California companies take heed! The sales tax will be increasing to 8.75% effective April 1st, 2009. This is supposed to be a "temporary" increase through 2011. We'll see how temporary that is.
Remember to change your records so that you'll be all set when it comes time to submit your payments to the State Board of Equalization.
Wednesday, March 11, 2009
Wednesday, March 4, 2009
The Dreaded Tax Crunch
April 15th is rapidly approaching. Do you have your receipts and bank statements ready to go? Did you plan ahead this year and use accounting software to make your tax prep easier?
If you are running your own business, no matter how small, it really pays to organize your accounting using financial software such as QuickBooks. You may think you don't have time to do it yourself and that may very well be true. But can you afford not to do it?
Hiring a freelance bookkeeping professional can save you money in the long run. It is much more cost effective to have a professional bookkeeper keep your books up to date then to pay your Certified Public Accountant to straighten out your bookkeeping while he/she is doing your taxes.
If you are all set for 2008 taxes, think ahead for 2009 and be prepared!
If you are running your own business, no matter how small, it really pays to organize your accounting using financial software such as QuickBooks. You may think you don't have time to do it yourself and that may very well be true. But can you afford not to do it?
Hiring a freelance bookkeeping professional can save you money in the long run. It is much more cost effective to have a professional bookkeeper keep your books up to date then to pay your Certified Public Accountant to straighten out your bookkeeping while he/she is doing your taxes.
If you are all set for 2008 taxes, think ahead for 2009 and be prepared!
Wednesday, February 18, 2009
Mileage Rates
Last July the IRS raised the business mileage rate to $0.585 per mile due to the rapidly rising fuel prices. Now that the price of gas has significantly decreased the IRS has lowered the mileage rate for 2009 to $0.55 per mile for business use.
The mileage rate for medical use is now $0.24 per mile.
The mileage rater for charitable purposes is $0.14 per mile.
The mileage rate for medical use is now $0.24 per mile.
The mileage rater for charitable purposes is $0.14 per mile.
Thursday, February 12, 2009
New Year, New Business
By now you should be through the headache of year-end payroll reporting requirements and sending out the 1099's to your eligible vendors. Did you get caught in a time crunch? Or miss some of those very time-sensitive filing dates?
Maybe you should consider out-sourcing your bookkeeping needs so that you don't need to pay late penalties and interest charges next year. It can be a cost effective solution. A few hours a month may be all you require to get a handle on your books.
Maybe you should consider out-sourcing your bookkeeping needs so that you don't need to pay late penalties and interest charges next year. It can be a cost effective solution. A few hours a month may be all you require to get a handle on your books.
Wednesday, December 31, 2008
Shareholder Payments
IRS audits now routinely review S corp payments to shareholders to see if payroll taxes are being avoided by treating payments to shareholder-officers as loans or shareholder distributions of cash or property.
An officer performing services for a corporation is entitled to payment; those payments are wages. For federal employment tax purposes, corporate officers are employees.
Avoiding employment taxes by treating compensation as cash distributions, expense reimbursements, or loans rather than as wages is illegal.
Make sure you are paying your shareholders correctly! Get a check-up of your books.
An officer performing services for a corporation is entitled to payment; those payments are wages. For federal employment tax purposes, corporate officers are employees.
Avoiding employment taxes by treating compensation as cash distributions, expense reimbursements, or loans rather than as wages is illegal.
Make sure you are paying your shareholders correctly! Get a check-up of your books.
Friday, November 28, 2008
Christmas Tax Tips
Tax tips: Gifts to employees and company parties
Nontaxable gifts. Fruit baskets, hams, turkeys, wine, flowers and occasional entertainment tickets, such as to a show or sports event, generally are nontaxable as de minimis fringe benefits.
Taxable gifts. Gift certificates (“cash in kind”) are wages subject to FIT, FITW, FICA, and FUTA—even for a de minimis item. For example, a gift certificate for a turkey is taxable even though the gift of a turkey is not. Cash gifts of any amount are wages subject to all taxes and withholding.
Parties and picnics. The cost of occasional parties is nontaxable to employees and their families as a de minimis fringe—if they are infrequent and for the purpose of promoting employee health, goodwill, contentment, or efficiency. Examples: occasional holiday celebrations, cocktail parties and company picnics. Such parties are fully deductible to the business (they are not subject to the 50% limit on business meals).
