Saturday, January 24, 2015
Friday, January 23, 2015
Ben Steverman for Bloomberg Businessweek writes: For the second year in a row, TurboTax has raised its prices. At least that's what it feels like to many customers.
Robert D. Flach for Main Street writes: There are a variety of professional credentials or licensing designations that appear as initials after a person’s name to identify his area of expertise - AIA, CFP, CPA, CLU, DVM, EMT, JD, LPA, MD, PE, PhD, RN.
AFSP - Annual Filing Season Program
ATP - Accredited Tax Preparer and ATA – Accredited Tax AdvisorThe Accreditation Council for Accountancy and Taxation (ACAT) is a non-profit independent testing, accrediting and monitoring organization established in 1973 by the National Society of Accountants. It offers two credentials in taxation – the Accredited Tax Preparer (ATP) and Accredited Tax Advisor (ATA). Both credentials require adherence to the Council's Code of Ethics and Rules of Professional Conduct. And both require 4 hours of CPE in “ethics” per three-year cycle.
EA – Enrolled AgentEnrolled agents have unlimited right to “practice” before the IRS. This means there is no restriction to the type of taxpayers they can represent, what types of tax matters they can handle, and before which IRS offices they can represent clients.
RTRP – Registered Tax Return PreparerA person claiming to be an RTRP has proven basic competence in tax preparation by passing the IRS test, but is no longer required to maintain required annual CPE in taxation. This credential is no indication that the holder remains up-to-date on tax preparation issues.
NO INITIALS - The Unenrolled Preparer
Mark Lee for AccountingWeb UK writes: It’s the world’s largest online business networking tool and deserves to be considered quite separately from the more ‘social’ networking sites such as Facebook, Twitter, Google+ and Pinterest.
On Linkedin today there are more than 330m profiles, 3m companies and ‘only’ 2m jobs. It’s grown to become a huge beast that can be tamed and used to benefit accountants who are clear as to their objectives when using the site.
These might be to build your practice, your client base, your influence, your reputation or simply to further your career.
Passive or Active
Like all users of the site, accountants can choose whether to be passive or active users of Linkedin.
Passive users simply create a profile and wait to be contacted by other users. It may happen. It may not. I’ve seen plenty of accountants say they are on Linkedin but get no new clients from the site. This is unsurprising if they have been inactive there and/or have an incomplete profile.
You can make it easy for others to want to connect with you or you can make it hard for them to do so – in which case there may be little point in registering your profile there in the first place.
Active users actively search out prospective clients, introducers, collaborators and/or influencers. They make their presence known on the site and in groups where their target audiences are also active users.
Linkedin claims to have re-engineered their search facility recently. This should make it faster and easier for users to find what they seek on the site.
First things first
There is little point in registering to use Linkedin unless you create a decent professional profile there. I shared loads of related tips on AccountingWEB in the first of a series of six articles about Linkedin in 2013: See: Linkedin part one: Profile tips. That advice remains equally valid two years on.
LinkedIn has recently upgraded the generic guidance they provide to help users complete or edit their profiles.
The value of some of the guidance depends on where you are in your career and how active you plan to be on the LinkedIn website. or example I am regularly being prompted to add sections on ‘language’ and ‘volunteering opportunities’ to my profile. There would be no point, so I ignore the prompts.
You can also now easily check out how your profile looks to other people. This may prompt you to make changes so as to give the right impression to people who do not yet know you. Just click the blue button in the middle beneath your profile photo.
If you are like most accountants, your LinkedIn profile will pop up first whenever someone searches for you online (eg: using Google or Bing). This is generally true regardless of how search engine friendly is your website. And it is even more likely if you don’t have a website or much of a profile page or photo on your own website.
Your profile will also show up in searches for ‘someone like you’ on LinkedIn. Or at least your profile will show up in such cases if it has been well prepared.
This was a new section added to profiles by LinkedIn in 2012. I used to think it was all a little silly but it’s value is becoming clearer.
Imagine you were looking for a divorce lawyer on LinkedIn and you were checking out their profiles. If one has many more endorsements of relevant skills than another, this could impact your choice.
Of course your choice is unlikely to be swayed by any number of endorsements for their networking skills, commercial law work and after-dinner speaking. Such skills are just not relevant to someone looking for a divorce lawyer.
