Monday, May 6, 2013

$49 for Sage 50 Accounting Certification Course Bundle ($795 Value) / Legit?


 IT University Online (ITU)  is releasing a new Groupon offer for their Sage 50 Certification Bundle this upcoming Monday (May, 6, 2013) ITU targeted Sage training for their next Groupon offer due to the clear demand from accounting professionals for quality online education. Sage is one of the most utilized and important accounting software packages in the industry so offering a Groupon in concert with the Sage software suite was a natural next step for ITU. Their Sage Certification Bundle contains over 25 hours of online training in a modular fashion that allows for a strong student retention level. IT University has previously released Groupon offers for their Cisco Certification Training Bundle, Microsoft Office Certification Career Advancement Bundle & Complete CompTIA Certification Bundle. The strong success of these offers has proven that industry professionals are looking for a quality training solution that doesn't break the bank. As ITU's Manager of Student Services, John Tesse, explained; "Too many industry professionals and aspiring industry professionals never get the training they need, simply because the cost is too high. In today's economy, many people sit in the catch 22 of not being able to get the job because they don't have the training and not being able to get the training because they don't have the income from the job. I believe we've caused an end to that dilemma for many people by offering high quality training at a price that is affordable for almost every family."
The accounting field is rebounding strongly from its downturn a few years ago and the market is now ripe with opportunity for those that possess the certifications necessary to qualify for the variety of accounting positions currently available. Recognizing this demand, IT University capitalizes on offering high quality instruction in an online delivery format that suits anyone's busy schedule. This allows for a customized study experience and eliminates the "cookie cutter" training approach of many traditional classroom facilities. ITU also provides one-on-one support so students can work with a certified instructor when they need assistance. ITU consistently sets themselves apart from the others in their space by using visual and interactive training techniques to increase student's retention level of their training material. Their courses include features such as; instructor led lectures, visual demonstrations, multi-media presentations, test simulations, one on one support and guaranteed certification. With their On Demand Training students can repeat topics as many times as they want before moving forward. This allows participants in their program to make sure they are thoroughly trained before moving forward in their course. Ultimately, this translates to over a 97% pass rate for IT University's classes. ITU's management team is thrilled to bring this new offer to market and continue to help professionals gain the training they need at the price they want.
Here's the Groupon Link.
Commentary:  We're not sure what to make of this.   We've found some discussions on the company offering the deal in their Cisco Training here and here.   There seems to be some issue of their integrity that you can read at RipOff Report here, the Rebuttal to the complaint from IT Online University can be read here.
Our final view on this? Caveat Emptor (Buyer Beware).
Posted on 7:01 AM | Categories:

Izzbox Reviews of Xero Accounting Software and An Interview With an Award Winning Xero Certified Advisor

From Izzbox we read:

Xero’s Main Features

  • Xero allows business owners to invoice, enter expenses and track cashflow on the go.
  • Xero online accounting software can create and send invoices automatically and the invoices can then be paid online
  • Xero’s dashboard allows you to get an instant picture of your sales, invoices out and bills. Giving you an up to date view of your current cashflow
  • Payroll – easily enter a pay-run and print employee payslips. For more complex payroll requirements there are numerous add-on services too
  • Free, unlimited online support available around the clock

