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July 2, 2018 / Jessica Connell

Tax Due Dates for July 2018

July 10

Employees Who Work for Tips – If you received $20 or more in tips during June, report them to your employer. You can use Form 4070.

July 16

Employers – Nonpayroll withholding. If the monthly deposit rule applies, deposit the tax for payments in June.

Employers – Social Security, Medicare, and withheld income tax. If the monthly deposit rule applies, deposit the tax for payments in June.

July 31

Employers – Social Security, Medicare, and withheld income tax. File Form 941 for the second quarter of 2018. Deposit any undeposited tax. (If your tax liability is less than $2,500, you can pay it in full with a timely filed return.) If you deposited the tax for the quarter in full and on time, you have until August 10 to file the return.

Employers – Federal unemployment tax. Deposit the tax owed through June if more than $500.

Employers – If you maintain an employee benefit plan, such as a pension, profit-sharing, or stock bonus plan, file Form 5500 or 5500-EZ for calendar-year 2017. If you use a fiscal year as your plan year, file the form by the last day of the seventh month after the plan year ends.

Certain Small Employers – Deposit any undeposited tax if your tax liability is $2,500 or more for 2018 but less than $2,500 for the second quarter.

For more tips visit www.PlumCPAs.com

Copyright © 2018 CPA Site Solutions

This information is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

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June 27, 2018 / Jessica Connell

Customize QuickBooks’ Forms

Every opportunity you have to interact with your customers and vendors is critical. Whether it’s a phone call, an in-person connection, or an email, how you present yourself reveals a lot about you. Are you efficient? Friendly? Do you handle orders and problems and payment issues quickly and carefully?

Your accounting forms can also contribute to your image. They should always be:

  • Neat and attractive.
  • Easy to read, with the most important information displayed prominently.
  • Consistent with any graphics you use on other company materials.
  • Accurate, above all.

You might be able to use at least some of QuickBooks’ form templates as is, without any modifications. But couldn’t they be better? More visually appealing? Formatted to include only the fields that your business most often needs? QuickBooks contains the customization tools you need to make them so.

Improving What Exists


Figure 1: You can personalize your QuickBooks forms and make them consistent with any design themes your brand may use. 

Let’s look at the modification options for an invoice, though, depending on what version of QuickBooks you’re using, you can also work with sales receipts, purchase orders, statements, estimates, sales orders, and credit memos. Start by opening the Lists menu and selecting Templates. Highlight Intuit Product Invoice in the list. Click the down arrow next to Templates in the lower left corner and choose Edit Template.

The above image displays part of the window that opens. Here, you can add a logo, change the color scheme, and change fonts for your company’s contact information and the labels that identify each field (like Bill To, Terms, and Quantity). The right pane of this window shows you what the form will look like as you make changes.

Nothing you’ve done so far will prevent you from using Intuit’s pre-printed forms. But when you click Additional Customization at the bottom of the screen, you’ll be warned that if you make modifications beyond this point, the forms may not print correctly. To be safe, click Make a Copy. You’ll be able to print this new version on plain paper.

Deeper Customization

The image below shows you part of the window that opens when you click on Additional Customization. The first two columns here are the most important; they let you specify the labeled fields that will appear on your invoices. When Header is the active column, you’ll be able to choose the content that will go at the top of your form, like Date, Invoice Number, and Terms.

Next to each default label, you’ll see boxes for Screen and Print. Click in these boxes to create or delete checkmarks; this will indicate whether each label will appear in the software itself and which will be printed for your customers to see. If you’d like to change the language QuickBooks uses to describe each, enter your preferred word or phrase in the Titlecolumn.


Figure 2: With the Header column highlighted, you can shape the appearance of the top section of your invoices. 

Caution: As you’re checking and unchecking boxes, a dialog box may open telling you that your changes will cause some fields to overlap on your form. If you click the Default Layout button, QuickBooks will make automatic adjustments to fix this. Clicking Continue means you’ll have to use the software’s Layout Designer to make your own adjustments. This tool is not particularly intuitive, and it requires some design skills. If you must work with the Layout Designer, please call for assistance.