Equally I would encourage you to think carefully about which skills you show on your profile. LinkedIn attempts to be helpful by suggesting that you may also have related skills. So, for example, if you claim to know about ‘tax’, LinkedIn may suggest you also know about, CGT, VAT and IHT.
LinkedIn also encourages visitors to your profile to endorse you for related skills that you have not (yet) added to your profile.
People may think they are being helpful so agree with LinkedIn. Or they may genuinely agree that they know and can endorse the suggestion you are skilled in a particular topic.
My advice is to remove any irrelevant or confusing skills from the list on your profile.
Equally do not add new ones to your profile just because Linkedin has encouraged someone to endorse you for them. I removed all reference to tax from my profile, despite amassing over 100 endorsements, as I stopped giving tax advice to anyone nine years ago! I don’t want my profile popping up when people search for a tax adviser on LinkedIn.
It’s also likely that the more endorsements you have for key skills the higher ranked will be your profile when someone searches the site for experts. It helps to think about who do you want to influence and what do you want to be ‘found’ for when someone searches on the site.
I would suggest that having only a handful of endorsements for what should be your key skills, could undermine your credibility.
You do have the option to hide your skills and endorsements so that they do not show on your profile. That may be preferable in some cases, especially if you are planning to just be a passive user and have amassed only a few endorsements.
Blogging on LinkedIn
Until quite recently most users were not able to blog on Linkedin’s own platform.
This changed last year so now hundreds of people I know are now, as LinkedIn puts it, ‘sharing their perspective’ by blogging on the site.
The theory goes that this can help you to get discovered for your posts and strengthen your reputation. Yawn. Just like blogging on your own website – only less so.
Yes, it is possible that the people you hope to influence with your profile or activity on LinkedIn ‘might’ notice that you have blogged something relevant to their interests or problem.
But, if my own experience is typical, the impact will be marginal at best. And I say that as someone directly connected to over 4,000 people on LinkedIn and with an extended network of over 16m.
I have posted a number of pieces on the site with very little discernable impact over the last few months. I have tried pieces distinct from those on my own blog, pieces that cover similar points and pieces intended to direct readers to go to my blog to read more.
I have concluded that it’s not going to have much impact for me and that it is likely to be just another distraction for accountants in general.
The latest update news from LinkedIn highlights a number of other changes mostly intended to encourage you to spend more time on the site.
These changes will be of limited interest if your main reason for using LinkedIn is to be found and/or for lead generation. Despite visiting the LinkedIn site almost every day I pay little attention to most new features when they first arrive. I have learned, over the years, that they rarely change the way I use the site though they may make it easier and faster for me to find what I want.
In summary you can expect to see:
- A new look is being rolled out over the coming months
- New activity feeds and a new dashboard so you can monitor how much interest there has been in your profile
- A ‘keep in touch’ slider facility to see what the people you know are doing on the site – so that you can easily interact with them and comment on what they’ve done or their news
LinkedIn is such a mature site that few changes are really much more than cosmetic. This means they only excite the naïve, novice and news focused commentators. Accountants are better advised to focus on new features only when it is clear how they can help you to achieve your business focused objectives and get more value from your profile, presence and activity on the site.
John Stokdyk for AccountingWeb UK writes: A new movement is disrupting traditional accountancy tools and techniques. John Stokdyk takes a look at how third-party add-on applications are being used by UK accountants.
From tracking usage in our SSA surveys, we estimate that more than 50% of AccountingWEB members now run some kind of cloud accounting application.
The market is divided between three camps:
- Local, independent software houses who made that fastest running in this country among start-ups and microbusinesses: KashFlow (now part of IRIS), FreeAgent, Clear Books, Liberty, Arithmo, etc
- European developers who developed cloud accounting tools and brought them to the UK: Twinfield (now part of CCH), e-conomic, Exact
- Publicly listed, International developers who are aiming to capture a global market: New Zealand’s Xero, Intuit in North America, and the UK’s own Sage
Each of these groups has suffered their own surges and dips and while AccountingWEB’s figures show FreeAgent, KashFlow and Clear Books with the strongest camps among our members, the global trend, measured by Google in terms of headline interest over the past decade looks more like this (source - Google Trends; Quickbooks Online (red); Xero (blue); Sage One (yellow):
But that’s yesterday’s story. As we head into 2015, the information we are picking up on AccountingWEB is that with adoption rates for the core accounting engines experiencing steady, mainstream growth, the real breakthroughs are now happening among the third party cloud applications that connect into these systems.
