Celebrating a 3rd Year Anniversary with a Client

Celebrating a 3rd Year Anniversary with a Client

This past weekend I celebrated the 3rd year anniversary of a client’s business with other members of his club. I met Dan of 9Round when he called my office prior to his opening to discuss his upcoming needs. I was about to have a book signing at the local Barnes & Noble for Business Success With Ease (see http://affordablebookkeepingandpayroll.com/bswe/ for book details). I invited Dan to stop by the event since I would be sharing information I thought would be helpful for him. A couple of months later, I was at our Chamber Business Expo and saw he had a table and was promoting his grand opening coming up and I took the information he shared on attending that day for free. I’d never been to a kickboxing studio, and I was interested to find out about it. I invited a good friend of mine to join me. I have to admit I don’t really like exercising that much (there are other things I’d rather do!), but it was a fun way to exercise if I was going to do it. Although I don’t normally trade services with clients (I usually just purchase their products/services and they purchase mine), when he said he was ready for bookkeeping assistance, I offered a trade. Rather than charge him for the QuickBooks set-up, he gave me the same value in classes. I figured if I had a financial investment, I’d be more likely to go. I like 9Round Torrance for a few reasons which include: Dan and his staff are very kind and patient with the members. It doesn’t matter if your fitness is...
Tax Benefits for Education

Tax Benefits for Education

It’s August and many parents have children heading to college soon, and there are tax benefits for education. Are you aware you may qualify for some credits or deductions on your income tax return? Following is information you may find helpful regarding this topic: A tax credit reduces the amount of income tax you may have to pay. A deduction reduces the amount of your income that is subject to tax, thus generally reducing the amount of tax you may have to pay. An education credit helps with the cost of higher education by reducing the amount of tax owed on your tax return. If the credit reduces your tax to less than zero, you may get a refund. There are two education credits available: the American opportunity tax credit and the lifetime learning credit. You must meet all three of the following for either credit: You, your dependent or a third party pays qualified education expenses for higher education. An eligible student must be enrolled at an eligible educational institution. The eligible student is yourself, your spouse or a dependent you list on your tax return. If you’re eligible to claim the lifetime learning credit and are also eligible to claim the American opportunity credit for the same student in the same year, you can choose to claim either credit, but not both. In the past, there were also deductions you may have been able to take on your tax return. These included: Tuition and Fees –  The tuition and fees deduction could reduce the amount of your income subject to tax by up to $4,000. You could not claim the tuition and fees deduction as...
Tax Court Slams the Brakes on Vehicle Deduction Claim

Tax Court Slams the Brakes on Vehicle Deduction Claim

Do you claim deductions for your vehicle? If you do, make sure to keep a detailed log of your of all your businesses trips. There are many taxpayers who have tried and failed to take advantage of these deductions, including the recent example of Katrina Taylor. Ken Berry, from Accountingweb.com, reviews the case and discusses what we can learn from this misguided taxpayer’s mistakes. Katrina Taylor et vir v. Commissioner, TC Memo 2017-99, the taxpayer committed a multitude of sins – including errors, omissions, and inflated expenses – that brought upon her downfall. Katrina Taylor’s husband operated a recycling business in West Virginia. At the same time, she operated a long-term care billing business. Taylor claimed that she sought out healthcare providers, mainly nursing homes and hospitals, and offered to review their customer accounts. Then she allegedly proposed to prospective clients that if she collected on any past-due accounts, they would pay her a percentage of the amount collected. Taylor also worked full-time at a hospital. During the tax years in question, Taylor included her business income and expenses, consisting mostly of alleged car and truck expenses, on the Schedules C for her husband’s recycling business. Those Schedules C did not indicate which income and expenses were attributable to which business. Subsequently, the IRS disallowed the couple’s deduction for car and truck expenses. So the taxpayer took her case to the Tax Court. At trial, the couple produced spreadsheets showing that Taylor made 144 distinct trips between their home and prospective client sites. Each entry had a date, a destination, beginning and ending odometer readings, total miles driven, and...
GO-Biz Accepting Applications for California Competes Tax Credit

