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It’s almost tax time! Tips to Streamline Your Year-End Processes.

It’s December already and we wanted to provide some helpful reminders in order to help you streamline your year-end and tax return processes for 2011.

S-Corp Owners Health Insurance Reportable on W-2 – From the IRS: “Heath and accident insurance premiums paid on behalf of the greater than two percent S corporation shareholder-employee are deductible and reportable by the S corporation as wages for income tax withholding purposes on the shareholder-employee’s Form W-2. These benefits are not subject to Social Security or Medicare (FICA) or Unemployment (FUTA) taxes. The additional compensation is included in Box 1 (Wages) of the Form W-2, Wage and Tax Statement, issued to the shareholder-employee, but would not be included in Boxes 3 and 5 of Form W-2.”

For more information, including information about sole shareholder/employee situations, please see: http://www.irs.gov/businesses/small/article/0,,id=203100,00.html

NC County Business Property Tax Listings – “Any individual(s) or business(es) owning or possessing personal property used or connected with a business or other income producing purpose must file a county business property listing by January 31, 2012 unless an extension is filed.” For more information on registering for an account and to obtain forms for filing, please visit the following county Triangle, NC County websites as they apply to you.

Wake County – http://www.wakegov.com/tax/forms.htm
Durham County – http://www.co.durham.nc.us/departments/txad/Business_Personal_Property_Taxation.html
Orange County – http://www.co.orange.nc.us/assessor/BusinessPersonalProperty.asp

NC Employment Security Commission Notices – NC ESC will be sending out notices through the end of the year to address any changes in your unemployment insurance rate for 2012. Be sure to provide these to your payroll service provider to update their systems.

1099 Forms Due 01/31/12 – If you have paid or will pay subcontracted vendors more than $600 in non-employee compensation in tax year 2011, you will need to have a W-9 form on file for each of them in order to issue their 1099 form. The W-9 form will allow you to obtain the information needed to determine 1099 eligibility, their taxpayer ID number, and a current address for mailing. The deadline to submit 1099 forms to the taxpayer is January 31st and the deadline to submit to the IRS their copy is February 28th. Failure to file on time can result in penalties.

The W-9 form can be downloaded here: http://www.irs.gov/pub/irs-pdf/fw9.pdf.

Please also see the following IRS Publication http://www.irs.gov/pub/irs-pdf/i1099msc.pdf.

IRS Virtual Tax Workshop – If you would to obtain more information about your tax requirements, the IRS offers a free virtual workshop for small business owners and self-employed individuals at http://www.irsvideos.gov/virtualworkshop/

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Three Tips for Employers Outsourcing Their Payroll

November 1, 2011 2 comments

Three Tips for Employers Outsourcing Their Payroll Special Edition Tax Tip 2011-05, September 2, 2011 via IRS.GOV

Outsourcing payroll duties to third-party service providers can streamline business operations, but the IRS reminds employers that they are ultimately responsible for paying federal tax liabilities. Recent prosecutions of individuals and companies who – acting under the guise of a payroll service provider – have stolen funds intended for payment of employment taxes makes it important that employers who outsource payroll are aware of the following three tips from the IRS:

Employer Responsibility – The employer is ultimately responsible for the deposit and payment of federal tax liabilities. Even though you forward the tax payments to the third party to make the tax deposits, you – the employer – are the responsible party.If the third party fails to make the federal tax payments, the IRS may assess penalties and interest. The employer is liable for all taxes, penalties and interest due. The IRS can also hold you personally liable for certain unpaid federal taxes.

Correspondence – If there are any issues with an account, the IRS will send correspondence to the address of record. The IRS strongly suggests you do not change the address of record to that of the payroll service provider. That could limit your ability to stay informed of tax matters involving your business.

EFTPS  – Choose a payroll service provider that uses the Electronic Federal Tax Payment System. You can register on the EFTPS system to get your own PIN to verify the payments.The IRS web site – http://www.irs.gov has more information on the responsibilities of employers outsourcing payroll, payroll service providers and EFTPS.

via Three Tips for Employers Outsourcing Their Payroll.

for more information about online payroll services: www.netWorthPayroll.com

Kilpatrick Townsend & Stockton LLP – North Carolina to Require Employers to Use E-Verify

North Carolina has joined the growing list of states that will require private employers to verify the eligibility of their new hires to work in the United States through E-Verify, a federally administered online system for confirming the identity and employment eligibility of individuals. The new statute, signed by Governor Perdue on June 23, 2011, will phase in its E-Verify requirement over the next two years, eventually applying to all North Carolina employers with twenty-five or more employees.

