From the Washington Post:
Even as we wade through the wreckage of the housing collapse, Americans remain a staunchly house-proud people. And our government is apparently determined to encourage us: This month, President Obama signed into law an extension and expansion of the popular homebuyer tax credit, which had been scheduled to expire at the end of November. But before you rush out to claim your extra cash, take a moment to make sure you're not in the housing market for the wrong reasons. We've found that several of our most cherished beliefs about the value of a home don't hold true:
Read more by clicking the above link.
Monday, November 30, 2009
Thursday, November 26, 2009
Why we are passing on a sales tax charge on your billing this month.
Our PayCycle service was recently sold to Intuit.
Intuit has taken the position, which we have objected to, that they are no charging sales tax for the use of their service.
We are passing on that sales tax to you and it will be reflected on your December statement.
See the email below.
Thank you for your inquiry dated 11/09/2009 regarding IL sales tax. We appreciate the opportunity to service your payroll needs.
I apologize for the inconvenience, we have issued you a credit for the sales tax on Monday, 11/03/2009. If you do not see the credit by Wednesday, 11/11/2009, please contact us.
Intuit Online Payroll, formerly PayCycle is not providing a service, but the right to use a prewritten software application. The software is provided as a web based "Application Service Provider/ Software as a Service" application (ASP or SaaS). The States tax prewritten software as tangible personal property, whether or not the customer receives a tangible copy of the software; downloads the software; or uses an on-line ASP or SaaS version of the prewritten software. Please note that both KPMG and Deloitte agreed that the taxability should be based upon an ASP or SaaS model and not the conventional payroll service model. The Illinois Department of Revenue Regulations cites this in Title 86 Part 130 Section 130.1935 Computer Software.
We were glad to be of assistance and look forward to helping you with any future payroll needs.
If you have any questions, please do not hesitate to contact us over the web at https://onlinepayroll.intuit.
Thank you for choosing Intuit Online Payroll as your payroll partner. We appreciate the opportunity to serve you.
Sincerely,
Mark Dulay
The Intuit Online Payroll Support Team
Intuit has taken the position, which we have objected to, that they are no charging sales tax for the use of their service.
We are passing on that sales tax to you and it will be reflected on your December statement.
See the email below.
Thank you for your inquiry dated 11/09/2009 regarding IL sales tax. We appreciate the opportunity to service your payroll needs.
I apologize for the inconvenience, we have issued you a credit for the sales tax on Monday, 11/03/2009. If you do not see the credit by Wednesday, 11/11/2009, please contact us.
Intuit Online Payroll, formerly PayCycle is not providing a service, but the right to use a prewritten software application. The software is provided as a web based "Application Service Provider/ Software as a Service" application (ASP or SaaS). The States tax prewritten software as tangible personal property, whether or not the customer receives a tangible copy of the software; downloads the software; or uses an on-line ASP or SaaS version of the prewritten software. Please note that both KPMG and Deloitte agreed that the taxability should be based upon an ASP or SaaS model and not the conventional payroll service model. The Illinois Department of Revenue Regulations cites this in Title 86 Part 130 Section 130.1935 Computer Software.
We were glad to be of assistance and look forward to helping you with any future payroll needs.
If you have any questions, please do not hesitate to contact us over the web at https://onlinepayroll.intuit.
Thank you for choosing Intuit Online Payroll as your payroll partner. We appreciate the opportunity to serve you.
Sincerely,
Mark Dulay
The Intuit Online Payroll Support Team
Simple easy free bookkeeping online
The daunting task of organizing this years records for preparing your income tax return just got a little easier.
We suggest that you take a look at the website outright.com.
Outright: Simple Bookkeeping Online
Streamlining the work involved with owning a business, helping entrepreneurs pay the right taxes, record financial transactions, and keep their businesses on track and growing. Created after watching a number of small businesses, like ourselves, struggle to capture business deductions, often piecing together different solutions. Believing business owners spend too much time and effort on the least enjoyable part of running one's own business, our goal is to make it simple, helping entrepreneurs track all of their income and expenses to get their taxes done accurately.
Click on the above link for more information about outright.
We suggest that you take a look at the website outright.com.