When you click the Columns tab, you’ll see a list of the fields available for the main body of your invoices, like Description, Quantity, and Rate. This works similarly to how you just modified the Header, with one exception: You’ll be able to enter numbers in the Order column to specify the placement of each field. Here again, you’ll be able to watch a preview of your form change in the right pane.

If you want to start over, click the Default button to revert the form to its original state. When you’re done, click OK.

Neatness Counts

Whether you print and mail your forms or simply dispatch them electronically, we strongly encourage you to make them as professional and polished as you possibly can. Their appearance will enhance or detract from the image your customers and vendors have of your business. Please call the office if you need help learning about and implementing the customization options that QuickBooks offers.

Copyright © 2018 CPA Site Solutions

This information is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

May 30, 2018 / Jessica Connell

Getting Ready for Payroll in QuickBooks Online

Payroll is probably the most complex element of small business accounting. Not only are you directly responsible to your employees, but you also need to make sure you are handling everything related to benefits and payroll taxes correctly.

Whether you are switching from a manual system to QuickBooks Online, or you have just hired your first employee, you will soon discover that the site can make your payroll-related tasks much more organized and accurate–speeding up the process tremendously.

But before you start getting ready for your first payroll run, you have a lot of setup work to be done. Be sure to leave yourself time before those first paychecks are expected. This is not meant to be a payroll setup tutorial. While some step-by-step instruction is provided, initially, we just want you to see what information you will need to have available and how QuickBooks Online handles it.

Building a Backbone

There is no particular order set in stone for your payroll preparation tasks, although you will need to provide some background information about your company and its policies before you can start creating employee records.

QuickBooks Online does not walk you through the steps required; however, it does display a page with links to all of the data that you will have to enter. Click the gear icon in the upper right, and then click Payroll Settings. You will see this screen:


Figure 1: QuickBooks Online’s Payroll Settings screen displays links to the pages where you will manage your setup tasks.

You would have entered information about your Contact Information and Work Locations (under the Business Information heading) when you first signed on to QuickBooks Online. At the same time, you would have been exposed to the Chart of Accounts, which already has accounts designated for payroll. You can see them by clicking Preferences | Accounting, but please do not customize these. If modifications are needed, we will do them for you.

Payroll Policies

How often will you pay your employees? Go up to the Payroll heading in the upper left and click on Pay Schedules. Click Createand open the drop-down list next to Pay Period to select the frequency desired. Then enter the date for the first payroll you will run in QuickBooks Online and the end date for the period that it covers. Click the box below if you want this to be the default setting for all employees. Then click OK to return to the previous page.

Open the Vacation and Sick Leave Policies window. If you do not yet have accrual rules for these paid days off, let us help you here. It is complicated. When you are done, click the back arrow to return to the Pay Policies window and select Deductions/Contributions. Are you offering benefits like health insurance? You will need to have your paperwork and information handy before you start completing this section.


Figure 2: Before you can pay employees, you will need to have entered information about the benefits you offer so you can withhold dollars for them.

Click the plus sign (+) in front of Add a New Deduction/Contribution and complete the fields here, then click OK. You will assign these deductions to employees on their individual records in QuickBooks Online. If there are any Employee Garnishments needed (like child support), click the down arrow next to Add Garnishment for and select the worker from the list. You will provide details for these in the window that opens. This information was most likely provided to you by the agency requesting it. When you are done, click OK.

Taxes and More

If you are new to payroll and have never dealt with payroll taxes before, you are going to need our help getting this complicated element set up correctly. Even if you have, we would recommend that you call and set up a consultation with one of the QuickBooks Online experts in the office. QuickBooks Online does a good job of providing guidance here, but failure to submit payroll taxes (or pay them incorrectly) can lead to penalties and fines–or worse.

In addition, there are other setup tasks you will need to complete, such as:

  • Connecting your payroll bank account to QuickBooks Online.
  • Creating employee records.
  • Setting payroll production preferences.

Setup is by far the most challenging part of processing payroll in QuickBooks Online. Once that is done, you will just be entering hours and making modifications. Please contact the office if you are planning to take this on or have any questions.