Xero Reviews

A Xero Review From JoineryWorkshop.com


Tell us a little about your company.
Joinery Workshop
Established in 2006, Joineryworkshop.com has established a distinguished record of providing single and double-glazed, traditional sash and casement windows to British period property. Whether it’s restoration or double glazing of existing windows or complete replica replacement, we provide the bespoke solution that your period property requires.
If you would like to find out more you can follow them on Twitter.
What prompted you to go for a cloud accounting solution?
My business was growing at such a rate that real-time cash flow management had become a necessity. It was no longer possible to wait for my accountant to produce the figures – I needed to know things as they happened. Good cash-flow management is vital to any business experiencing rapid growth and Sage was simply not up to this task.
The great thing about the cloud is you can access the system anywhere and anytime … You can reconcile your bank account on your smart phone in bed at 1am; you can see the value of invoices raised on a given day whilst half way up a mountain in Bulgaria; If the office has a power cut then you can work from home – still with full access.
What was your accounting set-up prior to moving over to the cloud?
Sage and a 3rd party bookkeeper
How did you find the transition from your old set-up to a cloud solution?
Relatively straightforward. The biggest problem was getting information out of our old accountant
Did you consider any alternative cloud accounting solutions before deciding on Xero? And, if so, what made you go with Xero over the others?
When selecting which cloud based accountancy package to go for we considered several options. What made me select Xero was its superior level of 3rd party integration i.e. bank feeds; credit cards; CRM systems; HR systems etc. There are literally hundreds of 3rd party software providers using Xero.
What would you consider have been the main benefits of moving your accounting to Xero?
Cloud computing is the most exciting thing to happen to small businesses since the end of world war 2!
Managerial time saved both in cash-flow management and profit analysis.
Increased financial control
The simplicity of the system allows many employees to work directly with the accounting system thus improving their awareness of profitability and cash-flow
Have you had any issues with Xero or are there any features missing that you would like to see included?
Some of the bank feeds could work better. It’s quite difficult to work out which ones are seamless and which ones are temperamental – trial and error being the only real method. However, their helpdesk has proved excellent, you can always get there in the end – even with the tricky ones.
A lot of small business owners we have spoken with intimated that a fear over security of their data or what would happen in the event of a server loss has been putting them off going with a cloud solution, did this factor in your decision making?
I find this argument slightly ridiculous. As a small business, any solution you create yourself is going to be far more vulnerable than a solution created by a huge multi-million pound organisation with teams of developers working 24/7. Personally I have found the cloud to be more reliable and secure than our local solution.
What would you say to any small business owner who is currently on the fence over whether to use a cloud accounting solution?
It’s a no brainer. The cloud is cheap to adopt, will grow with your business, future proof, but perhaps most importantly of all – very often significantly better than the bespoke solutions a blue-chip competitor is currently working with – in other words it can give you a competitive advantage over the big boys!
Do you use any other aspects of cloud computing (data storage, Customer Relationship Management etc)?
We use Google Apps – Gmail, Calendar, Google Drive, Google Sheets, Google Docs, etc; Dropbox; Payeroo; WordPress; Twitter; Facebook; Linkedin; and we are currently evaluating Capsule CRM and Order Harmony.

A Xero Review From Satora Limited


Tell us a little about your company.
para
I run three businesses under the Satora Limited company. A paragliding training operation where I get to throw my customers off mountains, a retail business selling equipment for that sport and I also run a bed & breakfast. Soon to add another business called Secret Wales.
You can find out more about the paragliding company andbed and breakfast on Facebook.
What prompted you to go for a cloud accounting solution?
I changed to from a PC to a Mac and Quickbooks wouldn’t run on it.
What was your accounting set-up prior to moving over to the cloud?
Quickbooks desktop.
How did you find the transition from your old set-up to a cloud solution?
Simple. Just export items, customer and supplier lists from Quickbooks and import them into Xero.
Did you consider any alternative cloud accounting solutions before deciding on Xero? And, if so, what made you go with Xero over the others?
Xero seems to have won a lot of awards and 200,000 users says a lot. The free ones sound attractive but if the product is free, how do they make their money? I would rather pay and hopefully know the company will still be here tomorrow.
What would you consider have been the main benefits of moving your accounting to Xero?
For twenty years I’ve sat there with bank statements and pen, ticking items off when I can find them on the accounts. I have always truly hated this. Xero actually makes this fun.
Up to now, it seems incapable of allowing you to make the smallest mistake. Being able to access anywhere is good. But the big one for me is live bank feeds with amazing reconciliation features. For twenty years I’ve sat there with bank statements and pen, ticking items off when I can find them on the accounts. I have always truly hated this. Xero actually makes this fun; just click away on your mouse whilst holding a cup of coffee in the other hand. Its ability to match bank records to invoices is incredible.
Xero also sends a weekly email telling me what I have to action in my accounts. Like I said, it won’t allow you to forget anything!
Have you had any issues with Xero or are there any features missing that you would like to see included?
When I first looked at it, it looked too simple so I was thinking ‘accounting for dummies’. It didn’t take long to work out it could be just that simple if you wanted it but burrow into it and it will give you everything. I’m currently looking at the multitude of bolt ons for eBay and Amazon feeds etc.
A lot of small business owners we have spoken with intimated that a fear over security of their data or what would happen in the event of a server loss has been putting them off going with a cloud solution, did this factor in your decision making?
No; get used to it. Its the future. Saying that, looking at the help page, I get the impression a backup all function is in the pipeline.
What would you say to any small business owner who is currently on the fence over whether to use a cloud accounting solution?
Let software make your life easier because you’re going to need all the help you can get. Xero does it all and their after sales respond within a few hours and are very helpful people.
Do you use any other aspects of cloud computing (data storage, Customer Relationship Management etc)?
I use a few Google apps with the main one being a task manager, Gqueues and I highly recommend that as well.