GO-Biz Accepting Applications for California Competes Tax Credit

Would you be interested in having tax credits for your business? The third quarter application period is open for businesses interested in applying for the California Competes Tax Credit program. The program is provided by the Governor’s Office of Business and Economic Development (GO-Biz), which offers a variety of different services to help business owners including international trade development, regulation guidance, small business assistance, and assistance with state government. With information shared by the CalChamber’s website, you can learn how this program could potentially help your business and how you can apply. The California Competes Tax Credit is an income tax credit available to businesses that want to come, stay, or grow in California. Tax credit agreements are negotiated by GO-Biz and approved by a statutorily created “California Competes Tax Credit Committee,” consisting of the State Treasurer, the Director of the Department of Finance, the Director of GO-Biz, and one appointee each by the Assembly Speaker and Senate Rules Committee. This program is open to any business planning to create new full-time jobs in the state, regardless of size or location. Businesses can access the online application here. Applications must be submitted by August 21. Since 2014, GO-Biz has allocated $492.5 million to 688 companies projected to create 70,747 new jobs and $14.4 billion in new investments. Members of the CCTC team are available to provide technical application assistance. An application guide, Frequently Asked Questions (FAQs) and program regulations are available on the California Competes Tax Credit page. If you would like to learn more information on CCTA program, you can participate in an upcoming online webinar hosted by...
New Form I-9 Released, Again

New Form I-9 Released, Again

A new revised I-9 form has been published by the U.S. Citizenship and Immigration Services (USCIS). The form has been updated twice in less than one year and has a revision date of 07/17/17 N. Shared by CalChamber.com, Gail Cecchettini Whaley has brought this information to our attention in her recent article on what specific revisions have been made. By September 18, 2017, employers must use only this new version (rev. 0/7/17/17 N). Until then, employers can continue using Form I-9 with a revision date of 11/14/16 N or use this new version. The Instructions for Form I-9 and the Form I-9 Supplement have also been updated. One change relates to the timing of when the Form I-9 must be completed. Previously, the form and instructions stated that the employee must complete Section 1 “by the end of the first day of employment.” Now, the USCIS has removed “the end” from the phrase, and the employee must complete Section 1 “by the first day of employment.” According to the revised Handbook for Employers: Guidance for Completing Form I-9, the employee must complete Section 1 “at the time of hire (by the first day of their employment for pay).” Remember, employers cannot ask an individual to complete Section 1 before he/she has accepted a job offer. According to the USCIS, revisions also include: A change to the name of the Office of Special Counsel for Immigration-Related Unfair Employment Practices to its new name, Immigrant and Employee Rights Section. Revisions related to the list of acceptable documents on Form I-9: Added the Consular Report of Birth Abroad (Form FS-240) to List...
10 Things to Know About the Child/Dependent Care Credit

10 Things to Know About the Child/Dependent Care Credit

Are you a parent incurring child/dependent care costs so you can work? Are you aware you may qualify for a deduction on your tax return? If you paid someone to care for your child, spouse, or dependent last year, you may be able to claim the Child and Dependent Care Credit on your federal income tax return. Below are 10 things the IRS wants you to know about claiming a credit for child and dependent care expenses. The care must have been provided for one or more qualifying persons. A qualifying person is your dependent child age 12 or younger when the care was provided. Additionally, your spouse and certain other individuals who are physically or mentally incapable of self-care may also be qualifying persons. You must identify each qualifying person on your tax return. The care must have been provided so you – and your spouse if you are married filing jointly – could work or look for work. You – and your spouse if you file jointly – must have earned income from wages, salaries, tips, other taxable employee compensation or net earnings from self-employment. One spouse may be considered as having earned income if they were a full-time student or were physically or mentally unable to care for themselves. The payments for care cannot be paid to your spouse, to the parent of your qualifying person, to someone you can claim as your dependent on your return, or to your child who will not be age 19 or older by the end of the year even if he or she is not your dependent. You must...
IRS Website Offers Small Business Employment Tools

IRS Website Offers Small Business Employment Tools

Do you have trouble understanding and complying with the complex IRS payroll regulations for your small business? The IRS website offers tax resources for small businesses with products ranging from printable calendars, online calculators, a series of educational webinars and step-by-step guides. An article published on the CPA Practice Advisor website, helps inform entrepreneurs about the tools available to assist them with employment taxes. Federal law requires most employers to withhold federal taxes from their employees’ wages. IRS tools can help small businesses understand some of the requirements for withholding, reporting, and paying employment taxes. The IRS website, IRS.gov, provides easily accessible information and guides on what forms employers should use as well as how and when to deposit and report employment taxes. Federal Income Tax– Small businesses first need to figure out how much tax to withhold. Small business employers can better understand the process by starting with an employee’s Form W-4 and the withholding tables described in Publication 15, Employer’s Tax Guide. Social Security and Medicare Taxes– Most employers also withhold social security and Medicare taxes from employees’ wages and deposit them along with the employers’ matching share. In 2013, employers became responsible for withholding the Additional Medicare Tax on wages that exceed a threshold amount.There is no employer match for the Additional Medicare Tax and certain types of wages and compensation are not subject to withholding. Federal Unemployment (FUTA) Tax– Employers report and pay FUTA tax separately from other taxes. Employees do not pay this tax or have it withheld from their pay. Businesses pay FUTA taxes from their own funds. Depositing Employment Taxes– Generally, employers...
2 Simple Tax Changes That Would Fix Social Security for Good

