Wednesday, April 23, 2014

Why You Should be Filing Quarterly Taxes / Business Owners

Frank Mullens for MasterCard writes: We as business owners tend to focus our attention on running the day-to-day activities of our businesses. While paying quarterly estimated taxes may seem more of a distraction than a business imperative, nothing could be further from the truth. This becomes quite apparent when you review your tax return. As the amount you owe the government increases, or that small refund is made smaller as a result of underpayment penalties, the importance of making estimated federal income tax payments becomes crystal clear.
If you have been in business for several years, you have probably already learned this lesson, perhaps even the hard way. However, if you’ve just begun to chase your entrepreneurial dream, quarterly federal income tax payments are most likely on the bottom of your to-do list, or worse, not even on your radar.

What is Estimated Tax?
Estimated tax is how tax on income not subject to withholding is paid. Estimated tax may be required if withholding is not enough. Withholding is most commonly associated with the taxes deducted from salary and pensions. Common sources of income where estimated taxes may apply include self-employment, interest, dividends, alimony, rents, and gains from the sale of assets, prizes and awards. The Internal Revenue Service’s Publication 505 Tax Withholding and Estimated Tax helps explain how it works.

How Do I Know if I Need to File Quarterly?
Quarterly estimated tax pays income and self-employment tax, as well as other amounts that may be owed. A penalty may apply if too little is withheld or paid as a quarterly estimated tax. A penalty will be charged if quarterly payments are paid late or in an amount less than required even if your return shows a refund.
No quarterly estimated tax payments are due if in the current tax year you met three conditions:
  1. You had no tax liability in the prior year
  2. You were a United States citizen or resident for the entire year
  3. The prior year was a twelve-month year (not a partial year)
Yet, if you are a sole proprietor, partnership, S-corporation shareholder or a self-employed individual owing a tax of more than $1,000, your corporation owes more than $500, or if you had a tax liability last year you may have to make quarterly estimated tax payments.

When Are Payments Due?
Another way to determine when to pay quarterly estimated taxes in order to avoid a penalty is if your withholding and refundable credits are less than the smaller of your expected 2014 tax or your twelve month 2013 tax liability.

For calendar year 2014, taxpayers (adjusted for fiscal year filers) quarterly estimated tax payments must be postmarked by April 15, June 16, September 15, and January 15, 2015. If you file your 2014 tax return by February 2, 2015, paying the balance due with your income tax return, the fourth quarterly estimated tax payment due January 15, 2015 is not required.

The underpayment penalty can be waived if a payment was missed due to a casualty, disaster, or other unusual situation where a penalty would be inequitable or you retired after age 62 or became disabled. Some special rules may apply. Refer to Form 2210 and instructions for Form 2210 for more details.
TIP: Should the government shut down again, don’t gamble on it; make the January 15, 2015 payment.

So How Do I Pay Quarterly Taxes?
The easiest part of paying your quarterly estimated tax is choosing the method in which to pay. Mailing a check or money order with a payment voucher postmarked by the due date is one option, but more and more we are turning to online payments and the government has obliged us. You can go online or use your phone to pay those taxes to the IRS. There are two electronic payment methods to choose from, directly from your bank account or using your credit or debit card. While using a credit/debit card will result in a convenience fee charged by the processor, there are actually some benefits as well. Some benefits include earning points or miles, delaying a cash impact on your business and more. For more information, see Paying the IRS with a Debit or Credit Card for all the details.

Hire an Accountant
If you spend all of your time running the business and taxes are the last thing you have an interest in understanding or time for, hire a trustworthy tax advisor. I recommend asking a friend or trusted colleague for a referral on who they trust with their tax preparation. Tax professionals stay up to date on changes in tax law and requirements and are well worth the monetary investment.

Taxes can be challenging and sometimes downright confusing. The 2013 IRS Tax Code fills an overwhelming 73,000 pages. If you have questions, do a little research. The Internal Revenue Service has online material to help calculate what you owe. When in doubt, consult with a tax professional.

