Tag: business taxes

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‘Tis the (Filing) Season – Time for W2s and 1099 Reporting

1099-santa-hatEvery year-end brings with it not just the holiday spirit, but also the underlying dread felt by small business owners – a creepy and back-of-your-neck hair-raising feeling associated with annual business tax reporting and filing. That old saying about “death and taxes” has a lot of validity to it; sometimes they feel like the same thing to a small business owner. And this is the filing season. Ho ho ho.

The reporting requirements for small businesses seem to be growing at a rapid pace, and business owners are struggling to find the information and tools that ease the adjustment to increasingly burdensome reporting and compliance. The IRS has implemented a number of measures to increase tax revenues and enforce compliance, including stricter 1099 reporting requirements. With information provided at both ends of the “transaction” it is easier to identify those discrepancies which trigger audits.   With this type of business intelligence, the IRS has developed a fairly strong weapon to combat non-compliance, so small business owners need to really pay attention (the IRS is).  If the feds are tooling up, then business owners should, too.

Just to add to the seasonal festivities, make sure you upgrade your accounting software in time to benefit from the right rules and forms. If you run a small business and keep most of your information on spreadsheets (still? really?), that’s OK because there are solutions available which draw the information from spreadsheets, eliminating the need to re-enter data. Seriously, though, you should consider using actual bookkeeping or accounting software.

It is also important to remember that payroll tax filing dates for W-2s and 1099 forms were changed for 2016 taxes, and these changes continue for 2017. The filing deadline for 2017 W-2s and 1099 forms (including Form 1099-MISC) is January 31, 2018, which is a month earlier than the pre-2017 filing date. Thankfully, the deadline for providing W-2 forms to employees and 1099-MISC forms to other workers for 2017 has not changed. This deadline is still January 31, 2018. 

Using a cloud-based service to file 1099s online should be something your business considers doing if it isn’t already. Because most services include form and feature updates, users don’t have to go looking for the right documents or worry that they are using an outdated form.  In an online or hosted solution, users benefit from updates without downloads and get stricter security around their data than would likely be present on their own PC.  As it relates to your accounting software, make sure it has the capabilities you need in this area and don’t settle for limited functionality.

Here are some features you’ll want to look for in your e-filing solution this year:

  • The ability to print and/or mail forms to recipients as well as e-filing forms directly with the IRS or SSA
  • Have Form 1096 or W-3 automatically calculated and transmitted electronically with the detail forms
  • Upload volumes of data with Excel templates or import from your accounting software (saves time and reduces input errors)
  • Store data securely and provide full access to filed forms for multiple years
  • Maintain payer and recipient records securely for use year after year.
  • Encrypt data upon submission and keep it encrypted throughout the entire process
  • Supports 1099 Corrections (should allow filing of corrected forms regardless of how the original form was filed)
  • Accountants, Bookkeepers and Tax Preparers should be able to set up multiple payers and file on behalf of many clients from a single account, even filing for all clients at once or via batch submission

Year-end tax filing, especially dealing with 1099s and W2s, is an arduous task for most small businesses and their professional service providers, yet it is one of those things that simply can’t be put off.  Where there is a single income tax return there could be literally hundreds of associated 1099s or W2s to file.  1099 filing in particular has become more of a focus as authorities crack down on contractor versus employer classifications and seek to develop easier identification of audit candidates (something every business owner wants to avoid).

The point of the discussion is that there are cloud-based tools which are highly useful, feature rich, and very affordable… and business owners and their accountants or bookkeepers would be wise to take a look rather than assuming that the general accounting software will do the trick this year and the next.  Remember that tax filing season is an annual event, and being able to rely on a consistently useful solution can make the season a bit merrier (or at least a little less stressful) for all.

jmbunnyfeetMake Sense?

J

Hi! I was looking for the Frangos.

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The IRS is Spending a Lot of Money to Make a Lot of Money | cashlessandpaperless

Electronic documents and paperless solutions are supposed to help make our lives easier.  By eliminating the paper documents and working with electronic ones instead, users would be able to efficiently manage all their valuable information in one place.  Even more, this information could be shared electronically (swiftly and simply) with others.  However, as most advancements in technology have demonstrated, every solution comes with its own new set of problems.  Where accounting and taxes are concerned, tax payers and the IRS alike are dealing with the impacts of accounting for and substantiating “cashless and paperless” transactions and other activities.  It seems that the IRS is spending more time and resources (=money), expecting that a frontal assault armed with digital records will provide a basis for improved tax collections.

