What exactly is QuickBooks? QuickBooks is an accounting program that is used primarily by small businesses. It is very user-friendly, which makes it ideal if you are not an accountant.
QuickBooks will enable you to take control of your business finances to help you to make better decisions. Business owners can keep track of receivables from customers and clients, bills that are due, and account balances such as checking accounts, inventory, and credit cards. You can even reconcile your accounts to your statements to make sure your records are accurate. Can you imagine not knowing how much your customers owe you?
Ideally, you will want to be able to generate financial reports such as profit and loss statements, as well as balance sheets. A profit and loss statement will tell you how much your sales, expenses, and profits were, while a balance sheet reflects assets (such as checking accounts), liabilities (such as loans), and equity (the difference between assets and liabilities, which is your ownership stake).
Successful small business owners know how their business is performing on an ongoing basis. This is where QuickBooks can help. Your decisions should be made based upon the financial results of your business. Just remember not to do it alone. While QuickBooks is very user-friendly, many people do need assistance from an expert. It can be extremely advantageous to consult with us on an on-going basis. We can advise you on how to best set up QuickBooks, how to use it effectively, and how to interpret your business results to help you to save money, taxes, and increase profits.
Tuesday, May 4, 2010
I Received a Notice from the IRS – Now What?!
If you receive a letter in the mail from the IRS, the first thing you should do is open it! It might not be as bad as you think. The most common notice I see is that a client forgot to include interest, dividends, or wages from a W-2 on their income tax return and now they owe additional taxes, interest, and penalties.
Just because you receive a notice that you owe money doesn’t mean the notice is correct. You want to see why there is an increase, and compare the figures in the letter to your tax return. Then you want to see what the proposed changes are. I have seen notices that have actually showed incorrect W-2 wages.
Usually you have 30 days to respond to the notice before additional interest and penalties will be assessed. There are several options to take at this point.
The first option, if the notice is correct and the additional penalties and interest are very insignificant, should be to pay the amount due as soon as possible. If the notice is correct and you have a valid reason for not including a portion of income, you should then include payment of the taxes and interest on those taxes only. Additionally, you will need to respond to the notice to state why the penalties should be removed. The IRS will remove penalties if you have a justifiable reason. As a caveat, if the penalties are not removed then you will owe not only penalties, but possible interest on the penalties as well. The cost/benefit has to be weighed carefully. If the notice is completely wrong, then you should not send any payment, but include an explanation in your written response to the IRS, along with any supporting documents to show why you do not owe additional taxes, interest, and penalties.
As you can see there are several options when receiving a notice from the IRS or one of the state taxing authorities. Do not hesitate to contact our office if you receive a notice. We can clearly explain it to you and guide you through the next step to take.
Just because you receive a notice that you owe money doesn’t mean the notice is correct. You want to see why there is an increase, and compare the figures in the letter to your tax return. Then you want to see what the proposed changes are. I have seen notices that have actually showed incorrect W-2 wages.
Usually you have 30 days to respond to the notice before additional interest and penalties will be assessed. There are several options to take at this point.
The first option, if the notice is correct and the additional penalties and interest are very insignificant, should be to pay the amount due as soon as possible. If the notice is correct and you have a valid reason for not including a portion of income, you should then include payment of the taxes and interest on those taxes only. Additionally, you will need to respond to the notice to state why the penalties should be removed. The IRS will remove penalties if you have a justifiable reason. As a caveat, if the penalties are not removed then you will owe not only penalties, but possible interest on the penalties as well. The cost/benefit has to be weighed carefully. If the notice is completely wrong, then you should not send any payment, but include an explanation in your written response to the IRS, along with any supporting documents to show why you do not owe additional taxes, interest, and penalties.
As you can see there are several options when receiving a notice from the IRS or one of the state taxing authorities. Do not hesitate to contact our office if you receive a notice. We can clearly explain it to you and guide you through the next step to take.
Patient Protection and Affordable Care Act
The Patient Protection and Affordable Care Act is 906 pages long. It can be easily found by typing it in at google.com. One of the highlights of the Act is to provide a credit to small business owners who provide health insurance to their employees starting in 2010.
The amount of the credit is equal to a maximum of 35 percent of the premiums paid by an eligible small business during 2010. This will increase to a maximum of 50 percent of premiums paid during the year 2014. The employer must have paid at least half the cost of single coverage for their employees to be eligible.
Since the credit was designed to help small business owners that employ low and moderate income workers, average wages per employee must be less than $50,000 per year. Generally, an employer must have fewer than 25 full-time equivalent employees. Employers with less than 10 full-time equivalent employees with average annual wages per employee of less than $25,000 will receive the maximum credit.
Unfortunately, employees such as dependents, including spouses and children, and most business owners are excluded from the definition of employee.
Hopefully this credit will be of help to many small business owners who are on the fence about providing health insurance for their employees due to cost concerns.
The amount of the credit is equal to a maximum of 35 percent of the premiums paid by an eligible small business during 2010. This will increase to a maximum of 50 percent of premiums paid during the year 2014. The employer must have paid at least half the cost of single coverage for their employees to be eligible.
Since the credit was designed to help small business owners that employ low and moderate income workers, average wages per employee must be less than $50,000 per year. Generally, an employer must have fewer than 25 full-time equivalent employees. Employers with less than 10 full-time equivalent employees with average annual wages per employee of less than $25,000 will receive the maximum credit.
Unfortunately, employees such as dependents, including spouses and children, and most business owners are excluded from the definition of employee.
Hopefully this credit will be of help to many small business owners who are on the fence about providing health insurance for their employees due to cost concerns.
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