Frank Mullens is the CFO COO at Marketing Innovations International, Inc. where he encourages the persistent evolution of corporate strategy to seize market opportunities and grow profits.  Combining experience as a CPA (inactive), education of an MBA and a variety of accounting and finance roles with a keen understanding of technology, Frank brings a pragmatic view of business to bear on the challenges facing growing businesses.
Posted on 10:53 AM | Categories:

Why Excel is costing you millions

Gayle Ryan for Business Excellence writes: A few years ago, the ability to capture and manipulate data was an exciting possibility. Organizations often pulled information from databases, which they would then export into Excel to manipulate and analyze. Today, however, static reporting is no longer enough. Recently there has been a shift in Information Technology from traditional Business Intelligence (BI), where reports are static, to data discovery, where the reports are focused on users, and are dynamic and easy to use. Organizations now need to be able to explore their information and visualize the data in order to stay competitive.

Organizations have more data than ever before, and companies that have developed a way to harness and explore their data have an advantage in the market. Excel has its place for certain functions, but spreadsheets don’t allow decision makers to see the big picture as effectively as a dashboard. In fact, even Microsoft has noticed the shift away from static reporting and realized that Excel isn’t enough, which is why there are more data discovery capabilities in newer versions of Excel and in Microsoft Power View. Still, even the added capabilities in Microsoft Power View still do not allow users to fully monitor, analyze, and explore their data. In order to remain agile and recognize opportunities, organizations need to invest in BI tools that include data discovery and dashboards.

Gartner predicts that more and more devices will be connected with the internet, calling it the “Internet of Everything”. Gartner named this one of the top 10 strategic technology trends for 2014, predicting that this trend will drive an enormous increase in information available. With this massive expansion in available information, the potential for exploration and analysis also grows, requiring the need for more sophisticated and proactive information management and analytical models. Is Excel up to the task?

Excel reports are static, and take time to produce. By the time the decision makers receive their report, the information is already out of date. With a real-time dashboard, people receive updates as soon as the information is available. Dashboards are also interactive, unlike Excel, which means that if a certain data point is troubling, dashboard users can drill down to get more information. Dashboards even provide alerts and updates when something is amiss. Excel spreadsheets do not provide alerts or updates, and, they are actually hindering our ability to understand critical information by being difficult to read. Finally, Excel spreadsheets are prone to error. One typo can skew all of the data, and it may take time to notice and correct the mistake. Data discovery tools are automated, and much of the room for human error is eliminated.

With more and more information available through a growing number of devices connected to the internet, there are more opportunities for companies to develop new business models, products, marketing strategies, and engagement models for customers, employees, and partners. However, this will only be possible for the organizations that are able to use their information quickly and effectively. Excel spreadsheets are not a reliable way to manage BI, reporting, and data discovery in order to compete in the quickly changing market. Companies need a comprehensive solution, including BI infrastructure, data discovery tools, dashboards, and effective data visualizations that will allow them to analyze and explore large sets of data.
Gartner makes the bold statement that “No business can afford to ignore or underplay the impact of technology-driven disruptions that are even transforming what it means to be a business in a digital world.” Traditional BI is no longer enough; data discovery is now necessary to remain competitive.

Comprehensive BI solutions that include data discovery and dashboards, however, can require a large investment of both time and money. Depending on the organization’s requirements and existing IT infrastructure, investments in servers, storage, clients, and networking may be necessary. Implementation, training, and administration also add to the upfront costs. It is possible, however, to reduce the capital expenditure needed for deployment with cloud services.

In addition to the up-front costs, BI tools will incur maintenance costs and costs associated with enhancing and extending the application. These costs usually far outweigh the up-front investment. In fact, Gartner estimates that, for a business application that is used for 15 years, the average cost to go live is 8% of the total lifetime cost of ownership. It is important to note that the Total Cost of Ownership (TCO) is highly dependent on design decisions, and so it is important for organizations to design the BI solution according to their needs from the beginning, as this will affect, and could drastically reduce, the maintenance and enhancing costs.

However, a BI solution will actually reduce operational costs. Manual reporting can be almost eliminated or greatly reduced with a comprehensive BI and dashboard solution. Each organization’s reporting needs and subsequent savings will vary; however, organizations that assign one analyst to each team can likely reduce the number of analysts to one or just a few for the entire organization. Neo@Ogilvy, a Dundas Data Visualization customer, used Excel to analyze and report on its customers’ data. After implementing a BI solution, including a Dundas powered dashboard, the organization saw their reporting time decrease by 90%.

