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Posts Tagged ‘Accounting’

QuickBooks Training Workshop (Raleigh, NC) – Tues, May 8th 2012

http://qbworkshopmay2012.eventbrite.com/

Brush up on your QuickBooks skills or learn new ones! Join our Certified QuickBooks ProAdvisor for this interactive and informative QuickBooks training class. This will be a four hour “crash course” that will cover the basics and provide live working demonstrations so you can  quickly learn to use QuickBooks to manage your accounting data.

Topics to be covered will include:

  • Setting up your Company File and Chart of Accounts
  • Working with Lists, Items, and Classes
  • Customer Transactions: Sales Receipts, Invoicing, and Receiving Payments
  • Vendor Transactions: Writing Checks, Entering and Paying Bills
  • Recording Bank Deposits and Credit Card Transactions
  • Preparing and Understanding Reports

Additional content may be covered if time permits.  Every participant will receive a free training packet that will include step-by-step student lessons and other useful information for future reference and support.  Bringing your own laptop to follow along is optional but not required. Light Refreshments will be available.

Time: 1:00-5:00PM.  

Ticket Price: $99.00

Hurry, seating is limited!

Venue Info: Team Nimbus Center – 3801 Computer Dr.  Suite 101  Raleigh, NC 27609

Presented by: netWorth Bookkeeping & Payroll Services of Cary, NC – www.netWorthBookkeeping.com

216 E Chatham St, Suite 102, Cary, NC 27511

For more information: 919-249-6200 or info@netWorthBookkeeping.com

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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/

Steps For Adding Payroll Services To Your Business

If your small business is growing, and it’s time to add an employee, you may be wondering just where to start to begin this process (our focus for this blog is NC because that’s where we are located, your state requirements may differ). Most of the time, your payroll service provider will give you a checklist and packet of forms to complete in order to add employees to your payroll. There are three major components that will be needed to set your company up for payroll services.

First, you will need a Federal EIN, otherwise known as an Employer Identification Number. You may have already received this when you started your business but if you are a sole proprietor, you may need to apply for a new number:

http://www.irs.gov/businesses/small/article/0,,id=97860,00.html

Secondly, you will need a State Withholding Tax Id Number. If you already collect and file Sales and Use Tax, the number will be the same and you just need to call the state and add withholding tax to that existing number.  To apply for a new NC withholding account number, you can apply online here:

http://www.dornc.com/electronic/registration/index.html

Third, you will need a new NC Unemployment Security Commission account number to collect and remit state unemployment insurance withholding:

https://www.ncesc1.com/business/web604/web604Main.asp

Now that the main peices for the employer portion are out of the way, let’s take a look at what forms the employees will need to provide in order to receive payroll wages. The employer must retain these documents for their records for each employee:

W-4 Form (Withholding Allowance)

I-9 (Employment Eligibility Verification)

NC-4 (State Employee’s Withholding Allowance Certificate)

In NC, employers must also provide New Hire Information to the state. A form can be mailed or you can report your new hires online at www.NCNewHires.com.

For more information about whether a worker is an Employee or Independent Contractor, see: Employee or Independent Contractor?

Contact netWorth Bookkeeping Services for more information about our  easy, affordable, online payroll services

How Much Data Can QuickBooks Hold?

via QuickBooks Tip – How Much Data Can QuickBooks Hold?.

How much data can your QuickBooks company file hold before it becomes “stuffed”, overflowing like a file cabinet, and SLOW?  This is a very good question that most people don’t take into consideration — well because it’s software and should hold an unlimited amount of data.

QuickBooks Pro and Premier are designed for small businesses with 20 or fewer employees and annual revenues of less than $1 million per year, according to the latest information from the ProAdvisor certification study materials.  It is intended to store at least 2 years of detailed information in a company file – this allows you to compare your current business years performance with that of a previous year.

Quickbooks Enterprise is designed for larger businesses having 20-250 employees, needing up to 30 simultaneous users, stricter user access to financial information with 115 different permission settings, want to connect multiple locations, perhaps have remote workers, need to combine financial statements from multiple company files, and have more than $1 million in annual revenue.

How fast a QuickBooks file grows varies significantly from one company to another.  there is no “average” or “typical” company file size, since every business tracks different information.

How quickly a data file grows to “overflowing” will depend on the number of transactions that are entered, the amount of information entered per transaction, and the number of “links” per transaction.

For example, a company that enters 500 1-line invoices per month might find that their data file is smaller than another company that enters 100 5-line invoices per month.  Another example would be a company who usually receives 5 separate payments per invoice would have a larger data file than a company who receives one payment per invoice.

A good way to estimate the growth of your QuickBooks company file is to take the average number of monthly transactions (keeping in mind that an invoice, a payment and a deposit represent 3 separate transactions; while a bill and a bill payment represent 2 transactions), and multiply that by 2 KB to determine approximately how much your file will grow each month.  You can then take the monthly amount and multiply it by 12 to determine an estimated yearly data file size.

According to Intuit, QuickBooks can handle a maximum or 2 billion transactions, however, they do not state which version, (Pro, Premier, or Enterprise) this figure applies to.