Outright: Simple Bookkeeping Online
Streamlining the work involved with owning a business, helping entrepreneurs pay the right taxes, record financial transactions, and keep their businesses on track and growing. Created after watching a number of small businesses, like ourselves, struggle to capture business deductions, often piecing together different solutions. Believing business owners spend too much time and effort on the least enjoyable part of running one's own business, our goal is to make it simple, helping entrepreneurs track all of their income and expenses to get their taxes done accurately.
Click on the above link for more information about outright.
Monday, November 23, 2009
Is Now the Time for a Roth IRA Conversion?
Usually when Washington gives you a tax break with one hand, they take something else away with the other - leaving you to decide which is better. That's certainly the case with new rules making it easier to convert your regular IRA account to a Roth IRA. This could be a great opportunity for you, but it's not a slam-dunk. So we're writing to let you know the change is coming and to help decide if you should investigate further.
Under current law, there are two kinds of IRAs. The regular IRA lets you deduct contributions today, and defer tax on your funds until you withdraw them. The Roth IRA, on the other hand, offers no up-front deduction, but lets you take money tax-free during retirement. And there are no required minimum distributions as with regular IRAs.
Today you can convert your regular IRA to a Roth IRA, if your income is under $100,000. Starting in 2010, however, you can do it regardless of how much you earn. What's the catch? You have to pay tax on the full amount you convert now.
If the tax you pay to convert today is less than the tax you would pay to withdraw the money tomorrow, it makes sense. But deciding isn't as easy as you might think - who knows where tax rates will be tomorrow? Even calculating the actual tax you'll pay to convert today is harder than it looks. You can't just assume that you'll pay your regular marginal rate. That's because you take the full amount you convert and add it to the rest of your income. And that has ripple effects to consider - like phasing out itemized deductions and personal exemptions, subjecting Social Security benefits to tax, and even pushing yourself into a higher tax bracket!
Bottom line: this is not a do-it-yourself calculation! So if you're curious about this opportunity at all, don't make an expensive mistake you can avoid. Call us - at 217-241-4597.
Under current law, there are two kinds of IRAs. The regular IRA lets you deduct contributions today, and defer tax on your funds until you withdraw them. The Roth IRA, on the other hand, offers no up-front deduction, but lets you take money tax-free during retirement. And there are no required minimum distributions as with regular IRAs.
Today you can convert your regular IRA to a Roth IRA, if your income is under $100,000. Starting in 2010, however, you can do it regardless of how much you earn. What's the catch? You have to pay tax on the full amount you convert now.
If the tax you pay to convert today is less than the tax you would pay to withdraw the money tomorrow, it makes sense. But deciding isn't as easy as you might think - who knows where tax rates will be tomorrow? Even calculating the actual tax you'll pay to convert today is harder than it looks. You can't just assume that you'll pay your regular marginal rate. That's because you take the full amount you convert and add it to the rest of your income. And that has ripple effects to consider - like phasing out itemized deductions and personal exemptions, subjecting Social Security benefits to tax, and even pushing yourself into a higher tax bracket!
Bottom line: this is not a do-it-yourself calculation! So if you're curious about this opportunity at all, don't make an expensive mistake you can avoid. Call us - at 217-241-4597.
Year end tax planning and why Uncle Sam is a Scrooge when it comes to Christmas Bonuses
Sally Smith, was a smart businessperson, she knew the basics of year-end tax planning.
1. Postpone income to next year.
2. Pay as many expenses as possible this year.
3. Keep inventory level low.
4. If you are going to make a capital investment, do so before the end of the year.
5. Double check for missing deductions.
6. Invest in an IRA for similar type account.
Sally owns a retail store and faced the year end with her eyes wide open. Sally knew that a few strategies would pay big dividends on April 15. Here is what she did to reduce her tax liability:
Since Sally was operating her business on a cash basis and relied upon cash sales through her cash register, she did not have the opportunity to postpone much income. She has established a policy for many years to close her books on December 28, which gave her opportunity to defer three days of sales to next year.
Sally then reviewed her bills. She started to write out checks for her expenses. She wrote checks for all expenses due, even if some expenses were due in January. She dated her checks for December 28, 2009 to be sure that the expenses were recorded for this year on December's bookkeeping. Her checks written totaled to almost $10,000. Her one simple strategy, accelerating expenses meant that Sally saved over $4,000.00 in income tax this year.