There is mounting research that indicates organizations need a BI solution that includes data discovery, dashboards, and data visualization tools in order to use the ever-increasing amount of data available and remain competitive in the market. With this evidence, the question is, can you afford not to invest in BI?

The opportunity costs of avoiding a BI solution and continuing to use Excel for reporting and data exploration will soon become apparent, if they aren’t already. By continuing to use traditional BI tools including static Excel reports instead of a data discovery solution, companies aren’t able to aggregate all of their data and see the larger trends. Managers and executives aren’t able to understand their data easily and make fact-based decisions quickly. Organizations aren’t able to harness and use data, an element that has, and will continue to disrupt the way businesses run.

Dundas Data Visualization

Posted on 8:33 AM | Categories:

Make Plans Now for Next Year’s Tax Return

Most people stop thinking about taxes after they file their tax return. But there’s no better time to start tax planning than right now. And it’s never too early to set up a smart recordkeeping system. Here are six IRS tips to help you start to plan for this year’s taxes:

1. Take action when life changes occur.  Some life events, like a change in marital status, the birth of a child or buying a home, can change the amount of taxes you owe. When such events occur during the year, you may need to change the amount of tax taken out of your pay. To do that, you must file a new Form W-4, Employee's Withholding Allowance Certificate, with your employer. Use the IRS Withholding Calculator on to help you fill out the form. If you receive advance payments of the premium tax credit it is important that you report changes in circumstances, such as changes in your income or family size, to your Health Insurance Marketplace.

2. Keep records safe.  Put your 2013 tax return and supporting records in a safe place. That way if you ever need to refer to your return, you’ll know where to find it. For example, you may need a copy of your return if you apply for a home loan or financial aid. You can also use it as a guide when you do next year's tax return.

3. Stay organized.  Make sure your family puts tax records in the same place during the year. This will avoid a search for misplaced records come tax time next year.

4. Shop for a tax preparer.  If you want to hire a tax preparer to help you with tax planning, start your search now. Choose a tax preparer wisely. You are responsible for the accuracy of your tax return no matter who prepares it. Find tips for choosing a preparer at

5. Think about itemizing.  If you usually claim a standard deduction on your tax return, you may be able to lower your taxes if you itemize deductions instead. A donation to charity could mean some tax savings. See the instructions for Schedule A, Itemized Deductions, for a list of deductions.

6. Keep up with changes.  Subscribe to IRS Tax Tips to get emails about tax law changes, how to save money and much more. You can also get Tips on or IRS2Go, the IRS’s mobile app. The IRS issues tips each weekday in the tax filing season and three days a week in summer.

Remember, a little planning now can pay off big at tax time next year.

Additional IRS Resources:

Posted on 7:49 AM | Categories:

Smart tax planning doesn't stop on April 15

Vanguard Tax Center writes: With the tax-filing deadline behind us, it's a good time to look ahead for ways to minimize your tax bite in 2014—and beyond—while keeping recent federal tax law changes in mind.
"The number of new taxes and regulations need not cause a radical change in your strategy," said Sarah Hammer, a senior analyst with Vanguard Investment Strategy Group. "Vanguard's thinking on the best way to tax-optimize your portfolio remains the same as it was last year."
Instead, we encourage you to focus on smart tax moves that can maximize your after-tax investment returns, including:
With a few exceptions, the tax rules introduced in 2013 still apply in 2014. Here are highlights of tax-law changes to help you plan for the year ahead. Because some of the rules are fairly complex, we suggest that you consult a professional financial or tax advisor about your situation.

Federal income tax changes

The top tax bracket increased in 2013 from 35% to 39.6% for single filers above $400,000 in adjusted gross income (AGI) and married couples above $450,000. While the rates haven't changed for the 2014 tax year, the income brackets have widened and exemptions have been raised to adjust for inflation. For more information, visit