“If you’ve recently been involved in an IRS audit of a business, you have likely seen the agent enter the room fully prepared with copies (subpoenaed) of bank statements and other documentation. It used to be the tax payer who had to provide all the documentation, and the auditor simply used that material. These days, it has become too easy to falsify or improperly change information in electronically stored files (using Photoshop or other tools), so the IRS has lost trust in the data tax payers provide. Instead, they spend a great deal of time and resources collecting this information for themselves (because they can), and then use their copies of the data to compare the data provided by the tax payer.

The IRS will accept electronic records in lieu of original paper documents in many cases, and this is often because they have an ability to validate the content of the electronic records through comparison. Yes, the IRS can collect electronic banking information from financial institutions and other sources, just like the account holder can. It’s become more of a “guilty unless you can prove you’re innocent” approach, and puts the tax payer in a purely defensive posture. Even more, it assumes the tax payer has the sophistication and tools necessary to access and manage all of that electronic data effectively.”

read more at: The IRS is Spending a Lot of Money to Make a Lot of Money | cashlessandpaperless.

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QuickBooks In-House Hosting Services for Accountants

QuickBooks Hosting Services for IT-Capable Accountants

DIY-SelfHostingSmall businesses in large numbers are looking to the cloud as a platform to deliver solutions for the problems of escalating IT costs, mobility, and remote access to business data. The cloud is also becoming the recommended platform for the delivery of services from accounting and bookkeeping professionals, as the benefits of remote data access and real-time collaboration nicely address the requirement for accounting pros to exchange and share information with their business clients. One of the popular “cloud” hosting solutions addressing a collaborative accounting model is a hosted application approach to using Intuit QuickBooks desktop products. While accounting professionals may be aware that QuickBooks can be hosted by 3rd party providers, many firms are not aware of what is referred to as the “self-host” model, which is a QuickBooks hosting model for accounting firms with some in-house technical capability.

For small businesses and many accounting service providers, working with a 3rd party hosting provider makes a lot of sense, as the host has the infrastructure and the support organization necessary to service large-scale hosted customer requirements.

On the other hand, there are a lot of accounting and bookkeeping firms which have skilled in-house IT personnel who are more than capable of creating a hosting environment to serve not only their internal needs, but also to meet basic requirements of the QuickBooks-using clients they work with. It makes sense to explore the possibilities of implementing a “self-hosting” model for client access to QuickBooks, overcoming the cost and other barriers involved with 3rd party hosting services.

When an accounting firm works with a number of clients with QuickBooks desktop edition files, the firm has to install and manage not only their own software products, but also the relevant QuickBooks software products in use by the various clients (must have the right QB program in order to open the QB data file). This often puts an undue burden on the internal IT systems of the practice which has its own internal-use software and systems to support. With an internal hosting approach, the firm can provide standardized/centralized application hosting services to their clients, building their own “economy of scale” on the platform and reducing the IT management while achieving all the real-time and remote access benefits of an outsourced hosted model. The firm does not experience a retail cost for a hosting solution, and the cost to host the client is generally offset through the efficiency gained at the firm level through direct access to client data and applications.

The technical model for delivering hosting services to a relatively small client base is not overly complicated. Commercial service providers have complex architectures because they must serve a large and diverse client base, and they never really know what sort of devices (computers and printers) or connectivity the customer may have. Commercial providers have to be prepared to deal with any and all situations, where a “self-host” firm needs only to concern themselves with supporting their particular client users and use cases. Additionally, when the solution is offered as part of the accounting or bookkeeping service, the support requirements of the customer tend to be focused during mutual working hours, as opposed to the 24×7 support demanded of the commercial host.

As accountants and bookkeepers search for solutions to improve efficiency, increase profitability and differentiate services, it makes sense for those serving QuickBooks desktop clients and having an in-house IT capability to explore becoming a QuickBooks self-host. It is one possible way to eliminate cost as a barrier to working closer with QuickBooks desktop clients while providing the mobility and collaboration businesses need.

 

Make Sense?

Joanie Mann Bunny FeetJ

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Why Accountants and Bookkeepers Use the Cloud

When businesses do business, they generate a lot of information. In most cases, this information has a relationship to a financial transaction of some sort, like a bill from a vendor or an invoice or sales receipt for a customer. It can be difficult for a small business owner to find the best way to manage the information about customers and products and suppliers, and figuring out the best way to handle the bookkeeping and accounting is often a secondary issue. Sure, it’s important to know how much money is in the bank, but online banking helps with that. For a small business owner trying to keep their operation running, the biggest problems are the ones they face every day, like remembering which customer likes which products, or knowing which suppliers will deliver in a pinch. Bookkeeping just isn’t a huge focus other than during tax time because it doesn’t help them get business done.