2 Simple Tax Changes That Would Fix Social Security for Good

Did you know the Social Security Trust Fund is expected to run out of reserves by 2034? According to recent projections, in about 17 years benefits may need to be cut. These cuts could negativity affect American retirees’ who financially depend on Social Security. In an article from The Motley Fool, a investment website, Matthew Frankel writes on how combining two policy changes would ensure Social Security’s health for another 65 years. The Social Security funding gap and why tax increases are the logical solution As I’ve written before, Social Security is well-funded for the time being, but this isn’t expected to last too long. Specifically, the program is expected to start running at a deficit in 2020, and continue paying out more than it brings in for the foreseeable future. According to a report by the nonpartisan Congressional Budget Office, or CBO, the long-term funding deficit is projected to fluctuate between 1.5% and 1.9% of GDP from 2027 through 2082. So, it’s fair to say that the average annual deficit over the long run is expected to be about 1.7% of GDP. There are two ways to fix the problem — raise taxes or cut benefits — and there are dozens of options within those two categories. However, studies have shown that the vast majority of Americans of all ages, income levels, and political affiliations are opposed to Social Security benefit cuts in any form. Plus, according to the same CBO report, most forms of benefit cuts won’t have much of an impact on the funding deficit all by themselves. Tax increases, by contrast, are not just a...
Pregnancy Discrimination Results in $100,000 Fine

Pregnancy Discrimination Results in $100,000 Fine

Are you aware that pregnancy discrimination from potential job employers is a valid discrimination claim? Women who are looking to be employed can not be turned down for a position solely for the reason that they are pregnant. A recent example was released on the U.S. Equal Employment Opportunity Commission website where the EEOC took action against a company who rescinded a job offer after they learned of the applicant’s pregnancy. Daytona Beach-based insurance brokerage firm Brown & Brown will pay $100,000 and furnish significant relief to resolve a pregnancy discrimination lawsuit filed by the U.S. Equal Employment Opportunity Commission (EEOC), the federal agency announced in May. According to the EEOC’s suit, Brown & Brown made a written job offer to the applicant and also sent her an employment agreement for a “personal lines technical assistant” position at its Daytona Beach location and proposed employment start dates. Upon receipt of the offer letter, the applicant affirmed her interest by email and sought to ask a few questions regarding the offer. About two hours later, the applicant spoke with the department leader’s assistant and inquired about maternity benefits because she was pregnant. The assistant immediately advised the department leader of the applicant’s pregnancy and, minutes later, according to the suit, the applicant received an email from the company rescinding the job offer, stating that it “had a very urgent need to have somebody in the position long term …We appreciate you telling us beforehand.” Pregnancy discrimination violates Title VII of the Civil Rights Act of 1964, as amended by the Pregnancy Discrimination Act. EEOC filed suit in U.S. District Court...
7 Things To Do Right Now To Save On Taxes This Year (cont.)

7 Things To Do Right Now To Save On Taxes This Year (cont.)

In our preceding blog post, we discussed an article on what things you can start doing right now to save on taxes this year. Starting from reviewing your previous tax return to funding your health savings account, you can review the information we covered here: (http://bit.ly/2skq8IO). Today’s post will talk about how you can save more money for by making changes to your W-4, reviewing your estimate payments, and making an appointment with your tax professional. 5. Make Changes To Your W-4 Or Consider Changing Your Withholding. The form W-4 is the form that you complete and give to your employer – not the IRS – so that your employer can figure how much federal income tax to withhold from your pay. You typically fill out a form W-4 when you start a new job or at the beginning of the year. Generally, the more allowances you claim on your W-4, the less federal income tax your employer will withhold from your paycheck (the bigger your take home pay) while the fewer allowances you claim, the more federal income tax your employer will withhold from your paycheck (the smaller your take home pay). You want to get this number right since if you owe too much at tax time, you could be subject to an underpayment penalty. (For more on making changes to your W-4, check out this prior article.) 6. Review Your Estimated Payments. If you receive payments or other money throughout the year without having any federal income taxes withheld, you should consider making estimated payments. If you are filing as an individual taxpayer, you generally have...

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