2013 and 2014 tax rules at a glance

Federal marginal income tax brackets
(for taxes due in April 2014)
(for taxes due in April 2015)
  • 10% ($0–$8,925)
  • 15% ($8,926–$36,250)
  • 25% ($36,251–$87,850)
  • 28% ($87,851–183,250)
  • 33% ($183,251–$398,350)
  • 35% ($398,351–$400,000)
  • 39.6% ($400,000+)
Married filing jointly:
  • 10% ($0–$17,850)
  • 15% ($17,851–$72,500)
  • 25% ($72,501–$146,400)
  • 28% ($146,401–$223,050)
  • 33% ($223,051–$398,350)
  • 35% ($398,351–$450,000)
  • 39.6% ($450,000+)
  • 10% ($0–$9,075)
  • 15% ($9,076–$36,900)
  • 25% ($36,901–$89,350)
  • 28% ($89,351–$186,350)
  • 33% ($186,351–$405,100)
  • 35% ($405,101–$406,750)
  • 39.6% ($406,751+)
Married filing jointly:
  • 10% ($0–$18,150)
  • 15% ($18,151–$73,800)
  • 25% ($73,801–$148,850)
  • 28% ($148,851–$226,850)
  • 33% ($226,851–$405,100)
  • 35% ($405,101–$457,600)
  • 39.6% ($457,601+)
Personal exemptions and itemized deductions
(see below for more information)
PEP and Pease limitations: Reinstated for higher-income taxpayers. Remain repealed for income at or below $250,000 (individual filers), $275,000 (heads of households), and $300,000 (married filing jointly) for tax  years beginning after December 31, 2012. PEP and Pease limitations: Remains repealed for income at or below $254,200 (individual filers), $275,000 (heads of households), and $305,050 (married filing jointly).
Capital gains and dividend taxes 
2013 and 2014
Short-term gains taxed as ordinary income.

Long-term gains taxed based on your top marginal income tax rate:

  • 0% if you're in the 10% or 15% brackets.
  • 15% if you're in the 25%, 28%, 33%, or 35% brackets.
  • 20% if you're in the 39.6% bracket.
Qualifying dividends continue to be taxed at the same level as capital gains.

Additional Medicare tax on investment income explained below.
Medicare taxes 
2013 and 2014
Additional 0.9% tax on salary and/or self-employment income (only for higher-income taxpayers):
  • Above $200,000, if single.
  • Above $250,000 (combined), if married filing jointly.
  • Above $125,000, if married filing separately.
Additional 3.8% tax on net investment income (including long-term capital gains and dividends) if your modified adjusted gross income exceeds:
  • $200,000 (single).
  • $250,000 (married filing jointly).
  • $125,000 (married filing separately).
The surtax was created to fund Medicare expansion as part of the Affordable Care Act and is reportable on IRS Form 8960.
Estate, gift, and generation-skipping taxes(see below for more information)
2013  2014 
Exemption: $5.25 million for individuals.

Tax rate: 40% on amounts above the exemption.

Estate and gift tax regimes remain unified, and spouses can continue to access unused estate tax exemption amounts.
Exemption: $5.34 million for individuals.
Tax rate: 40% on amounts above the exemption.

Estate and gift tax regimes remain unified, and spouses can continue to access unused estate tax exemption amounts.
Qualified charitable distributions
2013 and 2014
If you're 70½ or older, all or part of your annual required minimum distribution (RMD) could be made directly from an IRA (but not a Roth) to a qualified charity, up to $100,000 per year, without the distribution being treated as taxable income. However, Congress did not extend this provision beyond its expiration date of December 31, 2013.
Social Security payroll tax
2013  2014 
Flat 6.2% withholding rate on income up to $113,700 (applies to both employers and employees). Flat 6.2% withholding rate on income up to $117,000 (applies to both employers and employees).

Pease limitation and personal-exemption phase-out

The Pease limitation on itemized deductions continues to apply in 2014. This limitation reduces many itemized deductions (such as mortgage interest expense, charitable contributions, and state and local taxes) by 3% of the AGI that exceeds $254,200/$305,050 for single/married filers, but up to a maximum of 80% of what the itemized deductions would be without the new restrictions.
Sarah HammerThe personal-exemption phase-out continues to apply at a 2% reduction in personal and dependent exemptions for each $2,500 over the threshold of $254,200/$305,050, up to the complete elimination of exemptions.
According to Ms. Hammer, the Pease limitation does not necessarily affect the tax deductibility of charitable giving.

"If your Pease limitation is already met by other deductions such as state and local taxes or mortgage interest, then you'll likely still enjoy the full benefit of charitable deductions," she said.

We realize these rules can be quite complex and urge you to consult a tax planning professional before filing your taxes.

