Wednesday, September 6, 2017

Answers to Common Questions After You File Your Tax Return


Many taxpayers have questions after they file their tax returns. The IRS provides answers to many of them. These are a few of the most common.
* How can I check the status of my refund?
You can go online to check on your refund if it has been 24 hours since the IRS would have received your e-filed tax return or four weeks after you mailed your paper return. Go to www.irs.gov and click on “Where’s My Refund?” You will need your Social Security number, your filing status, and the amount of your tax refund.
* What records should I keep?
Keep receipts, canceled checks, or other substantiation for any deductions or credits you claimed. Also keep records that verify other items on your tax return (W-2s, 1099s, etc.). Keep a copy of the tax return, along with the supporting records, for seven years.
* What if I discover that I made a mistake on my return?
If you discover that you failed to report some income or claim a deduction or tax credit to which you are entitled, you can correct the error by filing an amended tax return using Form 1040X, Amended U.S. Individual Income Tax Return.
* What if my address changes after I file?
If you move or have an address change after filing your return, send Form 8822, Change of Address, to the IRS. You should also notify the Postal Service of your new address so that you’ll receive any refund you’re due or any notices sent by the IRS.
For answers to other tax questions you may have, give us a call.

Monday, September 4, 2017

Considering Paying for Your Child’s College Education?

Should you pay for your child’s college education? Or should your child find the financing? There are compelling arguments for both sides, but ultimately, your family needs to do what’s best for your financial situation. Most families find that a combination of both works the best.
Parents should pay.
Arguments in favor of shelling out your hard-earned cash for a son’s or daughter’s higher education can be compelling. For one thing, college is a very expensive proposition these days. A year of undergraduate study at a private university can easily top $30,000 and public in-state schools can run over $12,000. Of course, if your student decides to get an advanced degree or go to medical or law school, he or she can run up a bill exceeding the cost of your home mortgage. Advocates of this point of view ask, “Do you really want to saddle your kid with that kind of debt so early in life?”
They add that if your child ends up working to pay for college, that’s less time available for study and making friends. And, of course, friendships built in college can generate a wealth of opportunities for a future career. Also, by investing in tax-deferred 529 plans, parents can withdraw funds free from federal and some state income taxes when it’s time for college.
The child should take the responsibility.
Others argue that covering the cost of your child’s college education should not be your priority. After all, they reason, your kid has a lifetime to pay back student loans, and making loan payments can generate a positive credit history. Advocates of this position also argue that kids who have to pay for their own tuition, books, and living expenses learn responsibility and value the investment that college represents. They also point to available tuition reimbursement plans provided by some companies or the military service option as a way to get a college education without breaking the bank.
Those on this side of the debate often argue that 529 plans are overrated as a savings vehicle because investment options can be limited and tax rules are likely to change, undermining future tax benefits. Finally, they reason that a parent’s own retirement savings should take precedence over saving for a child’s education.
Making the decision.
Of course, your family’s dynamics, the importance you place on a college education, and your personal financial priorities will factor into this decision. If you’d like help looking at the pros and cons of this important issue, give us a call.