In addition to estimated annual file growth and a maximum number of transaction that QuickBooks can handle, business owners must also take into consideration the maximum number of List items that QuickBooks can can accommodate.

The table below indicates the maximum number of items that can be held in individual and combines lists.

List Name
Maximum Number of Items
(Simple Start, Pro, Premier)

Maximum Number of Items
(Enterprise)

Chart of Accounts
10,000
10,000

Items, including Inventory Items
Group Items can contain 20 individual items
14,500
>100,000*
(29,000 in version 6.0 & earlier)

Job Types
10,000
10,000

Vendor Types
10,000
10,000

Customer Types
10,000
10,000

Payroll Items
10,000
10,000

Payroll Items per Employee Record
25
100

Price Levels
100
100

Classes
10,000
10,000

A/R & A/P Terms – TOTAL
10,000
29,000

Payment Methods
10,000
10,000

Shipping Methods
10,000
10,000

Customer Messages
10,000
10,000

Memorized Reports
14,500
29,000

Memorized Transactions
14,500
29,000

To Do Notes
10,000
10,000

Total Names – Employees, Customers,
Vendors, Unit of Measures and Other
Names – COMBINED
14,500
100,000*
(29,000 in version 6.0 and earlier)

Sales Reps
14,500
29,000

Sales Tax Codes
10,000
10,000

Billing Rate Levels
100
100

Fixed Asset Items
10,000
10,000

Ship Via
10,000
10,000

Templates
10,000
10,000

Units of Measure
10,000
10,000

Ship To Addresses
Unlimited (?)
Unlimited (?)

 

Some taxpayers must wait until mid-February to file

WASHINGTON — Some taxpayers will have to wait to file until mid- to late February to file their returns because of late changes to the 2010 tax law passed by Congress in December.

The IRS said it needs more time to re-program its processing systems to take into account the new law. The agency plans to announce a more definitive filing date before then.

The IRS said taxpayers who will need to wait to file fit into three categories:

Taxpayers claiming itemized deductions on Schedule A. Itemized deductions include mortgage interest, charitable deductions, medical and dental expenses as well as state and local taxes. In addition, itemized deductions include the state and local general sales tax deduction extended in the Tax Relief, Unemployment Insurance Reauthorization, and Job Creation Act of 2010 enacted Dec. 17, which primarily benefits people living in areas without state and local income taxes and is claimed on Schedule A, Line 5. Because of late Congressional action to enact tax law changes, anyone who itemizes and files a Schedule A will need to wait to file until mid- to late February.

Taxpayers claiming the Higher Education Tuition and Fees Deduction. This deduction for parents and students — covering up to $4,000 of tuition and fees paid to a post-secondary institution — is claimed on Form 8917. However, the IRS emphasized that there will be no delays for millions of parents and students who claim other education credits, including the American Opportunity Tax Credit and Lifetime Learning Credit.

Taxpayers claiming the Educator Expense Deduction. This deduction is for kindergarten through grade 12 educators with out-of-pocket classroom expenses of up to $250. The educator expense deduction is claimed on Form 1040, Line 23, and Form 1040A, Line 16.

For taxpayers who must wait before filing, the delay will affect paper and electronic filers.

The IRS said people in the affected categories should start working on their tax returns, but not submit their returns until systems are ready to process the new tax law changes. A specific date of when systems are ready will be announced in the near future.

via Late tax breaks mean some must wait until mid-February to file :: WRAL.com.

1099-Misc Forms Explained

1099-Misc is a type of information return required by the IRS for income reporting purposes to track payments made to independent contractors. These are usually people who provide services to your business such as accounting, general construction contractors, service technicians, attorneys, landlords, etc. who are NOT employees of your business.   These payments may also include mileage reimbursements and materials provided.

According the IRS:

What is nonemployee compensation? If the following four conditions are met, you must generally report a payment as nonemployee compensation.

  • You made the payment to someone who is not your employee;
  • You made the payment for services in the course of your trade or business (including government agencies and nonprofit organizations);
  • You made the payment to an individual, partnership, estate, or, in some cases, a corporation; and
  • You made payments to the payee of at least $600 during the year.

The biggest challenge is making sure you know how to properly classify independent contractors and employees.   This will help avoid penalties for not withholding income tax from these payments if they are deemed to have been employees.

In order to determine tax payer status, ID information, and 1099 eligibility, you must obtain a FORM W-9 from each of your subcontract vendors.  It is a good policy to adopt that you do not issue payments to new vendors until you have their W-9 form on file.  That way, you will not be scrambling at year-end to get information such as their tax ID and address in order to process their 1099 forms or to know if they are exempt as a corporation.  1099 Forms are due to each recipient by January 31st and to the IRS (form 1096) by February 28th.

New Changes to the 1099-Misc Rules :

Few people are aware of new changes to the 1099 Rules that were passed with the Healthcare Reform Bill. Under the old rule, non-employee compensation for services that totaled more than $600 per year required having a 1099 form issued. Also, under the old rule Corporations were exempt so you wouldn’t have to issue a 1099 to PCs-R-Us, INC.  if they fixed your computer, for example.