Alternative minimum tax exemption increases in 2014

The exemption thresholds increase for 2014. Married couples filing jointly will be exempt up to $82,100 and single filers up to $52,800. The alternative minimum tax (AMT) is a federal income tax calculated separately from the regular federal income tax. It is designed to prevent taxpayers—particularly those with high incomes—from using certain deductions and credits (called tax-preference items) to pay little or no taxes.

Tax rules for kids

In 2014, children under age 19 will pay no federal income tax on their first $1,000 of "unearned income"—that is, capital gains or interest. They'll also be taxed at their individual rate on the next $1,000. For income above $2,000, they will be taxed at their parents' rate, unchanged from 2013.

The same rules apply for full-time students under age 24, unless their earned income (wages, tips, and other pay derived from employment) is greater than half of their parents'. Individuals age 19 and older and dependent full-time students age 24 and older pay taxes at their own individual rate.

Retirement savings action items

Retirement plan contributions present another important source and opportunity for tax optimization. For the 2014 tax year, the federal contribution limit to a 401(k), 403(b), and 457 is $17,500, the same as in 2013. If you're age 50 or older, you're permitted to make a "catch-up" contribution of $5,500.

For IRAs, whether traditional or Roth, the maximum contribution for those under age 50 is $5,500. If you're 50 or older, you can contribute an additional $1,000. Contributions to a traditional IRA are generally tax-deductible. Certain IRS restrictions apply if you're an active participant in your company's retirement plan, such as a 401(k).

Gifts and estate planning

The gift tax annual exclusion amount for 2014 is $14,000—the same as 2013. In other words, an individual who gives a gift of up to $14,000 every year to any number of people will generally not be taxed. Married spouses filing jointly can give twice that amount—$28,000—and there's no limit for gifts paid toward tuition or medical expenses if paid directly to the provider.

Gifts beyond those amounts would then count toward the lifetime gift and estate tax exemption, which would require filing a gift tax return on IRS Form 709. The gift and estate tax exemption (amount exempt from gift and estate tax) was made permanent in 2013 and is inflation-adjusted. For 2014 the gift and estate tax exemption is $5.34 million. Gifts above the exemption amount will be taxed at 40% to the giver.

According to Ms. Hammer, "the gift and estate tax regimes are 'unified,' which means that a gift made during your lifetime above the exclusion reduces your estate tax exemption, dollar for dollar. The unification feature creates opportunities for smarter gifting strategies that could benefit income and estate taxes concurrently."

The bottom line? Smart tax planning need not be a seasonal event. Understanding the rules and following some fairly simple steps can help you develop a sound tax-planning strategy for years to come.
  • All investing is subject to risk, including the possible loss of the money you invest.
  • Tax-loss harvesting involves certain risks, including, among others, the risk that the new investment could perform worse than the original investment, and that transaction costs could offset the tax benefit. There may also be unintended tax implications. We recommend that you consult a tax advisor before taking action.
  • Links to third-party websites will open new browser windows. Except where noted, Vanguard accepts no responsibility for content on third-party sites.
Posted on 7:11 AM | Categories:

Japanese cloud-based accounting startup Freee raises $8M

The Bridge writes: Tokyo-based Freee, the operator of a cloud-based accounting solution of the same name, has raised $8 million from two venture capital firms, including DCM and Infinity Venture Partners. This is according to a Nikkei reported earlier this morning.

Prior to this funding, the company secured a $500,000 in seed round funding from DCM back in March of last year, and a $2.7 million series A round of funding from DCM and Infinity Venture Partners back in July. The total amount of funding to date has reached $11.2 million since the company’s launch back in July of 2012. For more information about the company, check out our brief interview below with their execs from back in October.

In this space, their competitor Money Forward also raised $5 million from Jafco back in October.
Posted on 7:11 AM | Categories:

BoxFreeIT's MYOB Essentials Accounting vs Xero Review – Which is Best for Micro-Business?

Pam Madytianos & Bookkeepers4U for BoxFreeIt writes: Cloud accounting has certainly picked up momentum. Accounting software companies are continually improving and releasing programs in the battle to capture the SME market in cloud accounting. In this review, we compare the entry-level cloud programs offered by MYOB and Xero.

MYOB Essentials Accounting is an updated and rebranded version of MYOB LiveAccounts. Priced at $29 per month, MYOB Essentials Accounting has unlimited transactions, bank feeds, unlimited customer invoicing, supplier bills and unlimited users. At time of writing it also includes payroll for unlimited employees but this will soon be sold separately.