It is this question of value in daily bookkeeping and accounting work that business owners and their accounting service providers alike struggle with. Certainly, most business owners recognize the necessity to get the books done, but it is generally for compliance purposes alone. Payroll taxes, sales and use taxes, personal property taxes, income taxes – these are the items that business owners think about when they think about accounting. If you see it through the eyes of the business owner, accounting = paying taxes. It’s a tough value proposition for the accountant, when you think about it. The business owner has to pay someone to figure out how much they have to pay someone else. Yeah, try to sell more of that, and good luck.

The cloud, on the other hand, is helping accounting and bookkeeping professionals change this perspective. It’s a relatively new working model for some even though the idea has been there for a long time. Better information helps business make better business decisions, and accounting professionals can help businesses implement the controls and processes which ensure that the information is complete and accurate; they can help make the information better and more meaningful.

Remotely accessed and hosted desktops and application models have been around for quite a while, too, but only recently has the market begun to realize the full potential of the hosted model. We have the investment in SaaS solutions to thank for this; they blazed the trail for online application adoption and created awareness of the possibilities around hosting and anytime/anywhere access. The SaaS and “true cloud” applications continue to gain in popularity and acceptance, yet the hosting model is providing businesses with the ability to retain use of their business applications and data yet benefit from the same managed service and remote access that other online solutions provide.

When you look at how public accountants and professional bookkeepers work with their clients, the concept of creating shared access to accounting applications and financial data makes a lot of sense. Time and distance are the real issues to be solved – the business owner and their accounting pros generally work from different locations, and likely need to access the information for different purposes at different times. If they aren’t in the same place and using the same tools, how efficient can the collaboration truly be? With the cloud, on the other hand, collaboration is fully enabled and allows each user to do what they need to regardless of the location and time.

As the accountant or bookkeeper is able to work more closely with their client (using the same tools and the same data in real time), information can be processed more regularly and with a higher degree of accuracy. Outsourced accounting and bookkeeping providers are then able to give their clients more timely and accurate financial information which supports making better business decisions all the time. Helping with the organization and processing of information as business happens, fewer gaps are found in the data and the improved controls protect against data loss or misclassification. The data becomes more useful in that it contains more details, is more accurate and complete.

For the accounting professional, the benefits are many. Not only is the professional in a better position to deliver tangible value to the client (much higher value than just a tax bill!), the value is delivered more frequently which increases the overall value perception of the service being provided. Note the word “value” is used a lot here; it is the basis for billing clients for the useful nature of services provided and not on the time it takes to provide them. Internally to the accounting or bookkeeping business, the increased efficiency introduced with real-time application and data access means that processing workflows and resources may be more streamlined and handled with a great level of efficiency, which drives improvement in profitability and the consistency of service delivery.

There are a lot of new and exciting products and services emerging: cloud application services, artificial intelligence and automation, and the Internet and Interfaces of Things.. and businesses are being encouraged to adopt these solutions for a variety of reasons. For accountants and bookkeepers working with small business clients, there is no doubt that the cloud, hosting and online collaboration are the keys to helping get more and better business done.

Joanie Mann Bunny FeetJ

Read about Hosting All My Applications in the Cloud

or more about the Collaborative Online Model for Small Business Accounting Professionals

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The Truth About Death and Taxes – Preparer Regulation Makes Sense

The Truth About Death and Taxes – Preparer Regulation Makes Sense

There’s an old saying that there are only two sure things in life – death and taxes.  While it isn’t the happiest of thoughts, perhaps a more sullen reality is that there is one thing that honest taxpayers have in common with those who participate in tax fraud and evasion: mortality.

It is not something we like to talk about, but it’s a problem that continues to reveal itself over and over again.  Tax preparers with little or no training are preparing tax returns for individuals and businesses, and sometimes it isn’t until after the death of the taxpayer that a problem is found.  The unfortunate result is that the heirs of the taxpayer are often left with the problem and the tax bill.

A recent article in CPA Practice Advisor highlights three more instances where cases of tax fraud were identified, and where the preparers were the culprits and not the tax payers.  Regulation of tax preparation professionals just makes sense, and will go a long way towards protecting businesses and individuals – and their heirs – from tax problems created by unskilled or fraudulent tax preparation.

Joanie Mann Bunny Feet

Make Sense?

J

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Arrest for Sales Tax Evasion in Tennessee | TaxRates.com

Business owners and CFOs are experiencing a crackdown on tax liability nonpayments. Cash is tight everywhere, and agencies will only increase collection and enforcement efforts – especially when it involves a public trust. Whether it is sales tax or payroll tax, noncompliance can mean a whole lot more than just fines and penalties.

http://wp.me/p2hGOJ-ft

via Arrest for Sales Tax Evasion in Tennessee | TaxRates.com.