New generation cloud firms
One of the clearest indications of the sudden rise in third party cloud applications came from entries to the 2014 Practice Excellence Awards, particularly in theinnovation and technology champion categories. Alongside several firms who were developing their own cloud accounting tools, there was a strong contingent of accountants who were deploying multiple cloud tools to meet the information needs of their both clients and their own firms.
Accountancy’s new wave was represented by the 2014 Practice Excellence Award winner for small firms and innovation, Tayabali Tomlin, along with technology champion nominees Jessica Pillow and Sharon Pocock.
All of these firms tell a similar story to that of Kinder Pocock, who explained: “Two years ago Kinder Pocock realised that online accounting software would become an essential part of business.
“We started using Xero in-house, and offering it to clients. We immediately realised that Xero was efficient, interactive, easily accessible and easy to use for both the practice and clients. It also gave us a better interaction and relationship with clients… We can see clients’ live accounting data at any time. This has saved us time, but has created major improvements in the advice and support we offer clients, including in-year tax planning advice, cashflow management.”
Having made this breakthrough, the firm reviewed all its business processes and rebuilt them using online applications and add-ons, including:
- Receipt Bank, which lets clients capture and send digital receipts and supplier invoices to Xero, via a photo app, email or even Dropbox
- Spotlight Reporting for management accounts, cash-flow and forecasting. “We create reports showing actuals, budgets, variances, margins, comparatives, together with charts and graphs to visualise the data on tablets and smart phones.”
- Practice Ignition - used to create online quotes, letters of engagement, re-engagement letters and requests for records
- Xero Practice Manager - Once accepted online, jobs are created in its companion Practice Manager module, which triggers in Xero. “Time savings and client satisfaction have been improved greatly,” the firm reports
- EchoSign (for digital signing), GoCardless (card payments) and Directli (direct debits)
The firm also seeks out solutions for clients including the online point of sale system. For example one e-commerce client was not happy with their online system and with Kinder Pocock’s support they moved onto Xero, using a tailored integration system devised by the firm and the client’s web designer to link the accounting software to the Magento new e-commerce platform.
On the back of this innovative, technology driven approach the firm’s turnover has increased by 40% and net profit by 61% in the past year, with no additional staff.
“Not only do we gain clients specifically because we use online solutions, but they stay with us because we are able to offer solutions to system problems they may be having,” Kinder Pocock reported.
Valued Accounting tells a similar tale of growth beyond its home region in the North East, and claims to deploy more than 25 different types of software, all of which are chosen for their ease to use for clients so they can “see the end result in a format they understand”, the firm explained.
One client commented in a testimonial for the firm: “If someone had told me I could have saved over £6,000 in accountancy fees and got information I need to run my business quicker I would not have thought it was possible.
“Valued Accounting implemented systems within my business that have meant I have not had to replace a bookkeeper, that chase my outstanding debt for me automatically and predict my cashflow as well as getting management information I understand when I need it. They are an intrinsic member of our extended management team.”
The global scene
If further evidence were needed, a couple of research trips to the US provided it. As we reported on the big global accounting software fight, there are around 400 different add-on applications that work in tandem with QuickBooks Online and Xero, particularly in areas such as management reporting, project accounting, KPI dashboards, expenses management, stock control and distribution where local accounting standards are less of a technical restraint on systems.
In an article on the next generation accounting firm based on findings at the Solutions 14 event in Las Vegas last November, Donny Shimamoto commented how the emerging “virtual infrastructure” of cloud applications “allows the flow of data among systems supporting both clients’ and the firm’s operations, allowing accountants to be a more integrated part of their clients’ businesses”.
David Watson, co-founder of the reporting specialist Fathom described how cloud accounting was evolving into an ecosystem of apps connected by programming interfaces that can save a significant amount of time for accountants who willing to embrace them.
If you look more closely, many of these programs share some common characteristics with Fathom, which is expanding into the international market from its base in Brisbane, Australia. Alongside Fathom at the QB Connect conference in California were 50 other add-on developers, half of whom were from down under. Many of the same people reappeared a few weeks later at Solutions 14 in Las Vegas.