Since you pay tax on your inventory at the end of the year, Sally knew that reducing her inventory to the lowest amount possible was important for her. First, she decided to review her inventory to see if she had things that have been gathering dust. She found items that in fact had been sitting around for more than three years. She decided to mark those items down and immediately started an inventory reduction sale for those items. She knew that the value of her inventory was based upon her costs of the items, not the selling price. She also knew that items that were partially used or supplies not for resale did not count as part of her inventory.
Sally had been debating whether to purchase a new computer for her business. The local computer store was offering a "six-months same as cash" financing offer for the purchase of new computers. Sally decided to purchase the computer now, electing to take advantage of the special financing offer. She knew that she could deduct the full purchase price of the computer on her tax return, even though she did not pay for it right away. When you purchase something using a credit card or borrow the money, as Sally did, you get to deduct the amount when you purchase the item. The $3,000 computer saved Sally $1,200 in income tax.
As part of her year-end review Sally took a minute to see if perhaps she has recorded all her business expenses as part of her monthly record keeping. She knew that the credit card that she had been using exclusively for business had some interest payments that were not included. She made a note to record her year-end statement from her credit card company to make sure that it was included as interest paid on her year-end documents to her accountant. In addition, she decided to review her automobile mileage and other receipts for expenses that she might not have had for her business and had a chance to record in her monthly record keeping.
Sally also knew that she had time to make her annual IRA contribution until April 15 of next year. She decided not to make it till next April. She also made a note to talk to us about Roth IRA accounts and analyze the different options available to her. One of her options was a self-employed Pension Plan commonly called a SEP. IRA's. SEP. IRA's do not have to be opened or funded until the due date of your return. That means that Sally doesn't have to open or make a contribution to a SEP. IRA for the 2009 tax year until April 15, 2010. She can also contribute a larger amount to her SEP. IRA than she could to her regular IRA. However, she was reluctant to open one because she also knew that she would have to contribute an amount to her full time employees. She made a note to ask her accountant what that contribution would be and what her resultant tax savings would equal. She also thought her accountant might have ideas on how to "cushion" the employee's contribution issue.
Sally knew that her year end review of her tax situation saved her almost $7,000 this year. She made a note to review her year end information before we prepared her tax return in 2009.
SAVE TAXES...REMEMBER BEFORE JANUARY 1, 2010
1) Postpone income to next year.
2) Pay as many expenses as possible this year, even if you do not send the checks off till January, be sure to write the checks for the expenses.
3) Keep inventory at a low level.
4) If you are going to make a capital investment, do so before the end of the year.
5) Double check for missing deductions.
6) Invest in an IRA or similar type account.
Christmas bonuses are taxable wages for your employees with two exceptions. Uncle Sam is a Scrooge when it comes to Christmas bonuses. Of course the rules are not black or white. Exceptions apply. If you choose to pay your employees a Christmas bonus, you are required to withhold Social Security, Medicare, Federal and Illinois State income taxes. In addition, you are required to pay both Federal and State Unemployment taxes on Christmas bonus money paid to your employees. You are however able to exclude the above mentioned payroll tax liability if your cash Christmas bonus does not exceed $25.00 per employee. Any cash payments over the $25.00 amount are taxable wages for employment tax purposes. You can also avoid any payroll tax liability if you give your employees a non-cash gift of $75.00 or less.
1. Postpone income to next year.
2. Pay as many expenses as possible this year.
3. Keep inventory level low.
4. If you are going to make a capital investment, do so before the end of the year.
5. Double check for missing deductions.
6. Invest in an IRA for similar type account.
Sally owns a retail store and faced the year end with her eyes wide open. Sally knew that a few strategies would pay big dividends on April 15. Here is what she did to reduce her tax liability:
Since Sally was operating her business on a cash basis and relied upon cash sales through her cash register, she did not have the opportunity to postpone much income. She has established a policy for many years to close her books on December 28, which gave her opportunity to defer three days of sales to next year.
