BuxMont Accounting will be closed June 30th-July 4th, 2014 to celebrate the holiday. Have a safe & happy 4th of July, and we'll see you when we get back.
If you use QuickBooks, it's important that you are using bank reconciliations to ensure that you aren't missing transactions or duplicating entries in your software. Here are a few quick pointers about how to best utilize this functionality:
1. The starting balance of the most recent month’s bank statement (and the bank reconciliation starting balance) should always be equal to the ending balance of the previous month’s bank statement and bank reconciliation. Any differences are typically because a transaction was voided or changed that should not have been. If there’s a difference, you can try to fix it yourself by running the reconciliation discrepancy report under the banking section of the reports menu. If that report shows no changes were made, or if identifying and correcting the errors are beyond your abilities, try undoing and redoing the previous month's reconciliation or contact a professional.
2. The ending balance of the bank reconciliation should always match the bank statement exactly. Don't be tempted to force the reconciliation, even if it is only off by a few dollars- it's often a symptom of other errors. If you are diligent in your data entry, this feature can help identify duplicated charges, fraudulent activity, and miscategorized transactions.
3. Every transaction in QB should match what was ACTUALLY done in the bank accounts. If a transaction was done the wrong way or something was deposited into the wrong bank account, both the incorrect bank transaction and the correcting bank transaction should show up in QuickBooks instead of just the transaction that was meant to happen.
4. When you are doing the reconciliation, keep an eye out for the following, which are indicative of errors:
a. Debit (ACH) transactions that have not cleared the bank account by the end of the month they’re entered in QB, unless they are at the end of the month- in which case they may clear the following month.
b. Bank deposits that have not cleared the bank account within a few days of the actual transaction.
c. Checks that you’ve written and are still outstanding 90 days after they’re written.
Individuals and businesses in areas affected by hurricane Irene may have additional time to file their tax returns and estimated tax payments this year. Due to the complications brought about by hurricane Irene and tropical storm Lee, the IRS has allowed for an additional extension of filing time for those taxpayers in Pennsylvania counties where a state of emergency was declared. They include Bucks, Montgomery, Delaware, Philadelphia, Union, and others. If you live in one of those counties and filed for an extension of time to file your tax return, you automatically have until 10/31 to file your tax return and avoid late filing penalties. If you have a place of business in one of those counties or if your tax preparer is located in the affected area, you may also have additional time to file. Take advantage of this today!
A second benefit for those directly affected with casualty losses (flood or wind damage to their property) is that they are allowed to include the casualty loss as an expense on their 2011 tax return OR their 2010 tax return. If the 2010 tax return was already filed, the taxpayer can amend the tax return in order to get the benefit immediately. This is a great option for taxpayers who had uninsured flood losses.
IRS penalties for late filing of a tax return can be as high as 5% of unpaid tax liabilities for individuals and $195 per owner for an S-Corporation, for each month the return is late. These penalties add up quickly, but there is still time to act. If you have specific questions, need assistance filing an original or amended return, or preparing your estimated tax payments, please feel free to contact Mark Breon, EA of BuxMont Accounting at 267-999-9002.
For more information, see the IRS bulletin on Hurricane Irene here : http://www.irs.gov/newsroom/article/0,,id=245668,00.html
For more information, see the IRS bulletin on Tropical Storm Lee here : http://www.irs.gov/newsroom/article/0,,id=245668,00.html
I offer bookkeeping services to help business owners and managers spend more time on the things that make them money and less time being burdened with the day-to-day operations of the business. If you are behind on invoicing, paying bills, or recording your expenses, the pile is only going to grow while you try to figure out where to start. Processes that take you 10 hours a week might only take me 1-2. Call me today to see how I can help you streamline your operations. Here are some examples of ways that I can work with clients...
The first version of my 2010 Drake Professional Tax Software was delivered yesterday, so the next three weeks (before 12/31) are the best time to review your tax situation. There is still time for year-end tax planning that can help you reduce your tax bill for THIS YEAR. Let's project your income & expenses to find out if you'll owe money or get money back. Let's work to shift income and expenses, or talk about moving retirement assets into vehicles like a ROTH IRA. January is too late to make significant changes!
Business Owners: Let's review your books NOW, so that you can avoid the last minute rush. Is now the best time to purchase a new piece of equipment, hire a new employee, or lease a car? I can help you figure out the tax implications. Call today to schedule an appointment. 267-999-9002
Last Saturday's Reporter featured BuxMont Accounting in the lead article of their business section. You can read it here. Please share it with your friends, family, and business associates.
The best time to reduce your tax bill is the period from now until the end of the year. If you wait until January, February, or later to begin your tax preparation, you miss out on huge opportunities to save significant money. Call today to discuss which tax-saving opportunities are right for you.
For many people, this might be a great time to convert to a ROTH IRA. Others may be facing open enrollment for company benefit plans. Don't guess what the best option is for you- ask us for recommendations. Many simpl options can save thousands of dollars in taxes.
Taxpayer was a resident of Pennsylvania, but earned income while working at a job in another state. Which state(s) does he need to pay taxes to? Does he get taxed twice on the same income?
Most states impose a personal income tax on non-residents for all income earned within the state, and Pennsylvania imposes a personal income tax on residents for all income earned, regardless of where it was earned.
For a resident of Pennsylvania working in Indiana, Maryland, New Jersey, Ohio, Virginia, or West Virginia, the taxpayer would only owe Pennsylvania taxes, as each of those states has a reciprocal agreement with Pennsylvania. A reciprocal agreement between two states means that neither state will impose an income tax on wage income of the other state’s residents.
If the second state is any other state with an income tax, such as New York, the taxpayer would be required to file tax returns in both states. On their Pennsylvania tax return, the taxpayer would receive a credit up to the amount they would have owed on that income in Pennsylvania. In a state with an income tax higher than Pennsylvania’s income tax, like New York, the taxpayer would typically not end up owing additional taxes to Pennsylvania for the income earned in New York. While the taxpayer reports the income to two states, the resident credit prevents double taxation.
Contest: Stump the accountant and win an acoustic guitar!
Email me (email@example.com) a brief synopsis of a hypothetical tax question, and I'll solve the problem in a future post (your identifying info will be removed). I will select the most difficult question on 9/15/2010 and the winner can pick up their prize at my office in Montgomeryville. Sponsored by BuxMont Accounting.
Mark Breon, EA will be attending the IRS convention in Las Vegas the week of August 23rd-27th. During that time, he will be working with the IRS case resolution team to solve difficult tax cases. If you or someone you know has an issue with the IRS, please call 267-999-9002 in order to discuss your situation with us. This is a once-per-year opportunity to resolve difficult cases. Don't miss this chance to get back on track with the IRS!
Mark Breon, EA
Mark is an IRS Enrolled Agent with a focus on the tax issues facing small businesses and individuals.