A Xero Review From Net Primates

Tell us a little about your company.
NetPrimates
Net Primates is an IT, Telecoms and Wireless company based in Southampton, Hampshire. Our services include installation and maintenance of VoIP Telephony Systems, large scale WiFi networks, IT services and Internet Connectivity. Our global client base consists of Residential users, SME’s with 1-100 employees and Large Enterprise’s with networks supporting 1000′s of users.
You can connect with Net Primates via their Facebook page or on Twitter.
What prompted you to go for a cloud accounting solution?
We are very much about being connected and in touch with our business anywhere in the world, be it email or phones. We found that our current accounting package (Quickbooks) was just not up to the job, we operate across multiple operating systems and multiple sites and Quickbooks just wasn’t growing with our business.
What was your accounting set-up prior to moving over to the cloud?
Quickbooks Pro, single user via RDP using a Windows 7 machine allowing us to access from anywhere and any operating system.
How did you find the transition from your old set-up to a cloud solution?
We found it relatively easy, we imported some data using CSVs and chose to manually import other parts, we used the exercise to clean out some of our old out of date data. The ability of our accountant to login remotely was also a great help when we experienced the odd hurdle during the migration.
Did you consider any alternative cloud accounting solutions before deciding on Xero? And, if so, what made you go with Xero over the others?
Not really, we had heard of the others but we know of other organizations using Xero and how well it works for them. The feedback we received from them was enough to make the decision for us.
We have seen such an improvement since we moved to Xero, our Bank Rec is always up to date, we are on top of our debtors and our recurring invoices just go out automatically without any manual input.
What would you consider have been the main benefits of moving your accounting to Xero?
Complete visibility of our accounts, Quickbooks required so much manual input including Bank Reconciliation that it got out of date really quickly. We have seen such an improvement since we moved to Xero, our Bank Rec is always up to date, we are on top of our debtors and our recurring invoices just go out automatically without any manual input.
Have you had any issues with Xero or are there any features missing that you would like to see included?
The from email address for sending invoices via email, by default Xero emails out the invoice from the email address of the user logged in and creating the invoice. This is a bit of a pain but we have created a work around until Xero release their planned feature update which will address this issue.
A lot of small business owners we have spoken with intimated that a fear over security of their data or what would happen in the event of a server loss has been putting them off going with a cloud solution, did this factor in your decision making?
We are confident that Xero have the infrastructure in place and the knowledge to maintain a stable and secure setup. We also have a number of offline backups of certain systems should we require it.
What would you say to any small business owner who is currently on the fence over whether to use a cloud accounting solution?
Do it! It has transformed our business, we have more than halfed our overdue accounts with improvements in our cashflow seen almost immediately. We have implemented Direct Debit collection with automatic intergration into Xero. All of our staff have visibilty of the relevant parts of the Accounts allowing them to make sure customers have up to date Accounts. If you have any questions Xero staff are quickly on hand to assist.
Do you use any other aspects of cloud computing (data storage, Customer Relationship Management etc)?
We use Capsule CRM with integration into Xero.
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Interview With an Award Winning Xero Certified Advisor
Tell us a little about yourself, your business and your experience with cloud accounting.
Xero Accounting Software expertes Totally 4 Business
I started my business as a self-employed bookkeeper, most of my clients used MYOB or spreadsheets. When the UK division of MYOB was sold, I was searching for something suitable for my clients when one of them asked me to look at Xero. That was in 2009 and I haven’t looked back since. I instantly fell in love with it! No more exchanging back ups to work on the accounts, both the client and I could work on them at the same time if necessary. No more discovering there was no recent back up saved before the server crashed. And, more importantly, the client could understand the screens in the software and began to take an interest in their financial situation, making my job much more pleasant. I soon found people and companies were interested in having someone show them how to use Xero accounting software, which is when I began offering training, on site and by webinar. I enjoy training even more than bookkeeping so this is where Totally 4 Business now specialises.
From our survey the number one factor putting small businesses off a cloud accounting package is a fear over security of their data, how secure is Xero?
In a nutshell, Xero is as secure as online banking. Xero have published many blogs about the different aspects of security but this is the page that answers most questions about security on their website. Xero continually back up the data so that you don’t have to but it is still possible to download data into excel and store it on a disc yourself.
What are the main benefits of switching to Xero from a more traditional desktop software package?
Xero accounting software
Xero is online so is available from anywhere there is internet access, on your computer, laptop, tablet or smartphone. You can invite as many users as you like into your account without having to purchase any more licenses and without any extra fees. Bank feeds can be fed directly into your account on a daily basis so that your accounts can be kept completely up to date. Personal expense receipts can be photographed on a smartphone and sent directly into the main Xero account which means no more missing receipts. Xero update and improve their software every six to eight weeks and back up all data everyday, all included in the monthly subscription price.
