishing is the bogus request for data through e-mails. Crooks formulate a letter, e-mail it to the unsuspecting, and ask for bank account data, passwords, and the like. Sometimes the letter can be quite convincing and appear to be very legitimate. Be aware, contact your bank or Federal representative by phone to verify the veracity of the notification. Check my website for more tips.