Xero’s Starter edition costs $25 per month and includes bank feeds, unlimited users, payroll for one employee, 20 bank transactions per month, five customer invoices per month and five supplier bills per month. Xero’s Standard edition, which costs $50 per month, adds unlimited bank transactions, invoices and bills and payroll for up to five employees.


MYOB Essentials Accounting dashboard is simple and easy to use. It relies on the traditional MYOB style with tasks along the top menu bar which are easy to select. It gives you snapshots of Money In, Money Out, and Bank balances at a glance. With the click of an arrow you can see all the bank/credit accounts and balances of each.

MYOB Essentials Dashboard
MYOB Essentials Dashboard
Xero’s graph-based dashboard is attractive. It can be tailored to include the preferred accounts you wish to see. Users can click on the menu bars of each graph to drill down for further information too. The Xero menu screen has tasks listed under tabs which navigate to other areas of the application.

Xero Dashboard
Xero Dashboard

Bank Feeds

MYOB uses its BankLink service to provide reliable and secure feeds. BankLink, a 25-year-old financial data aggregator acquired by MYOB, has a team of data accuracy specialists that review the feeds using internal processes. Once checked they are uploaded into the MYOB file.
Xero uses two types of feeds. Xero has established relationships with most of the major banks and imports bank feeds directly. For other financial institutions Xero uses a third-party provider, Yodlee. Yodlee requires the user to provide their online bank credentials to Xero. Yodlee automatically logs into the business’s internet banking account, copies the transactions and sends them to Xero.

Bank Rules

Bank rules are very easy to use in MYOB Essentials Accounting, however they are quite basic. There is no separation between deposit/withdrawal types and not enough allocation rules to avoid errors or to capture enough information.

Xero’s bank rules are comprehensive and allow up to seven rule conditions for matching transactions. This increases the accuracy in finding matching transactions in the live bank feed. It takes a few goes to get it working but then it works well.

Bank Reconciliations

MYOB Essentials Accounting allocates transactions to accounts in the Bank Transaction screen. Transactions will auto-match if you have bank rules set up. When you are ready to finalise your bank reconciliation, you go to the Bank Reconciliation screen. At this point, the balance should agree to the closing balance on your physical statement. The statement balance and your MYOB balance are also on this screen.

Bank reconciliation in Xero requires you to approve (OK) all transactions matched to bank rules or invoices and bills. Transactions with bank rules automatically match and adjust your calculated statement balance. Xero has running statements and cashbook balances on screen so you can see what your balance is at any time. Xero advises users to check the balance in Xero against physical statements as there are sometimes duplicate or missing transactions.


Neither MYOB Essentials Accounting nor Xero have inventory tracking. Both systems can create a list of item codes for sales and purchases, but there is no record of inventory quantity kept on hand. Both systems have third-party products available for more advanced inventory requirements. (MYOB AccountRight Live also has inbuilt inventory tracking.) So both products are on par in this area.


MYOB Essentials Accounting has unlimited invoices. Invoicing is nicely laid out with a drop-down menu to select the customer or you can create customers on the fly with all details including name, address, etc. Essentials also offers quotes.

Xero Starter allows only for five sales invoices and five bill transactions per month. Xero Standard ($50 per month) gives you unlimited invoices and bills. When entering invoices, adding a new customer/supplier does not allow for the recording of address, contact and other details. There is no drop down to select the customer from a list but when you start typing, the customer name appears.


Payroll for Essentials Accounting allows for unlimited employees at present.  This will change in the latter part of the year when payroll will be sold as an optional extra. Payroll is easy to use and follows a three-step process. Just follow the prompts.

Xero Starter allows for only one employee, while Xero Standard ($50 per month) allows for up to five employees. You have to purchase Xero’s Premium packages for more employees – Premium10 ($60) for up to 10 employees, Premium 20 ($70) for up to 20 employees and Premium 50 ($80) for up to 50 employees. One feature I love in Xero is the employee portal where staff can enter timesheets, apply for leave and view payslips online.