For more tips visit www.PlumCPAs.com

Copyright © 2018 CPA Site Solutions

This information is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

May 23, 2018 / Jessica Connell

What to do when your Tax Return is late

Tuesday, April 17, 2018, was the tax deadline for most taxpayers to file their tax returns. If you haven’t filed a 2017 tax return yet, it’s not too late, and it may be easier than you think.

First, gather any information related to income and deductions for the tax years for which a return is required to be filed, then call the office.

If you’re owed money, then the sooner you file, the sooner you’ll get your refund. If you owe taxes, you should file and pay as soon as you can, which will stop the interest and penalties that you will owe.

If you owe money but can’t pay the IRS in full, you should pay as much as you can when you file your tax return to minimize penalties and interest. The IRS will work with taxpayers suffering financial hardship. If you continue to ignore your tax bill, the IRS may take collection action.

How to Make a Payment

There are several different ways to make a payment on your taxes. Payments can be made by credit card, electronic funds transfer, check, money order, cashier’s check, or cash. If you pay your federal taxes using a major credit card or debit card, there is no IRS fee for credit or debit card payments, but the processing companies charge a convenience fee or flat fee. It is important to review all your options; the interest rate on a loan or credit card may be lower than the combination of penalties and interest imposed by the Internal Revenue Code.

What to do if you Can’t Pay in Full

Taxpayers unable to pay all of the amount owed on a tax bill are encouraged to pay as much as possible. By paying as much as possible now, the amount of interest and penalties owed will be less than if you do not pay anything at all. Based on individual circumstances, a taxpayer could qualify for an extension of time to pay, an installment agreement, a temporary delay, or an offer in compromise. Please call if you have questions about any of these options.

For individuals, IRS Direct Pay is a fast and free way to pay directly from your checking or savings account. Taxpayers who need more time to pay can set up either a short-term payment extension or a monthly payment plan.

A short-term extension gives a taxpayer an additional 60 to 120 days to pay. No fee is charged, but the late-payment penalty plus interest will apply. Generally, taxpayers will pay less in penalties and interest than if the debt were repaid through an installment agreement over a longer period of time.

Most people can set up a payment plan using the Online Payment Agreement tool on IRS.gov. A monthly payment plan or installment agreement gives a taxpayer more time to pay. However, penalties and interest will continue to be charged on the unpaid portion of the debt throughout the duration of the installment agreement/payment plan. You should pay as much as possible before entering into an installment agreement.

Taxpayers who owe $50,000 or less in combined tax, penalties and interest can apply for and receive immediate notification of approval through an online, IRS web-based application. Balances over $50,000 require taxpayers to complete a financial statement to determine the monthly payment amount for an installment plan.

A user fee will also be charged if the installment agreement is approved. The fee (effective January 1, 2017) is normally $225 but is reduced to $107 if taxpayers agree to make their monthly payments electronically through electronic funds withdrawal. The fee is $43 for eligible low-and-moderate-income taxpayers.

Individual taxpayers who do not have a bank account or credit card and need to pay their tax bill using cash, are now able to make a payment at one or more than 7,000 7-Eleven stores nationwide. Individuals wishing to take advantage of this payment option should visit the IRS.gov payments page, select the cash option in the other ways you can pay section and follow the instructions.

What Happens If You Don’t File a Past Due Return

It’s important to understand the ramifications of not filing a past due return and the steps that the IRS will take. Taxpayers who continue to not file a required return and fail to respond to IRS requests for a return may be considered for a variety of enforcement actions–including substantial penalties and fees.

Need Help Filing your 2017 Tax Return?

If you haven’t filed a tax return yet, don’t delay. Call the office today to schedule an appointment as soon as possible.

For more tips visit www.PlumCPAs.com

Copyright © 2018 CPA Site Solutions

This information is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

May 17, 2018 / Jessica Connell

Using a Car for Business: New Rules under TCJA

Many of the tax provisions under tax reform were favorable to small business owners including those relating to using a car for business. Here’s what you need to know.

1. Section 179 Expense Deduction

If you bought a new car in 2018 and use it more 50 percent for business use, you can take advantage of the Section 179 expense deduction when you file your 2018 tax return. Under Section 179 you can immediately deduct (rather than depreciating) the cost of certain property in the year it is placed in service. In 2018, the Section 179 expense deduction increases to a maximum deduction of $1 million of the first $2,500,000 million of qualifying equipment placed in service during the current tax year. It is indexed to inflation for tax years after 2018.

