Another Independent Contractor Red Flag Issue Q&A

IRS Information, Payroll Tips
A nonexempt employee working a second job as an independent contractor for your organization is a red flag for the IRS, the DOL, and state agencies. So, make sure that your employee’s second job really meets the independent contractor criteria or be prepared to pay overtime. -------------------------------------------------------------- Question: We have a nonexempt employee who has offered to do landscaping work outside of his normal 40-hour week for our organization. Can we treat him as an independent contractor when he is doing this work? We would normally hire an outside company for landscaping. Answer: If the employee’s landscaping job meets the criteria for an independent contractor job, then you may classify him as such. If he does not meet the criteria, however, any additional work that he performs for your organization…
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Top 10 Tuesday #QuickBooks Tips from Around the Web-4/19/2011

News You Can Use
Top 10 Tuesday features 10 of our favorite tips from around the web. This week's favorites include: Microsoft Demo:  Create and use an e-mail template in Outlook 2007 Top Notch Bookkeeping The IRS May Hold You Liable for 941 Payments AccountingWeb Senate repeals 1099 provision; bill goes to President Obama for Signature Obama signs repeal of expanded 1099 requirements Scott Gregory How Do I Remove the Intuit Payment Network Stuff from My Invoices? QuickBooks & Beyond Intuit Statement Write Update Long for Success Top 10 QuickBooks Technical Support Questions QuickBooks and Your Business How to Restrict User Access in QuickBooks? The Contractor's Perspective The Small Business Jobs Act raises the stakes for fraudulent small business Intuit Small Business Blog 10 of the Best, Boldest, and Most Outrageous Tax Deductions Ever…
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Freebie Friday – Your QuickBooks file, the IRS & YOU eBook

Be A Better Bookkeeper, Free & Fee-Based QuickBooks eBooks, IRS Information
Oh sweet Friday - sometimes you come way to fast and other times not fast enough! Yup, it's time for "Friday eBook" here on the QuickBooks for Contractors blog. This week, I confess, I took a shortcut and turned our popular series "Your QuickBooks file, the IRS & You" and turned it into an eBook and called it good!  Friday's come too fast for me, in terms of getting things done (I do just about all of my blogging at night, early in the morning, or on the weekend otherwise I would never get any real work done during the day) - so I hope you will excuse this shortcut on my part. One of the reasons that I decided to turn it into an eBook is so that you…
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Top 10 Tuesday QuickBooks Tips From Around the Web – 3/15/2011

News You Can Use
We hope you enjoyed the debut of Top 10 Tuesday, here on the QuickBooks for Contractors blog, last week! Each Tuesday we will post our favorite QuickBooks and business tips that we found on the web the previous week – so today we’ll be posting our favorite tips for the week of March 7 through the 11th. This weeks Top 10 favorites are from: One Hour Bookkeeper: One SBO’s Tale of Bookkeeper Theft Diary of a Bad, Bad Bookkeeper:  Men Suck! CPA Site Solutions: What Color Palette Is Right for Your CPA Website?   The Bottom Line: QuickBooks Tutorial – Accounting for Equipment Loans (on YouTube) Top Notch Bookkeeping: Sanity During Tax Season - great advice for all year long!   Business-Keepers Consulting: Backing Up In QuickBooks – also includes…
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Create a QuickBooks External Accountant User For An IRS Audit

Be A Better Bookkeeper, General QuickBooks News, IRS Information
Giving your QuickBooks company data to an IRS Auditor is almost like inviting a stranger into your home - you don't know what they will do, and at this point in time, I haven't found any information on exactly what an Auditor will look for or what they will do once they do get their hands on your data file. To be honest, I don't even know if they are required to return your QuickBooks (or Peachtree) data file to you once they are done.  I do have to assume that they are required to do so, but you never know........... Hopefully, you will follow the suggestions outlined in An IRS Audit and They Want Your QuickBooks File - Best Practices article and provide a data file that ONLY contains…
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Your QuickBooks Company Data File, the IRS and You