A pain point with Xero payroll is the lengthy process to raise a draft bill after you post your payrun, approve then authorise, then apply separately to a multi-payment on the bank feed.
Xero payroll
Xero payroll


MYOB Essentials Accounting has a very basic card listing of customers and suppliers.
Xero has a more comprehensive card listing allowing for default print invoice templates, payment terms and tax code default by card.


MYOB Essentials Accounting and Xero users can invite accountants, bookkeepers and advisers into their file to collaborate with their client.
In Xero, accountants can also publish end of year reports straight from the software in the correct format.

Add-on Programs

MYOB Essentials Accounting recently added the ability to connect to third-party programs. The first bunch of add-on programs include Shoeboxed, ServiceM8 and SmartJobs.
Xero has a vast array of third-party products that integrate with it. Add-ons include Unleashed, Vend and Re-Leased to name a few.


MYOB has an online library of support notes, phone support, a community forum and live chat. There is also dedicated support for MYOB partners.
Xero has a community forum, but it does not have a phone support line. There is a good online self-help Q&A site and 24/7 email support.

Other Benefits

Inter-company accounts: Xero To Xero files makes it easy to deal with inter-company transactions.

Documents: Xero allows you to attach documents and photos against transactions, invoices and bills. Xero Starter gives you 1GB storage and Xero Standard gives you 5GB.
MYOB PayDirect: PayDirect allows smartphones to take payments which then update the software instantly so no more waiting for payments – handy for tradespeople on the road. This is in pilot stage for Essentials Accounting but will be available later in the year.


At the entry level, Xero is an appealing and easy to use program. Its main problem is the severe restrictions that are placed on the number of transactions that can be used per month in the Starter package. The next edition, which is closer to MYOB Essentials in features, costs double the price.

MYOB Essentials Accounting has no restrictions on the number of transactions, so would be suitable for a business that has grown beyond the micro stage.

This review was written by Pam Madytianos, director of Two Peas, an MYOB consultancy in Victoria, and Bookkeepers4U, a bookkeeping agency accredited in MYOB, Xero and QuickBooks. Two Peas was the MYOB Bookkeeping Partner of the Year in 2013.

BoxFreeIT is an independent news site covering cloud software for Australian and New Zealand businesses which launched in July 2011. The site is published by Sholto Macpherson, a business technology journalist in online and print media for over 11 years. BoxFreeIT operates in accordance with the MEAA (Australian Journalists Association) Code of Ethics.
Posted on 7:11 AM | Categories:

See How the ConnectBooks Mobile Apps for Sage 50 Measure Up Against What QuickBooks Offers

ConnectBooks writes: The ConnectBooks mobile apps for Sage 50-US Edition, Sage 50-Canadian Edition, and the QuickBooks Mobile App are both customer-centric. But ConnectBooks also provides Inventory and Vendor information, which are essential for estimates and ordering materials.
How about showing how these mobile apps differ?
There is a tri-fold brochure that describes ConnectBooks with a matrix showing the features supported by each mobile app. Click here to view or download the PDF. It may also be accessed as an attached document to this email.

What is meant by customer-centric?
The term means that the support of the accounting information centers on customer data. And that is how it should be since customers are the source of revenue—a very important component of cash flow and the life blood of a company. The most important function of a company’s mobile app is the creation of invoices and quick delivery of these bills to the clients. The mobile apps of ConnectBooks and QuickBooks both do a good job of invoice creation. The invoice creation process of ConnectBooks is demonstrated below. Put on your earphones for 3 minutes and click on the View hyperlink.

How are the line items for the invoice created?
Line items are created by choosing from the items in your Inventory data within Sage 50. Of course, you would have items for all the materials. You should also have an item for each labor skill of your crews with appropriate costs. As shown in the video, you can change labor and material unit prices as you enter a line item and enter the labor hours or material quantity. When you touch the Post button in ConnectBooks, your Sage 50 database back in the home office is updated.

That looks easy enough, but how does the invoice get to the customer?
In order to keep the video short, so we did not show the invoice delivery. That is a simple three-step process: 1. Touch a button and a PDF is created of the invoice. 2. Choose the email address from the Customer data. 3. Touch the Send button.

What does ConnectBooks offer that is not offered by QuickBooks?
ConnectBooks offers access to Inventory and Vendor information, both of which are important to small business owners and the sales and service staff in the field. When creating estimates, knowing the stock levels are important factors. If overstocked, a materials discount may be important to being more competitive. If materials need to be re-ordered, contacting the vendor to determine availability and current costs are essential factors in pricing.