Why would someone go down the route of having to pay every month to access their data? A spreadsheet is free and desktop software is a one-off payment?
A spreadsheet is free and is perfectly adequate for a straight-forward small business but spreadsheets can start to get numerous, complex and time-consuming as a business grows, especially when VAT registered. Desktop software is a one-off payment for one version. To use upgraded software, further purchase is required. The same applies when you require further licenses for more staff as the business grows. Often, your accountant also needs to run the same version of the same software in order to be able to access your data. Comparing the monthly subscription cost for Xero which is easy to use, saves bookkeeping time, for as many users as you like, includes regular upgrades and back ups, as well as being able to access your data from wherever and from whatever device you choose against spreadsheets and desktop software is more than likely to be favourable.
What would make you recommend Xero over other cloud solutions like Kashflow or Freeagent?
I have only ever used FreeAgent when converting data over to Xero for clients. As far as I have seen, FreeAgent is a good cloud accounting solution for sole traders, as the name suggests, without any prior knowledge of bookkeeping, accounting and the taxes a business is required to pay. Mostly due to the reporting available, sole traders/small businesses can outgrow FreeAgent whereas Xero can serve them throughout. I also believe that there are many more add-ons available to integrate with Xero than FreeAgent.
I have never used Kashflow so I can’t comment.
How easy is Xero to use? If a business owner has zero experience in bookkeeping or accounting will they require help to use it?
Xero is incredibly intuitive and easy to use. But I do think it is advisable for a business owner with zero (or very little) bookkeeping knowledge to have some guidance or help to use it because, as with any system, it will be useless if you enter incorrect information. Personally, I have found that I can train someone to use Xero on a basic day to day basis, along with simple bookkeeping, in approximately two hours. It is perfectly possible to teach yourself to use Xero from their very informative help centre and short video guides but this will take much longer than learning from an advisor.
Does Xero handle Payroll?
At present, in the UK, Xero does not handle payroll. Xero is actively looking for a payroll partner in the UK. There are several payroll add-ons that integrate with Xero which means that the payroll is calculated in the add-on system and the journal is then automatically sent to your Xero account. The UK version of Xero accounting software does have the ability to record the payroll details against each staff member and to create wage slips.
Is it possible to have multi-users in Xero Accounting Software? And if so is there a way to see what data has been added or changed by a particular user?
It is possible to have multi-users. Each user had their own unique log in. Each time a user creates or changes transactions a note is attached to it and available for other users to see
I have no problem with security, in some ways I think it’s safer than having your data on a desktop my main concern is continuity of service. What would happen to my data in the event of a major server loss or, as unrealistic as it may seem, the company going bust? 
Security of Xero Accounting Software
I also believe, especially for small businesses, that the data is more secure in Xero than on desktop software where you are responsible for the back up of your data and the reliability of your server. If you are particularly concerned, as I mentioned before, you can download your entire general ledger into excel to store however you wish.
This is how Xero responded to some high profile company security failures.
Does investing in Xero mean I no longer need an accountant or bookkeeper?
No! The majority of businesses require an accountant, even if only to make sure the accounts are correctly filed every year. The advantage with Xero is that you can use it alongside your accountant who should then be able to offer you financial advice on how to grow your business and make the best decisions. You can build up a relationship instead of just dropping everything off at year end and hoping there won’t be too much tax to pay! With Xero, you may be able to manage without a bookkeeper if you’re confident with your own bookkeeping skills. But, a bookkeeper is probably more skilled than you are, it is what they do all day every day. Although it is extremely important for you to know the financial situation of your business, your time should be spent running it, doing what you do well. Again, with Xero, you can build a relationship with your bookkeeper who can then point out abnormalities in your finances and anything that should be referred to your accountant in order for your business to grow smoothly.
One of our aims is to go as “paperless” as possible can I tie Xero in with other apps like a CRM, a quotation tool and inventory management?
Yes, you can. There are plenty of add-ons you can integrate with Xero accounting software with more being added continually. Xero has an open API and encourages other apps to integrate with them.
Is Xero suited for a particular type of business or industry? Or, alternatively are there any instances where Xero would not be a recommended solution?
Xero is suited to many types of business and industry. Personally, I have worked with companies successfully using Xero from the following; Digital Marketing, Design, PR, Specialised Joinery, Retailers, Landscape Gardening, Nursing Homes, Virtual Assistance, Surveyors, Solicitors, Plumbers, Training and Coaching, Bookkeepers and Accountants (of course), Dental and GP Practices, Kennels and even a private airline pilot.
There are bound to be companies where Xero is not suitable, usually due to a specialised requirement that is not a facility within Xero. I would always suggest talking to a Xero Advisor and testing the system with a free trial.