Get your books in order for the end of the year. Consider hiring a freelance bookkeeper if you don't already have one.
Nontaxable gifts. Fruit baskets, hams, turkeys, wine, flowers and occasional entertainment tickets, such as to a show or sports event, generally are nontaxable as de minimis fringe benefits.
Taxable gifts. Gift certificates (“cash in kind”) are wages subject to FIT, FITW, FICA, and FUTA—even for a de minimis item. For example, a gift certificate for a turkey is taxable even though the gift of a turkey is not. Cash gifts of any amount are wages subject to all taxes and withholding.
Parties and picnics. The cost of occasional parties is nontaxable to employees and their families as a de minimis fringe—if they are infrequent and for the purpose of promoting employee health, goodwill, contentment, or efficiency. Examples: occasional holiday celebrations, cocktail parties and company picnics. Such parties are fully deductible to the business (they are not subject to the 50% limit on business meals).
Get your books in order for the end of the year. Consider hiring a freelance bookkeeper if you don't already have one.
Friday, November 21, 2008
Health Savings Account Fact Sheet
As the cost of health care coverage continues to rise, Health Savings Accounts provide access to affordable health care coverage for small business owners, employees, and the self employed.
• A Health Savings Account (HSA) is a tax preferred account owned by an individual used to pay for current and future medical expenses, including deductibles, co-payments and other forms of cost-sharing.
• HSAs are funded by tax deductible contributions. Both employees and employers may contribute to the employees’ HSA, which is different from other tax-preferred health care coverage which limits contributions to only one party.
• HSAs are available to individuals covered by HSA-eligible health plans, like high deductible plans and other consumer-directed health plans.
• HSAs are portable, meaning that the individual has ownership of the resources in the HSA. An individual is not dependent on a particular employer, should the individual change jobs or become unemployed. Instead, the HSA travels with the individual.
• Individuals with HSAs have flexibility to use their HSA account funds to pay for current medical expenses or save the money in the account to pay for future medical expenses.
• Today’s health-care environment often presents high or unexpected bills. HSAs matched with the individuals HSA-eligible insurance provide security against high or unexpected bills.
• Since the HSA is owned by the individual, the individual has control over the account. This lets the individual make all decisions about the account; including how much to put in the account, whether to save the account for future expenses or for current medical expenses, which medical expenses to pay with the account, and which company will hold the account.
• For small business owners, HSAs avoid the administrative time and costs, since employees self-administer their HSA.
• Small business owners can determine how much they want to contribute to their employees’ accounts and are able to choose the frequency with which they make such contributions. No minimum contributions are required.
For more information on HSAs, visitwww.hsa.gov
• A Health Savings Account (HSA) is a tax preferred account owned by an individual used to pay for current and future medical expenses, including deductibles, co-payments and other forms of cost-sharing.
• HSAs are funded by tax deductible contributions. Both employees and employers may contribute to the employees’ HSA, which is different from other tax-preferred health care coverage which limits contributions to only one party.
• HSAs are available to individuals covered by HSA-eligible health plans, like high deductible plans and other consumer-directed health plans.
• HSAs are portable, meaning that the individual has ownership of the resources in the HSA. An individual is not dependent on a particular employer, should the individual change jobs or become unemployed. Instead, the HSA travels with the individual.
• Individuals with HSAs have flexibility to use their HSA account funds to pay for current medical expenses or save the money in the account to pay for future medical expenses.
• Today’s health-care environment often presents high or unexpected bills. HSAs matched with the individuals HSA-eligible insurance provide security against high or unexpected bills.
• Since the HSA is owned by the individual, the individual has control over the account. This lets the individual make all decisions about the account; including how much to put in the account, whether to save the account for future expenses or for current medical expenses, which medical expenses to pay with the account, and which company will hold the account.
• For small business owners, HSAs avoid the administrative time and costs, since employees self-administer their HSA.
• Small business owners can determine how much they want to contribute to their employees’ accounts and are able to choose the frequency with which they make such contributions. No minimum contributions are required.
For more information on HSAs, visitwww.hsa.gov
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