Wednesday, August 30, 2017

How To Cut Car Maintenance Costs


Insurance, fuel, loan interest, maintenance, repairs, depreciation – all the expenses associated with owning and driving an automobile can take a huge bite out of your family budget. Some of these are sunk costs. Because the money is already spent – the down payment to purchase your car, for example – such costs are irrelevant when budgeting for the future. But other costs of owning and operating a vehicle can be pared down substantially. Shopping around for a better insurance rate or discovering a station that sells cheaper gas may save hundreds of dollars over time. Being vigilant about routine maintenance is also a great way to reduce operating costs and avoid major repair bills.
To make a dent in your car maintenance budget, follow these five tips from the pros.
  • Read the owner’s manual. That little booklet in your glove box is full of detailed information about your car. It also includes a recommended maintenance schedule, which is more reliable than the sticker the auto shop attaches to your windshield after an oil change. If you’ve lost your owner’s manual, maintenance recommendations for your car are often available on websites such as www.carcare.org.
  • Shop around for repairs. Generally speaking, independent repair shops tend to charge less for repairs than dealerships. But be cautious. Ask family and friends for recommendations, and don’t be afraid to get several estimates. If possible, find a shop with at least one certified automobile technician.
  • Change your oil regularly. Depending on your car’s make and model, as well as driving conditions in your town, “regularly” will vary. Again, the owner’s manual should be your guide to determine how frequently to change lubrication fluids. How long an engine functions without major repairs is often directly correlated to how routinely the oil was replaced.
  • Use cruise control. In general, driving at a constant speed improves gas mileage. You’ll need fewer trips to the gas station if you keep an even pressure on the accelerator instead of lurching through town like a student driver.
  • Check your tires. Another key to better gas mileage is to keep your tires properly inflated. The recommended tire pressure of the vehicle’s original set of tires may be listed on the door jamb sticker. If you have purchased a new set of tires, the tire pressure may be different than the original set. Rotating the tires regularly will also help to evenly distribute wear and tear and may keep your shock absorbers from needing replacement as often.

Thursday, August 24, 2017

Tips On Tip Reporting

If you are like millions of taxpayers who work in the service industry, you may receive tips. The tax code is clear; if you receive tips you must report them as income. Some employers have systems to make this easy, while others do not. Here are some suggestions:
Think 1-2-3
Proper tip reporting has three components.
1. Keeping a daily tip record
2. Reporting your tips to your employer
3. Recording your tips on your income tax return
Recording tip activity
Per the IRS, you can keep your tips by either maintaining a tip diary or by saving documents that show your tips. If your employer does not provide you with an electronic form of a tip diary, you can always create your own. The IRS has one for your use in Form 4070A.
Reporting tips to an employer
You should record daily activity in your diary and then provide a monthly summary to your employer by the 10th of the following month. The report should include the following elements:
• Your name and address
• Your social security number
• Employer name and address
• Time period
• Date submitted to employer
• Your signature
• Tip information: cash tips received, credit/debit tips received, tips paid out to fellow workers, and net tips received
Paying taxes
With proper tracking and reporting of tip activity to your employer, filing your taxes on this income can be done without too much trouble. Here are some ideas.
Use your employer for reporting. With proper reporting, your employer can help ensure taxes are withheld and sent in for you. This can help you avoid a large tax bill at the end of the year.
Giving your employer funds. If your tips are a high portion of your income, your wages may not be sufficient to cover your taxes. To solve this, you can provide some of your tip income to your employer to pay a proper level of withholdings on your behalf.
Other things to note
Service charge or tip? If your employer adds a set tip amount to a bill (18 percent automatic tip for parties of six or more), this is not a tip, it is a service charge and is treated as wages.
Shared tips. Be careful reporting those tips you share with others. Clearly report your own net tip income to your employer. Do not report gross tips that you share with others on your tax return.
Know the penalty. If you do not report tips to your employer, the potential penalty is 50 percent of the social security and Medicare-related taxes you may owe on the unreported tips.
Allocated tips. Sometimes your employer pays you tips and reports them on your W-2 that are above what you reported to your employer. The good news? You receive additional income above your hourly wages. The bad news? You will owe income taxes AND social security and Medicare taxes on these tips.
Keeping track of tip income can be made manageable by developing a good reporting system. Please ask for help if you need assistance before it gets out of hand.
For more information, Visit: Accountants in New Jersey | Accountants in New Jersey | Bookkeeping services NJ