Sally then reviewed her bills. She started to write out checks for her expenses. She wrote checks for all expenses due, even if some expenses were due in January. She dated her checks for December 28, 2009 to be sure that the expenses were recorded for this year on December's bookkeeping. Her checks written totaled to almost $10,000. Her one simple strategy, accelerating expenses meant that Sally saved over $4,000.00 in income tax this year.
Since you pay tax on your inventory at the end of the year, Sally knew that reducing her inventory to the lowest amount possible was important for her. First, she decided to review her inventory to see if she had things that have been gathering dust. She found items that in fact had been sitting around for more than three years. She decided to mark those items down and immediately started an inventory reduction sale for those items. She knew that the value of her inventory was based upon her costs of the items, not the selling price. She also knew that items that were partially used or supplies not for resale did not count as part of her inventory.
Sally had been debating whether to purchase a new computer for her business. The local computer store was offering a "six-months same as cash" financing offer for the purchase of new computers. Sally decided to purchase the computer now, electing to take advantage of the special financing offer. She knew that she could deduct the full purchase price of the computer on her tax return, even though she did not pay for it right away. When you purchase something using a credit card or borrow the money, as Sally did, you get to deduct the amount when you purchase the item. The $3,000 computer saved Sally $1,200 in income tax.
As part of her year-end review Sally took a minute to see if perhaps she has recorded all her business expenses as part of her monthly record keeping. She knew that the credit card that she had been using exclusively for business had some interest payments that were not included. She made a note to record her year-end statement from her credit card company to make sure that it was included as interest paid on her year-end documents to her accountant. In addition, she decided to review her automobile mileage and other receipts for expenses that she might not have had for her business and had a chance to record in her monthly record keeping.
Sally also knew that she had time to make her annual IRA contribution until April 15 of next year. She decided not to make it till next April. She also made a note to talk to us about Roth IRA accounts and analyze the different options available to her. One of her options was a self-employed Pension Plan commonly called a SEP. IRA's. SEP. IRA's do not have to be opened or funded until the due date of your return. That means that Sally doesn't have to open or make a contribution to a SEP. IRA for the 2009 tax year until April 15, 2010. She can also contribute a larger amount to her SEP. IRA than she could to her regular IRA. However, she was reluctant to open one because she also knew that she would have to contribute an amount to her full time employees. She made a note to ask her accountant what that contribution would be and what her resultant tax savings would equal. She also thought her accountant might have ideas on how to "cushion" the employee's contribution issue.
Sally knew that her year end review of her tax situation saved her almost $7,000 this year. She made a note to review her year end information before we prepared her tax return in 2009.
SAVE TAXES...REMEMBER BEFORE JANUARY 1, 2010
1) Postpone income to next year.
2) Pay as many expenses as possible this year, even if you do not send the checks off till January, be sure to write the checks for the expenses.
3) Keep inventory at a low level.
4) If you are going to make a capital investment, do so before the end of the year.
5) Double check for missing deductions.
6) Invest in an IRA or similar type account.
Christmas bonuses are taxable wages for your employees with two exceptions. Uncle Sam is a Scrooge when it comes to Christmas bonuses. Of course the rules are not black or white. Exceptions apply. If you choose to pay your employees a Christmas bonus, you are required to withhold Social Security, Medicare, Federal and Illinois State income taxes. In addition, you are required to pay both Federal and State Unemployment taxes on Christmas bonus money paid to your employees. You are however able to exclude the above mentioned payroll tax liability if your cash Christmas bonus does not exceed $25.00 per employee. Any cash payments over the $25.00 amount are taxable wages for employment tax purposes. You can also avoid any payroll tax liability if you give your employees a non-cash gift of $75.00 or less.
Thursday, November 12, 2009
Escape the tyrany of your acounting payroll software.
Never pay for a Quick Books update again. Don't even think about
We can help.
Our system is half the price of any other payroll processor. Including Quickbooks.
Easier to use. Extremely safe. No set up fee.
Direct deposits are free. Quickbooks aren't
Relax, payroll taxes are a snap and guaranteed to be accurate.
Access you payroll information anywhere, anytime, from any computer.
And the most important feature that no one else can offer, the safe warm feeling knowing that your payroll and payroll taxes are done right.
We are right behind you, looking over your shoulder, making sure everything is done right.
We can help.