The new rule states that beginning in 2012 payments that total $600 or more (at once or cumulative) made to ANYONE for ANYTHING, including corporations for services AND GOODS must be issued a 1099-misc form. You read that right! If you are a business, and you purchase more than $600 worth of supplies at Staples or Walmart, you will be required to issue them a 1099 form at year end.  There are currently attempts at repealing this provision which have so far, (as of this writing) have been unsuccessful.

The IRS has also created a new 1099-K form requirement which is already in effect for 2011.

There are actually many various 1099 forms for different types of payments and you should always consult with a qualified accountant or tax professional for specific help in this area for your business.  Feel free to contact us for more information.

Are You Ready to Turn Your Skill into a New Business?

Are you GREAT at what you do?  Do you have years of experience in a particular trade or field and are now an expert?  Maybe now you are thinking “Hey, I might start a business and make a living out of this.”  Your expertise and hard work are only half the battle.  Now comes the hard part.

Entrepreneurship can be a great source of income, pride and accomplishment.  It can also be quite challenging to run and maintain “the business side” of a business.  This is a common source of confusion and frustration for many new business owners, even for small, single owner operations and they often become sad statistics of startup failure.   It’s important to take steps to make sure you set yourself up to succeed from the beginning.

Here are some common snafu areas for many business owners which can make or break your new venture:

1.  The Business Plan – I know, I know.  You’ve heard it a million times but it’s all written down in your head.  Not only do you need one, you need to revisit it once a year and make sure that is consistent with helping you meet your objectives and goals.  I also recommend writing a “Vision Statement”, which is where you see yourself in 5 years, written in present tense.  For example:  We are the largest supplier of buttons in our metro area of _____ with revenues of_____ per year.  You get the idea. Only a concrete, well thought out goal can be obtained and be able to withstand any challenges.

2.  Taxes and Legal Compliance – Understanding your tax obligations and making sure you are in legal compliance is crucial.   From Federal to State level, there are income taxes, annual filings and reports (if you are incorporated), state Sales and Use Taxes, and Payroll Taxes just to name a few.  Even simple mistakes in any of these areas can lead to stiff penalties and fines, in some cases enough to force you to close your doors.  Even something seemingly as innocent as misclassifying an employee or contractor can have expensive consequences. Don’t get caught off-guard!  Consult an Accountant and/or an Attorney to plan your business, pick the right legal structure and get off to a good start.  You can also start with this FREE Virtual IRS Small business tax workshop available online, anytime.  Oh, and don’t forget about protecting yourself with good insurance!

2.  Accounting and Record Keeping – Not knowing where you stand financially is not only a common cause of business failure but frustration in general.   Having your data organized and keeping track of income and expenses can give you the tools you need to make decisions to steer your business in the right direction.  This will also help save you money at tax time by making sure you don’t miss any allowable deductions.  A good bookkeeping system can also help you with fraud detection and monitoring for theft (if you carry inventory).  This is definitely an area that you will want to hire a professional to help you with from the beginning.  If you weren’t an accountant before you started your business, you won’t be one after.  “Flying blind” will cost you far more in the long run than you’ll pay your bookkeeper.

4.  Marketing – Okay, so you’re awesome at what you do but who else knows it?  How will you reach new customers and let them know how awesome you are?  Have you taken into consideration an advertising budget to get your brand off the ground?  This is also an area where you may need to hire a marketing expert to help you.  With so many new online media streams to promote yourself, it’s important to have a brand or “image” and a consistent marketing message.  This could include everything from your business cards to your website (don’t even THINK about not having one), your social media campaigns on Twitter and Facebook, etc.,  and your blog (like this one I am writing).  There are also many free and inexpensive ways to get customers which are time consuming but necessary.  Word of mouth referrals and good old face-to-face networking are tried and true methods to meet potential clients and build relationships.  Remember, business is personal and these contacts will be key to your long-term growth and success in surprising and unexpected ways.

5.  Pricing Services or Products Correctly – This is a tricky one because so many variables come into play.  Your costs, your volume, and your competition should all be considered when trying to get to that “sweet spot.”  A break-even analysis will be an invaluable tool in helping you understand what you need to charge for each item or service and how many you need to sell just to cover your costs.  You need to know if your pricing structure is both viable and sustainable.

6.  Don’t Reinvent the Wheel – Chances are that whatever your business model is, someone else is already out there doing it and doing it well.  Take some time to talk to some folks who are already in the field and learn from them.  If their business is successful, it’s because they are doing something right.  You can always add your own uniqueness or improve upon “tried and true” formulas to make it your own.  It’s also equally important to use this learning opportunity to figure out what NOT to do and avoid costly mistakes.

Hopefully, you  have been doing research about starting your own business and haven’t been scared off or deterred so far.  Don’t be afraid to ask for help! If you are willing to accept that your dream of business ownership may come with some serious (but manageable) responsibilities, then you are on your way to having a successful future filled with unlimited possibilities.