If unplanned materials are needed by field staff, the ability to contact suppliers and access to those materials is essential to productivity and meeting timelines.

The Who Owes Me shows customers with highest outstanding balances that may be induced to pay bills sooner when revenue is short. Likewise, Who I Owe lists vendors who are owed (with largest balances first) can be used to contact suppliers who may agree to a partial or delayed payment. Both may be helpful in managing cash flow.

ConnectBooks is a superior mobile app that is more beneficial to small business owners!

About IntelleApps, LLC
ConnectBooks for Sage 50-Canadian Edition and Sage 50-US Edition are products of IntelleApps, LLC. IntelleApps is a fast growing company with an exclusive focus on developing state-of-art mobile apps for the Apple iOS and Google Android platforms.

IntelleApps is located in Chantilly, VA, USA and is a Sage Development Partner. Sage Corporation is the Creator and owner of the Sage 50-Canadian Edition and Sage 50-US Edition accounting software products.
Posted on 7:11 AM | Categories:

Can you make deductible IRA contributions if you have solo 401k

 Over at BiggerPockets we came across the following discussion, Can you make deductible IRA contributions if you have solo 401k ?

P Joshi

· Santa Clara, California

This IRS page mentions that limits are subject to coverage under employer plan.

What if you are not covered by typical employer plan but if you have a self directed 401k / solo 401k (one member 401k plan for a self employed person)? Are you still prevented from IRA deduction similar to large employer 401k members?

Problem is that for new self-employment gig, schedule C income may be small and so retirement contributions to solo(k) (roughly max 25% of schedule C income) would be tiny. But, income from non-schedule C sources could be enough to make a deductible 5k contribution to IRA. But, if solo 401k is treated as W-2 employer plan, not much retirement contribution can be made either to IRA or solo(k).
Any clarification?

Real Estate Investor · Los Angeles, California
This is a good question that I am interested to know the answer as well.

Real Estate Investor · Springfield, Missouri

You may have a 401K and an IRA, you can have multiple IRAs so long as you follow the requirements for contributions, you could put all your income in a tax qualified plans but with restrictions to 401Ks. You can also have a self directed plan and you can mix plans, one could be a regular IRA and you could have a Roth IRA. You can also make contributions after the year end and apply them to last year's deductions. You can open accounts after you are 59 1/2, the age at which you may withdraw funds. At older ages you may also contribute more as well.
This was the topic of our local financial TV show last Saturday, so I'm just passing along what they were saying! See your investment advisor for details. I got out of the financial planning side long ago, so I don't get into tax matters anymore or in giving financial advice. :)

Financexaminer@real estate investor dot com

Real Estate Investor · Anaheim, California

@P Joshi
you can make contributions to both, self-employed Solo 401k as well as IRA. The income source to calculate the contribution amount would be different for each of those retirement plans. In order to contribute to Solo 401k earned self-employment income must be used, depending on your business structure that could be income on schedule C or wages you pay to your self if you are incorporated. Please be sure to consult with knowledgeable CPA, if you need a referral, I would be glad to point you in the right direction.


· Santa Clara, California

Bill, thank you for your response. And yes, I agree with you that you can have a traditional IRA, as well as roth IRA in addition to your solo 401k. The only issue is that income limits to make tax-deductible contributions depend on whether you are covered by what IRS calls "employer plan". So, is a solo 401k based on someone's small self-employment income, covered under definition of "employer plan"?
Sorry, for wrong link format.
Check table 1.2 and 1.3 at this page:
So, if your solo 401k is same as "employer plan", for a single, you can make fully tax deductible IRA contribution only if your modified AGI is less than 59k. However, if you don't have 401k with W2 employer and your solo 401k is not counted as "employer plan" then, as per Table 1.3, you can make a tax deductible IRA contribution, regardless of how high your modified AGI is, if you are single / HoH (and income limit of 178k for married filing jointly)!
If solo(k) is counted as "employer plan" basically, your retirement contributions can only go to solo 401k and that is limited to probably approx 25% of your schedule C income only.
This IRS page tries to clarify employer plan but it is not clear to me if solo 401k fits the bill.
Posted on 7:10 AM | Categories:

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