Tuesday, August 15, 2017

Do A Business Valuation When You’re Ready To Sell Your Company


Well before you’re ready to sell your company, you’ll want to determine its fair market value as a starting point for negotiations. Of course, obtaining a reasonably precise value for your business is often a complicated and time-consuming task. Accurate appraisals must weigh a variety of factors and incorporate numerous assumptions. The more precise the underlying numbers and suppositions, the more likely the appraiser’s determination of fair market value will reflect what a willing buyer would actually pay. Here are two questions an appraisal should address.
  • How does your business compare? If you’re operating a service business, your valuation will differ – often substantially – from a company involved in light manufacturing or retail. Buyers will expect a reasonable return on their investment, a return that is often represented as some form of earnings multiplier. For example, your business may be valued at three times projected earnings. Once determined, that number can be compared to businesses of similar size in your market. Of course, accurate valuations must compare apples to apples. “Earnings” must be defined. Should “earnings” include or exclude the owner’s pay, interest expense, depreciation, or taxes? A careful appraisal will also scrutinize the balance sheet. The basis for valuing tangible and intangible assets (including non-compete agreements) and liabilities (such as mortgages, installment loans, and accounts payable) should be clearly laid out – before the business is put on the block.
  • Will present trends continue? The future may be difficult to predict, but a careful analysis should be based on conservative projections, assumptions, and common sense. If, for example, the business is expected to retain skilled management and employees, buyers may be willing to pay a premium. If, on the other hand, the company is overly dependent on a few products or customers, potential buyers may be scared off. Or they may require concessions to mitigate perceived risk. Again, a careful appraisal will consider many such factors and value the business accordingly.
Remember: an appraisal is merely a starting point for negotiations. The more accurate the appraisal, the more likely the business will be priced correctly and potential buyers will be attracted. Unfortunately, determining the fair market value of a business may be fraught with missteps and faulty assumptions. For that reason, hiring a trained and objective professional is often a worthwhile investment.

For more information, Visit: Accountants in New Jersey | Bookkeeping services NJ | Small business accounting

Monday, August 7, 2017

Four Tips For Building An Emergency Fund

Planning for business emergencies is like buying insurance: you pay into an account and hope you’ll never have to use it. But life happens. Equipment breaks down. Electrical problems occur. Employees leave. Having money in the bank to cover those unexpected expenses can reduce stress and keep you from relying on credit cards and loans to keep your business afloat.
Here are four easy and effective ways to establish and maintain an emergency fund for your business.
1. Start small. Many financial planners advise setting aside enough money to cover at least six months of expenses. That’s a worthy goal. But for many businesses, it’s also a daunting task, an objective that will take years – not months – to achieve. So, set a realistic and achievable amount for your emergency fund, and then get in the habit of contributing regularly. Then don’t touch the account except for real emergencies. Leave it alone and it will grow.
2. Pump it up. When you get a surplus of revenue, tax refund, or windfall, consider using a portion of that money to bolster your emergency account. Fight the temptation to increase spending with every new dollar that comes along.
3. Make it automatic. With online banking, it’s easy to set up routine transfers from your businesses’ primary account to a separate savings account. Consider allocating a portion of each quarter’s earnings to an emergency fund. Consider establishing the account at a financial institution other than your regular bank. As the saying goes, “Out of sight, out of mind.” If the money never shows up in your regular checking account, you’ll be less likely to use it for everyday business expenses.
4. Slash expenses. Take a hard look at your budget and consider everything fair game: expensive client dinners, extravagant business parties or trips, and so on. You may find that a surprising number of dollars can be freed up and stashed away in savings. The key, of course, is to direct those savings – immediately, if possible – away from regular spending and into your emergency account.
If you’d like more ideas for setting financial goals or building up an emergency fund for your business, give us a call.

