Among others, this item is to be considered carefully when making decisions about payroll:
8. Worker Classifications – There are several incentives for employers to classify workers as independent contractors instead of employees. Mainly, an employer isn’t responsible for payroll taxes or fringe benefits for outside contractors. This has been an on-going issue for decades, but now the IRS intends to tighten up compliance of the rules.
Posted in Tax Time Prep
It can be easy to forget about Uncle Sam when you’re in the midst of day-to-day operations, but making tax mistakes can be costly for your small business. To help you prevent hearing the knock of the IRS at your door, here are five common tax-centric mistakes to ensure you avoid.
via The Top 5 Tax Mistakes Small Businesses Make | Intuit Small Business Blog.
Posted in Tax Time Prep
The actual process of keeping books is easy to understand when broken down into steps:
1. Keep receipts and or other acceptable records of every payment and expenditure from your business.
2. Summarize your income and expenditure records on a periodic basis (generally daily, weekly, or monthly).
3. Use summaries to create financial reports that will provide specific information about the business. For example, how much monthly profit is the business making or how much the business is worth?
Bookkeeping and accounting functions of a business share two basic goals:
1. To keep track of income and expenses improving chances of making a profit.
2. To collect the necessary financial information about the business to file various tax returns.
Remind yourself of these goals whenever feeling overwhelmed by the details of keeping financial records.
Be reassured that there is no requirement that records are kept in any particular way. In other words, there is no official “right” way to organize the books. As long as the records accurately reflect business income and expenses the IRS will find them acceptable. Whether you do your accounting by hand, on ledger sheets or use accounting software, these principles are exactly the same.
Keeping records:
Summaries of business income and expenses are the heart of the accounting process. Remember that each business sale and purchase must be backed by some type of record containing the amount, the date, and other relevant information about the sale or purchase.
From a legal point of view, the method of keeping receipts can range from slips kept in a box to a sophisticated cash register hooked into a computer system. You will, of course, want to choose a system that fits your business needs.
For more information on how to get set up and ready to roll, call us today at 540.309.5165. We offer an hour free consultation!
via Business Income and Expenses Tracking | Virtual Bookkeeping Company – Your Administrative Solutions.
Posted in Budgeting, Tax Time Prep
Most people in business for themselves, especially those starting out, believe they can keep their own books. After all, they find plenty of good accounting software on the market, programs that practically fill the spreadsheets out by themselves. They believe they can save money and at the same time keep a closer eye on expenses when they write every check themselves and balance every account.
Those arguments have a lot of appeal. But I’ve found that in the long run, a bookkeeper or accountant is not just someone who keeps track of the pennies and receipts, but a key member of your management team. I ask my accountant whether I should lease or buy a car, extend a business trip into a vacation, and how much I should put aside for retirement. In short, specialists are worth their salt because they know how to save you time and money.
via business – Hiring a Bookkeeper or an Accountant | Entrepreneur.com.
Posted in Budgeting, Information
WASHINGTON — Income inequality has soared to the highest levels since the Great Depression, and the recession has done little to reverse the trend, with the top 1 percent of earners taking 93 percent of the income gains in the first full year of the recovery.
The yawning gap between the haves and the have-nots — and the political questions that gap has raised about the plight of the middle class — has given rise to anti-Wall Street sentiment and animated the presidential campaign. Now, a growing body of economic research suggests that it might mean lower levels of economic growth and slower job creation in the years ahead, as well.
via Income Inequality May Take Toll on Growth – NYTimes.com.
Posted in The Economy
How glad am I this morning that I’m not the R.R. Donnelley employee who released Google’s financials early?
The sell-off of Google’s stock began swiftly and brought the price down almost 9%. This occurred because investors weren’t expecting those disappointing figures after the stock price had reached an all-time high over a continual increase in the previous three months.
Trading was actually suspended for three hours after the race to sell began to “allow investors to digest the information.” After this digestion, apparently, cooler heads prevailed and the stock recovered slightly.
What can we learn here? Bad news—especially bad financial news—must be communicated effectively. At Moore Bookkeeping, our goal is to produce accurate, timely financial information that you can use to operate your business. Give us a call and let us help you avoid getting blindsided.
The Day – Google stock price plummets after leak | News from southeastern Connecticut.
Posted in Information, The Economy
In the first Presidential debate, Barack Obama and Mitt Romney spent a lot of time arguing about which of them would do more to help small business. (The phrase “small business” was repeated 26 times in the debate.) And as the economy still holds center stage in the campaign, the theme of what each will do for America’s almost 28 million small businesses will no doubt be revisited in Tuesday’s second debate.
Despite the seemingly unanimous opinion that Romney won the last debate, the candidates’ definitions of small business, small-business concerns, and how their respective tax plans would affect small business created as much as debate as their performances.
Posted in The Economy
Clients should always be encouraged to file their returns on time and pay as much of the balance due as possible, but those that cannot pay in full are not out of options. Changes the IRS has made as part of its “Fresh Start” initiative over the past two years have made it easier for taxpayers to qualify for alternative payment programs. Ignoring a tax bill is never a good option, and the Fresh Start changes should provide a good incentive for taxpayers to work with the IRS to resolve past due taxes.
If a client is unable to pay in full, Sec. 6159 allows the IRS to enter into a monthly payment plan (installment agreement). The IRS also has the authority to settle the tax, penalties, and interest by negotiating an offer in compromise (OIC). This is a contract between the taxpayer and the government to settle the tax debt for less than the full amount owed.
Posted in Information
Regardless of who wins the presidential election in November or what compromises Congress strikes in the lame-duck session to keep the economy from automatic tax increases and spending cuts, 160 million American wage earners will probably see their tax bills jump after Jan. 1.
That is when the temporary payroll tax holiday ends. Its expiration means less income in families’ pocketbooks — the tax increase would be about $95 billion in 2013 alone — at a time when the economy is little better than it was when the White House reached a deal on the tax break last year.
Independent analysts say that the expiration of the tax cut could shave as much as a percentage point off economic output in 2013, and cost the economy as many as one million jobs. That is because the typical American family had $1,000 in additional income from the lower tax.
via Payroll Tax Cut Unlikely to Survive Into Next Year – NYTimes.com.
via Payroll Tax Cut Unlikely to Survive Into Next Year – NYTimes.com.
Posted in Budgeting
The first presidential debate had more discussion about Big Bird than the euro zone.
If you listen to last night’s debate, the U.S. economic challenges don’t include housing or the spillover impacts from the euro zone’s debt crisis. Scant attention was paid to the fiscal cliff.
The inattention highlights the fact that no matter who wins the White House, policy changes won’t come soon enough to alter the short-run trajectory of the U.S. economy. Real gross domestic product is likely to grow at an annualized rate centered around 2% — and that’s if the fiscal cliff is avoided.
via Candidates Ignored Some Big Economic Issues in Debate – Real Time Economics – WSJ.
Posted in The Economy
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