Posted on 6:37 AM | Categories:

History of the Tax Attorney's Fees Deduction

LawyerSite.com writes: You mean that you didn’t know that there was such a thing as the tax attorney’s fees deduction?  Well, perhaps that’s because it’s not actually called the tax attorney’s fees deduction. Tax attorneys like me just like to call it that. It’s technically part of the Job Expenses and Certain Miscellaneous Deductions subject to the 2% floor and it can be found at line 23 on Schedule A (downloads as a pdf). You might overlook it since it’s labeled as “Other expenses” cause it’s thatimportant.
Miscellaneous deductions are the third most popular of the itemized deductions (you can read more about itemized deductions in this prior post). Those deductions are currently only allowed to extent they exceed 2% of your adjusted gross income (“AGI”), similar to the way that you figure the deductions for medical expenses. The threshold for the deductions is often referred to as a “floor.”
Here’s a quick example: assuming you have miscellaneous deductions that total $5,000 and AGI of $50,000, you can only deduct $4,000. The math is: $5,000 (total expenses) less $1,000 “floor” ($50,000 x 2%) = $4,000 in deductions on Schedule A.
So, which fees qualify as deductible? Usually, legal fees related to individuals are not deductible. When it comes to attorney’s fees you pay to defend the action from your crazy neighbor about your tree, not deductible. But attorney’s fees related to tax may be deductible. To qualify, your legal fees must be:
  • To produce or collect income that must be included in your gross income,
  • To manage, conserve, or maintain property held for producing such income, or
  • To determine, contest, pay, or claim a refund of any tax.
That means generally, tax planning advice related to your income or income-producing property (including estate planning that is related to tax planning) and some tax controversy work would be deductible. This also extends to tax advice rendered in the course of planning for divorce or to collect alimony; divorce-related attorney fees are otherwise not deductible.
Great news, right? It’s like a rebate on your tax attorney bill. It is worth noting (so that I don’t get virtually egged by my colleagues) that the IRS also allows a deduction at line 23 for “tax advice fees” not restricted to that provided by attorneys, so advice provided by your accountant, CPA and investment advisor may also be deductible.
Tax-related legal expenses may also be deductible if they are tied to doing or keeping your job. This includes fees paid to defend yourself against criminal charges arising out of your trade or business – good news for “Whitey” Bulger.
(Other business-related legal fees may also be deductible – just on other tax schedules.)
The history of the deduction is interesting in that the statutes didn’t change wildly for most of the history of the Code, though the interpretations of the deduction did. The language in the Tax Code which allows for deductions for “all the ordinary and necessary expenses paid or incurred during the taxable year in carrying on any trade or business” remained virtually unchanged in most versions of the Tax Code, including those from 1926 (downloads as a pdf) and 1939 (downloads as a pdf) and included tax-related legal fees.
The difficulty was in the interpretation. The courts, of course, read this language strictly meaning that the taxpayer had to be involved in a trade or business, not merely producing income. (See Higgins v Commissioner, 312 U. S. 212 (1941)) That meant that taxpayers who incurred fees to produce income not in the course of business were not able to take the deduction. The fact that the income was taxable but not deductible because of the wording in the law clearly bothered many on the bench and in Congress. The Revenue Act of 1942 changed that by adding language which clarified that fees related to profit-seeking activities, including personal investments and hobbies, would be deductible so long as the respective income was taxable.
The deduction survived for decades until the 1980s. As part of Reagan’s sweeping tax changes, the Treasury issued a report on November 27, 1984, referred to as the “Tax Reform for Fairness, Simplicity, and Economic Growth.”  In the report, it was proposed that a floor be imposed on miscellaneous itemized deductions. The suggested floor was 1% of AGI and the justification was based on simplification. The report (downloads as a pdf) stated:

Allowance of the various employee business expense deductions and the miscellaneous itemized deductions complicates recordkeeping for many taxpayers. Moreover, the small amounts that are typically involved present significant administrative and enforcement problems for the Internal Revenue Service. These deductions are also a source of numerous taxpayer errors concerning what amounts and what items are properly deductible.
In terms of administration, the deduction was a bear. In addition to the confusion behind what was properly deductible (miscellaneous is just so vague), the report noted that the sheer number of returns claiming the deduction was overwhelming. Further, the value of those deductions was tiny: in 1982, half of the taxpayers who itemized claimed miscellaneous deductions worth less than 1/2 of 1% of their AGI.
However, the Treasury also recommended that the “expenses be deductible by the taxpayer, whether or not he itemizes deductions.” (Emphasis added and yes, the Treasury used the word “he”, not me)
Congress took the Treasury up on some of its advice and did impose a floor on miscellaneous deductions when it enacted the Tax Reform Act of 1986.Section 67 of the Tax Code now allows for a deduction for miscellaneous expenses “only to the extent that the aggregate of such deductions exceeds 2 percent of adjusted gross income.”
Congress did not take all of the Treasury’s advice and continued to restrict the deduction to those taxpayers who itemize. The deduction is also disallowed if a taxpayer is subject to the AMT.
The Regulations have since clarified what is and is not deductible under the Code including, at Section 1.212-1, subparagraph (l):

Expenses paid or incurred by an individual in connection with the determination, collection, or refund of any tax, whether the taxing authority be Federal, State, or municipal, and whether the tax be income, estate, gift, property, or any other tax, are deductible. Thus, expenses paid or incurred by a taxpayer for tax counsel or expenses paid or incurred in connection with the preparation of his tax returns or in connection with any proceedings involved in determining the extent of his tax liability or in contesting his tax liability are deductible.
The Regulations have further clarified that tax advice connected to alimony and tax is deductible at Section 1.262-1:

Generally, attorney’s fees and other costs paid in connection with a divorce, separation, or decree for support are not deductible by either the husband or the wife. However, the part of an attorney’s fee and the part of the other costs paid in connection with a divorce, legal separation, written separation agreement, or a decree for support, which are properly attributable to the production or collection of amounts includible in gross income under section 71 are deductible by the wife under section 212.
(Again, the sexism is in the Code, not on my end)
There’s been no real movement on the deduction over the past 25 years. The deduction as written in 1986 stands today, still subject to the 2% floor.
You don’t hear a lot about the deduction for legal fees come tax time which is odd since, in theory, these fees could add up a lot more quickly than medical expenses which you do hear a lot about. My advice, which is, of course, self-serving, is to ask your tax professional about the deduction. Remember that you don’t have to run a business to qualify – all sorts of life events from getting a divorce to 
Posted on 6:35 AM | Categories:

Seven Small Business Mentoring Tips: How To Survive Paying Taxes

From Size14Cocktaildress.com of all places we read: “Death and Taxes.” Ben Franklin gave timeless small business advice when he proclaimed that they are the only two things in life that are certain. But you don’t have to let your tax responsibilities drive you and your business to an early grave.As a business coach, the one problem I see many entrepreneurs running into is failing to budget enough money to set aside for their taxes. Then when it comes time to file their taxes, they don’t have the cash. Unfortunately, not filing taxes is NOT the solution to the problem! The following business mentoring tips are among some of the best pieces of bookkeeping business advice that I have shared with busy entrepreneurs over the years. If you come up short on cash at tax time, here are some things you can do:

Business Mentoring Tip #1: Gather your records and file all your tax forms immediately, even if you can’t pay a cent. 

Business Mentoring Tip #2: Write a letter and attach it to your forms explaining your financial situation. The IRS will work with you to find a payment option with which you can live. One of those options could be setting up a plan so that taxes can be paid in installments. 