Wednesday, August 2, 2017

Don’t Assume It’s Correct, Just Because It’s The IRS

Quotes from actual IRS correspondence received by clients:
“Our records show we received a 1040Xfor the tax year listed above. We’re sorry but we cannot find it.”
“Our records show you owe a balance due of $0.00. If we do not receive it within 30 days, appropriate collection steps will be taken.”
“Payment is due on your account. Please submit payments on or before June 31 to avoid late payment penalties and interest.”
It’s pretty tough to pay a balance due of $0.00 or submit a payment on June 31 when June has only 30 days. The message should be clear. If you receive a notice from the IRS, don’t automatically assume it is correct and then submit a payment to make it go away. The same is true for errors in any state tax agency notices. They are often in error. So what should you do?
Stay calm. Try not to overreact to the correspondence. This is easier said than done, but remember, the IRS sends out millions of notices each year. The vast majority of these notices attempt to correct simple oversights or common filing errors.
Open the envelope. You’d be surprised how often clients are so stressed by receiving a letter from the IRS that they cannot bear to open the envelope. If you fall into this category, try to remember that the first step in making the problem go away is to open the correspondence.
Review the letter. Make sure you understand exactly what the IRS thinks needs to be changed and determine whether or not you agree with their findings. Unfortunately, the IRS rarely sends correspondence to correct an oversight in your favor, but it sometimes happens.
Respond in a timely manner. The correspondence received should be very clear about what action the IRS believes you should take and within what timeframe. Ignore this information at your own risk. Delays in responses could generate penalties and additional interest payments.
Get help. You are not alone. Getting assistance from someone who deals with this all the time makes going through the process much smoother.
Correct the IRS error. Once the problem is understood, a clearly written response with copies of documentation will cure most IRS correspondence errors. Often the error is due to the inability of the IRS computers to conduct a simple reporting match. Pointing the information out on your tax return might be all it takes to solve the problem.
Certified mail is your friend. Send any response to the IRS via certified mail. This will provide proof of your timely correspondence. Lost mail can lead to delays, penalties, and additional interest on your tax bill.
Don’t assume it will go away. Until you receive definitive confirmation that the problem has been resolved, assume the IRS still thinks you owe the money. If you don’t receive correspondence confirming the correction, send a written follow-up.

Monday, July 31, 2017

Five Home Office Deduction Mistakes

If you operate a business out of your home, you may be able to deduct a wide variety of expenses. These may include part of your rent or mortgage costs, insurance, utilities, repairs, maintenance, and cleaning costs related to the space you use.
It can be a tricky area of the tax code that’s full of pitfalls for the unwary. Here are some of the top mistakes people make:
Not taking it. This is probably the biggest mistake those with home offices make. Some believe the deduction is too complicated, while others believe taking a home office deduction increases your chance of being audited. While the rules can be complicated, there are now simple home office deduction methods available to every business.
Not exclusive or regular. The space you use must be used exclusively and regularly for your business.
Exclusively: If you use a spare bedroom as a business office, it can’t double as a guest room, a playroom for the kids, or a place to store your hockey gear. Any kind of non-business use can invalidate you for the deduction.
Regularly: It should be the primary place you conduct your regular business activities. That doesn’t mean that you have to use it every day nor does it stop you from doing work outside the office, but it should be the primary place for business activities such as record keeping, billing, making appointments, ordering equipment, or storing supplies.
Mixing up your other work. If you are an employee for someone else in addition to running your own business, be careful in using your home office to do work for your employer. Generally, IRS rules state you can use a home office deduction as an employee only if your employer doesn’t provide you with a local office to work at.
Unfortunately, this means if you run a side business out of your home office, you cannot also bring work home from your employer’s office and do it in your home office. That would invalidate your use of the home office deduction.
The recapture problem. If you have been using your home office deduction, including depreciating part of your home, you could be in for a future tax surprise. When you later sell your home, you will need to account for this depreciation. This depreciation recapture rule creates a possible tax liability for many unsuspecting home office users.
Not getting help. There are special rules that apply to your use of the home office deduction if:
– You are an employee of someone else.
– You are running a daycare or assisted living facility out of your home.
– You have a business renting out your primary residence or a vacation home.
The home office deduction can be tricky, so be sure to ask for help, especially if you fall under one of these cases.
Things to remember
Recognizing the home office deduction complexity, the IRS created a simplified “safe harbor” home office deduction. You simply take the square footage of your office, up to 300 square feet, and multiply it by $5. This gives you a potential $1,500 maximum deduction. However, your savings could be much greater than $1,500, so it’s often worth getting help to calculate your full deduction.
Finally, if you are concerned about a potential future audit, take a photo or two of your home office. This is especially important if you move. That way if you are ever challenged, you can visually attempt to show your compliance to the rules.