The New Legislation

The new law will require all North Carolina employers with twenty-five or more employees to enroll in and use E-Verify to check the eligibility of employees to work in the United States. The law applies only to new hires and does not require employers to verify the immigration status of their existing workforce through E-Verify. The law also specifically exempts seasonal temporary employees employed for ninety or fewer days during a consecutive twelve-month period.

The E-Verify requirement will be phased in gradually, depending on the size of the employer. The E-Verify requirement will become effective on October 1, 2012, for employers with 500 or more employees. Employers with 100 to 499 employees will become subject to the requirement on January 1, 2013, and employers with twenty-five to ninety-nine employees will be covered by the law on July 1, 2013.

Once the law takes effect, employers who fail to verify a new hire’s employment eligibility through E-Verify will face civil penalties from the North Carolina Department of Labor, regardless of whether that employee is indeed authorized to work in the United States. The size of potential penalties will vary based on the number of employee verifications the employer failed to make as well as whether the failure constitutes a repeat violation. For any violation, an employer will also be required to submit an affidavit stating that, after consultation with the affected employee, it has requested a verification of the employee’s work authorization through E-Verify.

Potential Legal Questions

Opponents of the North Carolina statute could potentially argue that it is preempted by federal law. Federal immigration law prohibits states from “imposing civil or criminal sanctions” upon those that employ unauthorized aliens, except through “licensing or similar laws.” Although the United States Supreme Court recently upheld Arizona’s E-Verify law in Chamber of Commerce v. Whiting, the Court emphasized that the Arizona law is enforced through suspension of business licenses, rather than through civil or criminal penalties.

The North Carolina law presents a substantially different question from that resolved by the Supreme Court in Whiting. On the one hand, North Carolina’s new statute arguably runs afoul of federal law because it is enforced through civil penalties. On the other hand, the North Carolina law does not directly penalize the employment of unauthorized aliens; rather, it penalizes employers for failing to use the E-Verify system, even if those employers employ no unauthorized aliens. As North Carolina’s law departs from the model of the Arizona E-Verify law that survived a Supreme Court challenge, the new law could face its own legal challenges.

Practical Implications

Employers in North Carolina that have twenty-five or more employees should prepare to enroll in and use the E-Verify system, if they are not already participating in that system. E-Verify compares information provided by a new hire on Form I-9 with information in the federal government’s databases to verify the individual’s identity and eligibility to work in the United States. Although E-Verify is a free service, participating employers will incur costs in using it as a result of the time it takes the employer’s personnel to be trained in the use of E-Verify, to enter data into the E-Verify system, and to respond to E-Verify determinations that information supplied on a new hire’s Form I-9 does not match government records.

via Kilpatrick Townsend & Stockton LLP – North Carolina to Require Employers to Use E-Verify.

QuickBooks Tip – Undeposited Funds Default | Everchange LLC

via QuickBooks Tip – Undeposited Funds Default | Everchange LLC.

QuickBooks Tip – Undeposited Funds Default

If you have used QuickBooks, you may have noticed that when you enter customer receipts there is no option to select which bank account the money is deposited to. Not all clients know that the amounts are coded to an account called undeposited funds and sit in that account until you go into the “Banking – Make Deposits” screen and make the official deposit that will match your bank statement.

I have had a couple of clients not know this and their undeposited funds account was huge. Then, the client does not see the deposit in the bank account and enters the deposit a second time by using the Banking – Make Deposits screen thereby duplicating a customer payment. And the undeposited funds account stays large.

To avoid making this mistake, change the default setting in QuickBooks. Goto Edit – Preferences. Highlight Payments on the left part of the screen. Click the Company Preferences tab. Uncheck the box in the Receive Payments section that says Use Undeposited Funds as a default deposit to account. click the OK button.

After changing the preference, you will notice a new drop-down menu on the receive payment screen which allows you to choose your bank account or undeposited funds. When do you use undeposited funds? When you have more than one payment being deposited the same day. For example, if you received 5 checks and those 5 checks are on the same deposit slip that you take to the bank, use undeposited funds. Then click on Banking – Make Deposit, select the payments, click OK, verify the date is correct, verify that the amount on the screen matches the amount on the deposit slip, and save the transaction.

