14Apr 2010 by Nancy Smyth

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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12Apr 2010 by Nancy Smyth

QuickBooks Tip – Tracking Two Different Sales Tax Amounts

Construction News, Sales Tax Tracking
A customer wrote to ask: In addition to needing to charge a fixed percentage (6%) of Sales Tax to each customer, I am also required to charge a 1 1/2% Discretionary Tax on the first $5,000.00 of each job/project/total Estimate.  How do I accomplish this using QuickBooks? For the most part, QuickBooks does a good job of tracking taxable and non-taxable sales -- even taxable and non-taxable items on the same invoice.  However, when it comes to tracking sales tax with a fixed rate on a fixed dollar amount of an entire sale -- in addition to sales tax on the entire sale......well it fails miserably and causes a lot of frustration for QuickBooks users who encounter a situation of this nature. Try this workaround from the March 2010 edition…
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05Apr 2010 by Nancy Smyth

IRS & State Auditors Crack Down on Independent Contractors

IRS Information
While looking for a way to increase tax revenues, the IRS and many state governments are cracking down on how companies classify their workers.  If your business uses independent contractors you should get ready for new scrutiny! You may wonder - "What's the big deal, so what if I use independent contractors"? Well, it's like this.......when a you as a business owner report payments made to independent contractors - you report those wages using a 1099 form.  When payments are reported using a 1099 form, you as the business owner aren't required to pay unemployment insurance, worker's compensation insurance OR PAYROLL TAXES on that money. Hiring independent contractors isn't against the law, however, there are very strict rules about WHO/WHAT an independent contractor is and often times what you may…
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21Jan 2010 by Nancy Smyth

IRS to demand new reconciliations

IRS Information
The IRS plans to require credit card and other firms that process transactions to report gross network transactions to participating merchants—and the IRS—annually starting next year. The IRS will use the reports as it does W-2s and 1099s. Thus, a company whose gross receipts differ from those in these reports will be audited or asked to explain the differences. That means each business  will have to monitor and reconcile the reports and, if there are errors, request corrected statements. [IR-2009-106; REG-139255-08, Income Tax Regs].Stay tuned for further updates as they become available.
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28Sep 2009 by Nancy Smyth

Review-QuickBooks 2010, Easier Registration with possible “glitch”

QuickBooks 2010 - What's New?, QuickBooks Corner
QuickBooks 2010 registration seems much more automated, with as much as possible being handled online.  In most cases, this should mean that users who upgrade will have to input less data, which will save them time and trouble. However, there's a potential problem that can occur in Steps 3-5 that you need to watch out for.  If you begin registration and have a file open, the data in the file will automatically populate the registration fields. If the open file doesn't contain the information you need to use for registration this could be troublesome.  I had a "test file open when I began the registration process".  So in MOST circumstances this should not be a problem. If you notice that this is happening onscreen, delete the incorrect data and then fill in the correct data. …
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02Jun 2009 by Nancy Smyth

Summer Hiring – Rules for 2009

Construction News, IRS Information, Payroll Tips
From the May 2009 issue of the General Ledger. Firms owned by parents that employ their children. Owners’ children can work for the firm, regardless of age, number of hours worked or time of day—if the parent(s) own 100% of the business. Children under 16 cannot do hazardous work such as use lawn mowers, sewing machines, etc., work where food is cooked, or work near flammable or hazardous material. Minimum wage: 100% of owners hiring only immediate family members need not pay the minimum wage. But if owners regularly employ nonfamily members, they must pay even family members the minimum wage. Owners’ children under 21: Wages are exempt from FUTA. Owners’ children under 18: Wages are exempt from FICA—if the parents are sole owners or sole partners—but FIT must be…
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28Apr 2009 by Nancy Smyth

White House Delays rule requiring electronic verification

Construction News, IRS Information, Payroll Tips
{from the American City Business Journals/Denver on 4/27/09} Federal contractors will now have until June 30 before they have to use the E-Verify system to check the eligibility of their employees to work in the U.S. The Obama administration postponed the date the electronic verification rule would apply to government contractors and subcontractors in order to have more time to review it, according to U.S. Citizenship and Immigration Services. The rule was issued by the Bush administration in November. Business groups have filed a lawsuit challenging the rule, contending the government doesn't have the authority to make use of E-Verify mandatory. Congress created the E-Verify system as a voluntary program, they noted. More than 117,000 employers now use the Web-based system, which compares information supplied by employees with government records.…
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10Feb 2009 by Nancy Smyth

QuickBooks Client Data Review Tool – Not Just for Accountants

Be A Better Bookkeeper, General QuickBooks News
The "QuickBooks Client Data Review Tool", introduced and available directly from the Accountant Menu in both the QuickBooks Premier Accountant Edition 2009 and the Enterprise Solutions Accountant Edition 9.0 isn't just for Accountants - (in my opinion, anyway).NOTE: This feature is also available in QuickBooks Premier Accountant Editions 2010 and Enterprise Solutions Accountant Edition 10.0. As a business owner with multiple employee's working with your company data file, you should have the ability to "know" what these employees are doing and how they are recording the daily transactions of your company. As a business owner, you too can access an use the QuickBooks  "Client Data Review Tool" and take ownership of your company transactions that make up your QuickBooks company file.  The QuickBooks Client Data Review Tool can be "enabled"…
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29Jan 2009 by Nancy Smyth

Intuit Launches “Small Business United” program

QuickBooks Corner
Intuit has launched a "Small Business Untied" program which provides Small Business Solutions to Help Entrepreneurs Thrive. On the heels of announcements by other companies of massive layoffs, Intuit is doing it's part to help stimulate the economy be offering over $350,000.00 in small business grants and free software. Intuit's Small Business United program is a multi-phase initiative that will bring a much needed stimulus package to more than 27 million small businesses in the country. This stimulus package includes more than $350,000.00 in small business grants and donations, plus free business tolls and products from Intuit. For additional information about the Small Business United program, visit https://smallbusiness.intuit.com/
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