Wednesday, July 26, 2017

Reap The Benefits Of Hiring Your Child For The Summer


Hiring your children to work in your business can be a win-win situation for everyone. Your kids will earn money, gain real-life experience in the workplace, and learn what you do every day. And, you will reap a few tax benefits in the process. Before you decide if hiring your child is the right thing for your business, learn if it can work for you.
Generally, if your child is doing a legitimate job and the pay is reasonable for the work, his or her salary can be a tax-deductible business expense. Your child’s income can be tax-free to them up to the standard deduction amount for a single tax payer ($6,350 in 2017). Wages earned in excess of this amount are typically taxed at your child’s rate, which is likely lower than your rate.
The following guidelines will help you determine if the arrangement will work in your situation:
  • Make sure your child works a real job that he or she can reasonably handle, no matter how basic or simple. Consider tasks like office filing, packing orders, or customer service.
  • Treat your child like any other employee. Expect regular hours and appropriate behavior. If you are lenient with your child, you risk upsetting regular employees.
  • To avoid questions from the IRS, make sure the pay is reasonable for the duties performed. It’s not a bad idea to prepare a written job description for your files. Include a W-2 at year-end.
  • Record hours worked just as you would for any employee. Pay your child using the normal payroll system and procedures your other employees use.
  • Hiring your children works best if you are a sole proprietor. It has additional tax benefits not available if your business is organized as a C corporation or an S corporation.
If you have questions, give us a call. Together we can determine if hiring your child is the right course of action for your business and your family.
See more at : http://www.bas-pc.com/

Monday, July 17, 2017

Get to Know These Tax-Saving Terms


As you begin to think about scheduling your midyear tax planning appointment, refresh your memory on the meanings of terms that can save you money. Here are three.
  • Exclusion. Exclusions are items that would generally be included on your return, but are specifically excluded by a tax law provision. For example, gifts and inheritances you receive are excluded from your income – you simply don’t report them on your federal tax return.
  • Deduction. By definition, a deduction means an amount is subtracted from your income. Tax deductions fit into four general categories.
Above the line deductions, such as alimony paid, can be claimed even if you don’t itemize.
Itemized deductions are a specific group of expenses, including amounts you pay for certain taxes, medical costs, charitable donations, mortgage interest, and disaster losses.
The standard deduction is a simplified substitute for itemized deductions. It’s a flat amount you can use to reduce your gross income instead of itemizing each allowable expense.
Business deductions are the ordinary and necessary expenses required for carrying on your trade or business.
  • Credit. Income tax credits are subtracted from the tax you owe. Note the difference from the definition of deductions, which reduce your income and indirectly reduce your final tax bill.
Tax credits can be refundable, meaning you’ll get money back if the credit exceeds the amount of tax you owe. Nonrefundable credits can only reduce your tax to zero.
These terms can be confusing. Call if you have questions about these tax-savers and how including them in your midyear planning can benefit you.

See more at : http://www.bas-pc.com/

Wednesday, July 5, 2017

Five Reasons to Incorporate Your Business



Most new businesses start with no thought about legal structure. In the eyes of the IRS, the default structure is a “sole proprietor,” in which your business profits are taxed on your personal tax return. This can serve you well to start, but there are several reasons you may want to consider incorporating as your business grows.


  • To protect your personal assets from creditors. When you operate your business within a corporation, creditors are often limited to corporate assets to satisfy a debt. Your home, savings, and retirement accounts are no longer fair game.
  • To provide a personal liability firewall. The corporate form can help protect you against claims made by others for injuries or losses arising from actions of your business.
  • To issue shares of stock. You can help build your business by issuing shares to new investors, or by offering stock options to key employees as a form of compensation.
  • To gain tax flexibility. A corporation can provide you with more tax flexibility. Deliberate planning can help optimize the taxable division between corporate income, dividends, and your personal wages.
  • To enhance your business presence. Being incorporated sends a signal that your business is a serious enterprise, and it could open doors to opportunities not offered to sole proprietors. Consumers, vendors, and other businesses often prefer to do business with incorporated companies.

If you are still going over the pros and cons of incorporating your business, give our office a call. Together, we can complete a thorough tax review that will help shed light on the impact such a move will have on your business situation.

See more at : http://www.bas-pc.com/

Wednesday, June 28, 2017

Don’t Underestimate the Power of Curb Appeal




Curb appeal is often talked about when selling a residential home, however, it applies just as frequently to the commercial building or space. If you want to improve the market value, curb appeal matters. Locations with great curb appeal usually command higher prices and spend less time on the market.

Luckily there are simple, inexpensive ways to help your building impress buyers.

1) Make it sparkle. Walk around the outside and take note of what looks dirty: windows, downspouts, gutters, siding, and doors. These can usually be tackled with soapy water and a scrub brush. For a bigger job, consider using a pressure washer.

2) Coat of paint. Updating the color of your door, trim, or shutters may help your building look newer and more modern.

3) Replace hardware. Don’t overlook your building address numbers, entry door locksets, doorbells, mailboxes, or light fixtures. These elements add visual interest, but can detract from the appeal if they show years of wear. Replace, clean, or paint pieces that have become dingy or out of date.

4) Update landscaping. Planting a tree is a great way to add long-lasting dimension and appeal. Consider flanking the front entry with trees or shrubs. Add a pop of color by placing flower planters or adding window boxes to front-facing windows. Or simply make sure the lawns are being mowed before showings.

5) Incorporate outdoor art. For an outside the box idea, bring some art into the space leading up to your entry door. It could be as simple as a birdbath, bird feeder, or hanging windchimes; or as unique as a one-of-a-kind sculpture from a local artist.

See more at : http://www.bas-pc.com/

How to Build Your Business Credit



Whether your firm has been operating for years, or you decided over last night’s coffee to start a new venture, you’re sure to face the need for business credit. Entrepreneurs often ask friends and family to invest in their start-up businesses, and many draw on personal funds to launch new firms. But to address ongoing business needs – such as requirements for inventory, equipment, and real estate – most firms seek additional help from credit card companies and banks.

Unfortunately, today financial institutions are more wary than they used to be about extending credit to small companies. And with many business revenues faltering because of market pressures, even well-established companies have found it difficult to obtain loans.

As a result, establishing good business credit has become more important than ever. To convince a lender that your company represents a good risk, you should first prepare a well-written business plan. It need not be as long as a Tolstoy novel, but should lay out in some detail your products, pricing, estimates, competition, and basis for cash flow projections. A clearly defined business plan will convince potential lenders that you’ve addressed the greatest obstacles to your firm’s success. Before approaching lenders, consider your business structure as well. For example, a limited liability company or corporation may be seen as less risky than a sole proprietorship. The goal is to present a professional image to convince the lender that your company will prosper in good times and bad.

To establish good business credit, you’ll also want to make sure all required licenses are current and your firm is registered with the major business credit reporting bureaus such as Experian and Equifax. Work with vendors who report to these bureaus so that your on-time payments are tracked.

Of course, the key to building good business credit is making all your payments on time. As with personal credit, your business credit score will climb as managers prove their skill at monitoring the firm’s cash flow and their commitment to honoring the firm’s obligations.

Also consider having our office review your financial statements before you send them to the bank. If you need assistance with this or other business concerns, give us a call.