When do you select your bank account? When you only receive and deposit 1 transaction for that day. For example, you receive one check and that one check is listed on the deposit slip that you take to the bank. And in doing this, you avoid having to go to the Banking – Make Deposits screen to make the official deposit

-Our friends at EverChange, LLC are located in Durham, NC and provide expert QuickBooks and Accounting Services.  For more QuickBooks tidbits, feel free to visit their twitter account @EverChangeLLC or “like” EverChange, LLC on Facebook.

How Remote Services Can Help Save You Time and Money

Now more than ever, businesses are looking for ways to cut costs and operate more efficiently.  Some contracted services, such as bookkeeping and accounting, are outsourced to local professional firms or independent contractors in order to save the company the hassle and expense of hiring an internal employee.

Traditionally, these services have been provided “onsite” or at the place of business which requires additional time and/or mileage to be paid to the professional. Today, there are various resources and business applications that will allow services like these and even internal functions to be provided remotely from anywhere. With the cost of fuel rising once again, let’s explore some of the ways your business can have “remote” or “offsite” workers to help you grow your business while saving you time and money.

     

  • Online Banking Sign up with your bank to access your accounts, transfer funds, and pay your bills online from anywhere.  You can even link your QuickBooks accounting file to your banking account and download all of your transactions onto your ledger with the touch of a button.  Even those paper statements are becoming a thing of the past and your accountant can download them as needed to work on your books from anywhere.

  • QuickBooks Online Payments In addition to being able to download all of your daily transactions into your accounting software right from your bank account, you can now also accept customer payments via EFT every time you email an invoice. Simply register for this feature and your customers can click the link provided with the invoice and enter their routing and account information.  You receive your payment as an electronic deposit in a few days and only pay a small transaction fee of $0.50 each.  No more running to the bank to make deposits or tracking what payments apply to which invoice.  It’s VERY easy to use, free and convenient for the customer.  My clients love it!
  • Log Me In This service allows you to securely access any computer from anywhere.  Access files, work remotely, or transfer documents on your work computer when you’re not there.  Great for offsite workers and for peace of mind because you can always access your office computer.  For more info:  www.logmein.com
  • ShareFile A secure file transfer system that allows you and your customers to transfer files back and forth that are too large to email (like some QuickBooks files).  They even design the interface to match your website and color scheme.  Customer service is top notch and they are based right here in the Triangle area of NC!  www.ShareFile.com
  • Virtual Phone Number Not in the office? No Problem! Just get a “virtual phone number” to have one main number that is as mobile as you are. Each employee or contractor can have a unique extension that forwards to their cell phone or individual voice mail box.  The system can also forward your voice mails as an MP3 file to your email or transcribe it as a text message right to your phone. The best part? The cost for one business extension starts around $6 per month.  www.phone.com
  • CutePDF Your computer recognizes this nifty little FREE program the same as any other printer. Instead of printing your documents on paper, simply save as a PDF and archive it digitally.  It’s quick, easy to use, and you get to save trees and help our environment, too. www.cutePDF.com
  • Instant Messenger There are various free instant messenger programs out there such as Yahoo, AIM, Windows Live, and even Gmail.  Save on phone charges and stay in touch with remote employees and workers by instantly being able to communicate with them.  You can even set your status if you are busy, away from your desk, or on the phone.  A life saver when you just need information in a pinch!
  • Cloud Computing I’m sure you’ve heard this is all the rage as of late.  Actually, it’s been around for years just not with such a trendy name.  The “Cloud” is actually nothing more than “internet based applications” that allow you to store and access your data and software at an affordable price.  Instead of buying your own server which can cost thousands, you can simply “rent” server space and access your data and software applications over the web.
  • Online Payroll Services Payroll is one of those areas that causes a great deal of stress and forces a lot of business owners to be tied down to their payroll schedule. Enter the online payroll service! These simple to use, convenient web-based services allow you to process your payroll over the internet from anywhere.  Some of them (like the payroll service we offer) even pay your taxes and file all your Federal and State forms electronically so you don’t have to.  It doesn’t get any easier than that!
  • Online Accounting and Billing Software If you need to access your accounting data or bill your clients while you are on the go, consider moving to an online accounting or billing service.  There are many out there to choose from so do some research to see which meets your needs best. Some of the more popular ones are QuickBooks Online, FreshBooks, Outright, and Kashoo.

These are all tools that you, your employees, and contractors can utilize to help save money, time, office space (save on rent!), paper, mileage, and our environment.  What are some ways your business uses to stay green, fast, and efficient?