Business Mentoring Tip #3: Have a solid business plan that makes accommodations for both federal and state taxes, and stick to it. The last thing a new business needs is to lose its profits by paying penalties to the IRS. 

Business Mentoring Tip #4: Open a second bank account like a tax savings account, to be used exclusively for saving money for paying taxes. As a business coach, I’ve seen many clients successfully use this strategy.

Business Mentoring Tip #5: Each time your write yourself a check or make a cash withdrawal from the ATM, take 20% of that money and deposit it into your tax savings account. For example, for every $100, set $20 aside for taxes. You will be pleasantly surprised how quickly your tax savings will add up! 

Business Mentoring Tip #6: Each quarter, January 15th, April 15th, June 15th and September 15th make estimated tax payments to the Federal and State governments. 

Business Mentoring Tip #7: Each October meet with your tax preparer for preliminary tax planning. You can evaluate where you are for the year and leave yourself ample time to reduce your tax liability or make additional payments. By using this proven bookkeeping business advice and implementing these seven tips into your business’s bookkeeping practices, you will be able to survive paying your taxes.
Posted on 6:35 AM | Categories:

Taming taxes in retirement

John Spoto  for the Eagle-Tribune writes: Taxes take a big bite out of investment earnings. An important goal of successful investing therefore is maximizing after-tax returns. This involves both assembling the correct mix of assets and placing them in the right types of accounts. Since different investments and different types of accounts are taxed at different rates, how investors allocate assets between taxable and tax-advantaged accounts can greatly affect the growth of their portfolio.


The guiding principle of “keeping more of what you earn” by minimizing unnecessary taxes becomes more complicated for those retirees who depend upon portfolio withdrawals to support living expenses. They face the dual challenges of investing and withdrawing their assets tax-efficiently.
Most retirees have accounts that are taxable, tax-deferred (traditional retirement), and tax-free (Roth retirement). If these accounts were taxed the same, an investor should be indifferent to the order in which they would be drawn down, because any order would produce the same results. However, because these accounts are subject to different tax rates and rules, a sensible withdrawal sequence can help reduce taxes and lengthen the portfolio’s life.
The guideline most often recommended is: First, withdraw from accounts where required minimum distributions (RMDs) are mandated. Second, spend cash flows (interest, dividends, and capital gains) from taxable accounts. Third, tap tax-deferred accounts. Finally, withdraw from tax-free (Roth) accounts. The rationale behind this approach is to allow tax-advantaged accounts to grow for as long as possible. Simulations conducted by academic and financial institutions generally support the notion that “all things being equal”, this spending order will usually produce a lower current tax bill, allow for more tax-deferred growth, and enable investors to achieve greater portfolio longevity.
However, in life, all things are rarely equal and retirees should avoid using this “one size fits all” approach before examining their specific situation. Each investor has unique personal and financial circumstances including: the type, size and cost basis of each investment account, estate planning goals, and current versus future tax rate expectations. All of these have important tax implications and therefore impact the preferred account withdrawal sequence.
Let’s consider when an alternative approach may be warranted.
— Capitalize on a temporary drop in income tax bracket. This often occurs during early retirement before required minimum distributions begin. This can provide an opportunity for the retiree to withdraw sufficient funds from tax-deferred accounts to fill up the lowest tax brackets, which under normal circumstances would be unavailable to the investor.
— Reduce the future tax impact of a large IRA or employer retirement plan. Those fortunate enough to have accumulated large tax-deferred balances may find these accounts lose some of their luster when they begin taking withdrawals under IRS distribution rules. They are fully taxable at ordinary income tax rates.
— Avoid paying capital gains taxes in taxable accounts. Investors who have amassed sizeable taxable accounts with low cost basis (large built-in gains) and do not need to tap them may choose to hold them and pass them on to beneficiaries. Doing so allows beneficiaries to receive them in a tax-efficient manner under current estate tax laws.
— Exploit differences between current and future tax rates. Accurately predicting future tax rates is a long shot at best. However, if an investor expects that her (or her heir’s) tax rate will be higher in future years than it is now, spending from tax-deferred accounts before tax-free Roth accounts may make more sense.
For most retirees generating a sustainable income while preserving the portfolio for themselves and their heirs is one of their highest financial priorities. Achieving this goal is challenging enough and is further complicated when the impact of taxes is introduced. However, employing a flexible, “tax-smart” strategy for drawing down the portfolio can go a long way toward helping retirees reach that important goal.
Posted on 6:34 AM | Categories: