Tax Preparation Fees on the rise:

According to a survey reported in accounting today, the average fee to prepare taxes is going up this year:


Tax practitioners will be charging more this year for tax preparation, according to an annual survey by the National Society of Accountants.

Taxpayers can expect to pay an average of $261 for an itemized Form 1040 with Schedule A and a state tax return, the survey found, compared to the $246 reported in last year’s survey.
The fee for non-itemized return will also rise, to $152 for a Form 1040 and state return, against $143 last year.

The IRS says it takes an average of four hours just to complete and submit a Form 1040,” says NSA executive vice president John Ams. “Add at least another hour if you also have to complete a state return. You have to ask, ‘How much is your time worth?’”



Read more by clicking on this link.

Is a Christmas party for my employees fully deductible?

Christmas parties are 100% tax deductible, straight down to the food & decorations, so party on!


According to the IRS there is no limitation in the amount of entertainment for Christmas Parties.

Expenses for recreational, social, or similar activities (including facilities) primarily for the benefit of employees (other than employees who are officers, shareholders or other owners, or highly compensated employees).  

Therefore an employee Christmas party is fully deductible.

TAX ADVICE DISCLAIMER: In accordance with IRS Circular 230, any tax advice included in this communication, including attachments, is not intended or written to be used, and cannot be used by you or any other person or entity, for the purpose of avoiding penalties that may be imposed under the Internal Revenue Code or applicable state or local tax law provisions, nor may any such advice be used to promote, market or recommend to another party any transaction or matter addressed within this communication. If you would like such advice, please contact us.

                            

New Client Manual Online

Thank you.

Just like Indiana Jones and the Last Crusade you have chosen...wisely.

I would like to take this opportunity to review with you our services, what to expect from us, what we expect from you, how we are paid for our services, and other important information that you need.

 

First A Word About Your Tax Guys.

• We have been in the tax preparation business for more than 30 years.  Yes we have been doing this stuff for a long time.  And that is good for you.  We have experience.  We have really know what we are doing.  And we do it very efficiently.  The IRS can be by design a very frightening organization. We call it institutional power by design.  We believe the reason that people hire us is that we can not only help you save taxes, but more importantly our experience helps you when things go bad.  We call it the safe warm feeling knowing that someone is looking over your shoulder making sure things are done right. Having someone to call when you get that brown envelope from the IRS is very important to our clients.  This is a very good thing for you.

• We are licensed by the Internal Revenue Service.  That means that we can represent you in all facets of dealing with the IRS.  If you have a problem, we have your back.  This license also allows us to deal with state and local taxing entities.  

• We deal with all sorts of clients.  We have a very diverse client base.  That means that we can draw on their collective experiences to help pass on to you the things that make businesses successful and warn you about things that don’t work.

• We prepare lots of income taxes.  And because we are very efficient, we can pass the savings on to you.  You can count on us to prepare your taxes accurately, efficiently, and stand behind the work we do.

Our guarantee.  

• ASSISTANCE: We are available year-round to answer any tax questions you may have.

• ACCURACY: Thorough employee training and double-checking of every return safeguards the accuracy of your return. However, if we make an error, we will correct our error, and reimburse you for any actual penalties and interest you incur.

• SATISFACTION: Your satisfaction is guaranteed. We will explain how your tax return was prepared and assist you in IRS matters. Your satisfaction is our number one goal.

• FEES:  You will know the fee to prepare your return before we prepare the return.  All you have to do is ask

Payroll Service

Several years ago the Internal Revenue Service and the Illinois Department of Revenue have mandated that with just a few exceptions, all payroll related payments must be paid electronically.  We have spent significant time upgrading our payroll system to meet these requirements.

We wanted to make sure that the information is available to you on a 24 hour basis.  We made sure that the systems met all of the new requirements.  We also made sure that the system is relatively simple to use.  We believe that the paycycle systems meets those needs.  In addition, paycycle will download your payroll information directly into your own Quickbooks accounting system.   

For the last four years we have been using the paycycle online payroll system.  You can access your companies’ information any time at the web site managepayroll.com.  The system requires you to have a username and a password.  At the time we created your company we assigned you a username and a temporary password.  The first time you access the system you sign on to the system you will be prompted to create a permanent password.  Although we have access to your information, we do not have access to your password.  If at anytime you lose or forgot your password, please call our office.  We will reset the password.

Emails we have emails.

You will receive emails from our office on a regular basis.  They include a variety of subjects including pending payroll periods, taxes due advisories, confirmation that a payment has been made, and whether the forms filed have been accepted/transmitted by the various government agencies. We send these emails to you to make sure that you are informed about what is happening, specifically we are going to debit your business checking account to pay your various tax liabilities.  Some clients are take charge.  They use the system to calculate and write their companies’ payroll checks.  Some clients use the system to pay their own personal tax liability.  Some clients have learned to ignore the emails.  In all cases we have your back. It is our office’s responsibility to make sure that your taxes are paid on a timely basis. Each month we will send you via snail mail a written confirmation of when, and how much taxes will be debited from your checking account.  In addition we write a monthly client newsletter geared toward the issues that small business owners face on a daily basis.  Our focus is on saving taxes, marketing and increasing cash flow.

Paying for our service.

Your checking account will be debited on a monthly basis for our agreed upon fee.  The debit will occur generally between the 5th and 10th of each month.  We will mail you an advice of the debit prior to that date.

Important stuff.

It is your responsibility to forward to us any notices or tax returns you receive immediately.  It is important to remember that the tax filing and paying systems is not a perfect one.  As the demands for more tax forms to be filed with the IRS, the system continues to show some cracks. Usually we can respond and remedy the situation.  It is not unusual for an occasional notice to be received by our clients. In other words, even if you are diligent in filing and paying your taxes, you will receive a notice. Occasionally the notice will require additional work, beyond the scope of our engagement. If this is the case, we will discuss with you what appears to be the best solution to solve the problem, as well as, our fee to continue solving the problem.    

Recordkeeping and your business.

I have to tell you how amazed I was to find people starting to organize last years’ figures, some that were incurred more than 19 months ago.  I don’t think I can remember what I spent last week let alone more than a whole year and an half ago.  In the old days we built our business on bookkeeping....an era before desktop computers and the internet.  Nowadays the computer has revolutionized your small business recordkeeping.  Here are three options you can try to make things a little easier.  Don’t struggle.  Don’t miss out valuable deductions.  Make record keeping part of your daily routine.

1.  Go online. Free advertiser supported online accounting software is available.  Probably the most popular software online is Wave.  Here is a link to there website http://waveaccounting.com/.  It is easy. Fairly comprehensive. Working with your tax guy is easy, too. Just invite us as a Guest Collaborator and we can both see your data, securely, in real time.  Perhaps the best part is the automatic download your bank account into your accounting records limiting the amount of data input you have to do. Advantages? It is free.  It is intuitive.  No need to change the way you are doing business today.  We like wave accounting so much we became a Wave accounting pro advisor.

2.  Consider a stand alone accounting software.  We recommend the Quickbooks clone Avanquest Bookkeeper.  This program offers more bang for the bucks than the 800 pound elephant Quickbooks.  It is $39.95.  What do you get for your money?  A fully functioning accounting software that includes credit card processing for no additional charge.  

3.  The ubiquitous Quickbooks.  It is expensive.  Requires yearly updates.  Currently the payroll update alone is $400.00.  And it seems that you are constantly bombarded with additional add-ons to buy.  However, the accounting community has embraced it as the defacto standard that our client’s are using to keep track of their records. We work every day with Quickbooks.

I know that there are other methods and systems.  I have always taken the position that what works for you works for me.  However, I suggest that you give the Wave accounting folks a try first and help you not miss all those deductions next year.