Be A Better Bookkeeper, General QuickBooks News, IRS Information, QuickBooks Setup & Cleanup
Yes, it's true.  The IRS can *LEGALLY request a backup of your QuickBooks (or Peachtree) company data file if you are being audited. BACKGROUND: In 2010, the IRS purchased somewhere between 1,500 and 2,000 licenses for the QuickBooks 2010 Premier Accountant Edition from an ISP (Inuit Solutions Provider) and not directly from Intuit as it is made to look in announcements (SEE NOTE BELOW). Approximately 1,100 agents were trained to utilize QuickBooks and these agents have been instructed to obtain a copy of the taxpayer's data base for the year under examination ONLY when it is necessary.  This method of examination of taxpayer records will not be used in all cases -- however, it will be up to the examiner. When requested, the electronic files should be provided on a…
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QuickBooks Tips-Year End Tasks for Filing Taxes; 1099’s

Vendors & Accounts Payable
The end of the year always adds even more tasks to your already busy schedule, and sometimes it is simply overwhelming and I’ve often been asked – “What do I need to do?” Intuit has built a very good “QuickBooks Year-End Guide/Checklist” and it’s included right in your QuickBooks program by going to the Help Menu and choosing Year-End Guide.  Over the next few days, we’ll cover each topic listed in the Year-End Guide, and offer some additional tips on each of the three sections: Tasks to prepare for filing taxes, Tasks to do if you use subcontractors, Tasks to do if you have employees and some Tips for the upcoming year. Tasks to do if you use subcontractors Ensure that 1099 info is correct – the IRS requires that…
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Straight from the IRS – Social Security Tax Reduced to 4.2%

IRS Information, Payroll Tips
12/17/2010 I just received the following email which is of interest to ALL employers and payroll personnel. Payroll Tax Cut to Boots Take-Home Pay for Most Workers; New Withholding Details Now Available on IRS.gov WASHINGTON - The Internal Revenue Service today released instruction to help employers implement the 2011 cut in payroll taxes, along with the new income-tax withholding tables that employers will use during 2011. Millions of workers will see their take-home pay rise during 2011 because the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 provides a two (2) percentage point payroll tax cut for employees, reducing their Social Security (FICA) tax withholding rate from 6.2% to 4.2% of wages paid.  This reduced Social Security withholding will have no effect on the employee's future Social…
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QuickBooks Bookkeeping Tips – Why Do I Need to Keep “Books”?

Be A Better Bookkeeper, General QuickBooks News, QuickBooks Setup & Cleanup
The primary purpose of using QuickBooks to keep books is to provide financial and management information in order for you to run your business, make sound business decisions, and to prepare your taxes. Most business owners are very worried about generating income; however, running a business involves a lot of other tasks.  You will need to invoice customers, record payments from customers, pay your own bills to outside vendors, perhaps manage inventory, and analyze your financial data to see where you need to focus your efforts next.  QuickBooks is a tool that you can use to automate the tasks you are already performing as a business owner or to set up a new business. Financial Management is the process of: Running your business Recording money coming in Recording money going…
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QuickBooks Tip Payroll Mistakes – It’s NOT As Easy As 1-2-3! Part 3

Payroll Tips
Payroll is an essential part of your business – not just a weekly, bi-weekly, or monthly annoyance.  Payroll is the primary way that employees are rewarded for good job performance and retained.  If you are issuing late or incorrect paychecks it can lead to dissatisfied, unmotivated workers – or worse.  It’s hard to keep good employees when a company gets payroll wrong. The relationship between employees and employers is highly regulated by the government and many of these regulations involve payroll.  There are literally hundreds of things that you have to know, as well as hundreds of mistakes that you can make.  As a result, the payroll process is much more complicated than anyone who has never done it can possibly know. The consequences of some mistakes can be more…
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IRS to Step up Audits of Sole Proprietors

IRS Information
From WebCPA The Internal Revenue Service plans to check for unfiled tax returns and look for unreported income from sole proprietors of small business during correspondence audits. Estimates by the IRS show that $68 billion of the $345 billion tax gap in 2001 was due to the underreporting of income by sole proprietors. The IRS conducted more than 5.1 million correspondence examinations between fiscal year 2004 and FY 2008 that recommended the IRS collect approximately $35 billion in additional taxes, according to a new report by the Treasury Inspector General for Tax Administration. For each tax return examined, a correspondence examination generated about $6,800 in recommended additional taxes. TIGTA found 129 audits where sole proprietors may have avoided tax and interest assessments totaling more than $1.7 million because the IRS…
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