For sport utility vehicles (defined as four-wheeled passenger automobiles between 6,000 and 14,000 pounds), however, the maximum deduction is $25,000 (also indexed for inflation). Certain exceptions may apply, however such as a seating capacity of more than nine persons behind the driver’s seat. Vehicles weighing more than 14,000 pounds are typically considered “work vehicles” and would not be used for personal reasons. As such, there is no expense deduction limit.

2. Luxury Auto Depreciation Allowance

For luxury passenger automobiles placed in service after December 31, 2017, the amount of allowable depreciation increases to a maximum of $10,000. The deduction increases to $16,000 for the second year, then decreases to $9,600 for the third year and $5,760 for the fourth year and for years beyond. These dollar amounts are indexed for inflation. Deductions are based on a percentage of business use; i.e., a business owner whose business use of the vehicle is 100 percent can take a larger deduction than one whose business use of a car is only 50 percent.

3. Additional First-Year Bonus Depreciation for Passenger Vehicles

For passenger autos eligible for the additional bonus first-year depreciation, the maximum first-year depreciation allowance remains at $8,000. It applies to new and used (“new to you”) vehicles acquired and placed in service after September 27, 2017, and remains in effect for tax years through December 31, 2022. When combined with the increased depreciation allowance above, the deduction amounts to as much as $18,000.

4. 100 Percent First-Year Bonus Depreciation for Heavy Vehicles

For tax purposes, pickup trucks, vans, and SUVs whose gross vehicle weight rating (GVWR) is more than 6,000 pounds are treated as transportation equipment instead of passenger vehicles. Heavy vehicles (new or used) placed into service after September 27, 2017, and before January 1, 2023, qualify for a 100 percent first-year bonus depreciation deduction as well, if business-related use exceeds 50 percent. These deductions are based on percentage of business use and vehicles used less than 50 percent for business are required to depreciate the vehicle cost over a period of six years.

5. Deductions Eliminated for Unreimbursed Expenses for Business use of a Car

Under tax reform miscellaneous itemized expenses were repealed. As such starting in 2018, if you are an employee who is required to use your own vehicle for business-related use and are not reimbursed for these expenses by your employer you are no longer able to claim a deduction for unreimbursed expenses for business use of a car on your tax return.

Questions?

If you have any questions about business use of a car, don’t hesitate to call the office.

For more tips visit www.PlumCPAs.com

Copyright © 2018 CPA Site Solutions

This information is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

May 15, 2018 / Jessica Connell

Self-Employed? Five Easy Ways to Lower your Tax Bill

If you’re like most small business owners, you’re always looking for ways to lower your taxable income. Here are five ways to do just that.

1. Deducting the Cost of a Home Computer

If you purchased a computer and use it for work-related purposes, you can take advantage of the Section 179 expense election, which allows you to write off new equipment in the year it was purchased if it is used for business more than 50 percent of the time (subject to certain rules).

2. Meal Expenses for Company Picnics and Holiday Parties

If you host a company picnic or holiday party–even if it is at your home–100 percent of your meal expenses are deductible. Prior to tax reform legislation passed in late 2017, 50 percent of your business-related entertainment expenses (with some exceptions) were generally deductible. Starting in 2018, however, entertainment-related expenses are no longer deductible. If you have any questions, please don’t hesitate to call.

3. Deduct $25 for Business Gifts to Associates

Don’t overlook the deductible benefit of business gifts during the holidays or at any other time of the year. As a self-employed individual, you can deduct the cost of gifts made to clients and other business associates as a business expense. The law limits your maximum deduction to $25 in value for each recipient for which the gift was purchased with cash.

4. Food Offered to the Public at a Trade Show

If you are a frequent trade show exhibitor (or you are in the business of “food”), you know that offering free food is a sure way to get people to visit your booth. Did you know it’s also a tax write off? Typically associated with a promotional campaign, food offered to the public free of charge is 100 percent deductible.

5. Minimize your Tax Bill by Funding a Retirement Plan

As a self-employed small business owner, there are several retirement plan options available to you, but understanding which option is most advantageous to you can be confusing. The “best” option for you may depend on whether you have employees and how much you want to save each year.