See more at : http://www.bas-pc.com/

Tuesday, June 20, 2017

Disability Insurance – What You Need to Know


Say “insurance” to most people and auto, health, home, and life are the variants that spring to mind. But what if an illness or accident were to deprive you of your income? Even a temporary setback could create havoc with your financial affairs. Statistics show your chances of being disabled for three months or longer between ages 35 and 65 are almost twice those of dying during the same period.
Yet people with financial savvy often overlook disability insurance. Perhaps they feel adequately covered through their job benefits. However, such coverage can be woefully inadequate. The fact is, most individuals should consider disability insurance in their financial planning. When considering disability insurance, think in terms of long term and short term. Many employers provide long-term disability coverage for all employees. Find out if your employer does. If you have long-term disability insurance, you need to consider short-term coverage to supplement during the period of disability before your long-term coverage begins. To get the right coverage for you, take the following steps:
Scrutinize key policy terms. First, ask how “disability” is defined. Some policies use “any occupation” to determine if you are fit for work following an illness or accident. A better definition is “own occupation,” whereby you receive benefits when you cannot perform the job you held at the time you became disabled.
Check the benefit period. Ideally, your policy should cover disabilities until you’ll be eligible for Medicare and Social Security.
Determine how much coverage you need. Tally the after-tax income you would have from all sources during a period of disability and subtract this sum from your minimum needs.
Decide what you can afford. Disability insurance is not inexpensive. Plan to forgo riders and options that boost premiums significantly. If your budget won’t support the ideal benefit payment, consider lengthening the elimination period (but be sure that accumulated sick leave, savings, etc., will carry you until the benefits kick in).
See mpre at : http://www.bas-pc.com/

Tuesday, June 6, 2017

How to Build Your Business Credit


Whether your firm has been operating for years, or you decided over last night’s coffee to start a new venture, you’re sure to face the need for business credit. Entrepreneurs often ask friends and family to invest in their start-up businesses, and many draw on personal funds to launch new firms. But to address ongoing business needs – such as requirements for inventory, equipment, and real estate – most firms seek additional help from credit card companies and banks.
Unfortunately, today financial institutions are more wary than they used to be about extending credit to small companies. And with many business revenues faltering because of market pressures, even well-established companies have found it difficult to obtain loans.
As a result, establishing good business credit has become more important than ever. To convince a lender that your company represents a good risk, you should first prepare a well-written business plan. It need not be as long as a Tolstoy novel, but should lay out in some detail your products, pricing, estimates, competition, and basis for cash flow projections. A clearly defined business plan will convince potential lenders that you’ve addressed the greatest obstacles to your firm’s success. Before approaching lenders, consider your business structure as well. For example, a limited liability company or corporation may be seen as less risky than a sole proprietorship. The goal is to present a professional image to convince the lender that your company will prosper in good times and bad.
To establish good business credit, you’ll also want to make sure all required licenses are current and your firm is registered with the major business credit reporting bureaus such as Experian and Equifax. Work with vendors who report to these bureaus so that your on-time payments are tracked.
Of course, the key to building good business credit is making all your payments on time. As with personal credit, your business credit score will climb as managers prove their skill at monitoring the firm’s cash flow and their commitment to honoring the firm’s obligations.
Also consider having our office review your financial statements before you send them to the bank. If you need assistance with this or other business concerns, give us a call.

Wednesday, April 26, 2017

Could the Coverdell ESA be the right fund for you?


As we approach graduation season, we have education costs on the brain!

You’re probably familiar with 529 college savings plans. Named for Section 529 of the Internal Revenue Code, they’re also known as qualified tuition programs, and they offer tax benefits when you save for college expenses.

But are you aware of a lesser-known cousin, established under Section 530 of the code? It’s called a Coverdell Education Savings Account and it’s been available since 1998.