Our system is half the price of any other payroll processor. Including Quickbooks.
Easier to use. Extremely safe. No set up fee.
Direct deposits are free. Quickbooks aren't
Relax, payroll taxes are a snap and guaranteed to be accurate.
Access you payroll information anywhere, anytime, from any computer.
And the most important feature that no one else can offer, the safe warm feeling knowing that your payroll and payroll taxes are done right.
We are right behind you, looking over your shoulder, making sure everything is done right.
Why is owning a business very similar to playing Betti the Yeti slot machine?
True story.
My wife and I made a day trip to St Louis yesterday and one of our stops was the Ameristar Casino.
A woman yesterday sat down next to my wife and started playing Betti the Yetti slot machine. My wife didn't seem to make much of the situation, the woman only played for a few minutes and then she stopped playing, reached into her purse for her wallet, looked at my wife and said,
"I just fed $100.00 into this machine and got paid &*(#!"
Understand this, Betti the Yetti is a penny slot with a minimum bet of 40 cents and a maximum of maybe $2.00. So $100 buys you a lot of spins.
"Do you know what she did next?" my wife asked me. And without missing a beat she answered her own question, "Put another $100.00 into the machine."
Owning a small business is very similar to gambling on a Betti the Yeti slot machine at times. You put your own money into it at times, not knowing if you are ever going to get a reward. Even a small reward.
However, there is one thing you can do right now, that is guaranteed to reward you each and every time.
Can you guess what it is?
More in a followup post.
My wife and I made a day trip to St Louis yesterday and one of our stops was the Ameristar Casino.
A woman yesterday sat down next to my wife and started playing Betti the Yetti slot machine. My wife didn't seem to make much of the situation, the woman only played for a few minutes and then she stopped playing, reached into her purse for her wallet, looked at my wife and said,
"I just fed $100.00 into this machine and got paid &*(#!"
Understand this, Betti the Yetti is a penny slot with a minimum bet of 40 cents and a maximum of maybe $2.00. So $100 buys you a lot of spins.
"Do you know what she did next?" my wife asked me. And without missing a beat she answered her own question, "Put another $100.00 into the machine."
Owning a small business is very similar to gambling on a Betti the Yeti slot machine at times. You put your own money into it at times, not knowing if you are ever going to get a reward. Even a small reward.
However, there is one thing you can do right now, that is guaranteed to reward you each and every time.
Can you guess what it is?
More in a followup post.
Thursday, November 5, 2009
10 Ways to lower your taxes now
From MSN money:
A reader wrote me recently: "I have discovered only three ways to cut my taxes: reduce income, give more to charity and incur major medical expenses. Is there anything else I can do?"
The reader has the right idea: Anything that reduces your income or maximizes your credits and deductions will lower your tax bill.
Click the above link to read more.
A reader wrote me recently: "I have discovered only three ways to cut my taxes: reduce income, give more to charity and incur major medical expenses. Is there anything else I can do?"
The reader has the right idea: Anything that reduces your income or maximizes your credits and deductions will lower your tax bill.
Click the above link to read more.
Monday, November 2, 2009
How I saved my client hundreds of tax dollars.....Free Breakfast seminar
10 Most Expensive Tax Mistakes That Cost Business Owners Thousands
If you’re like most business owners, you waste thousands of dollars every year in taxes you don’t need to pay. Attend our entertaining, fast-paced seminar to learn how to take advantage of these strategies and more:
- The single most expensive tax mistake of all
- How to slash your audit risk (Fly under the IRS radar!)
- The single most powerful strategy for most business owners
- Retirement savings strategies for every business
- How to make the most of meals, entertainment, and gifts
- The “mileage allowance” mistakes that cost thousands!
- Write off your family medical bills as a business expense
- How to deduct your kids’ private school and college tuition
Your invited
Two upcoming seminar options available:
Tuesday, November 10th, 8 am
— OR —
Thursday, November 12th, 8 am
Four Seasons Family Restaurant
(Next to Country Market)
1069 Jason Place
Chatham, IL 62629
Space is limited!
Contact us today to reserve a seat!!
RSVP
Phone: (217) 241-4567
email: taxpartner@gmail.com
Let us help you:
Save on taxes
Increase sales
Improve cash flow
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