There are four basic types of plans:

  • Traditional and Roth IRAS
  • Simplified Employee Pension (SEP) Plan and Savings Incentive Match Plan for Employees (SIMPLE)
  • Self-employed 401(k)
  • Qualified and Defined Benefit Plans

To make sure you are getting the most out of your financial future, contact the office to determine your eligibility and to figure out which plan is best for your tax situation.

For more tips visit www.PlumCPAs.com

Copyright © 2018 CPA Site Solutions

This information is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.

April 18, 2018 / Jessica Connell

Late Filing and Late Payment Penalties

April 17 is the deadline for most people to file their federal income tax return and pay any taxes they owe. The bad news is that if you miss the deadline (for whatever reason) you may be assessed penalties for both failing to file a tax return and for failing to pay taxes they owe by the deadline. The good news is that there is no penalty if you file a late tax return but are due a refund.

Here are ten important facts every taxpayer should know about penalties for filing or paying late:

1. A failure-to-file penalty may apply. If you owe tax, and you failed to file and pay on time, you will most likely owe interest and penalties on the tax you pay late.

2. Penalty for filing late. The penalty for filing a late return is normally 5 percent of the unpaid taxes for each month or part of a month that a tax return is late and starts accruing the day after the tax filing due date. Late filing penalties will not exceed 25 percent of your unpaid taxes.

3. Failure to pay penalty. If you do not pay your taxes by the tax deadline, you normally will face a failure-to-pay penalty of 1/2 of 1 percent of your unpaid taxes. That penalty applies for each month or part of a month after the due date and starts accruing the day after the tax-filing due date.

4. The failure-to-file penalty is generally more than the failure-to-pay penalty. You should file your tax return on time each year, even if you’re not able to pay all the taxes you owe by the due date. You can reduce additional interest and penalties by paying as much as you can with your tax return. You should explore other payment options such as getting a loan or making an installment agreement to make payments. Contact the office today if you need help figuring out how to pay what you owe.

5. Extension of time to file. If you timely requested an extension of time to file your individual income tax return and paid at least 90 percent of the taxes you owe with your request, you may not face a failure-to-pay penalty. However, you must pay any remaining balance by the extended due date.

6. Two penalties may apply. One penalty is for filing late and one is for paying late–and they can add up fast, especially since interest accrues on top of the penalties but if both the 5 percent failure-to-file penalty and the 1/2 percent failure-to-pay penalties apply in any month, the maximum penalty that you’ll pay for both is 5 percent.

7. Minimum penalty. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.

8. Reasonable cause. You will not have to pay a late-filing or late-payment penalty if you can show reasonable cause for not filing or paying on time. Please call if you have any questions about what constitutes reasonable cause.

9. Penalty relief. The IRS generally provides penalty relief, including postponing filing and payment deadlines, to any area covered by a disaster declaration for individual assistance issued by the Federal Emergency Management Agency (FEMA). For example, taxpayers who were victims of Hurricane Maria in certain municipalities of Puerto Rico and the Virgin Islands have until June 29, 2018, to file and pay.

10. File even if you can’t pay. Filing on time and paying as much as you can, keeps your interest and penalties to a minimum. If you can’t pay in full, getting a loan or paying by debit or credit card may be less expensive than owing the IRS. If you do owe the IRS, the sooner you pay your bill the less you will owe.

If you need assistance, help is just a phone call away!

For more tips visit www.PlumCPAs.com

Copyright © 2018 CPA Site Solutions

This information is for general guidance only, and does not constitute the provision of legal advice, tax advice, accounting services, investment advice, or professional consulting of any kind. The information provided herein should not be used as a substitute for consultation with professional tax, accounting, legal, or other competent advisers. Before making any decision or taking any action, you should consult a professional adviser who has been provided with all pertinent facts relevant to your particular situation. Tax articles are not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding accuracy-related penalties that may be imposed on the taxpayer. The information is provided “as is,” with no assurance or guarantee of completeness, accuracy, or timeliness of the information, and without warranty of any kind, express or implied, including but not limited to warranties of performance, merchantability, and fitness for a particular purpose.