The general idea of Coverdell accounts is similar to 529 plans – to provide tax incentives to encourage you to set money aside for education. However, one big difference between the two is this: Amounts you contribute to a Coverdell can be used to pay for educational costs from kindergarten through college.
Generally, you can establish a Coverdell for a child under the age of 18 – yours or someone else’s. Once the Coverdell is set up, you can make contributions of as much as $2,000 each year. That contribution limit begins to phase out when your income reaches $190,000 for joint filers and $95,000 for single filers.
Anyone, including trusts and corporations, can contribute to the account until the child turns 18. There are no age restrictions when the Coverdell is established for someone with special needs.

While your contribution is not tax-deductible, earnings within the account are tax-free as long as you use them for educational expenses or qualify for an exception. In addition, you can make a tax-free transfer of the account balance to another eligible beneficiary.

Qualified distributions from a Coverdell are tax-free when you use the money to pay for costs such as tuition, room and board, books, and computers.

Please call for information about other rules that apply to Coverdell accounts. We’ll be happy to help you decide whether establishing one makes sense for you.

And best of luck to you and your loved ones who are knee-deep in education costs, whether it’s kindergarten, college or anything in between.

Happy [Future] Graduation!

More Info : Business Accounting Systems, PC

Friday, April 21, 2017

What you should do when the IRS contacts you


After you file your tax return, the last thing you want to see is a notice from the IRS questioning your return. Some IRS notices involve very minor changes, like a correction to a Social Security number. Some are for serious changes that could involve a lot of money, such as a billing for more taxes, interest, or penalties due for an adjustment to your total tax liability.

So, what should you do if you get a letter from the IRS?

Here is a list of do’s and don’ts concerning contact from the IRS.
  • Don’t ignore the notice; the problem will not go away.
  • Act promptly. A quick response to the IRS may eliminate further, more complicated correspondence.
  • If you agree with the IRS adjustment, you do not need to do anything unless a payment is due.
  • If the IRS is requesting more money or a significant amount of new information, be sure to contact your tax preparer immediately.
  • Always provide your tax preparer with a copy of any IRS notice, regardless of how minor it appears to be.
  • Keep a copy of all the IRS correspondence with your tax return copy for the year in question.
Often taxpayers experience anxiety when they receive correspondence from the IRS. Don’t worry. The most important thing to remember is not to ignore the IRS. Bring any notice you receive to our office and let us assist you in resolving the problem quickly.

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Thursday, April 13, 2017

Find the best employees to contribute to your company

Turnover is an often overlooked cost of doing business. Sometimes it can run as high as 25% of salary and benefits. One way to reduce this cost is to hire wisely. It’s an oft-quoted cliché that employees are a company’s most valuable assets. Try generating revenue with unmotivated or unskilled employees, and you’ll soon discover that the cliché rings true.

How do you locate the best employees?

Know what you’re looking for. Before you publish a job announcement or talk to potential candidates, consider the type of skills that would fit best with your company. This may involve clarifying the types of skills that are essential to your company, as well as skills that are specific to the position being filled. For example, if the business prides itself on written communications, you don’t want to hire a candidate who struggles with grammar or balks at the prospect of writing a report.

Look in the right places. Once you’re clear about the type of employee you’re hoping to hire, focus on discovering the best candidates and drawing them to your company. You might post the position on job boards of specific trade organizations, network with local colleges and technical schools, or ask for recommendations from your current employees. In general, the more specific skills you hope to find, the wider net you’ll have to cast.

Make the interview count. Potential candidates are often counseled to conduct mock interviews, and wise employers will hone their interviewing skills too. You want to identify candidates who will be eager to contribute to your company. Asking focused questions and listening with a purpose are key to the interview process. A good interviewer will also attempt to identify “red flags” that indicate potential problems. For example, the candidate may provide vague or rambling answers to simple questions. This could indicate normal interview anxiety, or he or she might be hiding key facts from you – information that could directly affect your hiring decision.

Finding quality employees that will mesh well with your company culture is not an exact science. But, thoughtful preparation and careful interviewing can pay dividends for years to come.

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