We all know that car and truck expenses for trips on behalf of your trade or business are a deductible business expense.  Let’s explore the crazy tax world of correctly deducting your vehicle expenses. This discussion is courtesy of our Tax Coach software system.

Your first step involves calculating your Business Use Percentage (BUP) for your vehicle. The IRS divides mileage into three categories: 1) business; 2) commuting; and 3) personal. Ordinary commuting and personal trips are nondeductible. Trips from home to your first business stop and trips from your last business stop to home are personal. (Daily trips to the bank, post office, and similar stops where you perform no service don’t qualify.)

Travel between temporary business stops is deductible. So, for example, if you leave home, make six business stops, meet a prospect for dinner, then drive home, your mileage between your first stop and the restaurant is deductible. However, if you have a regular business stop (one that you make at least 8 to 10 times in a six-month period) that you expect to last less than a year, you can count those as business miles, too. If home is your principal place of business, then all business trips are deductible.

Once you’ve calculated your BUP, you have two ways to calculate your deduction:

1. The mileage allowance is 56.5 cents/mile (2013) plus parking, tolls, and your BUP of interest on your car loan and state and local personal property tax on the vehicle. The allowance for charitable use of the vehicle is capped at just 14 cents/mile, and for medical and moving use, 24 cents/mile.

1. With “actual expenses,” deduct your BUP of all expenses:
• Depreciation and interest (purchased vehicles)
• Lease payments (leased vehicles)
• Insurance
• Gasoline, oil, and car washes
• Tires, maintenance, repairs
• Licenses, tags, and personal property tax
• Parking and tolls

Don’t assume that easier record keeping justifies settling for the “one size fits all” allowance. It’s the same for every vehicle, no matter how big or expensive. And the wrong choice can cost you thousands. The American Automobile Association ("AAA") estimates that in 2010 actual costs per mile exceed the IRS flat rate in almost all categories of vehicles and driving habits, at a gasoline cost of $2.88/gallon remember those days.

If you own rather than lease your car, you can switch from the allowance to actual expenses. You'll have to use straight-line, rather than accelerated depreciation. You can’t go the other direction, switching from actual expenses to the allowance, if you’ve claimed any first-year expensing or accelerated depreciation.

The IRS approves four methods to track business miles. All of them require “adequate records or other sufficient evidence” to support business use. This means logging mileage at least weekly and keeping receipts for all expenses over $75.

1. “Brute Force.” Record every business mile for the year. Divide by the year’s total miles to calculate BUP. (If you use more than one car for business, this is the method you have to use.)
2. “90 days.” Record business miles for a “typical” 90-day period. Calculate BUP for that period, and use it for the entire year.
3. “First Week.” Record business miles for the first week of each month. Calculate BUP and use it for the entire year.
4. “Simplified.” Record starting and ending mileage for a 90-day period. Record personal and commuting miles for that period, and assume all the rest are for business. Calculate BUP and use it for the entire year.

Clear as mud.  We advocate a third system that seems to work for most clients.  Actual expenses with a clear policy that states that personal use of the vehicle is not allowed with the exception of commuting to and from your place of business.  You will have to pay taxes on the “implied income” derived for the commuting portion of the vehicle. This system only works if you have another vehicle for personal use.

Owning a small business is similar to juggling.  It just seems that we are always trying to keep five balls in the air at the same time, doing our best to keep one from falling. We are here to help. We encourage to take advantage of 30 plus years of experience working with small businesses just like you.  When a problem becomes unsolvable, call us.  Chances are we have had experience dealing with something that may seem too big to conquer right now.

No matter what the problems is, we continue to offer to you unlimited free telephone assistance, no matter what your client service level is, 52 weeks a year.  No calling customer service call centers.  No extra charge meters. No need to worry.  A trained experienced professional is ready, willing, and able to offer assistance and answer your questions. We demonstrate and deliver value to our clients every day.