The Xero effect
Few would argue that Australia and New Zealand lead the world market in cloud adoption and that enthusiasm has been accompanied by the blossoming of a new generation of cloud financial software developers.
“Our accountants and audience are at least a year or two ahead of the US in adoption and willingness to step up to that next level of proactive advice,” Watson told AccountingWEB in California. The UK, meanwhile, is somewhere in the middle [see video below for more on this point].
Xero’s influence is a significant factor in the antipodean invasion. “They’re a very good marketing organisation,” explained Watson. “Their entry into the marketplace five years ago really educated the market and now we’re seeing Intuit starting to encourage accountants to be proactive and to look at the ecosystem of apps for each accounting system.
“There’s a huge shift happening.”
Thursday, January 22, 2015
Most people file their tax return because they have to, but even if you don’t, there are times when you should. You may be eligible for a tax refund and not know it. This year, there are a few new rules for some who must file. Here are six tax tips to help you find out if you should file a tax return:
1. General Filing Rules. Whether you need to file a tax return depends on a few factors. In most cases, the amount of your income, your filing status and your age determine if you must file a tax return. For example, if you’re single and 28 years old you must file if your income was at least $10,150. Other rules may apply if you’re self-employed or if you’re a dependent of another person. There are also other cases when you must file. Go to IRS.gov/filing to find out if you need to file.
2. New for 2014: Premium Tax Credit. If you bought health insurance through the Health Insurance Marketplace in 2014, you may be eligible for the new Premium Tax Credit. You will need to file a return to claim the credit. If you purchased coverage from the Marketplace in 2014 and chose to have advance payments of the premium tax credit sent directly to your insurer during the year you must file a federal tax return. You will reconcile any advance payments with the allowable Premium Tax Credit. Your Marketplace will provide Form 1095-A, Health Insurance Marketplace Statement, to you by , containing information that will help you file your tax return.
3. Tax Withheld or Paid. Did your employer withhold federal income tax from your pay? Did you make estimated tax payments? Did you overpay last year and have it applied to this year’s tax? If you answered “yes” to any of these questions, you could be due a refund. But you have to file a tax return to get it.
4. Earned Income Tax Credit. Did you work and earn less than $52,427 last year? You could receive EITC as a tax refund if you qualify with or without a qualifying child. You may be eligible for up to $6,143. Use the 2014 EITC Assistant tool on IRS.gov to find out if you qualify. If you do, file a tax return to claim it.
5. Additional Child Tax Credit. Do you have at least one child that qualifies for the Child Tax Credit? If you don’t get the full credit amount, you may qualify for the Additional Child Tax Credit.
6. American Opportunity Credit. The AOTC is available for four years of post secondary education and can be up to $2,500 per eligible student. You or your dependent must have been a student enrolled at least half time for at least one academic period. Even if you don’t owe any taxes, you still may qualify. However, you must complete Form 8863, Education Credits, and file a return to claim the credit. Use the Interactive Tax Assistant tool on IRS.gov to see if you can claim the credit. Learn more by visiting the IRS’ Education Credits Web page.
The instructions for Forms 1040, 1040A or 1040EZ list income tax filing requirements. You can also use the Interactive Tax Assistant tool on IRS.gov to see if you need to file. The tool is available 24/7 to answer many tax questions.
If you found this Tax Tip helpful, please share it through your social media platforms. A great way to get tax information is to use IRS Social Media. You can also subscribe to IRS Tax Tips or any of our e-news subscriptions.
Additional IRS Resources:
- The Premium Tax Credit
- Form 8962, Premium Tax Credit (PTC)
- Publication 5187, Health Care Law: What’s New for Individuals and Families
- Schedule 8812 (Form 1040A or 1040), Child Tax Credit
- Form 8863, Education Credits
- Publication 596, Earned Income Credit
- Publication 972, Child Tax Credit
- Publication 970, Tax Benefits for Education
Suzanne Kearns for Intuit writes: If you started a business last year and incurred some expenses before you officially opened your doors, you may be entitled to deduct certain startup and organizational costs on your tax return this year. But the IRS has strict guidelines you must follow to claim them. Here’s a look at the rules.
The Allowable Deductions
According to the IRS, there are three categories of startup costs eligible for tax deductions, and you can only deduct them if you actually opened the business. The startup costs must be related to:
- Creating a trade or business or investigating the creation or acquisition of an active trade or business. Some of these costs might include surveying markets, analyzing products or the labor supply, visiting potential business locations, and any other costs associated with creating or investigating a new or existing business.
- Preparing the business to open. Any costs you incurred before opening your doors and begin to generate income are included in this category, with the exception of equipment, which will have to be depreciated. Eligible expenses could include employee training and wages, travel costs to locate suppliers and distributors, advertising, and consultant fees such as attorneys and accountants.
- Organizational costs. If you legally set up your business as a partnership or corporation before the end of your first year in business, you can deduct these costs as well. The expenses typically associated with incorporating are legal fees, state organization fees, salaries for temporary directors, and organizational meetings. Expenses to set up a partnership agreement include legal expenses and filing and accounting fees.
Chapters 7 and 8 of IRS Publication 535 outline these deductions in full detail.
How to Take the Deductions
The IRS allows you to deduct $5,000 in business startup costs and $5,000 in organizational costs, but only if your total startup costs are $50,000 or less. If your startup costs for either area exceed $50,000, the amount of your allowable deduction will be reduced by that dollar amount. And if your startup costs are more than $55,000, the deduction is completely eliminated. For instance, if your start up costs were $53,000, you would lose $3,000 of the deduction, and would only be allowed to deduct $2,000. And if your start up costs were $55,000 or more, you don’t qualify for the deduction at all. The costs remaining after your deduction should be amortized annually in equal portions over the next 15 years.
You should claim the deduction for the tax year that the business officially opened. If you fail to claim the deduction, you can still file an amended return within six months of the due date of the return, excluding extensions. If you do that, the IRS says you should write “Filed pursuant to section 301.9100-2” on your amended return, and send it to the same address to which you sent your original return.
Timing Is Everything
Sometimes taking the deduction in the first year doesn’t always make financial sense. For instance, if it’s likely that you will suffer losses for the first few years in business, you might be better off amortizing the deductions over a few years to balance out your eventual profits. To do so, it’s necessary that you file IRSForm 4562 [PDF] with your first year’s tax return. You can amortize qualified startup and organizational costs, and they don’t have to be on the same amortization period. But keep in mind that once you choose the periods for each deduction, you will not be allowed to change them. Be sure to talk to a tax adviser about this important decision.
Wednesday, January 21, 2015
Zoho today expanded Zoho CRM Free Editionby packing it with new features and making it available for up to ten users as it celebrates ten years of the product launch. The move is significant because companies with ten or fewer employees comprise more than 90 percent of U.S. businesses.
“Over the past decade, CRM software has become one of the most critical applications for businesses of all sizes. Yet, the majority of CRM solutions do not meet the price or ease-of-use requirements of many small and medium-sized businesses (SMBs),” said Zoho Evangelist Raju Vegesna. “To fill this gap, ten years ago, Zoho launched Zoho CRM Free Edition, which offered a feature-rich CRM for up to three users free. Today, we renewed our commitment to SMBs by expanding the Free Edition to an unprecedented ten free users.”
In addition to increasing the number of free users to ten, Zoho has revved up the Free Edition with more features providing a powerful experience. The new features include:
- A document management module to safely share proposals, competitive analysis and other sales collateral
- Security administration capabilities to set profiles, roles and permissions
- Support for up to 25,000 customer records
- Seamless integration with complimentary Zoho apps like Campaigns, Support, SalesIQ, Reports, Survey and Projects
“Most customers are cynical of so-called free products because they assume there has to be a catch. But, Zoho’s commitment to free is real and enduring. In fact, we recently strengthened our free editions for Zoho Mail,Zoho Sites and Zoho Connect,” added Vegesna. “And, unlike bait-and-switch free offerings, Zoho’s free editions are developed with the same craftsmanship as our enterprise editions.”
Zoho CRM’s 10-user Free Edition is available immediately. Existing Zoho CRM users currently using the Free Edition will automatically be upgraded to the 10-user free edition.
For more information on Zoho CRM Free Edition, please visithttps://www.zoho.com/crm/smb/, and for more information on Zoho, visit http://www.zoho.com. To get breaking Zoho news, follow the company on Twitter at @zoho and on Facebook athttp://www.facebook.com/zoho. The latest news about Zoho products is available on the company blog, http://blogs.zoho.com.
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